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Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Thursday, we’re taking a closer look at Amazon’s newest smart TV partner and what the match-up says about competition in the TV platform space. Also: new metaverse stats, and some musings about the way AI will change our understanding of history.
Why Amazon’s new smart TV partnership is such a big deal
Amazon on Thursday announced a new hardware partnership with TCL, a longtime Google partner. The move marks an end to one of the ecommerce giant’s long-simmering feuds with a key rival in the smart TV space.
The Chinese consumer electronics company is introducing two new QLED smart TVs with screen sizes of 50” and 55”, powered by Amazon’s Fire TV OS in Germany, Italy, Spain, and the United Kingdom.
This partnership is a major win for Amazon, which had been looking to team up with TCL for years. The Chinese company was equally interested in making Fire TV devices, but it was prevented from doing so by Google.
- The problem: TCL is also making smart TVs powered by Google’s Android TV OS and has been selling phones running Android and Google apps.
- For years, Google used its Android licensing policies to prevent companies like TCL from using what it deems “incompatible” versions of Android, including Amazon’s Fire OS.
- These licensing agreements even applied across device categories: If TCL had built a Fire TV-powered smart TV, it would have risked losing the ability to ship Android phones running Google’s apps.
- These restrictions effectively barred Amazon from doing business with most smart TV makers, as I was first to report in early 2020.
TCL tried hard to overcome those restrictions, and the company even resorted to creative corporate shell games to do so.
- One of the loopholes in Google’s policies has long been that manufacturers can make devices running forked versions of Android if they do so on behalf of other companies — an acknowledgement of the fact that just a handful of Chinese manufacturers effectively make all of our electronics.
- TCL wanted to take advantage of that loophole, but also use the power of its own brand.
- To do so, the TV maker created a shell company called Fortune Genesis Corporation, which then licensed the TCL brand name from TCL to slap it onto TCL-made products.
- As a test balloon for this, Fortune Genesis announced a TCL-branded smart soundbar running Amazon’s Fire TV OS at CES 2020.
- However, Google saw right through those efforts and thoroughly reprimanded TCL. The company got cold feet, pulled the soundbar, and Fortune Genesis was never heard of again.
Now, TCL is openly making Fire TVs, and it’s not the only major consumer electronics maker to do so. Amazon announced similar partnerships with Hisense and Xiaomi, which both also make a variety of devices based on Google’s Android operating system, earlier this year.
- The reason for this change: Google and Amazon have quietly made peace on the issue, as I was able to exclusively report for Protocol today.
- Google has not changed its stance on Google compatibility requirements completely, but it did strike a deal with Amazon to allow the retailer to partner with these TV makers, I’ve been told by a source close to one of the parties involved in the agreement.
- This could give Google some reprieve from regulators, who have been investigating the company for anticompetitive behavior in the U.S., Europe, and Asia.
The agreement also comes at an opportune time for Amazon. Fire TV streaming adapters have been selling very well for years, but consumers are increasingly opting for smart TVs over dongles.
- Daniel Rausch, Amazon’s VP of entertainment devices, acknowledged as much during a briefing about the two new TCL Fire TVs this week, telling me, “TVs are now the fastest-growing part of the Fire TV business overall.”
- Rausch declined to comment on Amazon’s relationship with Google, but he did say that Fire TV has been having a bit of a moment as of late, to the point where Amazon has sold more than 150 million smart TVs and streaming adapters powered by the Fire TV OS worldwide.
- “We crossed the point where we have over 160 different television models globally that have incorporated Fire TV as their operating system,” Rausch said.
And with Google not blocking partnerships with Android device makers anymore, that number is only poised to grow.
— Janko Roettgers
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The metaverse is already here, sort of
Investors may be taking issue with Meta’s freewheeling metaverse spending, but that doesn’t stop ordinary people from embracing metaverse-like platforms en masse. That’s the gist of a new report from Michael Wolf’s Activate Consulting this week.
- Activate interviewed more than 3,000 consumers about their use of online games and metaverse platforms and found that 77% of gamers participated in metaverse-like non-gaming activities within video games in the past 12 months.
- These included watching movies, shows, and other videos (48%), socializing (47%), creating and customizing avatars (34%), and creating virtual places (24%).
- That’s good news for companies betting on developing metaverse platforms, but the monetization path for brands looking to hawk their products in the metaverse may be less clear. Only 18% of respondents said they have purchased physical goods in games over the past 12 months.
- As always, there’s a big gap between super users and ordinary folks: 81% of super users spent time in metaverse-ish games and platforms like Roblox, Fortnite, and VRChat in the past 12 months, while only 21% of all other respondents professed to having done so, according to a separate Activate survey.
- VR itself is still a small contributor to these trends, but headsets could turn out to be a bit of a gateway drug: Only 25% of headset owners told Activate that they bought their device for social interactions, but 43% ended up using it for that purpose.
- 55% of headset owners told Activate that they use the device at least once a week, but 47% of VR sessions last 15 minutes or less.
— Janko Roettgers
In other news
Spotify says Apple is sabotaging its audiobook store. Spotify wants to avoid Apple’s 30% App Store fees, but says doing so is cumbersome and subject to arbitrarily changed rules.
Activision Blizzard is running out of legal options. The publisher failed for a second time in trying to get a California sexual harassment lawsuit thrown out on a technicality.
YouTube revenue dropped 2% in Q3. A decline in YouTube advertising resulted in slowing growth for YouTube and Google parent company Alphabet.
More of CD Projekt Red’s grand Witcher ambitions revealed. The Polish studio behind the hit RPG said Wednesday it would remake the first game in the series using Epic’s Unreal Engine 5.
Spotify will raise subscription prices next year. The price increase comes after Apple and Google raised prices for their respective music subscription services.
Gamers are more prone to racism and sexism, according to a new study from nonprofit Take This. Researchers say their findings provide a link between “extreme behaviors” and how strongly someone identifies with gaming culture.
HaptX introduces a new portable haptic glove. The G1 gloves, which use pneumatics and microfluidics to reproduce the sensation of touch in VR, will cost $5,500 a pair and come with a backpack for portability.
Microsoft has reportedly canceled plans for a consumer AR headset. The future of its HoloLens enterprise AR headset also looks uncertain, according to The Wall Street Journal.
The end of history
A lot has been written recently about the future of AI and synthetic media. This week, filmmaker and archivist Rick Prelinger, who, among other things, is the founder of the Prelinger Archives, took to Twitter to tackle a different subject: What will AI do to our understanding of history?
“Generative AI will soon be everywhere, and will literally ‘make history’ by sampling existing images,” Prelinger wrote. “History will gain a certain glossiness. It will be expected to be in color, or colorized; to foreground individual faces; to be high-res and immersive.” This could lead to a backlash, he argued, with some seeking out the authenticity of original footage. “But by then the tacit rules of representation will have changed. Generative AI may be mocked, but its place will be firm, just as tabloid history has come to dominate historical TV docs.” The entire thread is well worth your time.
— Janko Roettgers
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Thoughts, questions, tips? Send them to entertainment@protocol.com. Enjoy your day, see you tomorrow.
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