Author: azeeadmin

Patreon announced today that it was creating multiple pricing tiers for its membership service, with varying levels of features offered depending on price. The company will now offer a “Lite” offering that charges a 5% commission, a “Pro” offering at 8%, and a “Premium” option at 12%, with discounted rates for existing founders.

Today’s announcement is in line with the telegraphs we heard from the company in the deep dive TechCrunch conducted a few weeks ago as part of our first EC-1 package on Extra Crunch. As TechCrunch media columnist Eric Peckham discussed at the time in regards to Patreon’s fee structure and overall business model:

The problem is, it’s too friendly. [Patreon CEO Jack] Conte admits that Patreon’s current fee structure isn’t lucrative enough for it to operate profitably as a business: “It’s not enough. We’ve got to figure something else out.” This low fee rate — comparable more to a payment processor like Stripe than other platforms for creators and fans — was the main critique from VCs I talked with as well (both those who invested in the company and those who did not).

Patreon therefore needs additional revenue streams, and, unsurprisingly, it is already developing them. The company is preparing to offer additional functionality to creators in exchange for a higher cut of their revenue. Conte talks about this as a “value for value” plan …

While the new fee structure (5%/8%/12%) was expected from Patreon, the scale of the fees are surprisingly low given the messaging Peckham heard at the time. The company’s competitors charge significantly more — as much as 30% — and that leaves a large gap between the startup and the rest of the market.

That said, a huge part of Peckham’s thesis — and given the new fees, perhaps Patreon’s as well — is that membership is just a stepping stone to other services that will be far more lucrative than just a scrape on transactions. As Peckham wrote:

If membership gains mainstream traction among mid-tail creators and if Patreon (both through its Patreon platform and Memberful subsidiary) secures dominant market share as this market expands, it will be in a powerful position to offer ancillary services that could be quite lucrative. As Jack Conte told me, “Membership is Patreon’s Act 1. There’s so much more we can do to fund the creative class. You’re gonna need more than just membership. Over the next 10 years, there’s going to be a lot more that we do.”

Peckham noted financial services such as loans, as well as options like health insurance as potentially large categories of value-added services that could make the miserly revenue scrape much more bearable for the company long-term.

Given the importance of Patreon to the creative economy, be sure to read all of Peckham’s reports on the company’s founding story, product, business, investment thesis, competition, and exit options.

Google just unveiled Stadia at a conference in San Francisco, its cloud gaming platform. While most of the conference showcased well-known games you can play on your PC, Xbox One or Playstation 4, the company also announced that it is launching its own first-party game studio, Stadia Games and Entertainment.

Jade Raymond is going to head the studio and was here to announce the first details. The company is going to work on exclusive games for Stadia. But the studio will have a bigger role than that.

"I'm excited to announce that, as the head of Stadia Games and Entertainment, I will not only be bringing first party game studios to reimagine the next generation of games,” Raymond said. “Our team will also be working with external developers to bring all of the bleeding edge Google technology you have seen today available to partner studios big and small."

Raymond has been working in the video game industry for more than 15 years. In particular, she was a producer for Ubisoft in Montreal during the early days of the Assassin’s Creed franchise. She also worked on Watch Dogs before leaving Ubisoft for Electronic Arts.

She formed Motive Studios for Electronic Arts and worked with Visceral Games, another Electronic Arts game studio. She was working on an untitled single player Star Wars video game, but Visceral Games closed in 2017 and the project has been canceled since then.

According to Google, 100 studios around the world have already received development hardware for Stadia. There are over 1,000 engineers and creatives working on Stadia games or ports right now.

Stadia uses a custom made AMD GPU and a Linux operating system. Games that are already compatible with Linux should be easy to port to Stadia. But there might be more work for studios focused on Windows games.

According to Stadia.dev, the cloud instance runs on Debian and features Vulkan. The machine runs an x86 CPU with a “custom AMD GPU with HBM2 memory and 56 compute units capable of 10.7 teraflops”. That sounds a lot like the AMD Radeon RX Vega 56, a relatively powerful GPU but something not as powerful as what you can find in high-end gaming PCs today.

Google will be running a program called Stadia Partners to help third-party developers understand this new platform.

The tech industry is volatile and Backstage Capital founder and Managing Partner Arlan Hamilton is experiencing that firsthand. Last May, Hamilton announced the launch of a $36 million fund to invest in as many women of color as possible. But the $36 million fund, which would mark Backstage’s second fund, has yet to close, as Axios reported this morning.

The reason why it’s taken so long, according to Axios, is that “two separate anchors fell through and we have spoken to numerous investors who want to wait til we have more traction.” At one point, Backstage was in talks with The Alliance, previously run by Carlos Ghosn, two weeks before his arrest. They were discussing a $5 million operations deal.

