MVMT Quietly Released Its First Automatic Watch

So How Is It?

The internet’s favorite watch company, MVMT, has quietly released its first automatic watch, the Arc Automatic. 5-year-old fashion watch brand MVMT was recently bought by Movado, and MVMT seems to be putting its newfound access to money and resources to some use, putting out an automatic watch in four different color and strap combinations. Each build is a stainless steel case, coming in at $300.

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MVMT’s new Arc Automatic, in one of 4 colorways.

Recently, I warned against buying MVMT and Daniel Wellington watches, instead directing you towards a number of microbrands that have used ecommerce and social media to find success. This move shows MVMT may be taking a step into “real” watch making, now that is has introduced millennials to the idea of wearing something on the wrist (Apple Watches and Fitbits have also done a great job of this). It’s a classic story of disruption — start at the low end of an industry and eventually move upmarket, undercutting your competitors’ prices in the process — and it’ll be interesting to see how it plays out in the watch industry. Watches are so unlike many other industries where true disruption has occurred: brands have built up equity over centuries, and there is certainly no shortage of demand for luxury timepieces right now. In fact, it’s almost hard to contemplate a world in which Wall Street bros aren’t blowing their first bonus on Rolex Submariners or Panerais that are way too big for their wrists. Indeed, the true luxury market for watches in the U.S. has thrived over the past few years (over $6,000), even as the under-$3,000 market has struggled.

The MVMT Arc Automatic: What We Know

Microbrand watch companies have flourished in part because of their transparency: they leave no doubt about where they source their movements from, where manufacturing and assembly takes place, and how many watches they’re producing in a series. You’ll find no such transparency on MVMT’s website. There’s no discussion of the movement inside their Arc Automatics. However, from the looks of a 30-second unlisted YouTube hype video they posted, it looks as though they’re using a Miyota 8215 caliber in the watches (Miyota is a part of Citizen Group). It’s a common movement used in accessibly-priced automatic watches, and while it won’t win any awards for beauty or accuracy, it’s certainly a passable movement. I more so begrudge the company for not being transparent in what’s inside their watches.

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A 30-second YouTube clip hints that MVMT has put an entry-level Miyota movement in their new automatic timepieces.

The watch is also fairly large, measuring in at 41mm in diameter and 13.25mm thick. It surely wears large as well, since MVMT has brought over their trademark minimalist approach to the dial, meaning there is little bezel and the dial reaches nearly to the edge of the watch.

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Conclusion

In short, I’ve got mixed feelings about the watch, and MVMT’s approach in general. I applaud the company for introducing a new generation to wearing something on the wrist, even if they did so by selling cheap, battery powered gadgets that were made in China for a few dollars. They were never a watch company, but always just a social media marketing company that happened to sell watches. I have much the same feeling now that they’ve begun selling automatic timepieces: they’re upselling an entry-level watch movement with a trendy dial design. But if it gets more people into mechanical timepieces, then what is there really to complain about? I’ll sit around hoping their next purchase is a true timepiece with minimalist inspiration, perhaps Nomos’ Tangente or Junghans’ Max Bill.

For now though, I’ll continue to refer to the Seiko 5 line as the ideal entry-level mechanical watch. Still the only place you can find true in-house, workhorse movements at sub-$300 prices. So before you click purchase on that MVMT Instagram ad, do a little research.

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This Automatic Seiko is Just $65, and the Internet Loves It

The best automatic watch under $100

GQ’s “Best Stuff” loves it. There are YouTube videos after YouTube videos declaring it the “best automatic watch under $100.” There’s even a subreddit dedicated to shitposting about it. But I can’t seem to find a single Hodinkee post about it, which made me want to write about it even more.

I’m talking about the Seiko 5, specifically the SNK805, SNK807 and SNK809 (Seiko 5 is a broad line of budget watches from Seiko; for example, the SNZG series has a similar pilot/military inspiration, but in a 42mm case. This article focuses on the SNK because it’s perhaps the cheapest and most popular in the Seiko 5 line). Like many budding watch enthusiasts, the SNK807 (the blue reference) was my first foray into mechanical watches and I haven’t looked back since. The field- and pilot-watch inspired dial never really goes out of style and has an immediate appeal even to those without intimate knowledge of watches and their history

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The Seiko SNK805, SNK807, and SNK809, respectively.

