Twitter has an unfortunate reputation as the punchbag of social media. It has failed to deliver the huge returns of bigger rivals such as Facebook and Facebook-owned Instagram, it hasn’t been the cool new network for more than a decade and even its own most dedicated users love to drag it to oblivion.
Investors have been similarly wary of the 300m-strong social network – it has lagged behind rivals in terms of features, revenue per user and for monetisation tools. Lots of people rely on Twitter to make at least part of their income, but tend to monetise it off the network, with no cut for Twitter.
That might be starting to change. Twitter is trialling a “super follow” feature for people to support users they particularly like on the site, has bought the newsletter platform Revue and is integrating that with Twitter and has also bought up some other monetisation tools. With the departure of its part-time chief executive and co-founder Jack Dorsey, Twitter might be worth a second look in 2022.
NFTs will remain hyped to oblivion, some people will lose their shirts
If you managed to avoid any mention of NFTs – short for non-fungible tokens – online in 2021, you spend your time in far less nerdy corners of the internet than we do. Non-fungible essentially means that one token isn’t identical to the next one. So for a cryptocurrency, one bitcoin is no different from another bitcoin. For an NFT, each token is unique.
That means NFTs have become popular as a way to record blockchain “ownership” of a particular piece of digital art or memorabilia. These have included clips of NBA scoring shots, gorilla avatars and generative art.
Advocates say the ability to own digital art enables people to make ongoing creative work from the NFT they own, perhaps using it as the art for their company logo, adding it to existing intellectual property or even making a Gorillaz-style NFT avatar band.
Sceptics here note that all of this was and is possible without any use of NFTs at all: it is what intellectual property rights already exist to enable, after all. In practice, owning an NFT only proves you own the NFT – an entry on a blockchain somewhere saying you “own” whatever it links to. That may or may not be true legally, depending on how scrupulous the seller was.
If people are buying NFTs and driving up the price because they truly value the artworks on offer, then the gold rush could prove sustainable. If people are buying them solely because they think someone else will buy one for more, lots of people will lose big. One special thing to watch out for, for buyers and sellers alike, is platform fees. These can amount to hundreds of dollars – do remember the house always wins.
Uber, Deliveroo and the gig economy will struggle to make money
The delivery economy – and transport economy – is as big as it ever was, with home delivery of restaurant food and groceries still on the high it reached during the pandemic and demand for Uber-style transport up 20% to 40% on pre-pandemic levels.
The problem is that it doesn’t seem to be any more profitable for the companies offering the service than it was beforehand. Uber upped its prices by 10% in London, but is still struggling to recruit drivers and in the UK it is 20,000 drivers short of what it would need to meet demand. Alongside that, even though it is showing a tiny “adjusted” paper profit, it is still burning through hundreds of millions in cash.
The companies have new competition for labour too, in the form of a flurry of 10-minute grocery delivery startups, including Getir, Weezy and several more. Each of these is offering hefty discounts and cheap delivery to try to secure more customers than their rivals and so will be burning through cash at an alarming rate. Expect several of these to fail or to merge before 2022 is out.
Jack Dorsey will start a blockchain company. Peter Thiel might invest
Former Twitter CEO Jack Dorsey had been fairly obviously bored with his creation for some time, not least because his other company – the payments processor Square – has a valuation several times higher.
If the subtle clues of Dorsey’s rare tweets largely being pro-blockchain hype and the fact of him owning a payments company weren’t enough, in the last weeks of 2021 Dorsey renamed the company Block.
So, expect Jack Dorsey to launch a new blockchain-related subsidiary quite early in 2022 and don’t be surprised if Silicon Valley enfant terrible Peter Thiel invests – Thiel co-founded PayPal with the aim of breaking fiat currency and government control of money, so the appeal of blockchain as it hits maturity cannot be lost on him.
DAOs will be the new Spacs
This time last year, Spacs – short for special purpose acquisition companies – were the talk of the town. Spacs were a trick to help get your company publicly listed without the drawn-out, costly and risky process of an initial public offering (IPO).
A company would be created, raise money and then look for a startup to merge with, skipping lots of regulatory steps. People feared it would undermine safeguards designed to protect regular investors. From now, though, Spacs feel like they’ve had their moment.
