Author: azeeadmin

As many as 1 in 5 people today are y off of someone’s else’s account when streaming video from Netflix, Hulu or Amazon Video, according to a new study from CordCutting.com. Of these, Netflix tends to be pirated for the longest period – 26 months, compared with 16 months for Amazon Prime Video, or 11 months for Hulu. That could be because Netflix freeloaders often mooch off their family instead of a friend – 48 percent use their parents’ login, while another 14 percent use their sister or brother’s credentials, the firm found.

At a base price of $7.99 per month (the study was performed before Netflix’s January 2019 price increase), freeloading users could save $207.74 over a 26 month period. At scale, these losses can add up.

The report estimates Netflix could be losing $192 million in monthly revenue from piracy – more than either Amazon or Hulu, at $45 million per month and $40 million per month, respectively.

Millennials, not surprisingly, account for much for much of the freeloading. They’re the largest demographic pirating Netflix (18%) and Hulu’s service (20%). But oddly, it was Baby Boomers who were more likely to borrow someone else’s account to access Amazon Prime Video.

 

There’s an argument that those who pirate would never be paying customers, so these aren’t true losses. It’s the same sort of thing that was said about Napster mp3 downloads back in the day, or about those pirating movies through The Pirate Bay. But there is some portion of the freeloading population that claims they would pay, if they lost access.

According to the study, 59.3 percent would pay for Netflix, or around 14 million people contributing at least $112 million in monthly revenue. 37.8 percent, or 2 million, said they’d pay for Hulu; and 27.6 percent, or 1 million people, said they’d pay for Prime Video.

Hulu, at least, has more recently tried to make its service more appealing to penny pinchers. At its new price – $5.99 per month, rolled out this week – it’s making it harder to justify freeloading.

Netflix, on the other hand, seems to know its value, and raised prices this year so its base plan is a dollar more at $8.99 per month, and its most popular plan has climbed to $12.99 per month.

The full study offers other details on cord cutting trends, including breakdowns by gender and details on who accounts are mooched from, among other things.

As many as 1 in 5 people today are y off of someone’s else’s account when streaming video from Netflix, Hulu or Amazon Video, according to a new study from CordCutting.com. Of these, Netflix tends to be pirated for the longest period – 26 months, compared with 16 months for Amazon Prime Video, or 11 months for Hulu. That could be because Netflix freeloaders often mooch off their family instead of a friend – 48 percent use their parents’ login, while another 14 percent use their sister or brother’s credentials, the firm found.

At a base price of $7.99 per month (the study was performed before Netflix’s January 2019 price increase), freeloading users could save $207.74 over a 26 month period. At scale, these losses can add up.

The report estimates Netflix could be losing $192 million in monthly revenue from piracy – more than either Amazon or Hulu, at $45 million per month and $40 million per month, respectively.

Millennials, not surprisingly, account for much for much of the freeloading. They’re the largest demographic pirating Netflix (18%) and Hulu’s service (20%). But oddly, it was Baby Boomers who were more likely to borrow someone else’s account to access Amazon Prime Video.

 

There’s an argument that those who pirate would never be paying customers, so these aren’t true losses. It’s the same sort of thing that was said about Napster mp3 downloads back in the day, or about those pirating movies through The Pirate Bay. But there is some portion of the freeloading population that claims they would pay, if they lost access.

According to the study, 59.3 percent would pay for Netflix, or around 14 million people contributing at least $112 million in monthly revenue. 37.8 percent, or 2 million, said they’d pay for Hulu; and 27.6 percent, or 1 million people, said they’d pay for Prime Video.

Hulu, at least, has more recently tried to make its service more appealing to penny pinchers. At its new price – $5.99 per month, rolled out this week – it’s making it harder to justify freeloading.

Netflix, on the other hand, seems to know its value, and raised prices this year so its base plan is a dollar more at $8.99 per month, and its most popular plan has climbed to $12.99 per month.

The full study offers other details on cord cutting trends, including breakdowns by gender and details on who accounts are mooched from, among other things.