In the mechanical watch world, there’s an unfortunate tendency to assume that “you get what you pay for,” and that, for example, a nearly $200,000 Patek 5270 is by default a more lustworthy than a simple watch at an attainable price.

The Seiko 5 line was launched by Seiko in the 1960s as the market increasingly demanded do-it-all tool watches. While vintage Seiko 5s from this era obviously don’t fetch the sky high prices that Rolex tool watches do, you can still spot fun, vintage Seiko 5s on Chrono24.com or eBay, usually under a couple hundred bucks. They’re called Seiko 5 are named such because the brand demanded that all watches under the moniker carried five key attributes: (1) automatic winding, (2) day and date display in a single window, (3) water resistance, (4) recessed crown at 4 o’clock, (5) durable steel case.

The SNK line has all these: it’s got a 7S26 movement with 40 hours of power reserve that drives a day and date window at 3 p.m. It’s got Seiko’s “Magic Lever” winding system inside, which means the watch’s rotor winds the movement extremely efficiently. It’s not the prettiest movement, but most Seiko 5s came with a skeleton case back which allows new enthusiasts a glimpse of how entrancing a mechanical movement can be. These movements have been known to run for decades without service, and when you do need service, it’s easy to find because it’s such a ubiquitous caliber. Some complain that there’s no manual winding of the movement, but give the watch a few shakes before you strap it on your wrist, and it’s off and ticking.

The stainless steel case is water resistant to 100 feet (and Seiko is known for underestimating the water resistance of their timepieces), with 37mm diameter and 11m thickness.

The only real complaint I have is the canvas strap the watch comes with: it’s a cheap canvas that just doesn’t feel comfortable or look good. I swapped it out for a seatbelt NATO of the same color, and the watch instantly felt and looked better on the wrist.

When we write about watches, true value propositions like this are too often overlooked. For some reason, finding a good horological value isn’t respected the same way it is in other consumer categories. And while other large brands and microbrands offer value propositions in the $1,000-$2,000 category, Seiko is perhaps the only brand offering a true piece of watchmaking under $100.

Where to Find It

You can find the Seiko 5 SNK in all its iterations on Amazon, JomaShop, and other online retailers. You shouldn’t pay more than $65 for the watch, though you’ll see prices vary, especially on Amazon.

The Micro-Brand Watches You Need to Know

Check out these watch brands before you buy that Daniel Wellington or MVMT

As I began to fall deeper into the watch wormhole and looked to drop some real cash on my first time piece, my natural inclination was to find the best direct-to-consumer internet-first brand out there. Hey, if it works for my favorite cashmere sweater, fresh pair of white sneakers, and other wardrobe staples, why not watches? Of course, watches are a little different; many watch manufacturers have built up brand equity over centuries. Consumers connect to vintage pieces in a company’s collection and identify with the story their branding tells. And over those centuries, these brands have cultivated manufacturing expertise allowing them to craft beautiful in-house movements. But, more than one microbrand has managed to break through, often acquiring a cult-like following who devoutly snaps up their favorite brand’s new release minutes after it’s released. While distribution channels for major brands like Rolex or Patek Phillipe are often difficult for consumers to navigate, these microbrands leverage the internet to cultivate consumer relationships and brand loyalty.

Some websites do wonderful work covering microbrands (Worn & Wound and Gear Patrol among them), but they often don’t gather information about these brands into one easy-to-access resource, forcing you to search their archives for holistic information. I wanted to take some time to consolidate information about some of the best microbrands I’ve seen out there, what they’re about, and why they might be for you.

First, an attempt to define the term “microbrand”. It’s a term ambiguous almost by its very nature, but what these brands generally have in common is a direct-to-consumer model driven by ecommerce. Wikipedia defines microbrand watch companies as those selling 300-2000 pieces a year, which sounds good enough to me. They’re typically priced much lower than luxury watches (think a few thousand dollars, at lost), and leverage global manufacturing to source movements from ETA or Miyota, which also provide movements for some of the most well-known watch companies in the world (ETA is owned by Swatch Group, Miyota by Citizen Group). The brands – which are typically operated by just a few proprietors – then do the dial and case design or outsource the work to a shop. If you dig into their stories, you’ll also often find these brands got their start from a successful Kickstarter campaign.

In other words, check these brands out before you purchase that new Daniel Wellington or MVMT watch. Enough housekeeping, let’s get to the watches!

