Netflix needs lower prices to woo India

BANGALORE (Reuters) – Netflix Inc’s (NFLX.O) Indian operation drew attention in a surge of international subscribers in the third quarter, but it faces fierce competition and a difficult cultural conundrum to make inroads with the country’s more than one billion TV viewers.

FILE PHOTO: Traffic moves on a road past hoardings of Netflix’s new television series “Sacred Games” in Mumbai, India, July 11, 2018. REUTERS/Francis Mascarenhas

In a few short months, the world leader in video streaming has launched a blockbuster Mumbai-based crime thriller, been sued over comments about a former Indian Prime Minister and seen the future of two of its hit shows threatened by the #MeToo movement in India.

Helped by a roster that includes top-grossing movie franchise “Baahubali”, it has won fans among a young, tech savvy middle class and Chief Executive Officer Reed Hastings has said India could deliver the service’s next 100 million subscribers.

Local industry players, however, say Netflix’s strategy of pricing close to rates it charges in developed markets will see it struggle against domestic competitors like 21st Century Fox-backed Hotstar and one of the country’s top satellite TV providers, Tata Sky – a joint venture between the Tata Group and 21st Century Fox.

Amazon, with a trove of original Indian content like crime drama “Breathe”, offers movies and shows free to members of its Prime service.

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“With the existing model that we have, the prices that we’re at, we’ve got a long runway still ahead of us,” Netflix chief product officer, Greg Peters, said in a video interview after Tuesday’s third-quarter results.

“Now we’ll experiment with other pricing models, not only for India, but around the world that will allow us to broaden access by providing a pricing tier that sits below our current lowest tier. We’ll see how that does in terms of being able to accelerate our growth.”

The streaming giant arrived in India at the beginning of last year. It has a library of local content comparable to rivals and scored a big hit in July with the release of “Sacred Games”, a hard-boiled thriller built around action star Saif Ali Khan.

Like other U.S. entertainment companies, it has identified the need to create local content as important in winning viewers in the big emerging markets likely to dominate growth over the next decade.

But it has run into trouble, however, with the Bollywood studio that produced “Sacred Games” disbanding earlier this month in a cloud of sexual harassment allegations against one of its partners, and the show’s lead writer, Varun Grover.

Grover has publicly denied here these claims and rather than renewing for a second series, Netflix said earlier this week it was evaluating its options on the show.

At a time when India’s average per capita income is one tenth of the United States’, the service’s monthly fees are almost identical – 500 rupees ($6.80) for a basic plan, 650 ($8.85) for a standard plan and 800 rupees ($11) for premium.

Hotstar in comparison offers its premium streaming service, including “Game of Thrones” and English Premier League soccer, at 999 rupees for the whole year.

None of the companies mentioned in this report provide subscriber numbers for the Indian market, but media executives say Netflix’s numbers are probably still less than a million.

One analyst asked Hastings on Tuesday how much will Netflix have to tweak the model to achieve success.

“We’ll go from expanding from English to Hindi to many more languages to more pricing options, more bundling, all of those things are possible,” he said.

“There are over 300 million … households and almost twice that in mobile phone subs. We’ll take it a million at a time and figure out how to expand the market as we grow.”

Reporting by Sonam Rai and Vibhuti Sharma in Bengaluru; Sankalp Phartiyal and Shilpa Jamkhandikar in Mumbai; writing by Patrick Graham; Editing by Bernard Orr

Exclusive: Russian high tech project flounders after U.S. sanctions

MOSCOW (Reuters) – U.S. sanctions targeting Russia’s nascent high tech industry have caused a Russian microchip company significant financial woes and delayed the launch of an initiative meant to produce substitutes for Western products, the firm’s owner said.

FILE PHOTO: Russian Prime Minister Dmitry Medvedev visits a plant of Russian microchip company Angstrem-T in Zelenograd near Moscow, Russia August 3, 2016. Sputnik/Dmitry Astakhov/Pool via REUTERS

President Vladimir Putin has stressed the need to develop Russia’s domestic tech industry to make it less dependent on Western equipment. But Moscow’s efforts to manufacture Russian microchips and other high tech products have been thwarted by U.S. sanctions against a string of Russian tech companies.