We’ve still barely caught up with the Red Angel, whatever it is, but CBS just confirmed that Star Trek: Discovery will be coming back for a third season. Discovery will also add Michelle Paradise as a co-showrunner alongside Alex Kurtzman, making her the fifth showrunner to come aboard the Discovery in its relatively short tenure exploring the known universe.

“The massive success of Star Trek: Discovery‘s second season launch exceeded our expectations in both driving subscriber growth and generating a phenomenal response from Star Trek fans,” CBS All Access Executive Vice President Julie McNamara said. “With Alex Kurtzman and Michelle Paradise at the helm, we look forward to continuing Star Trek: Discovery‘s journey, growing the Star Trek franchise on CBS All Access and bringing fans new Star Trek stories for many years to come.”

We’re about halfway through Discovery’s second season, which is set to have 14 episodes. The show’s first season consisted of a handful of separate-ish story arcs, from Michael Burnham’s redemption to the Tardigrade drama and then on to the deeper, darker mad science and Terran Empire stuff. So far, Season 2 has drifted between a more episodic formula and the mystery of Spock, in what’s likely a season-spanning story arc, though honestly we’ll be happy with whatever happens as long as we don’t ever have to hear about the mycelial network again… ever.

While Discovery Season 2’s standalone adventure episodes are fluffier fun, the show’s willingness to plunge into the dark side of Starfleet keeps us coming back. That aspect of the show is apparently compelling enough that it’s even inspired a Discovery spin-off centered around Starfleet’s morally ambiguous black ops team Section 31 starring Discovery’s excellent Michelle Yeoh.

In the US, the new season of Star Trek: Discovery will continue its exclusive run on CBS All Access. That means fans of the latest iteration of the well-loved series will have to keep ponying up for yet another streaming service if they want to keep up with Burnham, Saru and Tilly as they navigate the vastness of space with only an intergalactic moral compass and the mycelial network (ugh) to guide them.

The “restaurant of the future” may elicit thoughts of a chrome diner with robot servers and an otherwise hefty amount of Tokyo futurist kitsch, but the fact is that the forthcoming sit-down dining experience may just end up looking a lot like ordering from a takeout app.

Presto is working with restaurants to update the 21st century dine-in experience, letting customers order and pay from their table with a tablet device while also providing hardware like wearable for servers so that they can be alerted when they are needed by customers.

The company announced today that they’ve raised $30 million in growth funding from Recruit Holdings and Romulus Capital. I2BF Global Ventures, EG Capital and Brainchild Holdings also participated in the raise. 

Considering how much online shopping has shaped commerce and apps like Instacart and Uber Eats are changing how we get food delivered to our houses, it’s a bit peculiar that physical restaurants with hundreds of locations have been so slow to shift the customer experience towards a greater reliance on tech.

Presto has launched partnerships with a number restaurant chains like Applebee’s, Red Lobster, Denny’s and Outback Steakhouse. These aren’t exactly mom-and pop locations, but Presto CEO Raj Suri says that these large restaurant groups are always looking to shift their weight to improve efficiencies across the board with new tech in a way that most small businesses just aren’t.

“I would say most restaurant groups are looking at how they can become more of a tech company… and adopt technology that could help them become more efficient,” CEO Raj Suri tells TechCrunch. “The industry is moving in this direction in a pretty significant way and it won’t be long before you see our technology in every restaurant.”

Beyond the ordering hardware, Presto’s new AI platform is aiming to give restaurants a more robust look at the state of each individual business and insights that help managers make decisions about staffing or deciding what food items to stock. The platform leverages a variety of data inputs so that things like nearby sporting events or weather patterns can be integrated into suggestions about how many servers should be staffed on a given Tuesday.

Presto is looking to supercharge their platform with the funding and rapidly expand their footprint. The 11-year-old company is now supporting 5,000 restaurant locations, but Suri says that Presto will double that number in 2019.

After four years and more than $2 billion in funding, OneWeb is ready to launch the first six satellites out of a planned constellation of 650 with which it plans to blanket the world in broadband. The Arianespace-operated Soyuz rocket will take off at 1:37 Pacific time from Guiana Space Center. You can watch it live at OneWeb’s site here.