While several startups, including BuzzFeed, went public via Spac in 2021, most of them underperformed the market and many lost money outright, meaning startups are eyeing up IPOs once again.
The hot abbreviation as we enter 2022 then is DAO – short for decentralised autonomous organisation. DAOs, which generally use their own cryptocurrency to create a one-coin, one-vote democracy, raise money and seek to use it for some agreed purpose. One recently tried but failed to buy a copy of the US constitution, leading to an almighty row over refunds when it failed.
Advocates see DAOs as the forefront of a new, democratised internet. Sceptics see a waste of time and effort, only an illusion of decentralisation, and big risks to naive investors not sure of the risks involved, or of the steep transaction fees. It’s possible both groups are right.
People will try to make VR happen again
The danger once anyone in technology starts using the phrases “immersive” or “living your life online” is that it’s almost inevitably followed by someone trying to make you wear a headset – and there’s no reason to believe Facebook’s attempt to push us on to the metaverse wearing their Oculus headsets will be any different.
Users have generally avoided virtual reality. Heavy headsets, motion sickness, the poor content and the utter nerdiness of VR put almost everyone off. But with the metaverse, an immersive internet that we are assured will work properly this time, being big tech’s new fixation, expect to see a new flurry of VR hype very soon.
Indie games will continue to have a renaissance
This year was another banner year for indie gaming, with even notable indie flop No Man’s Sky, which drew widespread criticism on launch, now being acclaimed after turning itself around. Find-and-murder-your-friends indie Among Us became a huge lockdown hit, while Garden Story, Sable, Valheim and more broke through. Expect to see a similar slew of strong titles as the sector enjoys its renaissance in 2022.
The podcast bubble won’t pop
It’s safe to go back into your podcast app again. All those homemade lockdown podcasts launched by everyone’s boyfriend have deservedly withered on the vine and the state of podcast output is better than ever.
Major professional broadcasters and production houses are making high-budget series, there is still a bustling indie scene and podcasting has found a voice beyond “two men in a shed”. The output is more diverse in terms of content and who’s behind the mic than with old media, and the monetisation is now working. Podcasts are a success story and we should take the win.
…but the newsletter bubble might
On the face of it, newsletters are enjoying a similar triumph, but here there are clouds on the horizon. Most of the top-table Substacks aren’t successful because they’re a counter to the culture wars, they’re successful because they fuel it. Substack hasn’t proved an escape from Twitter for authors, it has become an incentive to have Twitter beef and drive more subscriptions.
A bigger problem is the price. If you subscribe to one newsletter, £4.99 a month or so seems reasonable. At four or five, you’re paying three or four times more for newsletters than you would for the New York Times. People are trimming their subs and wondering aloud whether there could be, say, a merged subscription at a lower price for numerous letters. Perhaps we could call it… a magazine?
Ports are the new ports
Finally, in the greatest U-turn since whatever Boris Johnson reversed himself on last week, Apple has done something it hasn’t in decades: it has added ports back on to its new MacBook Pro. After trimming them all the way down to simply two USB-C ports and a headphone jack, the new Pros have an HDMI port and even an SD card reader. We really are back to the future.
Comment Intel puts on a show for its biggest manufacturing announcements, with episodes every few years using a rotating cast of CEOs and US presidents.
Intel boss Pat Gelsinger and President Joe Biden were the latest to join the series, on Friday jointly announcing the chip maker’s investment of $20bn in plants near Columbus, Ohio. The fabs could be operational by 2025 and make chips down to 2nm and beyond.
“This is our first major site announcement in 40 years,” Gelsinger said on on-stage later in the day with Ohio Governor Mike DeWine (R).
“Intel’s announcement today is a signal to China and to the rest of the world that from now on our essential manufactured products in this country will be made in the United States of America,” DeWine said.
Intel’s announcement today is a signal to China and to the rest of the world that from now on our essential manufactured products in this country will be made in the United States of America
Intel has previously wheeled out chief executives and commanders-in-chief to announce the plowing of billions into factories, with the presidents using the events to highlight the bump in manufacturing and jobs for the United States. But the aftermath has been littered with unfulfilled promises and failed goals, partially due to Intel’s sometimes incoherent manufacturing and product strategies.