Christopher Ward

Christopher Ward is something of a pioneer in the online-only microbrand space, launching from Maidenhead, England in 2004. Three English buddies, all with a common passion for watches, decided to start a company selling watches with Swiss movements at a fraction of the price you might see from a legacy Swiss brand. The company got its start by packing Swiss ETA movements into clean, well-designed dials, but has since begun building its own in-house movements. They supposedly caused a bit of a firestorm on watch forums when they released their first watch (leading to user bans when forum moderators thought the users were posting paid Christopher Ward content). In true Barbara Streisand-effect irony, the brand only grew from there. Their in-house caliber is actually the result of Christopher Ward’s 2014 merger with their Swiss manufacturing partner  Their automatic SH21 contains an impressive 120-hour power reserve, and is now available in a variety of watches from the brand, including the Grand Malvern Power Reserve, their best-selling watch. It’s priced at $1,900, about the sweet spot for most of Christopher Ward’s collection.

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Christopher Ward’s Grand Malvern Power Reserve with in-house caliber

Now, the company has a comprehensive line of watches, including dress, dive or sport, aviation, motorsport, often with fun and subtle design quirks. For example, watches in their new Trident line contain a seconds hand with trident spear counter balance.

Instagram (25k followers)

Oak & Oscar

Oak & Oscar was founded in 2015 by Chase Fancher (full disclosure: I’m biased towards this company because they’re based in my hometown of Chicago). They’ve been hard at work ever since, releasing three models over the preceding years: the Burnham Date, the Sandford GMT, and the Jackson Chronograph. Every design is beautifully executed, something you’d expect from a company that named its first model after Daniel Burnham, the architect behind the Flatiron Building and many of Chicago’s greatest buildings. Previous models have sold out, but the Jackson Chronograph is still available for purchase on their website. Often, they’ll post on Instagram about their Oak & Oscar owner retreats, and it’s honestly pretty cool to have created a passionate community of watch collectors who also want to hang out together. Midwest nice.

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Oak & Oscar’s latest model, the Jackson Chronograph

The Jackson comes in three variations: a stainless steel case with either a navy or grey dial, or a PVD case with darker grey dial. All went through limited production runs put remain available on Oak & Oscar’s website (though the warning “Low Stock!” sits on each version’s page). It’s a powered by a manually-wound Eterna movement (Swiss) that beats at 28,800 vibrations per minute, with a 60 hour power reserve. The case is 40mm in diameter and slightly thick at 14.5mm, giving the watch a nice presence on the wrist. One can also see through the sapphire caseback that the 25-jewel movement is nicely decorated, with four stars cutout of a bridge, referencing the city of Chicago’s flag. The stainless steel Jackson is $2,850, while the PVD-coated version is $3,150.

Oak & Oscar (rightly) claims that watch boxes have little utility and end up buried in a closet, so instead they send the watch with a nicely crafted leather watch wallet which holds three watches and has enough room to hold the spare straps they also send with the watch. Their leather is sourced from Chicago’s Horween Leather Company. Personally I’ve been scouring the forums and Ebay for a Sandford GMT, but to no avail yet, which is probably a testament to the fact that the original purchasers keep these watches.

Instagram (24k followers)

Autodromo

“Instruments for motoring” is the tagline of New York City-based Autodromo. The brand was launched in 2011 by a a vintage car fanatic, for vintage car fanatics. Its collection ranges from distinctive quartz chronographs to more simple automatic pieces. The last couple of years, Autodromo’s collection has been defined by its partnering with Ford to produce the Ford GT Endurance Chronographs, commemorating the Ford GT’s first win at Le Mans in 1966. If you’re into racing at all, you’ll immediately recognize this colorway:

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Autodromo Ford GT Endurance Chronograph with Le Mans commemorative dial

The worlds of vintage car and vintage watch enthusiasts seem to naturally overlap, and Autodromo has leveraged this to its advantage, carving out a nice niche in the sub-$1,000 space.

Instagram (37k followers)

Martenero

Brooklyn-based Martenero launched in 2014 with two models, the Founder and the Ace. They’ve added five watches to their collection since, each with a distinct and customizable style. The founders started the brand to create contemporary, yet classic time pieces; at a time when so many brands just re-release takes on their vintage models, it’s refreshing to see a brand with distinctively 21st-century design, with clear inspiration from classic watch motifs. Their most recent release, the Kerrison, comes packed with an automatic Miyota 9015 movement – the Citizen-built movement that’s a favorite of upstart brands the world over (that I just realized you can purchase on Amazon for about a hundred bucks). The designs are simple with a certain whimsy and punch of color that really makes the dials and hands stand out.

