End-to-end operators are the next generation of consumer business

At Battery, a central part of our consumer investing practice involves tracking the evolution of where and how consumers find and purchase goods and services. From our annual Battery Marketplace Index, we’ve seen seismic shifts in how consumer purchasing behavior has changed over the years, starting with the move to the web and, more recently, to mobile and on-demand via smartphones.

The evolution looks like this in a nutshell: In the early days, listing sites like Craigslist, Angie’s List* and Yelp effectively put the Yellow Pages online — you could find a new restaurant or plumber on the web, but the process of contacting them was largely still offline. As consumers grew more comfortable with the web, marketplaces like eBay, Etsy, Expedia and Wayfair* emerged, enabling historically offline transactions to occur online.

More recently, and spurred in large part by mobile, on-demand use cases, managed marketplaces like Uber, DoorDash, Instacart and StockX* have taken online consumer purchasing a step further. They play a greater role in the operations of the marketplace, from automatically matching demand with supply, to verifying the supply side for quality, to dynamic pricing.

The key purpose of being end-to-end is to deliver an even better value proposition to consumers relative to incumbent alternatives.

Each stage of this evolution unlocked billions of dollars in value, and many of the names listed above remain the largest consumer internet companies today.

At their core, these companies are facilitators, matching consumer demand with existing supply of a product or service. While there is no doubt these companies play a hugely valuable role in our lives, we increasingly believe that simply facilitating a transaction or service isn’t enough. Particularly in industries where supply is scarce, or in old-guard industries where innovation in the underlying product or service is slow, a digitized marketplace — even when managed — can produce underwhelming experiences for consumers.

In these instances, starting from the ground up is what is really required to deliver an optimal consumer experience. Back in 2014, Chris Dixon wrote a bit about this phenomenon in his post on “Full stack startups.” Fast forward several years, and more startups than ever are “full stack” or as we call it, “end-to-end operators.”

These businesses are fundamentally reimagining their product experience by owning the entire value chain, from end to end, thereby creating a step-functionally better experience for consumers. Owning more in the stack of operations gives these companies better control over quality, customer service, delivery, pricing and more — which gives consumers a better, faster and cheaper experience.

It’s worth noting that these end-to-end models typically require more capital to reach scale, as greater upfront investment is necessary to get them off the ground than other, more narrowly focused marketplacesBut in our experience, the additional capital required is often outweighed by the value captured from owning the entire experience.

End-to-end operators span many verticals

Many of these businesses have reached meaningful scale across industries:

All of these companies have recognized they can deliver more value to consumers by “owning” every aspect of the underlying product or service — from the bike to the workout content in Peloton’s case, or the bank account to the credit card in Chime’s case. They have reinvented and reimagined the entire consumer experience, from end to end.

What does success for end-to-end operator businesses look like?

As investors, we’ve had the privilege of meeting with many of these next-generation end-to-end operators over the years and found that those with the greatest success tend to exhibit the five key elements below:

1. Going after very large markets

The end-to-end approach makes the most sense when disrupting very large markets. In the graphic above, notice that most of these companies play in the largest, but notoriously archaic industries like banking, insurance, real estate, healthcare, etc. Incumbents in these industries are very large and entrenched, but they are legacy players, making them slow to adopt new technology. For the most part, they have failed to meet the needs of our digital-native, mobile-savvy generation and their experiences lag behind consumer expectations of today (evidenced by low, or sometimes even negative, NPS scores). Rebuilding the experience from the ground up is sometimes the only way to satisfy today’s consumers in these massive markets.

2. Step-functionally better consumer experience versus the status quo

Original Content podcast: Martin Scorsese and Fran Lebowitz have a good time in ‘Pretend It’s A City’

The concept behind the new Netflix documentary series “Pretend It’s A City” is pretty straightforward: Author Fran Lebowitz talks, while Martin Scorsese (who’s both director and an on-camera presence) listens and laughs.

Lebowitz’s musings across seven episodes are organized by loose themes, such as “Metropolitan Transit” and “Library Services,” with the more recent footage interspersed with clips from older interviews. That’s pretty much it as far as structure goes; while Lebowitz shares a number of amusing anecdotes, there’s no attempt to explore the broader arc of her career or explain why we’re watching a show about her.