Angstrem-T, which makes semi-conductors, has accumulated significant debts and is set to be taken over by state development bank VEB after failing to reimburse an 815-million-euro ($944.75 million) loan dating back to 2008, said Leonid Reiman, chairman of the company’s board of directors.

Reiman, Russia’s former minister of communications and information technologies, said the company’s inability to reimburse its debt was in part tied to U.S. restrictions on the import of dual-use technologies and its addition to U.S. Treasury sanctions in 2016.

The U.S. moves were prompted by Russia’s annexation of Ukraine’s Crimean peninsula in 2014 and its support for separatist rebels in eastern Ukraine. It has imposed further sanctions against Russia since 2016 over other issues.

Prior to the sanctions Angstrem-T purchased most of its equipment from U.S. multinational firm Advanced Micro Devices and bought a license from IBM to produce chips.

The company is heavily reliant on U.S. products, but the sanctions now bar it from doing business with U.S. firms.

“Although we initially received the (U.S.) State Department’s consent for this project and the delivery of the technology here, the sanctions caused the deadlines for its completion to be drawn out,” Reiman told Reuters.

“The factory is working, the products are being produced, but the question of procurement remains.”

FILE PHOTO: Russian Prime Minister Dmitry Medvedev visits a plant of Russian microchip company Angstrem-T in Zelenograd near Moscow, Russia August 3, 2016. Sputnik/Dmitry Astakhov/Pool via REUTERS

VEB, which Reiman said could become the majority owner of Angstrem-T by the end of the year, declined to comment.

IMPORT SUBSTITUTION

When Angstrem-T began producing its first chips in 2016 after nearly a decade of false starts and delays, Prime Minister Dmitry Medvedev depicted the initiative as a way Russia could surmount already existing U.S. sanctions.

“It’s good that we are starting to produce these ourselves,” Medvedev said at the factory’s opening, a month before Angstrem-T itself was targeted by the U.S. sanctions. “It’s a question of import substitution.”

Reiman would not disclose the magnitude of Angstrem-T’s debt. According to a Russian database that aggregates company data, the firm had 87.4 billion roubles ($1.34 billion) in debt last year. During the same period it recorded revenues of 101 million roubles.

A source in the field of microelectronics in Russia said the sanctions and repeated delays in the project had caused Angstrem-T’s products to become outdated.

The market for the 90 and 130-nanometre microchips it produces has significantly shrunk in recent years, according to the source.

A draft Russian government roadmap for the development of the microchip industry seen by Reuters says that once VEB’s takeover is complete, Angstrem-T should shift its production to the more modern 28-nanometre chips.

Such chips are used in products made by companies like Apple, Samsung and Sony.

The ministry has for several years lobbied for Russia to build a modern microchip plant, but to no avail.

Reporting by Maria Kolomychenko; Writing by Gabrielle Tétrault-Farber; Editing by Gareth Jones

Facebook Has a New Plan For Fighting Voter Suppression Tactics—And For Once It Involves Deleting Lies

Facebook‘s ongoing crusade against election-related abuse of its platform will involve the removal of some (but not all) disinformation that’s designed to suppress voting.

The company told Reuters that it would ban false information about voting requirements. It will also flag for moderation reports that may aim to keep people away from polling stations by alleging violence or long queues—if the reports are shown to be false, they will be suppressed in people’s news feeds, but they won’t be deleted.

Facebook (fb) generally does not remove falsehoods, even if they are demonstrated, so nixing false information about voting requirements is a notable step. It banned lies about voting locations a couple years back, but this latest move involves exaggerations about voter identification requirements.

In the wake of the mass disinformation campaigns that accompanied the 2016 election, Facebook has come under a great deal of pressure over its role in combatting the problem. It has partnered with think tanks in an attempt to better spot propaganda; it has removed “inauthentic” profiles that were aiming to spread misinformation; and it has sponsored research on the overall problem.

But, while the company is willing to suppress certain kinds of “fake news,” it won’t delete the vast majority of it.

“We don’t believe we should remove things from Facebook that are shared by authentic people if they don’t violate those community standards, even if they are false,” News Feed product manager Tessa Lyons told Reuters.