This time around, Gelsinger has identified manufacturing as a major growth driver, as part of his Integrated Device Manufacturing 2.0 strategy. Intel has promised to expand its contract manufacturing in a meaningful way, fabricating components that use the non-x86 Arm and RISC-V architectures, and signed on Qualcomm, a semiconductor rival, as a foundry customer.
Intel’s latest $20bn commitment will be used to build two plants on a 1,000-acre site that could be expanded to up to 2,000 acres and eight fabs. The site will employ 3,000 folks with an average salary of $135,000, and also bring 7,000 construction jobs to Ohio, DeWine said.
You can’t fault Gelsinger for announcing the factories: his shareholders and the world, amid a chip supply crunch, expect it. But not only should the news be seen in an historical context, it remains to be seen if Intel can meet the promises it laid out for the Ohio facilities.
In 2011, then-CEO Paul Otellini announced Intel was investing $5bn to complete Fab 42 when President Barack Obama visited an Intel facility in Hillsboro, Oregon. At the time, Fab 42 was to make 14nm chips, including smartphone processors, and create 4,000 jobs.
Ultimately, the announcement turned out to be a false promise. Intel cancelled completion of Fab 42 in 2014 after manufacturing woes and blunders in markets including mobile devices. In 2016, Intel laid off 12,000 employees to prioritize its products in the data center and the Internet of Things markets.
In 2017, then-CEO Brian Krzanich repeated the pledge to complete Fab 42, this time repackaged as a fresh announcement with President Donald Trump. Intel said it would invest $7bn to complete Fab 42 to make 7nm chips.
Intel powered up Fab 42 in Arizona in late 2020 to make not 7nm but 10nm chips. That’s the process node that was delayed for years due to critical fabrication missteps, causing Intel to lose its manufacturing lead over TSMC and Samsung.
Chipzilla hopes to do better on its commitments with Gelsinger, who wants to bring Intel back to its engineering roots.
Intel in September broke ground on more factories in Arizona, which carry a $20bn price tag. Work is also underway on manufacturing expansions in Oregon and New Mexico, and overseas in Ireland.
There’s a growing need to commit capacity to foundry customers, and to meet the higher demand for the company’s chips, an Intel spokesman told The Register in an email.
Gelsinger has stressed the “importance of building a more resilient supply chain and ensure reliable access to advanced semiconductors in the US for years to come. Today’s announcement is a critical step in our plans to fulfill these objectives,” the Intel spokesman said. ®
The draft DSA measures include tackling illegal content and holding social media platforms accountable for their algorithms.
The European Parliament has voted in favour of the long-debated Digital Services Act (DSA), Europe’s attempt to shift the balance of power from the hands of Big Tech and into the hands of EU residents.
MEPs voted 530 votes to 78 – with 80 abstentions – to approve the draft DSA text that will see tech giants held accountable for content on their platforms in a spate of new rules and regulations.
The move comes just a month after MEPs voted in favour of the Digital Markets Act (DMA), a similar set of proposed laws that seek to impose stricter rules around tech competition in the EU and rein in the monopoly large multinationals hold in Europe’s digital space.
The set of draft DSA measures include tackling illegal content, preventing the spread of misinformation and disinformation and holding social media platforms accountable for their algorithms.
The Parliament introduced several changes to the initial proposal by the European Commission, including exempting small businesses from certain DSA obligations, making targeted advertising more transparent and easier to refuse, and prohibiting targeted ads for minors.
Online platforms will be prohibited from using “deceiving or nudging techniques to influence users’ behaviour through ‘dark patterns’”, according to the revised DSA draft. Large platforms will also be required to provide “at least one recommender system that is not based on profiling”.
The approved text will now be used as the mandate to negotiate with the French presidency of the Council, representing member states. The negotiation will be led by Christel Schaldemose, an MEP from Denmark.
“Today’s vote shows MEPs and EU citizens want an ambitious digital regulation fit for the future,” she said after the vote. “Online platforms have become increasingly important in our daily life, bringing new opportunities, but also new risks,” she added.
Schaldemose said it was the duty of the European Union to make sure “what is illegal offline is illegal online” and that new digital rules need to benefit consumer and citizens, not Big Tech.
She said that, if enacted and enforced correctly, the DSA has the potential to inspire other nations such as the US to take on Big Tech and “safeguard democracy” before it’s too late.