OneWeb is one of several companies that aims to connect the world with a few hundred or thousand satellites, and certainly the most well-funded — SoftBank is the biggest investor, but Virgin Group, Coca Cola, Bharti Group, Qualcomm, and Airbus have all chipped in.

The company’s plan is to launch a total of 900 (650 at first) satellites to about a 1,100-kilometer low Earth orbit, from which it says it will be able to provide broadband to practically anywhere on Earth — anywhere you can put a base station, anyway. Much cheaper and better than existing satellite connectivity, which is expensive and slow.

Sound familiar? Of course SpaceX’s side project Starlink has similar ambitions, with an even greater number of satellites planned, and Swarm is aiming for a smaller constellation of smaller satellites for low-cost access. And Ubiquitilink just announced this week that its unique technology will remove the need for base stations and beam satellite connections directly to ordinary phones. And they’ve all launched satellites already!

OneWeb has faced numerous delays; the whole constellation was originally planned to be in place by the end of 2019, which is impossible at this point. But delays are the name of the game in ambitious space-based businesses, and OneWeb hasn’t been just procrastinating; it’s been girding itself for mass production, raising funds to set up launch contracts, and improving the satellites themselves. Its updated schedule, as it states in the mission summary: “OneWeb will begin customer demos in 2020 and provide global, 24-hour coverage to customers in 2021.”

At a reported cost of about a million dollars per satellite — twice the projected cost in 2015 — just building and testing the constellation will likely rub up against a billion dollars, and that’s not counting launch costs. But no one ever said it would be cheap. In fact, they probably said it would be unbelievably expensive. That’s why SoftBank and the other investors are “committing to a lot more capital,” as CEO Adrián Steckel told the Financial times last month.

The company also announced its first big deal with a telecom; Talia, which provides connectivity in Africa and the Middle East, signed on to use OneWeb’s services starting in 2021.

Soyuz launches could carry more than 30 of these satellites each, meaning it would take at least 20 to put the whole constellation in orbit. This first launch, however, only has six aboard; the other spots on board the mass launch system have dummy payloads to simulate how it should be going forward.

A OneWeb representative told me that this launch is meant to “verify the satellite design and validate the end to end system,” which is probably a good idea before sending up 600 more. That means OneWeb will be testing and tracking these six birds for the next few months and making sure the connection with ground stations and other aspects of the whole system are functioning properly.

Full payloads will start in the fall, after OneWeb opens its (much-delayed) production facility just outside Kennedy Space Center in Florida.

You can watch the launch at OneWeb’s site here.

Earlier this week, Microsoft used its MWC press conference to announce the next version of its HoloLens mixed reality visor. When it demoed the first version back in 2015, quite a few pundits assumed that the company had somehow faked the demos because this kind of real-time tracking and gesture recognition, combined with a relatively high-res display and packaged as a standalone device, had never been done before.

The fact that Microsoft took its sweet time to release this next version clearly shows that it wanted to gather feedback from its first set of users and developers who wrote apps for it. Microsoft also wasn’t under a lot of pressure to release an update, given that it never had a real competitor, with maybe the exception of Magic Leap, which is still in its very early days.

If version 1 came as a major surprise, then version 2, which I’ve now had time to try at MWC, is in many ways the natural evolution of the original promise: it’s more comfortable to wear, the field of view is large enough to feel more natural and the interaction model has been tweaked to make using HoloLens apps faster and easier. The hardware, too, has obviously been brought up to modern specs.

The first thing you’ll notice when you try the new version is that the initial calibration process that measures the distance between your eyes is now automatic. You essentially play a little game where you track a light in front of you and the new gaze recognition system takes care of setting up the calibration. Once that’s done, a hummingbird appears and lands on your hand. That’s also when you realize how much bigger the field of view has become. The bird is big enough that I’m pretty sure it wouldn’t have fit into the relatively small box that restricted the HoloLens 1’s field of view.

Don’t get me wrong, the experience is still not quite what Microsoft’s videos would have you believe. You are still very aware of the fact that there’s an abrupt end between where the AR images appear and where they end — but it’s far less jarring now that you have this bigger box. As far as the resolution goes, the specs are pretty much the same and there’s no practical difference that I noted.