Facebook’s cybersecurity policy chief, Nathaniel Gleicher, also told the news service that the company is considering banning posts that linked to hacked material, as Twitter (twtr) recently did. As shown with the hacking of the Democratic National Committee in 2016 by Russian operatives, this technique can form part of a coordinated effort to sway elections. However, the dissemination of some hacked materials is in the public interest, making this a tricky tightrope for social media firms to negotiate.

Artificial Intelligence Is the Wave of the Future (And It Always Will Be)

Here’s what I’m reading today:

It’s been a challenging year for Florida: Hurricane Irma in 2017, then red tide and green algae, and now the devastating, still unfolding story of Hurricane Michael.

The human toll and wide-spread damage from Michael are most pressing (18 confirmed dead, and thousands still not accounted for). But, Floridians are growing concerned about a longer-term test  that could affect its crucial tourism industry–a $112 billion a year business, that’s responsible for about 1.4 million jobs.

It’s not just the rebuilding effort in places like the Gulf Coast, or the perception sunbirds might have the Florida isn’t ready for them. It’s also an issue of timing.

“At the right time, we can let the country and the world know they can come back to those areas,” Ken Lawson, CEO of Visit Florida, told USA Today. Translation: soon–but not so soon that visitors will flock to a Florida where they might find “dead fish all over the beach.”

Sears files for bankruptcy

Early this morning, Sears Holding Corp., the current iteration of an iconic retail brand that traces its history back at least 132 years, filed for bankruptcy. Stores will close and people will lose jobs, but it’s a brand that lost so much cachet that you’re forgiven for wondering if people will really notice. (Bill Murphy Jr., Inc.com)

The death of Bill Coors

The heir to the Coors beer company was highly controversial for his politics. But before that, he took his family’s regional beer brand and built it into a national powerhouse. (David Henry, Bloomberg)

Emergency childcare as an employee benefit

In case you missed this one, Starbucks unveiled a new benefit for its 180,000 employees: emergency discount child care that can be used up to 10 days per year. It’s a perk offered at only 4 percent of U.S. companies. (Bill Murphy Jr., Inc.com)

Here’s why you’re suddenly seeing a lot more ads for brand new brands

This year the floodgates are opening, with more small, new brands putting together big, effective ad campaigns ahead of the holidays. Facebook, Instagram, Snap, and even podcasts are making big pushes to bring in smaller brands, and the brands are reacting. (Sara Fischer and Marisa Fernandez, Axios)

Why AI won’t do your hiring for you

The recent revelation that Amazon tried to use artificial intelligence to recruit engineers, only to discover that its machine learning wound up discriminating against women has people wondering whether AI will fulfil its promise in recruiting, or if people will start saying about it what wags say about soccer: “the sport of the future, and it always will be.” (Jena McGregor, The Washington Post)

Robert Mueller Has Already Told You Everything You Need To Know

With the exception of President Trump’s legal team, no one has been watching the Mueller investigation more closely than Garrett Graff. Graff, a historian and journalist, wrote the book on Robert Mueller (literally), has interviewed him probably more than any other journalist, and covers the investigation for WIRED. He sat down with WIRED features editor Mark Robinson at the four-day WIRED25 anniversary event in San Francisco to decode the Russia probe and answer the question: What happens next?

A lot. As even a casual follower of the Russia investigation knows, questions have swirled over whether Donald Trump and his campaign colluded with Russia to influence the 2016 election by hacking the DNC and launching a massive disinformation campaign. Though numerous indictments of Trump associates have already come out of the investigation, Mueller has yet to finish it, or release a conclusive report.

A more hotly anticipated government report there may never have been. As Trump’s legal teams prepare their defenses—arguing as recently as last week that it was perfectly legal for the campaign to use materials stolen by Russia to further Trump’s chances—the nation waits.

“Everyone is so focused on ‘When is Mueller going to release the Mueller Report?’, and I think that what people miss is that Robert Mueller has been writing the Mueller Report in public through all of these court filings,” Graff said.

In the short year and a half that Mueller has been investigating Russia’s attack on the 2016 election and the Trump campaign’s ties to it, he has indicted some of Trump’s most senior campaign officials. In each of those court filings he has included far more information than he needed to, notes Graff. For example, when Mueller indicted officers of Russia’s military intelligence GRU agency for hacking, he noted in the criminal filing that the night that Donald Trump went on live TV and invited Russia to hack Hillary Clinton and find her missing emails, the GRU “returned to the office and attacked Hillary Clinton’s personal email server for the first time,” Graff says, emphasizing that last phrase.

“Mueller uses that phrase ‘for the first time’ in the indictment, which is totally unnecessary, unless Mueller wants us to know that further down the road,” he says. “Mueller is making claims that I think point to breadcrumbs he is leaving us for where this is going to go.”

Graff says that once you factor in the information hidden in plain sight in the indictments, as well as what is pointedly left out of them, you begin to see that Mueller is carving out the negative space where the heart of the investigation lies. “He is staying very, very focused,” Graff explains, “And anything that he’s finding that is not directly related to Russia he is handing off to other prosecutors in a really interesting way because it gives us almost a negative relief of how to view Mueller’s investigation.”

That blank space can tell us where the investigation is going. And where is that? Straight toward Roger Stone, Graff surmises, pointing out that no one is more implicated by the information in the indictments that have already come out of the investigation. Short of that, Graff is hesitant to make predictions.

Garrett Graff is the author of The Threat Matrix: Inside Robert Mueller’s FBI and the War on Global Terror.

Amy Lombard

Normally, he says, as a reporter you always expect a story to end up being less weird than you are originally told. “You get these weird tips as a reporter, and it’s never that good. It ends up being like 75 to 80 percent as weird as the tip. That’s not true about any part of this story. Every single thing ends up being about 140 percent as weird as the original reporting,” he says.

A few weird things he thinks Mueller is particularly interested in, that linger in that negative space carved out by the public indictments so far: A Trump campaign meeting with Betsy Devos’ brother Erik Prince in the Seychelles in 2016, the role of the nation of Qatar in Russia’s disinformation campaign, the Trump tower meeting, the Trump money trail, and “weirder questions about money,” says Graff.

“I think almost certainly the bombshell—if there is a bombshell—is about money,” he says.


More Great WIRED Stories

Facebook Suffered a Stunning Attack That Affected 30 Million Users. Check This Facebook Page Now to See If You're One of the Victims

In a way, this is good news, given that when Facebook previously said it thought as many as 50 million users had been affected. 

But Facebook is also describing some of the data that was accessed, and it’s truly exhaustive. Before we get too deep into the weeds of how Facebook says the attack happened and what it’s doing about it now, here’s how to tell if you’re one of the 30 million or so people affected.

On that page, you’ll see a roughly 335-word description of the issue, followed by a light blue box. If everything’s okay, you should see a simple message within the box:

Is my Facebook account impacted by this security issue?

Our investigation is still ongoing, but based on what we’ve learned so far, the attackers did not gain access to information associated with your Facebook account.

If you see anything different, at least you’ll know that there’s something to be concerned about. Facebook says that “in the coming days” it will send: 

customized messages to the 30 million people affected to explain what information the attackers might have accessed, as well as steps they can take to help protect themselves, including from suspicious emails, text messages, or calls.

While you’re doing this, you should also take the time to check your Facebook privacy settings, as I described how to do previously. You might truly be surprised by how much data Facebook has on you.

In the meantime, here’s the overview of what Facebook says happened here:

  1. First, attackers exploited a vulnerability in the site’s code that apparently resulted from three separate bugs, from July 2017 to September 2018. In short, it allowed hackers to generate tokens that allow access to user profiles.
  2. The attackers had access to a limited number of accounts to begin with, and it’s not clear if these were bogus to begin with, but they were connected to other “friends” on the site. Then, they “used an automated technique to move from account to account so they could steal the access tokens of those friends,” and then friends of those friends. Ultimately this got them access to about 400,000 people.
  3. Ultimately, the hack metastasized across the network, accessing about 30 million total profiles.

Not every account was accessed in the same way. Facebook says for 15 million of the compromised accounts, the attackers basically just got names and contact details such as “phone number, email, or both, depending on what people had on their profiles.”

For another 1 million people, the hackers got access, but weren’t able to obtain any information.