And yet, as we discuss on the latest episode of the Original Content podcast, we both enjoyed watching the entire show.

Darrell describes Lebowitz as the consummate party guest, full of aphorisms and provocative opinions on everything from technology to sports to the New York York City subway. And there’s something delightful about watching an accomplished director like Scorsese just relaxing and having a good time.

On the other hand, it would be a little exasperating when we didn’t find Lebowitz’s as remarks quite as hilarious as Scorsese did, and watching one episode after another meant that she eventually wore out her welcome. So it’s probably best to enjoy the series an at a time, rather than binging the whole thing at once.

In addition to reviewing “Pretend It’s A City,” we also discussed Nielsen’s rankings of the most popular streaming services of 2020.

You can listen to our review in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also follow us on Twitter or send us feedback directly. (Or suggest shows and movies for us to review!)

If you’d like to skip ahead, here’s how the episode breaks down:
0:00 Intro
0:34 Listener email
5:46 Nielsen streaming data discussion
14:03 “Pretend It’s a City” review

Apple is extending Apple TV+ trials again

If you’ve got an Apple TV+ trial that’s set to expire sometime between now and June, good news: you’re getting some free bonus time.

Apple TV+ first launched in November of 2019, alongside a one-year free trial for anyone buying a new iPhone, iPad, iPod touch, Apple TV or Mac. As those initial trials approached their end, Apple voluntarily extended them out to February of 2021. Now they’re extending them once again.

As first reported by 9to5Mac, any trial that previously would’ve expired from February to June of 2021 will now expire in July instead. We have confirmed these plans with Apple.

Users should expect to get an email about the extension in the coming weeks. If you’re already paying for AppleTV+ or have it as part of an Apple One bundle, meanwhile, you’ll be getting a $4.99 per month credit until the end of June.

If you haven’t already, take this as an opportunity to blast through Ted Lasso, which is probably the most charming thing anyone has made for TV in a decade. Central Park is also great, though it has yet to hook me in quite the same way as Loren Bouchard’s other series (Bob’s Burgers, Home Movies).

Original Content podcast: Despite some odd choices, ‘The Undoing’ lays out a satisfying mystery

The HBO miniseries “The Undoing” wrapped up back in November, but the hosts of the Original Content podcast took advantage of the holidays to get caught up.

Based on a novel by Jean Hanff Korelitz, “The Undoing” tells the story of Grace Fraser (played by Nicole Kidman), a Manhattan psychologist whose husband Jonathan (Hugh Grant) is accused of a brutal murder. As the trial turns into a media spectacle, Grace tries to navigate how she feels about her husband and to discover who else might be guilty of the crime.

While Jordan had already watched the show as it aired, Anthony and Darrell were inspired to binge it thanks to an email from listener Michael Benedosso, who shared some amusing thoughts on Kidman’s wavering attempts at a New York accent — resulting in what he called “a world tour expressed via spoken word.”

We agreed that Kidman’s accent left a lot to be desired, and that her performance often felt a bit oblique (the latter, at least, was probably intentional).

We had other quibbles. For one thing, although the cast is relatively diverse, the story spends most of its time on the wealthy white family at its center, as their wealthy white friends. And there were perhaps a few too many red herrings that didn’t lead anywhere interesting.

Still, we were pretty satisfied in the end. With only six episodes and plenty of plot twists, there was really no time to get bored, and we were particularly impressed by Grant’s performance as Jonathan, as well as Noah Jupe as the Frasers’ adolescent son Henry and Noma Dumezweni as Jonathan’s steely lawyer Haley.

Before reviewing he show, we also discussed the recent launch of the Discovery+ streaming service.

You can listen to our review in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also follow us on Twitter or send us feedback directly. (Or suggest shows and movies for us to review!)

f you’d like to skip ahead, here’s how the episode breaks down:
0:00 Intro
0:30 Discovery+ discussion
6:41 “The Undoing” review
20:40 “The Undoing” spoiler discussion

Roku acquires Quibi’s content

Quibi is dead, but its shows will live on.

The Wall Street Journal reported last week that Roku was in talks to acquire the short-form video service’s content. And this morning, Roku announced that it has indeed reached a deal for the exclusive distribution rights to all of Quibi’s programs.

