🎵 TikTok comes for YouTube's kids
Hey Snackers,
Topping the list of problems not on our minds right now: how to take a selfie with friends who aren't in the same room as you. In case anyone was worried, Apple just snagged a patent for "synthetic group selfie" tech — the socially distanced selfie is coming.
The Nasdaq crossed 10K for the first time ever — in other news, the US economy is officially in a recession. From February to April, 3.3M business owners shut their doors — over 3X more businesses were lost in 3 months than during the entire Great Recession__. Minority and immigrant-owned businesses were hit hardest.
Kids spend almost as much time on TikTok as YouTube: the Battle for Gen Z's Attention
Missing Hey Arnold and Dexter's Laboratory... Instead of counting sheep to fall asleep, kids are counting TikTok dance moves. Digital safety company Qustodio collected data from 60K families with kids ages 4-15 in the US, UK, and Spain. Qustodio found that kids spend:
- 85 minutes/day watching YouTube: The video OG boasts 69% of US kids, 74% of UK kids, and 88% of Spanish kids as users — they're watching 2X as many YouTube vids/day as they did in 2016.
- 80 minutes/day watching TikTok: The Chinese short video app that exploded in popularity had 16.5% of US kids hooked in February. And engagement is intense: TikTok doubled kids’ social app use in 2019 and doubled their screen time in 2020.
- Lockdown jump: Closed schools and no playdates led to a surge — in mid-April, kids watched 97 minutes/day of YouTube and 95 minutes/day of TikTok (and parents had 192 minutes of peace).
Winning the tech trifecta... That's growth, engagement, and profits. While YouTube is winning on sheer numbers of kids, TikTok's almost got it beat on engagement — and it's growing fast, with the most quarterly downloads of any app ever. Plus, its parent ByteDance reportedly turned a $3B profit last year.
It's the battle of the attention spans... Kids are watching waaayy more videos in 80 minutes on TikTok than in 85 on YouTube. While both platforms are mostly user-generated, YouTube has a tough challenge in the battle for Gen Z's attention:
- Millennials (24-39): Grew up with Nickelodeon, Cartoon Network and Disney TV shows (episodes around 20 minutes long).
- 1st Wave Gen Z (16-23): Grew up with more YouTube videos (around 12 minutes long, on average).
- 2nd Wave Gen Z (1-15) — We're calling them "Gen T" now for TikTok: Growing up with short-form mobile content embodied by TikTok, whose videos are just 16 seconds long on average.
Restoration Hardware triples down on the brick-and-mortar experience (picture hotels and yachts)
When you can't afford the WeWork... Cruise out the day on a Chamberlain Velvet Sofa in an RH store, where the rustic yet sleekly modern decor will inspire your every PowerPoint. While the whole economy seems to move online, the upscale home-furnishing company (formerly known as Restoration Hardware) is doubling down aggressively on its brick-and-mortar game:
- Hotels: RH Guesthouses will be the company's first foray into the hotel industry (suite comes with RH chaise).
- Residences: Pre-furnished homes and condos will be RH's first experiment in the North American housing market.
- Yachts: RH will also be offering a yacht named "RH3" to charter for well-furnished Caribbean and Mediterranean getaways (casual).
All about the "lifestyle branding"... RH CEO Gary Friedman believes it can "make the climb" to the top of the luxury mountain by embodying a luxe lifestyle through aggressively physical experiences:
- RH already has its Galleries, impressive palaces in metropolitan hubs like LA and NYC that provide more of a wow-factor than a shopping trip.
- The new brick-and-mortar expansions are all part of Friedman's plan to create "an ecosystem of products, places, services and spaces that elevate the RH brand."
Bold CEOs make contrarian bets... With shopping already heading online 2 years ago, RH put its faith (and $$$) behind offline experiences — it dropped $50M on a huge NYC flagship store complete with a rooftop bar. And now while the corona-conomy accelerates the online push, RH is going harder than ever on physical locations. TBD whether it'll compete in the new market of stays and experiences. RH's CEO: "This is a time to be defined by our vision, not by a virus.”
IBM drops its facial recognition program — it thinks it's a weapon, not a tool
When Facebook knows everyone in the pic... (without you even tagging them). Facial recognition is a relatively hot field with potentially big profits to be made by the companies who develop, sell, and use it in their products. But one major player just ditched the tech on moral grounds:
- IBM is dropping its facial recognition business — it'll stop selling, developing, and researching the creepy/sophisticated tech, because it thinks it could be used as a weapon for mass surveillance and racial profiling.
- In a letter to Congress, IBM CEO Arvind Krishna said we should reevaluate how facial recognition tech is used by law enforcement agencies (and if it should be used at all).
- Amazon is one major tech company that sells facial recognition software to law enforcement through its product, "Rekognition" (creative).
Troubling data... Research suggests that many commercial facial recognition systems (IBM's included) have demonstrated bias across lines of age, race, and ethnicity. Then there's also the issue of privacy violations — but many don't think of those issues when unlocking their phones with their faces or tagging friends on FB.
Weapons deals are controversial — so are big tech deals now... Just like the knife you slice your avocado with could cut your finger, facial recognition tech could be (and is) used for a lot more than just unlocking iPhones: On a large scale, China’s 170M+ surveillance cameras use facial recognition to ID citizens out of crowds. Tech companies are increasingly dealing with the moral implications of their creations.
What else we’re Snackin’
- E-Bags: Instacart passes Walmart in the online grocery market, with a 57% market share compared to Walmart's 25%.
- Action: Hollywood will turn on its cameras on June 12th when film and TV production is set to resume in California (with health precautions).
- Vroomy: Shares of online used car seller Vroom more than doubled in value after they started trading on yesterday.
- Confused: The World Health Organization said asymptomatic spread of COVID-19 is "very rare," then clarified that much is still unknown.
- Blimey: Goldman Sachs had to close its Marcus savings business to new UK clients after deposits surged near to regulatory limits.
🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.
Wednesday
- Fed Chairman Jerome Powell holds a press conference
Disclosure: Authors of this Snacks own shares of Alphabet and Amazon.
ID: