| The Information is hosting an event on the impact of AI on the IPO market in San Francisco on November 14th, with speakers from NYSE, Citi and J.P. Morgan. How is the IPO market shaping up for tech and what will AI's impact be? More details & request an invite here. Greetings! That didn't take long. Within a day of Donald Trump's election as president, TV executives were signaling optimism that the new administration would make life easier for them by allowing the industry to consolidate. Warner Bros. Discovery CEO David Zaslav made the most articulate case on Thursday, presenting mergers as a way of helping out poor consumers who can't figure out how to navigate the crowded world of streaming apps. "Consumers put on a TV set and they see 16 apps. And each of those are doing different pricing. And you're sitting there with your phone and Googling where a show is or where a sport is.…It's just not a good consumer experience," Zaslav argued. Not only is he right, but this framing is more likely to appeal to antitrust authorities than arguing that mergers would help TV companies cope with shrinking cable revenues by helping them cut costs. Still, the idea that a veteran TV executive is worried about the consumer experience is a little ironic, given that TV executives gave us the world of high-priced cable TV, offering hundreds of channels people didn't watch. And those they did watch were jammed with so many ad breaks you might think the programs interrupted the commercials rather than the other way around. To be fair to Zaslav, he appears to have learned his lesson on advertising, noting on Thursday, "We have seen on cable that too much advertising really presents consumer challenges." What's worrying, though, is that Zaslav (like other TV executives) is a big advocate for creating bundles of streaming services—basically cable TV–like packages where you pay one price and get several services. Already, WBD has created a bundle with Disney that offers WBD's Max with Disney's Disney+ and Hulu for $29.99 a month, all without ads. That's a big discount on the $51.97 you'd pay to get the ad-free versions of those separately. But if you think that discounted price will last, then I've got a bridge to sell you. All the big TV companies have been jacking up prices on streaming regularly, to the point where most have erased the streaming losses that were straining their finances. But their streaming profits are still small, while the much more substantial profits from their cable channels are diminishing, as we saw in the third-quarter results today from Paramount Global and those from WBD on Thursday. That guarantees that prices of the new bundles will rise once people get used to them. And if consolidation happens, there's a risk that bigger bundles will come, costing more money and resembling cable packages with a mix of some programs you watch—and some you don't. Zaslav may not be thinking along those lines, to be sure. But there's a danger that allowing mergers will take us back to the worst of the cable world. That might be good for the companies, at least in the short term, but consumers are not likely to welcome it. With the election dominating the news this week, our story on how Elon Musk will play a key role in connecting Trump to China was a smart analysis that is worth a read. Other election-related articles included this piece on the future for artificial intelligence regulation, how investment bankers are talking with crypto firms about possible IPOs now, and a writeup of a subscriber call we ran with some policy heavyweights on the potential of the new administration. Also this week: - We delved into TikTok from several angles, including an update on the first half financial performance of its parent, ByteDance and how TikTok executives are hoping a Trump victory will save the app from a ban.
- On the AI front, we scooped the news that Amazon is discussing putting more money into Anthropic but wants the startup to agree to use Amazon-designed chips; two companies that work with OpenAI, Anysphere and Mercor, are in talks to raise money at valuations many times higher than what each scored a few months ago; and Perplexity is in talks to raise $500 million at a valuation three times what it raised money at earlier this year.
- Also on AI, the competitive threat posed by new services to established software firms like Salesforce is real, as we explained in this deep dive; don't miss the detailed table showing what big companies are using AI for.
- Meta Platforms has become more discriminating in how it spends money on virtual reality and mixed reality content—and some app developers have had to cut back as a result, Sylvia and Kalley report.
- A True Value analysis of Reddit suggested its stock had room to go higher, despite a big rally—and since publication Reddit stock has risen 22%.
- Michael Roddan scooped that Citigroup had stopped providing payment services to Chinese-owned bargain basement shopping site Temu, after Visa raised questions regarding Temu's business.
- Julia Black considers how the media missed the rise of the new tech right.
- Chipmaker Taiwan Semiconductor Manufacturing Co. has told some Chinese customers it will stop making advanced AI chips, potentially setting back the chip design efforts of companies such as ByteDance, Alibaba and Baidu, according to two people directly involved in the situation (More here).
- Elon Musk joined a phone call on Wednesday between Donald Trump and Ukrainian President Volodymyr Zelensky, Axios reported, the latest signal that the billionaire will play a major role in Trump's second administration after helping guide him to victory in the election.
- Jack Dorsey's payments fintech Block is negotiating a potential settlement with several state regulators that have probed the company's anti–money-laundering and other compliance programs, adding to the legal problems the Cash App and Square parent is facing.
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