The 14 million remaining people had the most information accessed, however, including:

  • names
  • contact information
  • username 
  • gender 
  • locale/language
  • relationship status
  • religion
  • hometown
  • self-reported current city
  • birthdate
  • device types used to access Facebook
  • education
  • work
  • the last 10 places they checked into or were tagged in
  • website
  • people or Pages they follow, and
  • their 15 most recent searches. 

That’s truly a mother lode. I suppose it’s that that there doesn’t seem to be any immediate indication that financial information was accessed.

And Facebook is quick to point out that the attack appears limited to Facebook personal accounts, not Messenger, Instagram, WhatsApp, Oculus, or other Facebook products. But the investigation is clearly ongoing.

“As we look for other ways the people behind this attack used Facebook,” the company said, “as well as the possibility of smaller-scale attacks, we’ll continue to cooperate with the FBI, the US Federal Trade Commission, Irish Data Protection Commission, and other authorities.” 

ST Engineering wins $5.5 million Singapore contract to test smart lamp-posts

SINGAPORE (Reuters) – Singapore Technologies Engineering has won a S$7.5 million ($5.5 million) contract for the trial of a smart lamp-post project in Singapore, which includes fitting sensors and cameras to posts in the city-state, according to the government’s official tender website.

The project is part of a broader “Smart Nation” plan developed by the Singapore government to use cutting-edge technology, designed to improve people’s lives while promising sensitivity to privacy concerns.

However, an aspect of the lamp-post trial to install cameras linked to facial recognition software has raised privacy fears among some security experts and rights groups.

ST Engineering did not immediately respond to a request for comment.

Reporting by Aradhana Aravindan; Editing by Kenneth Maxwell

Tencent Music delays $2 billion U.S. IPO due to weak markets: sources

HONG KONG (Reuters) – Tencent Music Entertainment has delayed its planned U.S. initial public offering (IPO) until at least November as the owner of China’s most popular music apps prefers to wait for global stock markets to stabilize, three sources said.

FILE PHOTO: Visitors use their smartphones underneath the logo of Tencent at the Global Mobile Internet Conference in Beijing May 6, 2014. REUTERS/Kim Kyung-Hoon/File Photo

The music arm of tech giant Tencent Holdings (0700.HK) is expected to raise at least $2 billion and was originally planning to launch its offering as soon as next week, the sources said.

However, Wall Street on Wednesday suffered its worst one-day drop in eight months, with the S&P 500 .SPX down 3.29 per cent. The index dropped a further 2.06 percent on Thursday.

“Are they really going to launch into this window?” asked one source involved in the deal, adding that the company had plenty of cash. “Why try and jam something out now?”

Chinese shares have also fallen, with the CSI 300 index of mainland Chinese blue-chips .CSI300 down 4.8 percent to a 27-month low on Thursday.

“Given the recent challenging market conditions, it won’t be a good idea for the company to go ahead with the listing timetable. It makes more sense to wait till the market recovers a bit,” said another person with knowledge of the matter.

Tencent Music declined to comment. The sources declined to be identified as the information was not public.

At $2 billion, the IPO would be one of the largest by a Chinese company in the United States this year, behind the $2.4 billion raised by video streaming company iQiyi (IQ.O) in March but ahead of the $1.6 billion garnered by online group discounter Pinduoduo (PDD.O) in July.

In total, Chinese companies have raised $7.5 billion from U.S. markets so far this year – the biggest amount since 2014 – according to Refinitiv data.

Tencent Music filed for its IPO earlier this month, setting a placeholder sum of $1 billion for registration purposes.

The company owns streaming apps QQ Music, Kugou and Kuwo as well as karaoke app WeSing, and claims more than 800 million monthly active users.

The number of Tencent Music shares to be sold were not disclosed and potential valuations were unclear. Its Swedish music streaming counterpart Spotify Technology SA (SPOT.N) is currently valued at around $27.1 billion.

The Chinese firm, which has a cross shareholding deal with Spotify, offers more in the way of socially interactive services that makes it profitable, while the Swedish firm is not. Tencent Music reported a 92 percent jump in sales in the first half of this year and net profit of $263 million.

Reporting by Julie Zhu and Julia Fioretti in Hong Kong; Writing by Jennifer Hughes; Editing by Muralikumar Anantharaman

How Open Plan Offices Kill Diversity and Equality

Why are so many companies (i.e. so many top executives) embracing a strategy that’s so obviously unproductive and which employees almost universally dislike? 