The other thing you’ll notice right from the get-go is that Microsoft wasn’t kidding when it said that the new HoloLens would be far more comfortable to wear. The original felt clamped to your head (and for me, it had a tendency to slowly slide down my face) and you never quite forgot how heavy it was. The new one rests comfortably on your forehead, and, while you still essentially clamp it to your face by tightening a knob at the back, wearing it feels far more natural. The actual device is only a few grams lighter than the first edition, but with what I assume is a different weight distribution, it simply feels lighter. And if you wear glasses, then there’s no pressure on those anymore either because none of the weight rests on your nose.

Another major difference: The HoloLens 2 is now a real visor that you can flip open. So while you can obviously look through the lenses, you can now also easily move the HoloLens away from your face.

As you go through the process of trying the new HoloLens, you’ll sooner or later come across menus, buttons and sliders. In the first version, the hand and gesture tracking wasn’t quite there to let you interact with those naturally. You’d have to use special gestures for that. Now, you simply tap on them as if you were using a smartphone. And when there’s a slider, you grab it and move it. The new demo applications that Microsoft showed off at MWC make good use of all of these.

And there’s another difference: This time around, Microsoft is clearly stating that the HoloLens 2 is for business users, and all of the demos focused on those. Gone are the days of shooting aliens as they break through your walls or playing virtual Minecraft on a table in your living room. Indeed, as Lorraine Bardeen, general manager of Engineering, D365 Mixed Reality Apps at Microsoft told me, the company clearly encouraged a lot of experimentation when it launched the first version. By now, those use cases have become clear.

“When we first started with HoloLens, both internally and in the first wave when we talked about, that this was a completely wide open technology,” she said. “It’s like if you had asked 30 years ago, what could you do with a personal computer. We started by making a bunch of sample applications.” Those applications showed off what you could do in gaming, communications, commercial applications, etc.

“We started by saying that this could be and do anything,” she added. But as HoloLens 1 arrived in the hands of users, a couple of clusters emerged and it’s those that Microsoft wants to focus on for the best out-of-box experience. But it’s also worth noting that Microsoft has committed to keeping HoloLens an open ecosystem. So if game developers want to create games — or their own game stores — there’s nothing holding them back.

Even though it’s now a far more capable device, at $3,500, it’s not a consumer device, and I don’t expect we’ll see any AAA games ported to HoloLens 2 anytime soon.

Party planning can be fun if you have the time for it and happen to know what you’re doing. For the rest of us, it can be a daunting, time-consuming endeavor, one that requires visits to numerous websites, in-store visits when those products invariably don’t arrive in time, then return visits to pick up those last items that you could have sworn you’d thrown in your shopping cart but didn’t.

Enter Coterie, a nine-month-old, New York-based startup that was incubated with the help of the investment firm Female Founders Fund and that is assembling party kits that it’s delivering to customers’ doorsteps, for everything from birthday party to baby shower to friendversary get-togethers.

Just tell the site how many people you expect, whether it’s 10 or 50, then pick a kit. For example, the “lux” version of its “shine on” package — which could pretty much suit any occasion — comes with glittery plates, metallic flatware, confetti, votives, string lights, gold paper straws, dressed-up paper cups and napkins, and confetti. Oh, also, gold paper fans as either wall or table decoration.

In the near future, customers of the site will also be able to handpick their products,

It’s less expensive to assemble your own party items, particularly if they are made of paper. That “lux” kit for 50 guests costs $329, with free shipping. These are also mostly items that can’t be reused.

Still, many of Coterie’s products can be recycled and, more to the point for Coterie, the sum of their parts can make a party sparkle in photos. Indeed, ease aside, a big motivator for Coterie customers seemingly will be how their parties look on social media, though venture capitalist Laura Chau disagrees with this assessment,

In fact, Chau, an investor at Canaan Partners who wrote a check to Coterie on behalf of her firm — Coterie has raised $2.75 million altogether, including from Female Founders Fund — says the company more or less pokes fun at social media. As she explains it, Coterie is building a modern brand that gives consumers a “frictionless, elevated and more beautiful experience. But the goal is not to feed on the fake perfection of Instagram but to blow up the idea that such perfection is real.”

