Lab Weekly — 05/17/2024

AI updates from Google and OpenAI, Plus, the latest news on TikTok, Netflix, Uber, and more

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AI Arms Race Enters New Phase of Scale and Multimodality

What the latest updates from OpenAI and Google tell us about the state of consumer-facing AI

In case you missed it…

News from the 2024 NewFronts

This year, the focus for digital advertisers was on the impact of generative AI, with some additional emphasis on emerging channels like connected TV and retail media networks. Here’s an aggregated recap of the various trends and must-know announcements coming out this year’s NewFronts presentations.

The Rise of Video Podcasts

The recent surge of interest in podcasts on YouTube has made it the top platform for podcast consumption in the U.S., overtaking both Apple Podcasts and Spotify. Here is what the seemingly paradoxical format tells us about the state of the podcasting industry

Meta’s AI & VR Strategies Are Aligning At Last

Meta has had a busy fortnight between launching the Llama 3 models and opening up its VR platform Horizon OS to third-party manufacturers, to bringing Meta AI to its smart glasses. At last, Meta is aligning its VR strategy to its open approach to AI, and it paints a fuller picture of the type of long game that Zuckerberg is playing.

TikTok Is Testing AI-Generated Search Results [The Verge]

It’s interesting to see TikTok leveraging the habits of its younger user base, who are already using the app as a search engine. This move caters directly to their needs and preferences, positioning TikTok as a convenient source of information. By testing features like “AI Smart Search” and “search highlights,” TikTok is strategically enhancing its search functionality to better serve as an informational tool alongside its entertainment offerings. For TikTok, it’s just another way to keep users within the app, reducing the need to switch to traditional search engines like Google for basic inquiries.

The distinction between AI-generated “search highlights” and other top-result snippets that are not labeled as AI-generated raises questions about transparency and the sources of these non-AI summaries. The lack of clarity on whether these summaries are aggregating video content on TikTok or pulling from external databases can be a point of contention for users concerned about the accuracy and reliability of the information provided.

In the context of its impending U.S. ban, this move can be interpreted as a strategic maneuver to solidify its position in the market. By diversifying its functions and becoming a more integral part of users’ digital habits, TikTok is attempting to make itself indispensable, thereby raising the potential backlash and political cost of a ban.

However, the lack of transparency around the source of information in non-AI-generated search results could backfire, especially in the context of heightened scrutiny. If users start to doubt the reliability of the information on the platform, it could weaken TikTok’s position rather than strengthen it.

Related: TikTok is testing 60-minute videos, which would let media companies post full TV show episodes [TechCrunch]; Meta is testing an AI-powered search bar in Instagram [TechCrunch]

Netflix To Bring Its Ad Tech In-House [Ad Week]

At its first-ever in-person upfront event on Wednesday, Netflix announced it will launch its own ad platform later this year. Once that’s up and running, it’d end its partnership with Microsoft for the ad technology that has been powering the streamer’s cheaper ad-supported tiers.

This move came at a time when Netflix is growing increasingly confident of its ad-supported tiers. The company shared that its ad-supported subscription plan has now hit 40 million users worldwide. In regions where the ad tier is available, over 40% of new Netflix sign-ups are opting for the cheaper ad-supported plan. For context, the streaming giant now has 270 million total subscribers across all its pricing tiers.

In light of the building momentum, it is perhaps unsurprising that Netflix now wants to cut off the middle-man and bring its ad-tech in house. After all, it’d give Netflix greater control over its advertising ecosystem, from targeting precision to data management. Netflix’s move to in-house ad-tech is also indicative of its broader ambitions to expand its ad revenue streams.

Related: Netflix strikes a three-year deal with the NFL to stream two new Christmas Day games this year [The Hollywood Reporter]; Comcast to launch Peacock, Netflix and Apple TV+ bundle [Variety]

Uber Takes On Instacart With Expanded Costco Partnership [Retail Dive]

Uber announced a slew of new features at its Go-Get 2024 event on Wednesday. This Costco partnership caught my eyes because it further expands Uber beyond a logistics/mobility company, but rather as a super bundle that now effectively includes a Costco membership. Costco on Uber Eats will be a “Costco on-demand” delivery service, available from select U.S. locations. Non-Costco members can also shop at Costco on UberEats, but items will be priced slightly higher than Costco members, who will also get 20% off an annual Uber One membership.

This deal is especially interesting coming on the heels of Uber’s recent partnership with grocery delivery service Instacart. For one, Uber is essentially positioning itself as an aggregator for last-mile grocery delivery, which ends up commodifying both Instacart and Costco as suppliers. Then again, the online grocery sector has been in a rut lately. After experiencing a surge in demand during the pandemic, many online grocery services have faced a slowdown as more consumers return to shopping in physical stores. Between Uber’s delivery services and Costco’s product offerings, a bundle may just drive more sustained engagement compared to standalone grocery delivery services.

Related: Uber introduced several new features on its annual “Go-Get” release day [Uber Newsroom]; Uber Shuttle lets you reserve up to five seats to or from an airport, concert or sporting event [Engadget]

Situational Awareness:

Android for Cars is getting new entertainment apps and more [Engadget]

Google also shared that there are now over 200 million cars on the road compatible with Android Auto. Cars are increasingly becoming a media room on wheels these days, and they are very streaming-ready now.

Reddit partners with OpenAI to bring content to ChatGPT to Reddit [Time Magazine]

A win-win deal for both parties involved — OpenAI gets to leverage the enormous amount of UGC on Reddit to train its CPT model, while Reddit gets to offer its users some new AI-based creative tools and grab some of OpenAI’s ad dollars.

Retro game emulator Delta is now №1 on the iOS charts [TechCrunch]

Apple’s recent decision to allow video game emulators on its App Store has sparked a surge of interest in playing and preserving classic games. Two more emulators, RetroArch and PPSSPP, arrived this week to let people play the classic games they grew up with on iPhones.

Disney-Fox-Warner sports streaming service reveals name and logo [Variety]

The success of Venu Sports heavily depends on its pricing, which we will hopefully find out soon ahead of its debut in the fall.

YouTube launches YouTube Select Creator Takeovers for top 1% creators [Variety]

This new feature will let advertisers buy out the inventory on channels representing the top 1% of YouTube content, which sounds great for a blitz-style targeted campaign timed to a cultural event or a major release.

• Nielsen‘s latest report says YouTube accounted for nearly 10% of all TV watch time in March. Moreover, Nielsen’s report found that digital/streaming was the only viewership category that grew year over year. It went up 12% from March 2023, while cable dropped 10% and broadcast dropped 4% in the same timeframe.
• The rapid growth of online retail media highlights the potential for physical stores as the next frontier for retail media. Per the latest eMarketer report, by 2028, in-store retail media spend will reach over $1 billion but will make up less than 1% of total omnichannel retail media ad spending.
• Insights into women in gaming are increasingly relevant in today’s video game industry. Out of the total online population, 72% of women play video games, compared to 81% for men, per Newzoo’s recent report on female gamers. Nearly half (44%) of female players play only on mobile platforms (exclusive mobile gaming is more popular among women than men).

If you find our insights valuable and would like to have a deeper conversation on technology and media innovations, or need to sound smarter in a client meeting or a pitch, please feel free to reach out to Chelsea Freitas, our VP of Strategy, at chelsea@ipglab.com.

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