I originally assumed the continued growth of open plan offices (now around 70% of all offices in the U.S.) was a victory of biz-blab over science–the corporate equivalent of anti-vaccination and climate change denial. However, since open plan offices are so obviously stupid, I’ve concluded there must be something deeper at work here–a hidden agenda.

What could it be?

A clue to this hidden agenda may lie in the undeniable fact that while executives want their employees to work in these open plan environments, they almost always secure private offices for themselves.

Another clue may lie in the way that the growth in open plan offices matches declines in work-from-home policies, private offices, and cubicle offices, all three of which offer varying levels of privacy for regular employees which open plan offices totally lack.

The unifying theme is that executives want employees to remain physically visible and constantly on display while simultaneously retaining their own right to remain invisible. This desire must be something that’s highly valuable to top management for them to be willing to pay such a huge tax in productivity and morale.

I’m not talking about a conspiracy. Nobody got together, twirled their metaphorical mustaches, and with a “brou-ha-ha-ha” decided to stick it to their employees. No, what’s operating here is something more subconscious, like confirmation bias. It’s a cultural thing and therefore largely unexamined, like most hidden agendas.

So, then, what deep need does the open plan office serve?

One obvious answer is the need to control the behavior of others–a need to which executives (who are often quite insecure about their ability to lead) are particularly susceptible.

However, while it is no doubt easier to control people when you can constantly look over their shoulders, that kind of monitoring can be done electronically. Since employees have no privacy rights, there’s nothing to stop companies from monitoring their behavior online. Big Brother doesn’t need to be physically present to stick his nose in your personal business.

If the deeper need is not a desire to control behavior, what could it be? Put another way, what benefit to executives get from making their employees physically visible while retaining the right to remain themselves invisible?

A well-documented effect of open plan offices is that constant visibility puts women at a disadvantage by forcing them to expend extra energy focusing on their physical appearance. However, it’s not just women who suffer from being forced into a fishbowl. Open plan environments also put at disadvantage those employees who are overweight, disabled, or in any way fail to conform to American standards of conventional attractiveness, i.e.young, thin, and light-skinned.

For example, open plan offices are vehemently hostile to older workers (Gen-X and above) because as one ages, it becomes increasingly difficult to achieve that cultural standard of conventional attractiveness.

Furthermore, some elements of open plan designs–such the ubiquitous workplace playground slide–are specifically intended to humiliate older workers. To a 20-year-old, using playground slide is merely embarrassing; to a 40-year-old it’s actively humiliating; to a 60-year-old, it’s a recipe for chiropractic appointment.

Rather than attracting millennials, open plan offices help top management eliminate or disempower workers who aren’t young, conventionally-attractive, generally light-skinned and male.–the exact demographic from whence sprang the majority of top managers. While such environments also tolerate young, conventionally-attractive females, the fishbowl-like characteristic of open plan offices guarantees that they’ll kept off-balance and “in their place” by being put constantly on display.

Seen this way, the open plan office, far from being a forward-looking vehicle to create collaboration and innovation, are actually only a manifestation of a traditional 20th century business culture which favors the dominance of older, light-skinned males, a dominance that expresses itself in everything from the demographics of Fortune 500 C-suites to the investment choices of venture capitalists.

That open plan offices tend to reinforce the patriarchy seems less surprising when you consider that the original concept of the open plan office dates not from the so-called “information age” but from the early years of 20th century, when companies–to increase paper-pushing efficiency–started arranging office workers’ desks inside large rooms called “bullpens.” 

Far from being a modern invention, open plan offices have been around for nearly 100 years. Within that history, companies have experimented with other workplace designs like private offices, cubicles, and telecommuting. Those experiments, however, fallen out of favor because those experiments gave employees more privacy, which was an assault on the status quo.

Companies have continued to embraced open plan designs not because they make employees more productive (they don’t) and not because employees find them inspiring places to work (they don’t) but because open plan offices reinforce the status quo–the same status quo that’s kept women and minorities out of positions of power, and that favors a younger, cheaper, more malleable workforce that’s less likely to challenge the dominance of the traditional powers-that-be.