Roku said it will make this content available for free with ads on The Roku Channel. That doesn’t just include the shows that were previously available on Quibi, but also “more than a dozen” programs making “their exclusive debut on The Roku Channel” — in other words, they were created for the service but unreleased due to the app’s shutdown.

“Today’s announcement marks a rare opportunity to acquire compelling original content that features some of the biggest names in entertainment,” said Roku’s vice president of programming Rob Holmes in a statement. “We’re excited to make this content available to our users in The Roku Channel through an ad-supported model. We are also thrilled to welcome the incredible studios and talented individuals who brought these stories to life and showcase them to our tens of millions of users.”

While Roku is best known for its streaming TV devices and software, advertising is a growing part of its business. And it says The Roku Channel (which offers both free content and subscription channels) reached 61.8 million U.S. viewers in the fourth quarter of last year.

Quibi, meanwhile, announced its shutdown in October, just six months after its splashy launch. The service was focused on creating video episodes that lasted 10 minutes or less and were designed for viewing on-the-go — a poor fit for a period of pandemic and lockdowns.

In their farewell note, executives Jeffrey Katzenberg and Meg Whitman suggested that the service failed due to a combination of bad timing and the fact that “the idea itself wasn’t strong enough to justify a standalone streaming service.”

“The most creative and imaginative minds in Hollywood created groundbreaking content for Quibi that exceeded our expectations,” Katzenberg said in today’s announcement. “We are thrilled that these stories, from the surreal to the sublime, have found a new home on The Roku Channel.”

It’s also worth noting that the service was initially focused entirely on mobile viewing, with no way to watch the shows on smart TVs. That eventually changed, starting with the addition AirPlay support. Now, with the Roku acquisition, it seems that shows designed to be watched on your smartphone will instead be viewed primarily on your TV.

Alibaba shuts down 12-year-old music streaming app Xiami

Using Xiami was once synonymous with having good music taste in China. The music app, which debuted around 2008 and was acquired by Alibaba in 2013, is discontinuing its streaming service today, Xiami said in a notice to users.

Xiami, which means “smalll shrimp” in Chinese, was once known for its smart discovery, elegant design, social features and support for indie musicians which helped attract a loyal following among China’s artsy, hipster types. The beginning of its decline coincided with the battle for music rights in China. A digital music behemoth was formed in 2016 when Tencent bought a majority stake in China Music Group, which brought to Tencent a reservoir of exclusive music deals. By 2017, Tencent’s music apps controlled as much as 75% of China’s music streaming market.

Xiami, on the other hand, lost large quantities of music rights and consequently users who converted to more resource-rich platforms, albeit grudgingly.

Alibaba did have a shot at online music. In 2015, the e-commerce giant appointed two renowned industry veterans — a songwriter and a music company executive — to steer its newly minted music group. Neither was necessarily seen as having the experience for running an internet music business. Instead of growing Xiami, they poured resources into a platform called Alibaba Planet to build artist-fan relationships. The idea didn’t take off.

In the meantime, newcomers like NetEase Music are holding out in their battle against Tencent’s music empire, of which dominance has endured to this day.

While users will lose access to the app and all their data, Xiami is not totally dead. Its copyrights-focused segment Yin Luo (音螺 or Conch Music) will continue to operate, according to the notice. But the dream of Xiami’s utopian founders, “earn music & money” (hence the app’s original name “EMUMO”), a vision they laid out inside a cafe on a snowy day in Hangzhou, is surely gone.

Discovery+ launches in the US today

The new year is kicking off with the launch of a new streaming service — Discovery+, which offers programming from Discovery’s networks including HGTV, Food Network, TLC, ID, OWN, Travel Channel, Discovery Channel and Animal Planet.

Discovery+ actually launched in the United Kingdom and Ireland last fall through a deal with Sky, but the company is treating today as the big launch, as the service becomes available in the United States.

Despite the crowded field of competing streaming services (including the similarly named Disney+, ESPN+, Apple TV+ and upcoming Paramount+), Discovery+ is aiming to stand out with a focus on documentary and reality content — it bills itself as “the definitive nonfiction, real-life subscription streaming service.”