Either way, party kits done the right way looks like a big business opportunity to Chau, who says she sees dozens of direct-to-consumer brands every month that might be interesting but don’t fit the venture model because the market is too small or too crowded. With Coterie, she says, it’s a “massive category with only one legacy player – Party City. And no one likes Party City.”

This last part is true, though there are also other, legacy players that no one really likes, including Oriental Trading Company.

Canaan and Female Founders Fund also appear to be betting that the tailwinds from Instagram and Pinterest will drive consumer demand for this kind of product. Just look up “festive planning” on Pinterest to see what we mean.

Coterie was founded by Sarah Raffa and Linden Ellis, two early employees of another e-commerce brand, Daily Harvest. According to an interview with CNN earlier this week, the friends were determined to start their own company, bouncing ideas off the partners at Female Founders Fund until collectively striking on Coterie.

The service launched on Monday.

A watchlist of risky individuals and corporate entities owned by Dow Jones has been exposed, after a company with access to the database left it on a server without a password.

Bob Diachenko, an independent security researcher, found the Amazon Web Services-hosted Elasticsearch database exposing more than 2.4 million records of individuals or business entities.

The data, since secured, is the financial giant’s Watchlist database, which companies use as part of their risk and compliance efforts. Other financial companies, like Thomson Reuters, have their own databases of high-risk clients, politically exposed persons and terrorists — but have also been exposed over the years through separate security lapses.

A 2010-dated brochure billed the Dow Jones Watchlist as allowing customers to “easily and accurately identify high-risk clients with detailed, up-to-date profiles” on any individual or company in the database. At the time, the database had 650,000 entries, the brochure said.

That includes current and former politicians, individuals or companies under sanctions or convicted of high-profile financial crimes such as fraud, or anyone with links to terrorism. Many of those on the list include “special interest persons,” according to the records in the exposed database seen by TechCrunch.

Diachenko, who wrote up his findings, said the database was “indexed, tagged and searchable.”

Many financial institutions and government agencies use the database to approve or deny financing, or even in the shuttering of bank accounts, the BBC previously reported. Others have reported that it can take little or weak evidence to land someone on the watchlists.

The data is all collected from public sources, such as news articles and government filings. Many of the individual records were sourced from Dow Jones’ Factiva news archive, which ingests data from many news sources — including the Dow Jones-owned The Wall Street Journal.

But the very existence of a name, or the reason why a name exists in the database, is proprietary and closely guarded.

The records we saw vary wildly, but can include names, addresses, cities and their location, whether they are deceased or not and, in some cases, photographs. Diachenko also found dates of birth and genders. Each profile had extensive notes collected from Factiva and other sources.

One name found at random was Badruddin Haqqani, a commander in the Haqqani guerilla insurgent network in Afghanistan affiliated with the Taliban. In 2012, the U.S. Treasury imposed sanctions on Haqqani and others for their involvement in financing terrorism. He was killed in a U.S. drone strike in Pakistan in August 2012.

The database record on Haqqani, who was categorized under “sanctions list” and terror,” included (and condensed for clarity):

DOW JONES NOTES:
Killed in Pakistan's North Waziristan tribal area on 21-Aug-2012.

OFFICE OF FOREIGN ASSETS CONTROL (OFAC) NOTES:

Eye Color Brown; Hair Color Brown; Individual's Primary Language Pashto; Operational Commander of the Haqqani Network

EU NOTES:

Additional information from the narrative summary of reasons for listing provided by the Sanctions Committee:

Badruddin Haqqani is the operational commander for the Haqqani Network, a Taliban-affiliated group of militants that operates from North Waziristan Agency in the Federally Administered Tribal Areas of Pakistan. The Haqqani Network has been at the forefront of insurgent activity in Afghanistan, responsible for many high-profile attacks. The Haqqani Network's leadership consists of the three eldest sons of its founder Jalaluddin Haqqani, who joined Mullah Mohammed Omar's Taliban regime in the mid-1990s. Badruddin is the son of Jalaluddin and brother to Nasiruddin Haqqani and Sirajuddin Haqqani, as well as nephew of Khalil Ahmed Haqqani.