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The Martenero Kerrison, a 42mm watch packed with an automatic Miyota movement.

Instagram (13k followers)

Halios

Halios and its flagship Seaforth diver watch are something of a darling to the internet watch world. Halios is essentially a one-man operation run by founder Jason Lim out of Vancouver. Halios is very much a passion project of Lim’s, but luckily his taste is impeccable; he’s inspired by 60s sport watches that are built to do anything and everything. He keeps his watches priced under $1,000, sourcing production out of Asia. Its Seaforth contains the ever-popular ETA 2824-2 automatic movement, so you know its built to last. It’s got a classic dive-watch build and a steel GMT bezel. Go to any watch forum and you’ll find a passionate base of Halios owners.

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The tough-as-nails Halios Seaforth.

Instagram (23k followers)

Weiss

Weiss Watch Company is one of the few companies that has a legitimate claim to the mantle “made in America”. Weiss Watch Company was started by Cameron Weiss, a California native who learned all his watch making skills in Switzerland – first in watchmaking school, before stints at Audemar Piguet and Vacheron Constantin. He’s truly passionate about bringing fine watchmaking back to the states, and if you flip over one of his watches, you’ll see he’s not messing around. All his watches feature Weiss’ own beautifully finished CAL 1003 movement. Its military-inspired field watch will inspire mid-century nostalgia in even the coldest of souls.Screen Shot 2018-10-13 at 4.35.49 PM.png

Instagram (16k followers)

Farer

“British Design x Swiss Made” is the moniker of popular micro-brand Farer. Their increasingly robust collection contains chronographs, GMTs, and simple three-hand designs. The company emphasizes the use of color, detail, and contrasting textures on their dials, leaving the internal movement to the Swiss experts. This means contrasting sub-dials on its chronographs and fun seconds hands, but to me, its GMT is perhaps best served by the inclusion of different colors. The GMT will set you back about $1,500, making it another viable option in the sub-$2,000 price range.

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A Farer GMT. What’s not to like about that green hand?

Instagram (22k followers)

Unimatic

Italian brand Unimatic is all about no-nonsense dive watches. They produce watches in small runs – usually less than 1,000 watches – and its hard to beat the prices too. For example, its Modello Unos will run you about $600. And they contain Seiko movements inside, which some of the most honest, durable (and well-priced) movements you’ll find anywhere.

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Unimatic’s minimalist dive watch | Instagram

Instagram (28k followers)

Raven

Raven has been quietly building classic-looking dive watches out of Overland Park, Kansas since 2008. Many of them have a Submariner feel, with case sizes varying from 40mm (Trekker, a classic dive watch) to 47mm (Titanium Deep, a monster of a watch). Most models come in at around $1,000, and all use the Swiss workhorse ETA 2824 automatic movement. It’s a movement also used by many Hamilton and Tissot watches in the $500-$1,000 price range, so you know you’re getting a quality Swiss movement inside the well-built stainless steel cases.

Instagram (6k followers)

Ochs Und Junior

Okay, this one’s a little different than those previously mentioned, but come on. Ochs Und Junior produces about 130 watches a year, most of which are custom made. Its perpetual calendar might just be the perfect watch: the perpetual calendar movement takes only nine additional parts, displaying what (in my opinion) is a modern horological wonder. The minimal, brutalist design might turn some off, but I keep coming back to the company’s video illustrating the build of the perpetual calendar. They’ll set you back about $30,000 though, so start saving your francs.

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Patents, Spotify, and Incentivizing Innovation

💊 PATENTS AND INCENTIVIZING INNOVATION

Tuesday brought decisions from both patent cases argued in front of the Supreme Court this term, Oil States Energy Services v. Greene’s Energy Group and SAS Institute v. Iancu. At issue in both cases was the process of inter partes review (IPR), which was instituted in 2012 after the passage of the America Invents Act. The process allows a competitor to bring call for an IPR, which, if institute, initiates a trial-like process engaging both parties. The USPTO has the sole discretion in reconsidering and potentially invalidating the patent at issue.

In Oil States v. Greene’s Energy, the question before the Court was whether the adjudication of IPR petitions by the USPTO is an exercise of the “judicial power” that under Article III of the Constitution can be exercised only by courts. The Supreme Court’s resident patent expert, Justice Clarence Thomas, wrote the opinion, holding that IPR does not violate the Constitution. Thomas wrote that because patents are a public right and the IPR process is simply a reconsideration of that grant, Congress has the authority to conduct the reconsideration. There has long been an academic argument about whether patents are public (e.g. statutorily created) rights or private (e.g. common law) rights, with Justice Thomas falling on the former side of that debate. But, Thomas was careful to articulate that the decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or Takings Clause.

According to Court documents, the IPR process has been used to invalidate some 1,300 patents since 2012. Tech companies are largely please with the decision, as it allows them to continue to use the IPR process to challenge patents instead of having to undergo long, drawn out litigation against alleged patent trolls.

But, pharmaceutical and biotech companies are more worried about the ruling, fearing it may open the door for competitors to more easily (and cheaply) invalidate patents through IPR. This gets to the difficulty of treating two fundamentally different industries (tech/internet companies and pharm/biotech companies) with different business models the same when it comes to intellectual property.

For modern tech companies, potential returns are much greater. Modern internet companies are driven by network effects that can generate massive returns to scale for innovation. They’re able to spread fixed costs over a massive user base that can scale quickly. Meanwhile, Moore’s Law (yea, I went there) implies that R&D cost, on a per unit basis, continues to decline for computing-based R&D.

On the other hand, evidence suggests that biotech and pharmaceutical R&D is only getting more difficult and more costly. Some have even referred to drug discovery as operating under a “reverse-Moore’s law,” and while machine learning may facilitate the drug discovery process, this promise is largely unfilled as of yet.

The Constitution gave Congress the power to “promote the progress of Science and and useful arts,” but the reality is spurring innovation requires different tactics in different industries. We can quibble about how strong patents should be in the biotech and pharmaceutical industries, but the heavy capital investment required to innovate in these sectors necessitates some statutory protection. But, the case for government-granted monopolies (patents) for software innovations is much more tenuous.

While we wait for the merging of software and biology (or, for software to eat biology), it’s important to recognize the different capital structures at play for different industries and structure incentives accordingly. We don’t need the government to incentive investment in the next “one-click buying” patent, but we do need to incentivize continued commercial investment in biological R&D. Government-granted monopolies are an impure means to an end (innovation), and it’s important to critically evaluate when and where they should actually be issued.

The second, less exciting opinion held that when the USPTO institutes an IPR process to review an already issued patent, it must decide the patentability of all claims the petitioner has challenged.

Photo by freestocks.org on Unsplash
Some inventions require patents (above). Some don’t. Photo by freestocks.org on Unsplash.

🎧 SPOTIFY THE HITMAKER

On April 24, Spotify announced its new free tier with a few major changes. First, it’ll recommend music to users on the fly using its machine learning. Second, and more importantly, it’ll let free-tier users listen on-demand to whatever song they want, as many times as they want, if the song appears on one of Spotify’s 15 personalized discovery playlists. These playlists account for about 750 tracks in total.

As I wrote after Spotify filed its F1, its success depends largely on its ability to cut out the music labels, whose content currently accounts for 87% of content streamed on Spotify. With the overhaul of its free tier, Spotify is attempting to mint new hints, allowing the 90 million users of its free tier to listen to certain songs, selected by Spotify, as often as they want. Spotify’s success depends in large part on its ability to serve as a platform for new or up-and-coming artists, helping users discover new artists while at the same time helping new artists get discovered. It’s a beneficial relationship for both listener and musician, with Spotify sitting in the middle taking a cut of the transaction. Providing free users access to unlimited listening of select songs drastically increases Spotify’s ability to be a hitmaker.

Apropos the patent discussion above, note that while Spotify has patents related to its machine learning and recommendation algorithms, these may not be essential to its business. The fact that it has 160 million total users makes the cost of acquiring these patents relatively trivial. Either way, the data Spotify continues to gather on its users is much more valuable (and protectable) than any patent it may or may not have acquired.


🎬 NETFLIX THEATRES?