In some tweets this morning, Hamilton pointed out that since the firm’s inception in 2015, it’s invested in more than 100 companies. In 2018 alone, Backstage Capital portfolio companies raised more than $50 million in additional funding and launched an accelerator to four cities.

Backstage Capital closed its first $5 million fund at the end of 2016, which included everything from a mobile app that take pictures and turns them into nail art (NailSnaps) to a woman working on a drone that can stop bullets mid-air (Astral AR). Backstage Capital’s limited partners include people like Slack CEO Stewart Butterfield, Pathbrite former CEO and founder Heather Hiles and Box CEO Aaron Levie. That fund, Hamilton previously told TechCrunch, took about 16 months to close. She expected this fund to close in about a tenth of that time.

Currently, Hamilton is focused on the accelerator, Backstage Studio, but also made clear that she has not stopped fundraising for the $36 million fund. Hamilton did, however, confirm that Backstage had to lay off a couple of people and has “never had enough capital to reach our aspirations,” she said in a direct message to Dan Primack of Axios.

“We pay the bills with investment money into Backstage Studio and revenue from corporate sponsorships,” Hamilton said. “We raised $2mil the past 14 months and generated $1mil in rev. We grew a ton in 2018 and shipped even more. We did with $3mil what it would have taken others 2-3x that amount we believe.”

Google unveiled its new Stadia game streaming service today and while we’re still waiting to hear more details about how (and when) consumers will be able to access the service, it’s clear that Google clearly kept game streamers in mind when it designed this new service. Indeed, it’s the first modern gaming platform that was clearly designed from the ground up with game streamers in mind.

During its presentation today, Google almost spent more time talking about streamers than the games that will be available on the service. Since Google owns YouTube, that’s no surprise. But it’s worth remembering that while YouTube surely has its own dedicated streamer community, it lags well behind Amazon’s Twitch . Stadia could change that.

So here is what Google is doing for streamers: Google’s own Stadia controller will have a button that lets you stream right to YouTube (though it’s unclear if you’ll be able to bring in a feed from your webcam, too). In Youtube, streamers will be able to give watchers a direct link to the game on Stadia — and there’ll probably be some revenue share here. But the really innovative piece here is that streamers will be also able to create a queue for viewers who want to play with the streamer. And that’s to a feature called State Share, sharing clips to YouTube will also be incredibly easy.

Since all the tech is managed by Google and runs in the cloud, there’s no additional hardware or software to buy and manage for streamers.

“Stadia is focused on empowering both creators and viewers to achieve new heights by breaking barriers of content capture and creating unique ways to engage with and grow a creator’s audience,” Google’s Ryan Wyatt said. “Established creators will have new ways to engage and monetize on YouTube with Stadia’s features. And with aspiring creators, we’re going to break down the barrier of entry in capturing content by giving you the ability to highlight, live stream and capture directly from Stadia.”

The last part is important, given how it takes a bit of work to create a working streaming setup. Of course, that’ll mean you’ll see lots of low-quality stream on YouTube once Stadia goes live, but there’ll surely be some new talent that’ll be discovered this way, too.

It’s worth remembering that Stadia is a new platform — this isn’t just a way to play your existing library in the cloud. Developers will have to specifically port games to it. With that, Google is able to add these features right into Stadia, making it the first platform that is able to do so from the outset.

If you’ve ever tried Pandora, you know the basic deal. The service offers a more passive form of music discovery than other streaming services, encouraging users to let algorithms do most of the heavy lifting, as radio stations are generated based on thumbs up and down.

Today, the company puts a new spin on the stalwart service, offering a half-dozen distinct “Modes.” Standard Pandora is still the core here (and there’s always the “My Station” mode for those who want to stick with Pandora Classic), but each offers a different way to interact with the stations.

Here’s the break down, per Pandora,

1. My Station: The classic station experience you know and love.

2. Crowd Faves: You’ll hear the most thumbed-up songs by other listeners within that station

3. Deep Cuts: You’ll go deeper into the catalog of that station artist/genre.

4. Discovery: You’ll hear more artists who don’t usually play on that station.

5. Newly Released: You’ll hear the newest releases from that station artist/genre.

6. Artist Only: You’ll hear only songs by that station artist.

As ever, the thumbs up and thumbs down icons serve as the basis of the customized curation. That limited interaction helps each of the stations figure out where to go, within the above outlined parameters.

The feature, which launches today, is designed to encourage users to “‘lea[n] in’ to the experience instead of just ‘leaning back,’” according to the company.

Of course, the move can just add easily been seen as a response to a changing music landscape. Believe it or not, it’s been 19 years since the company was founded, and these last several have seen a big shift toward streaming services like Spotify and Apple Music.