Plus, it’s priced at just $4.99 per month, or $6.99 if you want to go ad-free. And it will be free to some Verizon and Vodafone subscribers. (Verizon owns TechCrunch.)

At launch, original shows available on Discovery+ include several “90 Day Fiancé” spinoffs, “Amy Schumer Learns to Cook: Uncensored,” “Bobby and Giada in Italy” with Bobby Flay, “House Hunters: Comedians on Couches Unfiltered” (in which comedians watch classic episodes of “House Hunters”), the nature documentary “Mysterious Planet,” “Judi Dench’s Wild Borneo Adventure and a whole lineup of preview episodes for the upcoming Magnolia Network.

Discovery says the service includes more than 55,000 total episodes, with plans to launch 1,000 hours of original content in the first year. And the content goes beyond Discovery-owned brands, with nature documentaries from the BBC and programming from A&E, The History Channel and Lifetime.

Discovery+ is available on Amazon Fire TV devices, iOS devices, Google TV/Android TV/Chromecast devices, Microsoft Xbox One and Series S/X, Roku and Samsung smart TVs (2017 and later models). The plan is to launch in 25 markets this year, including the Nordics, Italy, the Netherlands and Spain, as well as parts of Latin America and Asia.

“As we go live with Discovery+ today in the U.S., we are thrilled to be working with best-in-class partners to make it available everywhere our fans are,” said Discovery President and CEO David Zaslav in a statement. “Our ambition is simple: Bring consumers the definitive and most complete destination for real-life entertainment at a price point that makes this the perfect companion for every household’s streaming and TV portfolio. There is nothing like it in the market today.”

Original Content podcast: ‘Wonder Woman 1984’ might be a beautiful mess, or maybe just a mess

“Wonder Woman 1984” was released on HBO Max on Christmas Day, where it quickly divided the hosts of the Original Content podcast.

Perhaps it was predictable that Anthony — a fan of clunky-but-ambitious superhero sequels like “The Dark Knight Rises” and “Avengers: Age of Ultron” — enjoyed the film. Darrell, meanwhile, took the side of most critics, who found the movie exasperating and even, at times, mystifyingly bad.

The biggest surprise was Jordan, who disliked the first “Wonder Woman” and actually preferred the sequel, thanks in large part to Kristen Wiig’s portrayal of the villainous Cheetah.

Everyone agreed that there were plenty of problems, including some slipshod and confusing plotting, as well as a portrayal of Wonder Woman that’s defined entirely by her longing for Steve Trevor, the Chris Pine character who died at the end of the first film but returns here under mysterious circumstances.

But where Anthony found the overall arc of the film — rewriting the melancholy love story of “Superman II” as a parable about capitalism and climate change — and its big emotional moments to be surprisingly affecting, Darrell thought the entire final act was ludicrous, with some of the worst CGI ever seen in a big-budget film.

In addition to debating the merits of “Wonder Woman 1984,” we also discuss our top streaming picks from the past year.

You can listen to our review in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also follow us on Twitter or send us feedback directly. (Or suggest shows and movies for us to review!)

If you’d like to skip ahead, here’s how the episode breaks down:
0:00 Introduction
0:35 Best of the year discussion
16:23 “Wonder Woman 1984” review
30:05 “Wonder Woman 1984” spoiler discussion

This quick and clever tool creates an instant homepage for your podcast

Podcast homepages weren’t something I gave any thought to until I launched my own standalone show. And honestly, even then I probably didn’t give enough thought to the subject. For that reason, many or most of my shows have Tumblr pages — which is, at best, a bit of a mixed blessing in 2020.

The biggest reason many podcasters give little consideration to the subject is the fact that most people are platform-dependent when it comes to listening. People who consume a lot of podcasts generally do so through a single platform/app, be it Apple Podcasts, Spotify, Google, Stitcher, Castbox, etc. But when it comes to actually promoting your show on social media, you’re best served by sharing a link that’s platform agnostic.

I’ve been playing around with Podpage a bit today. The new offering was created by Brenden Mulligan, co-founder of app developer toolbox LaunchKit, which sold its tools to Google way back in 2016. The offering has been around for a while now, but Mulligan has offered some updates and recently listed it on ProductHunt.

