Instagram has TikTok fever
Also on today's edition: Adani drops out, Covishield cleared, and no more tax havens
Good morning! Cricketer Virat Kohli has something to celebrate after a disappointing month. The fintech startup he backed, Digit, has doubled its valuation and is now worth $3.5 billion after raising $200 million from Sequoia Capital. Digit had entered the unicorn club in January.
Anyway, on to the day’s stories.
The global housing market is hot again.
Growth is life for Indian telcos.
Big game hunt.
Insta Pivots To TikTok
We probably knew this, thanks to Reels. But Instagram is now looking to take that leap, by moving beyond its origins in photo-sharing. This move, as articulated by Instagram head Adam Mosseri, means that the app will now start going full video — "full-screen, immersive, entertaining, and mobile-first," everything that describes TikTok perfectly. More broadly, this move would dramatically change the essence of Instagram beyond a social networking platform to a video and entertainment app.
Ringing in the changes: To this effect, the Facebook-owned app is also taking a more creator-friendly approach (one of its four key focus areas besides shopping, video and messaging). Taking a cue from Twitter's "Super Follow" feature (or OnlyFans, really), Instagram is developing "Exclusive Stories," which would presumably involve a subscription model. Besides, it is also looking at an NFT feature called Collectibles.
TikTok goes long: Meanwhile, TikTok is quietly making a pivot of its own, moving beyond "short" videos to something longer, with one eye on user retention, much like YouTube. It will now allow users to publish videos of upto three minutes, which is 3x its current one-minute time limit.
All In The Game
Facebook is doubling down on its gaming ambitions. The company has brought on Ubisoft to make game-streaming free to most parts of the United States. An international rollout is expected in 2022.
A different strategy: The social media giant’s approach is opposite that of rivals Google and Amazon. It has chosen to build the offering into its main social network and Android app, making it both free and a part of the larger Facebook experience. Its competitors, on the other hand, have opted for standalone cloud gaming for a monthly subscription.
Facebook has also chosen to host only Ubisoft's mobile games, highlighting the importance of mobile gaming in the larger ecosystem.
A toast to India: Closer home, Swedish gaming giant Modern Times Group has purchased Indian word game maker PlaySimple for ~$360 million. And WinZO, an online gaming and entertainment platform, has raised a Series C round of $65 million from Griffin Gaming Partners.
Telcos Gasping For Breath
India’s telecom industry is poised for a shakeout, with companies reeling under mounting debt, reducing profitability and competitive pressure. The searing heat of competition was evident when Airtel chairman Sunil Bharti Mittal said the company would not hesitate to increase tariffs, but not unilaterally. To say the industry was in trouble was an “understatement,” Mittal pointed out. “Ten operators gone out of business, two merged together… gasping for breath right now.”
A mountain of debt: Vodafone Idea (VI), a joint venture of Aditya Birla Group and Vodafone UK, has asked its bankers to bear with it even if some borrowing terms were broken. Its net worth had eroded to a negative INR 382.24 billion in March 2021. The combined borrowing of Bharti Airtel, VI, BSNL, and MTNL reached a record INR 3.85 trillion in FY 21, and together, they racked up a net loss of INR 700 billion.
Runaway hit: While they reeled under debt, billionaire Mukesh Ambani-led Reliance Jio clocked revenue of INR 704 billion and net profit of nearly INR 120 billion. Jio now accounts for about 30% of the combined revenue of the five operators and just 3% of their combined debt.
Telecom operators that in the past two decades revolutionised how Indians communicate and showcased a low-cost model to the world, have been crumbling under relentless pricing pressure from disrupter Jio. It now allows its predominantly prepaid plan users to borrow data in a pinch and pay later, a scheme that competitors like Airtel already offer. While cheaper offerings help lure rivals’ users, like a credit card prods spending, it also encourages thrifty Jio customers to be comfortable with carefree data use for video and audio streaming. It’ll also prepare them to upgrade to Jio’s superfast 5G when it launches.
Didi Ordered Out From App Stores
China’s Internet regulator has shut out mobility company Didi Chuxing from app stores, citing violations in the way the company collects and uses personal information.
The move comes days after the company sold shares to US investors, raising $4.4 billion. It debuted on the NYSE last week and notched up a valuation of almost $68 billion on the first day of trading.
Chinese regulators have gone after several domestic big technology companies, including Ant Financial, which was stopped in its tracks a day before its scheduled, potentially record-breaking IPO in Hong Kong and Shanghai last November. The regulator had announced a probe into Didi just a couple of days ago.
Betting High On Homes
Would you name your first-born after a home seller or a decrepit building if you get to own it? Stories like this are part of the deal in today’s housing boom. From the Americas to Asia, real estate prices have soared to the highest level since 2006, according to a report from Knight Frank.
Derelict sales: Home prices are up by double-digits. A Canadian “small box” house saw 192 show bookings within 24 hours of listing. In Sydney, rundown properties are selling like hotcakes where buyers just want a piece of the pie. China’s tech hub, Shenzhen, is becoming almost as expensive as Hong Kong, where apartments now cost as much as 43.5 times a resident’s average salary.
Boom boom: A supply crunch coupled with low mortgage rates is driving the housing surge. Moreover, the need to work from home because of the pandemic is luring people into putting in high bids for more spacious homes. Many experts say they’ve seen nothing like this in the housing market before.
What Else Made The Signal?
Covishield cleared: Twelve EU countries, - Austria, Germany, Slovenia, Greece, Ireland, Estonia, the Netherlands, Iceland, Switzerland, Latvia, Finland, and Spain - have included India’s Covishield in their approved list of vaccines. There is no word on Covaxin though.
No more tax havens: India has joined 129 other countries to reform the global taxation framework with a minimum 15% corporate tax rate to prevent treaty shopping and ensure that MNCs, including digital giants, equitably pay taxes, irrespective of the market they operate in.
Crypto goes green: Bitcoin mining’s green energy use climbed to ~56% in the quarter ended June 2021, a steep rise from the previous quarter’s 36.8% usage, according to a report by Bitcoin Mining Council.
Billionaire dropout: Gautam Adani is no longer in the top 20 of the Forbes global billionaires’ list. Adani Group shares had slipped after reports that the National Securities Depository had frozen some of its foreign investors’ accounts.
REvil attack: A widespread REvil ransomware attack on US-based IT management company Kaseya disrupted supply chains of more than 1,000 companies.
Let’s go meatless: Nature’s Fynd, an alt-meat company based in Chicago, has received $158 million backing from Jeff Bezos, Bill Gates, and Al Gore, among others.
Mixing it up: The Indian government may ask automakers to manufacture vehicles that can run on petrol and ethanol-blended fuel. The move, likely as early as October, aims to reduce pollution caused by fossil fuels.
Treehouse learning: Poor connectivity is a pressing issue for students and teachers in the online classroom setup. A government teacher in a village in Kodagu, near Bengaluru, spent two months building a classroom atop a tree to get better internet. It worked.
To infinity and beyond: Two women are making their way into space this month. One is Sirisha Bandla, only the second Indian-born astronaut to take off into the skies. She’ll be flying with Richard Branson on a Virgin Galactic craft. The other is Mary Wallace Funk. The 82-year-old is set to launch off with Jeff Bezos.
Atmanirbhar doggos: Thanks to PM Modi, Indian doggo breeds are finding a place in dog squads. Security agencies across the country are training Mudhol hounds, Rajapalayam and Rampur Hounds to join their ranks.