From one subscription media business to another. Reports have emerged that Netflix is looking for ways to get into the movie theatre business. While it may not be interested in Mark Cuban’s Landmark Theatres anymore, it sounds like Netflix wants to get some of its productions in theatres so it can qualify for awards. Jeff Bezos has long been obsessed with garnering awards with his Prime Video service, so it seems he’s not the only one with a complex (the Prime Video section of his shareholder letter is basically one long sentence about how awesome Prime is because of all the meaningless awards its various shows received).

Of course, Netflix (and to a lesser extent, Prime Video), are successful illustrations of the “laddering up” strategy that Spotify is now pursuing. That is, they built businesses off of licensing copyrighted content from TV and movie studios, building a war chest to invest in their own original content and cut out the middle man.

But, there may be differences between music and video that make this strategy harder for Spotify. Namely, old music still holds a ton of value, while old TV shows and movies are less valuable. I love to bump the Beatles, but only watch I Love Lucy when I’m home during the holidays and my mom makes me.


🦅 Bird’s Eye View. In China, facial recognition technology was used to spot a man in a crowd of 60,000 concert goers.

💡 From the Printing Press to the Internet. A chart showing productivity from 1440 printing press to today. Other academics have studied causes of the productivity slowdown since 2004, illustrating it’s more than just a “measurement problem” (Business Insider, Marginal Revolution).

The Bundle is Back 🗞

From Spotify to Apple News, bundles are back; are they better than ever?

One of the business world’s great apocryphal sayings goes something like this: “there are only two ways to make money in business: One is to bundle; the other is unbundle.” Netscape founder Marc Andressen attributes it to his buddy Jim Barksdale.

A recent spate of bundling news makes it clear that a new age of bundling is upon us:

  • Hulu and Spotify announced a $12.99/ mo bundle that includes unlimited access to both services. It’s a nice savings, as Hulu (with ads) cost $7.99/ mo and Spotify premium costs $9.99/ mo. It’s an expansion of the two companies’ partnership: last year, they offered a student bundle for $4.99/ mo.
  • On the heels of acquiring Texture, “the Netflix of magazines,” there are now reports that Apple is working to launch a subscription news in its Apples News app later this year. Apple has recently been pushing to bring in more revenue from its Services (think App Store and Apple Music), so this move fits in line with its broader strategy. Speaking of Apple Music, it was also recently reported that Apple Music now has 40 million subscribers, creeping towards Spotify’s 70 million.
  • Comcast and Netflix announced that customers will soon be able to add a Netflix subscription to new and existing Comcast Xfinity packages.
  • Medium’s Ev Williams wrote about the Medium model, bragging that it’s “one of the largest bundles of original content of its type, so it’s a great value for readers.” Medium launched its subscription model a year ago, and apparently it’s going great (graph without a y-axis be damned).
  • Jeff Bezos revealed in his annual shareholder letter that Amazon Prime – the bundle of all bundles – has over 100 million subscribers. By tacking on benefits at recently acquired Whole Foods, the scope of the Prime bundle continues to expand.

In addition to Netflix and Spotify proving that subscription bundles can work, the recent fire Facebook and other ad-driven companies have come under has give the bundle even greater tail winds.

Meanwhile, with the official launch of ESPN+, the sports broadcasting giant has dipped its toes in the water of the over-the-top future, albeit cautiously. ESPN won’t offer many of its flagship sporting events on ESPN+, indicating a reluctance to fully embrace a digital future. Despite staff upheaval and non-stop talk of “cord cutters,” ESPN’s cable TV business remains profitable. Further, ESPN owns (and continues to bid on future) rights to sporting events, meaning it has an intellectual property moat that others don’t necessarily have. Sporting events need to be seen live, while very few other events do. As such, ESPN doesn’t want to make the shift to digital too soon, thereby undercutting its existing cable business before it needs to do so.

Really though, the pendulum swinging from bundled to unbundled and back again is a reflection of the underlying technology: in the early 2000s we all carried around individual songs on our iPods. They took forever to update – and we had to hardwire the iPod into our PC – so it was fine if we just bought a few songs. Then, as cloud storage and streaming became technically (and economically) feasible, consumers shifted to streaming services. Chris Dixon has a great explainer on bundling economics here, but the conclusion is this: in the end, bundling is beneficial for buyers and sellers.