I’m digging it so far. It’s basically plug-and-play to get up and running, though you can customize a fair bit beyond that. For reference, a simple page I made this morning for my podcast, RiYL:

Image Credits: Brian Heater

After a couple of hours, I’m pretty seriously considering dropping the long-standing Tumblr in favor of the service. My page is pretty simple so far, and honestly, that’s by design. Or, rather, partially by design and partially due to the fact that I haven’t been very good about updating episode art, which has kind of limited my options here (perhaps I’ll go through the 400+ episodes on some future rainy day).

You start by entering your podcast name, and the service goes to work, scraping the relevant information and building it into a page. From there, you can add a Patreon (or other method for monetization) and all related social media. One of the nice things about having a purpose-built service like this is how it pulls together all of the relevant information into a single spot. The sidebar features a breakdown of the different podcatchers where you can listen to the show, coupled with a signup form to get show updates.

On the bottom are a selection of reviews from different podcasting services. Up top is a link to the services where you can leave that feedback. There’s also a subscription link and contact form, which is a handy way of allowing people to email you without giving out personal information. Notes submitted to the form will be sent to your associated email.

The basic experience is free and there are currently two upgrade options. At $5 a month, you can host it on your own website and for $12, there are a bunch more customization options, along with a more fully featured website, including blog functionality and the ability to add transcripts.

Streaming services face their real test in 2021

After a year where the movie business was defined almost entirely by pauses and delays, Warner Bros. took decisive action on December 3.

It had only been a couple of weeks since the studio had announced that in the face of surging coronavirus numbers, it wouldn’t be delaying the Christmas release of “Wonder Woman 1984” yet again. Instead, it would launch the movie simultaneously in theaters and on HBO Max, the new streaming service from its parent company WarnerMedia.

While media/telecom executives and Wall Street investors seem willing to make big investments for a streaming-centric future, they’ll expect to see actual profits soon.

It turned out that this decision — already described as a transformative moment in the industry, and potentially the beginning of the end for theaters — was just the beginning. On December 3, Warner Bros. announced that it would be following the exact same strategy for every movie on its theatrical slate in 2021.

This may have seemed like welcome news to moviegoers eager to finally see “In the Heights” (already delayed by about a year thanks to the pandemic) or “Dune” (ditto). But while “Wonder Woman” director Patty Jenkins and star Gal Gadot seemed to embrace the news, declaring that it was time to share their movie with fans, other Warner Bros. filmmakers were less enthusiastic.

For example, “The Dark Knight” director Christopher Nolan complained that Warner Bros. executives “don’t even understand what they’re losing,” and he claimed that filmmakers had gone to bed “thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service.” (Nolan’s “Tenet” was released in theaters in the fall, and its disappointing box office numbers, particularly in the U.S., probably played a big role in Warner’s decision.)

And in a guest column for Variety, “Dune” director Denis Villeneuve pointed his finger at AT&T, which acquired Time Warner several years earlier. He suggested that the streaming strategy had less to do with the pandemic and more with the underwhelming launch of HBO Max over the summer.

“With HBO Max’s launch a failure thus far, AT&T decided to sacrifice Warner Bros.’ entire 2021 slate in a desperate attempt to grab the audience’s attention,” Villeneuve wrote.

Barely more than a week after the Warner Bros. announcement, Disney had a big presentation of its own, laying out ambitious streaming plans for the next few years, with 10 Marvel shows, 10 Star Wars shows, 15 Disney Animation/Disney live action/Pixar series and 15 Disney Animation/Disney live action/Pixar feature films all in the pipeline for Disney+.

Disney’s announcements weren’t greeted with the same uproar and controversy as Warner’s — it didn’t represent a wholesale shift in its theatrical strategy (the Marvel Studios film “Black Widow” is currently still scheduled for a traditional release in May, for example), and unlike WarnerMedia, its announcements didn’t blindside filmmakers and throw their compensation into question.

Still, the message to the industry and the public was quite similar: While Disney isn’t abandoning theaters outright, it clearly sees streaming as its future, with the studio willing to reboot any and every intellectual property (“Turner and Hooch”! “Swiss Family Robinson”! An “Alien” TV series!) to attract potential subscribers.