SOMETIMES THE CURE IS WORSE THAN THE ILLNESS: That headline might be appropriate for Snapchat right now, who according to Tech Crunch, is getting mauled by users in online reviews of its newly redesigned interface. According to the research group Sensor Tower, 83% percent of user reviews have been negative since the redesign. The biggest cause of complaints is that Snapchat’s Stories content is now auto-populating user inboxes in between personal messages. Snapchat is probably doing this to bring brands’ sponsored content to the forefront, but it appears to be annoying the hell out of their core users. This pivot seems to be the reverse of other publishers’ strategies, like Facebook who recently announced it would deliver less branded content in the Newsfeed, and Pandora who’s rewarding listeners with enhanced functionality when they voluntarily engage with brands. These latter examples seem to be the way forward in digital media – on the thinking that if you make the experience good for users first, brands will also benefit. That feels like a better play than Snapchat’s new kitchen sink approach.
“WATCH” OUT FOR THOSE UNINTENDED CONSEQUENCES: Speaking of Facebook’s Newsfeed pivot, there’s some industry speculation about what could happen to their Watch video platform, as reported in the attached Digiday link. Since FB relaunched Watch in Aug’17 with original show content they’ve heavily relied on Newsfeed posts to drive views. So with the decision to trim back the amount of promoted content on Newsfeed users will be less likely to see Watch video content. While this won’t completely kill Watch, traffic is expected to decrease. This might force FB to transform Watch into a truly separate site users could go to for video content, like Google has with YouTube, instead of just a content section within FB proper. Regardless of how this plays out, it’s an example of how one strategic change could have down-the-line consequences on another part of their biz.
APPLE’S ABOUT TO GO ON A SPENDING SPREE: One of the most touted features of the newly passed Federal tax legislation is the ability for companies to repatriate profits which are currently parked in foreign subsidiaries. In the case of Apple they’ve amassed $256B (with a B!) in profits in a wholly-owned subsidiary in Ireland (is Tim Cook really Irish?!?), as a way to avoid paying US corporate taxes. But now, thanks to a one-time reduction in the corporate tax rate designed to encourage companies to onshore their profits, Apple and others are bringing the cash home. Apple still expects to pay taxes – an estimated $38B, which is an effective corporate tax rate of 15%. So what will they do with their newly-liquid cash? According to the attached Tech Crunch link, quite a bit. The centerpiece of Apple’s ambitious growth plan is to build a second corporate campus and data center – I guess all the cool kids are doing HQ2s these days. There’s also speculation that Apple will start manufacturing hardware in the US, which could help solve their mounting Asian production issues. All in Apple expects to invest $350B in US-based buildouts and create 20,000 tech jobs over the next decade. Obviously they have to actually walk the walk, but at least the talk sounds pretty good right now.
Have a great Thursday guys!
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