An executive walked gingerly around questions whether Snap's ad revenue is benefiting from the Facebook ad boycott. It’s "difficult to ascertain exactly what the impact of the Facebook boycott is on revenue,” said Chief Business Officer Jeremi Gorman on a Q2 call Tuesday. Gorman speculated some of Facebook’s lost ad revenue could be "related" to cuts in advertisers’ “overall content marketing budgets, just given the environment” of COVID-19. The Facebook hate-speech “conversation has opened the door for us” to “engage” with potential new advertisers, including with CEOs and chief marketing officers, he said. Facebook didn't comment Wednesday. The global health crisis “accelerated the shift to a more digital economy,” said Gorman. Snap’s advertisers “are exploring more ways to offer services digitally, including at-home fitness apps, online education programs, retail stores and restaurants offering online ordering and delivery services, and mobile-first banking and trading,” he said. The pandemic is encouraging business owners “to adopt digital marketing methods to engage with their customers globally,” said Gorman. Daily active users grew 17% year over year in Q2, with 238 million people using Snapchat “every day on average,” said CEO Evan Spiegel. Ad revenue grew 17% to $454 million, despite “extreme dislocations,” said Spiegel. As hard-hit industries like travel and theatrical entertainment “pull back spend,” he said, "we have transitioned to helping them plan for a future recovery led in part by our audience." Other industries like streaming and e-commerce that have thrived from “some of the COVID-related changes in consumer behavior” have been “leaning in as advertisers on our platform,” he said. “The path to this outcome was not a straight line,” said Chief Financial Officer Derek Andersen. “The operating environment has remained challenging as COVID-19 continues to impact macroeconomic conditions, and the businesses of our advertising clients." Advertisers hardest hit in the pandemic are those that “rely on in-person interaction with their customers” he said. The stock closed down 6.2% Wednesday at $23.20.
Consumer and tribal groups asked the FCC to extend the 2.5 GHz rural tribal priority window deadline. Public Knowledge, the National Congress of American Indians, Amerind Risk Management and Southern California Tribal Chairmen’s Association filed an emergency motion for stay, said a Wednesday release. The pandemic “impacted American Indians and Alaska Natives on Tribal lands harder than any other community in America, a situation further aggravated by the lack of reliable broadband on Tribal lands,” the groups told the FCC: “Unless the Commission extends the Tribal Window, hundreds of eligible Tribal nations will miss this unique opportunity to provide 5G service to their people.” Chairman Ajit Pai told lawmakers in June the commission is watching the window and considering extending it past the Aug. 3 end date (see 2006300084). Commissioner Jessica Rosenworcel supported giving the tribes more time (see 2004290055). “My feeling from talking to the chairman's office is that it really is under consideration, so we remain hopeful,” PK Senior Vice President Harold Feld told us. One problem is that Rep. Tom Cole of Oklahoma is the only Capitol Hill Republican to support an extension, Feld said. “We need more Republicans to express support so this doesn't look like it's something partisan,” he said: “We had bipartisan support last year to ask the FCC to give a 180-day window rather than a 90-day window, which the FCC ultimately did, and … we need the same kind of bipartisan showing here.” The filing was posted Wednesday in docket 18-120.
Speakers offered a very different view of the citizens broadband radio service during a Connected Real Estate virtual conference Wednesday. With the CBRS auction to start Thursday (see 2007200049), there was both optimism and continuing skepticism (see 2007210052) about how much interest the band will get.
State eligible telecom carrier (ETC) designation is useful to the FCC, though it might be time to update that and other USF rules from the 1996 Telecom Act, said Commissioner Jessica Rosenworcel at NARUC’s virtual summer meeting. Later Wednesday, the state regulator association's board unanimously adopted a telecom resolution opposing Capitol Hill efforts to scrap the ETC requirement (see 2007200054). Preserving the ETC designation is a top issue for state regulators, said NARUC President Brandon Presley in a Tuesday interview. He pledged to move “swiftly” on the association’s social justice pledge.
A Thursday Senate Communications Subcommittee hearing on the FCC and NTIA roles in spectrum policymaking is likely to at least partially focus on the dispute between the two agencies over Ligado’s L-band plan, lawmakers and officials said in interviews. The hearing is also likely to be a venue for lawmakers to address other related policy matters, including FCC disputes with other federal agencies on the 24 GHz auction and other frequencies, and bids to allocate proceeds from the coming auction of spectrum on the 3.7-4.2 GHz C band, lobbyists said. The panel begins at 10 a.m. in 253 Russell (see 2007160054).
The U.S. cloud gaming market could generate nearly $3 billion in annual subscription revenue, Parks Associates reported, with 30% of broadband households interested a service. Three-quarters of U.S. broadband households play videogames for at least one hour per week; gamers play for an average 22 hours. PC gaming has had the biggest gains during the pandemic. It and could generate more revenue, via service stacking and add-on sales, “if the offerings are designed and targeted correctly,” said analyst Kristen Hanich.
Logitech rode the COVID-19 stay-at-home wave in fiscal Q1 ended June 30, posting a 25% year-on-year sales hike to $792 million, it said Monday. Sales of video conferencing equipment soared 70% to $130 million; webcam revenue jumped 116% to $60.9 million. It's adding capacity to meet demand for webcams to overcome component shortages resulting from factory shutdowns in Asia, said CEO Bracken Darrell on a call (see that and other materials here). The company expects current quarter supply to improve, though Darrell expects the “underlying market tailwind to continue for some time.” Logitech raised its fiscal 2021 outlook from mid-single digits to 10%-13%, but Darrell said: “COVID shutdowns and a related economic slowdown will likely create uncertainty in the quarters, and perhaps even the year to come." Among trends the CEO cited are video calls replacing audio calls, esports that will “become bigger than conventional sports, and the “billions” creating content as movie theaters and live entertainment venues are closed. Some trends were underway, said Darrell, citing work-at-home Fridays, the popularity of esports and creators posting online in “democratization” of content. “Video everywhere” seemed like a long way off when Logitech identified it as a company direction several years ago, he said: “Because of COVID-19, video calls now, for most people, have simply exploded.” Trends will continue post-pandemic, he maintained, citing Siemens saying last week it will let its 140,000 employees “work from anywhere” two or three days a week.
Internet traffic at content delivery provider Limelight Networks reached “record levels” in Q2 as global economies locked down for the pandemic, said CEO Bob Lento on a Monday investor call. Cisco expects 26% traffic growth this year, including 35% growth in internet video traffic, he said: “We’re exceeding that.” Amid COVID-19's “increased global reliance” on the internet and content delivery, Limelight had “good traction” with VOD customers and “some live events are starting to return,” said Lento. Limelight’s “participation” in the April Peacock launch to Comcast subscribers and the May debut of HBO Max helped drive higher traffic in Q2, he said. Expanding network capacity is Limelight’s top “strategic imperative,” said Lento. Its goal entering 2020 was to achieve 100 terabits per second of capacity, he said. “We expect to meet or exceed that goal even while having experienced some supply chain issues and travel and operational restrictions resulting from COVID-19.” Limelight upgraded 2020 revenue guidance to $230 million-$240 million from $225 million-$235 million in the April forecast “despite the continued uncertainty of where this pandemic takes us,” said Chief Financial Officer Daniel Boncel. There are “more unknowns than knowns” about the pandemic and its economic impact, said Lento. “We don’t know what the future holds in terms of the spread and severity of the COVID-19 virus and its effect on the lifestyles of people around the world.” No single livestreaming event like the NFL is “that material from a revenue perspective,” said Lento. “But when you string them all together all over the world every day, it is a material part of our business and right now that was zero in Q2 or pretty close to it.” The stock closed 8.6% lower Tuesday at $6.99.
Amazon began additional checks for certifying Alexa’s voice-control capabilities, or skills, a spokesperson said in a statement Tuesday. In a presentation before the FTC that day, Clemson University Graduate Research Assistant Christin Wilson described Alexa’s certification process as “improper and disorganized." The agency held PrivacyCon, a conference with researchers meant to help identify consumer risks and better target enforcement efforts, Consumer Protection Bureau Director Andrew Smith said.
Private LTE and the citizens broadband radio service won’t be a major factor for in-building connectivity for years to come, speakers warned during the third installment Tuesday of Connect (X), the Wireless Infrastructure Association’s virtual trade show. The FCC is to start an auction Thursday of priority access licenses (see 2007200049).