But, bundling can also be used as an anti-competitive mechanism. I recently warned that Google’s Chrome ad-blocker may be an attempt to do this:

This forced tying of products together is what often gets monopolies in trouble with the law, in one way or another. AT&T’s attempt to force consumers to buy its own phones and network attachments was eventually deemed unreasonable and unnecessary by the FCC. Similarly, Microsoft’s attempt to bundle Internet Explorer with the OS eventually caught the DOJ’s attention, leading to a landmark antitrust case. And now Google is attempting to leverage its browser to squeeze the ad blocker market.

Of course, Spotify is nowhere near anti-competitive behavior: it’s not even profitable, and tech giants like Apple and Amazon are nipping at its heels. In fact, the bigger anti-competitive worry is these tech giants that can bundle together any number of services making it almost impossible for startups to compete.

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Sometimes, what’s old is new again. Photo by Nikita Kachanovsky on Unsplash.

THAT’S NOT (WAY)FAIR

On Tuesday, the Supreme Court heard oral arguments in South Dakota v. Wayfair. It’s a case on whether to overrule a 1992 decision that prohibits individual states from requiring out-of-state retailers that do not have a physical presence in the state to collect tax on sales to state residents. States claim they’re losing massive tax revenue. Online retailers are concerned about a patchwork system of state and local taxes, making it hard for them to efficiently conduct business. Since you asked, Amazon already collects sales tax when it sells its inventory through Amazon.com, but when third-party retailers sell through the Amazon Marketplace, the company leaves it up to them to collect the sales tax. Most probably don’t.

Even this Amazon example illustrates that large companies may be better able to collect local tax revenue, and it might be more difficult for small companies or merchants to collect the sales tax, robbing the smaller merchants of a single national marketplace. Thankfully, it seems as though our President has a handle on the matter:


☁️ Microsoft dismissed, but a cloudy future. With the hasty passing of the CLOUD Act, the Supreme Court dismissed a long-running dispute between Microsoft and the Department of Justice that had made it all the way to the Supreme Court.  The CLOUD Act clarifies that warrants for data held by service providers like Microsoft and Google reach data stored anywhere in the world. But, questions over whether Microsoft will challenge the new warrant issued under the CLOUD Act and how foreign governments will react to the new, hastily enacted legislation leaves the potential high for fresh disputes to surface.

The new legislation authorizes the U.S. to enter into bilateral data-sharing agreements for law enforcement purposes, while allowing service providers to move to quash a warrant if they believe there is a “material risk” that the request would violate the laws of a foreign government.

This sets the CLOUD Act on a collision course with international privacy laws like the EU’s forthcoming GDPR. Meanwhile,

Meanwhile, the EU has introduced a similar law, that allow European prosecutors to force companies to turn over data such as emails, text messages and pictures stored online in another country, within 10 days or as little as six hours in urgent cases (Reuters).


👮‍♂️ FCC adviser arrested. Perhaps taking a cue from her boss, broadband adviser Elizabeth Pierce was arrested on charges of tricking investors to dump $250m into a fiber optic scheme by faking contracts (The Verge).

🔑 Post hoc, ergo proper hoc. Visualizing errors and manipulation in logical thinking. Oh, and also it’s “raise the question,” not “beg the question.”

Bourgeois Culture is Dead, So Let’s Stop Talking About It

The internet is bad and boujee, and it’s only accelerating the pace of change

Dear Professor Amy Wax,

I remember when you burst onto the scene as a free speech victim late last year with your op-ed, “Paying the price for breakdown of the country’s bourgeois culture”. Let’s first put aside the irony of an article featuring a photo of John Wayne — a notorious womanizer who was divorced twice and had at least as many affairs — proceeding to talk about how people used to get married and stay married and that was good for society or something. The op-ed itself has been dissected and re-dissected ad nauseum by now.

It’s great to have you back this week with your Saturday Essay, enumerating the ways in which you’ve been oppressed since the op-ed was published. It’s another piece ripe for being ripped apart, but I’ll leave that to others (for the record, your basic point — that we must be able to engage in logical reasoning and civil discourse if we’re to survive is a society — is indisputable). The bigger point to be made is that none of this debate over “bourgeois culture” matters one bit. Technology, namely the internet, has fundamentally changed our society, and longing for 1950s values (or any form of “Make America Great Again-ism”) isn’t going to change that. To your credit, you (and Trump, for that matter) identify the core issue facing our country, perhaps accidentally, then proceed to arrive at exactly the wrong conclusion.

Continue reading Bourgeois Culture is Dead, So Let’s Stop Talking About It