Badruddin helps lead Taliban associated insurgents and foreign fighters in attacks against targets in south- eastern Afghanistan. Badruddin sits on the Miram Shah shura of the Taliban, which has authority over Haqqani Network activities.

Badruddin is also believed to be in charge of kidnappings for the Haqqani Network. He has been responsible for the kidnapping of numerous Afghans and foreign nationals in the Afghanistan-Pakistan border region.

UN NOTES:

Other information: Operational commander of the Haqqani Network and member of the Taliban shura in Miram Shah. Has helped lead attacks against targets in southeastern Afghanistan. Son of Jalaluddin Haqqani (TI.H.40.01.). Brother of Sirajuddin Jallaloudine Haqqani (TI.H.144.07.) and Nasiruddin Haqqani (TI.H.146.10.). Nephew of Khalil Ahmed Haqqani (TI.H.150.11.). Reportedly deceased in late August 2012.

FEDERAL FINANCIAL MONITORING SERVICES NOTES:

Entities and individuals against whom there is evidence of involvement in terrorism.


Dow Jones spokesperson Sophie Bent said: “This dataset is part of our risk and compliance feed product, which is entirely derived from publicly available sources. At this time our review suggests this resulted from an authorized third party’s misconfiguration of an AWS server, and the data is no longer available.”

We asked Dow Jones specific questions, such as who the source of the data leak was and if the exposure would be reported to U.S. regulators and European data protection authorities, but the company would not comment on the record.

Two years ago, Dow Jones admitted a similar cloud storage misconfiguration exposed the names and contact information of 2.2 million customers, including subscribers of The Wall Street Journal. The company described the event as an “error.”

Compass, the real estate tech platform that is now worth $4.4 billion, has made an acquisition to give its agents a boost when it comes to looking for good leads on properties to sell. It is acquiring Contactually, an AI-based CRM platform designed specifically for the industry, which includes features like linking up a list of homes sold by a brokerage with records of sales in the area and other property indexes to determine which properties might be good targets to tap for future listings.

Contactually had already been powering Compass’s own CRM service that it launched last year so there is already a degree of integration between the two.

Terms of the deal are not being disclosed. Crunchbase notes that Contactually had raised around $18 million from VCs that included Rally Ventures, Grotech and Point Nine Capital, and it was last valued at around $30 million in 2016, according to PitchBook. From what I understand, the startup had strong penetration in the market so it’s likely that the price was a bit higher than this previous valuation.

The plan is to bring over all of Contactually’s team of 32 employees, led by Zvi Band, the co-founder and CEO, to integrate the company’s product into Compass’s platform completely. They will report to CTO Joseph Sirosh and head of product Eytan Seidman. It will also mean a bigger operation for Compass in Washington, DC, which is where Contactually had been based.

“The Contactually team has worked for the past 8 years to build a best-in-class CRM that aggregates relationships and automatically documents every touchpoint,” said Band in a statement “We are proud that our investment into machine learning has resulted in new features like Best Time to Email and other data-driven, follow-up recommendations which help agents be more effective in their day-to-day. After working extensively with the Compass team, it was apparent that joining forces would accelerate our missions of building the future of the industry.”

For the time being, customers who are already using the product — and a large number of real estate brokers and agents in the US already were, at prices that ranged from $59/month to $399/month depending on the level of service — will continue their contracts as before, for the time being.

I suspect that the longer-term plan, however, will be a little different: you have to wonder if agents who compete against Compass would be happy to use a service where their data is being processed by it, and for Compass itself, I would suspect that having this tech for itself would give it an edge over the others.

Compass, I understand from sources, is on track to make $2 billion in revenues in 2019 (its 2018 targets were $1 billion on $34 billion in property sales, and it had previously said it would be doubling that this year). Now in 100 cities, it’s come a long way from its founding in 2012 Ori Allon and Robert Reffkin.

The bigger picture beyond real estate is that, as with many other analog industries, those who are tackling them with tech-first approaches are sweeping up not only existing business, but in many cases helping the whole market to expand. Contactually, as a tool that can help source potential properties for sale that owners hadn’t previously considered putting on the market, could end up serving that very end for Compass.