Modes is an interesting attempt to have it both ways, serving Pandora’s loyal base of just below 70 million users, while addressing increased interest in customizing the user experience.

Facebook and the ACLU issued a joint statement this morning, noting that they have settled a class action job discrimination suit. The ACLU filed the suit in September, along with Outten & Golden LLC and the Communications Workers of America, alleging that Facebook allowed employers to target ads based on categories like race, national origin, age and gender.

The initial charges were filed on behalf of female workers who alleged they were not served up employment opportunities based on gender. Obviously all of that’s against all sort of federal, state and local laws, including, notably, section VII of the Civil Rights Act of 1964.

Today’s announcement finds Facebook implementing “sweeping changes” to its advertising platform in order to address these substantial concerns. The company outlined a laundry list of “far-reaching changes and steps,” including the development of a separate ad portal to handle topics like housing, employment and credit (HEC) for Facebook, Instagram and Facebook Messenger.

Targeting based on gender, age and race will not be allowed within the confines of the new system. Ditto for the company’s Lookalike Audience tool, which is similarly designed to target customers based on things like gender, age, religious views and the like.

“Civil rights leaders and experts – including members of the Congressional Black Caucus, the Congressional Hispanic Caucus, the Congressional Asian Pacific American Caucus, and Laura Murphy, the highly respected civil rights leader who is overseeing the Facebook civil rights audit – have also raised valid concerns about this issue,” Sheryl Sandberg wrote in a blog post tied to the announcement. “We take their concerns seriously and, as part of our civil rights audit, engaged the noted civil rights law firm Relman, Dane & Colfax to review our ads tools and help us understand what more we could do to guard against misuse.”

In addition to the above portal, Facebook will be creating a one-stop site where users can search amongst all job listings, independent of how ads are served up. The company has also promised to offer up “educational materials to advertisers about these new anti-discrimination measures. Facebook will also be meeting regularly with the suit’s plaintiffs to assure that it is continuing to meet all of the parameters of the settlement.

“As the internet — and platforms like Facebook — play an increasing role in connecting us all to information related to economic opportunities, it’s crucial that micro-targeting not be used to exclude groups that already face discrimination,” ACLU senior staff attorney Galen Sherwin said in the joint statement. “We are pleased Facebook has agreed to take meaningful steps to ensure that discriminatory advertising practices are not given new life in the digital era, and we expect other tech companies to follow Facebook’s lead.”

Further details of the settlement haven’t been disclosed by either party, but the update is clearly a bit of a consolatory move from a company that’s landed itself on the wrong side of a large lawsuit. Even so, it ought to be regarded as a positive outcome for a problematic product offering.

Google’s new Stadia game streaming service may be great for people who don’t own a powerful PC or console, but those games have to run somewhere — specifically, in a Google datacenter. And the hardware they run on will be largely powered by a custom graphics card from AMD that, on paper at least, puts the PS4 Pro and Xbox One X to shame.

In its presentation at GDC today, Google touted its partnership with AMD, which created the unnamed card for integration with its Stadia “instances,” the Linux-based computers that will actually run the games players stream.

The actual specs shown on screen don’t mean much to hardware fiends — teraflops are how supercomputers are rated, not graphics cards, which have sophisticated custom units and pathways for different effects and calculations.

So although it’s impressive that this one produces 10.7 TF, more than the PS4 Pro and Xbox One X combined, unless you’re using this hardware for sequential logic operations, it’s more important to know its actual game-specific chops. Of course, I’m sure the GPU is also quite competent there — it has to handle both running a modern game at 4K and 60 FPS and may have some extra load from streaming the video as well.

The 16 GB of “total” RAM is also suspicious. The way it’s phrased suggests it may be inclusive of video RAM, i.e. that in the graphics card, which makes the most likely combo 4 GB in the card and 12 for the system. That’s just speculation, though.

Interestingly, shortly after announcing the single-GPU system that the Stadia will use, a multi-GPU instance was teased in order to show the possibilities of fluid dynamics in games. It’s unclear how this would come into play — perhaps it’s necessary for 4K instances of some games, or would be an upsell for performance-obsessed players.

Whatever the specifics, this gives an idea of what kind of power and cost the Stadia backend infrastructure is going to necessitate. Every concurrent player will require a dedicated instance, which at the scales Google hopes for means at least a couple hundred thousand of these things, increasing to millions if it takes off. Call the bill of materials $150 plus $50 a year in maintenance and upgrades (this is all just napkin math) and you’re easily looking at a hundred million dollar bottom line, probably way more.

