Bose Headphones Sued Over Privacy Concerns, Plus Video Game Add-Ons Have People Hooked
TRIVIA QUESTION OF THE DAY
What is the fastest-growing occupation in the United States?
1) Nurse practitioners
2) Wind turbine service technicians
3) Full stack developers
Check your answer at the bottom of today’s issue
- Stocks fell on Wednesday, dragged down by oil’s biggest drop since March and disappointing earnings from tech giant IBM
- The dollar strengthened thanks to positive news from the Fed, while U.S. Treasuries fell as global anxiety lessened, persuading investors to move away from safe haven investments
Entrepreneurship With a Side of Activism
After last year’s election, Planned Parenthood received 300,000 donations—40 times the usual number—in just six weeks. Now, the nonprofit is partnering with a Silicon Valley startup accelerator to keep the resistance rolling.
500 Startups, the venture capital accelerator behind CreditKarma and recently-public Twilio, will sponsor a hackathon (and donate $100,000) to help improve Planned Parenthood’s new period tracking app.
What even is an accelerator, and why are nonprofits turning to them?
Accelerators are programs designed to give entrepreneurs access to funding, resources and often office space. In exchange, the accelerators receive a small of amount of equity in their company. Even the Brew is housed in one at NYU.
You may have heard of Y Combinator, through which tech giants like Reddit and Airbnb have grown. YC began taking on nonprofits in 2013, and when the American Civil Liberties Union saw a similar influx of donations, it partnered with YC like Planned Parenthood is with 500.
It’s a match made in private equity heaven
YC and 500 are far from alone. Fast Forward, an accelerator dedicated entirely to nonprofits, was established in 2014 with investors like Sal Khan of Khan Academy (aka the reason Brew Crew graduated college). It estimates the number of nonprofit startups has exploded in the last decade.
Nonprofits like Planned Parenthood need all the help they can get in the face of funding fights, and investors have a chance to use their portfolios to change the world. The tax write-offs definitely don’t hurt either!
PetSmart Takes a Bone
It’s a dog-eat-dog world out there—literally, in this case: PetSmart, the largest U.S. pet retailer, is buying e-commerce pet startup Chewy.com for $3.35 billion. It’s the biggest e-commerce acquisition ever, even bigger than Wal-Mart’s $3 billion Jet.com deal last year. Chewy can thank Americans’ $66.75 billion annual pet spending for its fast growth—the site reported almost $900 million in revenue for 2016, only its fifth year in operation. Woof!
Bose or Big Brother?
Luxury headphone maker Bose is being sued for collecting and sharing users’ listening habits with third party companies (like software company Segment). The plaintiff, Kyle Zak, is accusing Bose (and its $350 headphones) of using its Connect app to infringe on his basic privacies. How so?
Zak and his lawyers argue that audio selections reveal a ton about a person, whether it be Muslim prayers that suggest religious affiliation or LGBT podcasts that hint at sexual orientation.
And this is just the latest example in a slew of incidents involving “connected” devices:
- Last month, WeVibe, a “smart sex toy” maker, had to cough up $3.75 million for collecting information on how customers “use” its product. We’ll let your imagination handle the rest.
- In February, Vizio paid out $2.2 million for monitoring smart TV viewing habits without consent.
Privacy Should Be on Amazon’s Mind Too
Yesterday, Amazon opened its Lex platform to developers. What’s Lex, you ask? Lex is the same technology behind Alexa, Amazon’s virtual assistant that powers the Echo speakers. Amazon CTO Werner Vogels envisions a world in which everything can be controlled by your voice. But with great data, comes great responsibility.
What Else Is Happening…
- ‘Shop,’ an e-commerce platform for recreational marijuana, is launching today. Coincidence? Not at all
- American soda consumption has fallen for the 12th year in a row
- Axel Springer, one of the largest media companies in the world, has invested in Uber
- Walgreens’ takeover of Rite Aid might be in jeopardy because of the FTC
- Monday: United Airlines Earnings (+); Housing Market Index (-)
- Tuesday: Bank of America (+), Goldman Sachs (-), IBM (+/-), Johnson & Johnson (-), Netflix (+/-), Yahoo (+) Earnings
- Wednesday: American Express (+), BlackRock (+), CSX (+), eBay (+), Morgan Stanley (+), Qualcomm Earnings (+); Fed Beige Book (+)
- Thursday: Verizon, Visa Earnings; Weekly Jobless Claims
- Friday: GE, Morningstar Earnings; Existing Home Sales
Video Game Add-Ons Have People Hooked
The video game industry is killing it right now (but you probably already know that from reading the Brew). Sales are at an all-time high and don’t appear to be slowing down anytime soon thanks to the increasing popularity of “add ons”—things like expansion packs or in-game purchases that gamers buy after already owning a video game. And they’re making game developers a ton of money. Here’s the scoop:
- Global spending in 2016 on add-ons for PC and console games totaled $4.78 billion, almost twice as much as in 2012. That number is estimated hit over $6 billion by 2020. It seems freemium really isn’t free.
- Electronic Arts was the top beneficiary of this in-game revenue: the maker of FIFA and Madden recorded $1.2 billion in add-on revenue. $800 million of that came from the Ultimate Team sports game mode, which allows to users to create their own fantasy teams.
- Take-Two also benefited from gamers’ addictions to in-game purchases. The company’s “Battleborn” game flopped when it was released, but Take-Two’s revenue still rose 13% that quarter thanks to sales from digital add-ons for its Grand Theft Auto games.
- The one negative of these add-ons is people are playing old games longer than before. Activision Blizzard claimed that lower-than-expected sales for “Call of Duty: Infinite Warfare” were partly due to the fact that gamers were still playing “Black Ops III” because of the add-ons.
2) Wind turbine service technician is the fastest-growing occupation in the country. New data from the Bureau of Labor Statistics projects this job will the have the highest growth in employment between 2014 and 2024, with a median pay of $51,050 last year. Not too shabby.
Stat of the Day
$812 million: that’s roughly how much Warren Buffett lost yesterday thanks to IBM’s
(-4.94%) stock slide after a disappointing earnings report. Berkshire Hathaway owns about 8.6% of the tech giant’s total outstanding shares, which lost $8.40 per share Wednesday.
Question of the Day
Mr. Smith was killed on Sunday afternoon. The wife said she was reading a book. The butler said he was taking a shower. The chef said he was making breakfast. The maid said she was folding clothes, and the gardener said he was planting tomatoes. Who did it? (Answer)