The focus on using tech to storm into a legacy industry is also coming at an interesting time. As we’ve pointed out before, the housing market is predicted to cool this year, and that will put the squeeze on agents who do not have strong networks of clients and the tools to maximise whatever opportunities there are out there to list and sell properties.

The likes of Opendoor — which appears to be raising money and inching closer to Compass in terms of valuation — is also trying out a different model, which essentially involves becoming a middle part in the chain, buying properties from sellers and selling them on to buyers, to speed up the process and cut out some of the expenses for the end users. That approach underscores the fact that, while the infusion of technology is an inevitable trend, there will be multiple ways of applying that.

This appears to be Compass’s first full acquisition of a tech startup, although it has made partial acquihires in the past.

A significant FTC ruling issued today will see video app TikTok fined $5.7 million for violating U.S. children’s privacy laws, and will impact how the app works for kids under the age of 13. In an app update being released today, all users will need to verify their age, and the under 13 year-olds will be directed to a separate, more restricted in-app experience that protects their personal information and prevents them from publishing videos to TikTok.

In a bit of bad timing for the popular video app, the ruling comes on the same day that TikTok began promoting its new safety series designed to help keep its community informed of its privacy and safety tools.

The Federal Trade Commission had been looking into TikTok back when it was known as Musical.ly, and the ruling itself is a settlement with Musical.ly

The industry self-regulatory group Children’s Advertising Review Unit (CARU) had last spring referred Musical.ly to the FTC for violating U.S. children’s privacy law by collecting personal information for users under the age of 13. Musical.ly, technically, no longer exists. It was acquired by Chinese firm ByteDance in 2017. The app was then shut down mid-2018 while its user base was merged into TikTok. But its regulatory issues followed it to its new home.

According to the U.S. children’s privacy law COPPA, operators of apps and websites aimed at young users under the age of 13 can’t collect personal data like email addresses, IP addresses, geolocation information, or other identifiers without parental consent.

But the Musical.ly app required users to provide an email address, phone number, username, first and last name, a short biography, and a profile picture, says the FTC. The also app allowed users to interact with others by commenting on their videos and sending direct messages. And user accounts were public by default, which meant that a child’s profile bio, username, picture, and videos could be seen by other users, the FTC explained.

“The operators of Musical.ly—now known as TikTok—knew many children were using the app but they still failed to seek parental consent before collecting names, email addresses, and other personal information from users under the age of 13,” said FTC Chairman Joe Simons, in a statement. “This record penalty should be a reminder to all online services and websites that target children: We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law.”

COPPA law, of course, becomes a bit complex to implement for apps like TikTok that sit in a gray area between being oriented towards adults and being aimed at kids. Specifically, apps preferred by teens – like Snapchat, Instagram, YouTube and TikTok – are often clamored for by younger, under 13 kids and parents comply.

But some parents are caught off guard. The FTC says Musical.ly had fielded “thousands of complaints” from parents because their children under 13 had created Musical.ly accounts.

In addition to the $5.7 million fine, the FTC settlement with Musical.ly includes an agreement that will impact how the TikTok app operates.

It says that TikTok is now considered a “mixed audience” app, which means there needs to be an age-gate implemented on the app. Instead of locking out under 13 users from the TikTok service, younger users will be directed to a different in-app experience which restricts TikTok from collecting the personal information prohibited by COPPA.

TikTok is also complying by making significant changes to its app. It will now restrict under 13 kids from being able to film and publish their videos to the TikTok app.

Instead, the under 13 crowd will be able to like content and follow users. They will only be able to create and save videos to their device – not to the public TikTok network, or even just to their friends if they use the TikTok app with a private account.

As TikTok already has a large number of kids on its app, it will push an app update today that displays the new age gate to both new and existing user alike. Kids will then need to verify their birthday in order to directed to the appropriate experience.

This is not likely going to have a impact on how many kids use TikTok, however. Kids today already know to lie to age pop-ups so they can enter a restricted app. That’s how they set up accounts on Facebook, Instagram, Snapchat and elsewhere.

Developing….