As of this writing (the presentation is ongoing) there’s still no mention of how Google plans to make money from this whole… situation. Show ads every 10 minutes of play? Take a cut of game sales? Publishers pay Google to make instant games available? Perhaps, as with plenty of other Google products, they’ll just release it first and figure out how to make money later. That works sometimes.

Google’s Stadia game-streaming platform works on a number of screens, but Google wants to give you a controller to take on all of these displays. Sure, you can use your regular keyboard and mouse or a third-party controller but Google has also opted to showcasing their own Stadia controller.

It’s not just a pretty look, Google’s controller connects to WiFi directly rather than your device to reduce latency in input. You’ll also see a couple of other interesting things on the controller, namely a capture button that lets gamers share their experiences to YouTube or their friends.

That’s not necessarily unique among other game controllers, but a Google Assistant button, which the controller also has, lets users make voice commands for special in-game features and general requests.

The controller also seems to have a built-in easter egg on the bottom…

Updating

Onstage at GDC, Google CEO Sundar Pichai announced the company’s latest big initiative, taking on the entire gaming industry with a live-streaming service called Stadia.

The service will let gamers leave their hefty GPUs and expensive systems behind. Pichai says that the service can be used on devices with a chrome browser and an internet connection. To Google that means Stadia will launch on desktops, laptops, TVs, tablets and phones.

At launch Acadia will support 4K at 60fps with surround sound and HDR. They say they are also working on 8K 120fps support in “the future.”

Google working on new gaming efforts here isn’t exactly a surprise. Last fall, the company launched a pilot program of sorts with Project Stream, allowing gamers to stream gameplay of Assassins Creed Odyssey in their internet browser at 1080p in 60fps.

Google is an underdog here, though the company obviously has a massive mobile gaming platform with Android, when it comes to desktop gaming, the tech giant doesn’t have a ton of background aside from their sporadic efforts on PC virtual reality. One would imagine that Microsoft or Valve are the best positioned here, but Google has some pretty heavy mindshare with YouTube Gaming and some pretty heavy infrastructure with Google Cloud.

Viewers will be able to move from YouTube directly into gameplay without any downloads. Google says this can be done in as little as 5 seconds.

Google certainly has ample reason to want gamers to move away from Windows PCs to systems with more lightweight onboard compute. The idea of running something heavier than minesweeper-equivalents on a Chromebook can be pretty powerful.

Updating

Glossier, known for its flagship line of barely there beauty products, has landed a $100 million Series D led by Sequoia Capital. The round values Emily Weiss’ business at a whopping $1.2 billion, fully cementing the company as a startup “unicorn” and tripling the valuation it garnered with a $52 million Series C in 2018.

News of the round was first reported by The Wall Street Journal and later confirmed by Glossier.

“We are building an entirely new kind of beauty company: one that owns the distribution channel and makes customers our stakeholders,” founder and chief executive officer Emily Weiss said in a statement.

As part of the round, which included support from newcomers Tiger Global Management and Spark Capital and existing investors Forerunner Ventures, Thrive Capital, IVP and Index Ventures, Glossier has hired Vanessa Wittman as its chief financial officer. Wittman previously held the same role at Oath and Dropbox. She replaces Henry Davis, who left the direct-to-consumer makeup brand in late 2018. Other recent additions include Edith Chen, Glossier’s new vice president of supply chain operations, and Nick DeAngelo, vice president of operations.

To date, New York-based Glossier has brought in nearly $200 million in venture capital investment, making it one of the most well-funded privately held beauty businesses. What’s next for the company? Weiss tells The WSJ an initial public offering isn’t out of the question, but didn’t provide a timeline. It’s been about five years since Glossier went from blog to business; it still has plenty of time before investors are pushing for an IPO.

Since it launched as a beauty blog in 2010, Glossier has grown into a 200-person business with $100 million in annual revenue in 2018. It has established two brick-and-mortar shops and expanded from au naturel makeup to “dialed-up extras” fit for the Instagram crowd. The recent launch of its first spin-off brand, Glossier Play, hints at a future where Glossier is a multi-brand beauty empire competing with the likes of Ulta and Estée Lauder.

Makeup is a huge and growing industry venture capitalists have been sleeping on. Megan Quinn, a general partner at Spark Capital, who led the round in Glossier on the firm’s behalf, says online beauty sales are expected to reach $120 billion by 2024. She expects Glossier to win the beauty market as a result of its intimate connection with customers, word of mouth customer acquisition channel and community-building tactics.

“To say that [Weiss] is a force of nature obfuscates her true superpower: she is a fantastic listener,” Quinn writes in a blog post. “By weaving her unique point of view with the feedback loops of her community, she has built a platform to power additional brands that respond to her customer’s needs. More importantly, she has built a world-class team of product designers, supply chain experts, marketing muscle, and arguably one of the largest engineering teams in beauty to make it happen.”