“Every modern disinformation campaign will exploit news media channels on digital platforms by gaming the system,” Haugen told MEPs in her opening statement. “If the DSA makes it illegal for platforms to address these issues, we risk undermining the effectiveness of the law,” she said.
Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic’s digest of need-to-know sci-tech news.
When FC Barcelona took to the pitch for the 2021 Spanish Super Cup final, the trophy wasn’t the only prize at stake.
Thousands of blaugrana fans were also keeping an eye on the market for FCB’s “fan token”, the club’s very own cryptocurrency. Socios, the web-based platform that pioneered fan tokens, had promised to “burn” 20,000 tokens for every goal Barcelona scored – and 40,000 if they lifted the cup.
In theory, success on the pitch would increase the scarcity of the currency, boosting its value. In practice, Barcelona lost the game and, footballing passions aside, it didn’t make much difference anyway. With 3.5m of the tokens in circulation, not to mention millions more retained by the club for future issuance, a few thousand here or there wouldn’t have moved the needle.
Football finance expert Kieran Maguire thinks clubs have latched on to crypto because revenues from other sources are starting to level off, having risen reliably for decades.
“Football clubs have realised that we’re now at max broadcast revenues, with modest growth at most to look forward to,” he said.
“As far as commercial sponsors are concerned, we’re seeing deals being renewed but not with increased money. The only way to increase matchday sales is to increase prices and fans are reluctant.”
Manchester United – whether one believes the club or not – claims to have 1.1 billion fans on the planet. With revenue of £488m in 2019-20, that’s just 45p per year, per fan.
“Clubs are thinking: ‘Can we ‘find another way of extracting money out of that huge fanbase?’ That’s where tokens come in.”
When AC Milan launched a token in early 2021, it raised $6m (£4.4m) in under an hour, or about 12% of the value of the club’s record signing, Leonardo Bonucci. Paris Saint-Germain’s token, the most valuable, has a market value of $45m.
In the murky and unregulated world of crypto though, it’s hard to know how much clubs are actually making. Socios said last year it had sold $300m worth of fan tokens but would not say how much of that went to the clubs with which it partnered.
Other platforms, such as Binance, are also moving into the fan token market, indicating there is room for growth, particularly given that only a few dozen clubs have entered the market in any meaningful way.
Pedro Herrera, senior blockchain analyst at DappRadar, a marketplace for blockchain-related apps, said that most fans buy tokens for the associated perks, such as votes on small decisions about which song to play over the stadium tannoy after a goal, or entry into a draw to win a signed shirt.
“It’s a win for the fan because they feel more involved; it’s a win for the team because it’s adding a layer of monetisation; and it’s a win for the [crypto] industry because you attract the masses and it’s one step closer to mass adoption.”
Maguire isn’t against crypto but adds a more sceptical tone: “Lots of fans love crypto and in its purest form it’s great. Banks have been overcharging people for years in terms of transaction fees and if crypto can reduce those fees that’s fantastic.”
“The problem is when unscrupulous traders, particularly via social media, seek to exploit fans who think a token is a serious investment product, rather than a glorified collectible.
“It’s magic beans. So long as it’s sold as a digital Panini card, it’s OK. But when it’s being seen as a form of investment, it’s moving into uncomfortable territory.”
“It’s unregulated, it’s volatile and it’s subject to manipulation by people who own large amounts of the asset.”
Fan tokens, though, are a mere paragraph in football’s rapidly unfolding crypto saga.
In 2021, crypto sponsors piled into football and were welcomed with open arms by cash-hungry clubs, leagues and players.
Exchange app Crypto.com sponsors Italy’s Serie A, one of the world’s most glamorous leagues, while Socios is Internazionale’s shirt sponsor. EToro, a trading platform that facilitates investment in multiple cryptocurrencies, has deals with more than half of the clubs in the Premier League.
Southampton players are understood to have been offered the option to be paid bonuses in bitcoin, as part of a £7.5m-a-year deal with Coingaming Group. And in January 2021, striker David Barral made history when he became the first player in a major league to be signed with bitcoin, albeit in Spain’s third tier with Internacional de Madrid.
This should come as no surprise given the reach that big-name stars have via social media and the money they can make from promotions. Other partnerships are perhaps more unexpected. Visitors to the Twitter profile of former Republic of Ireland international Tony Cascarino might have been wrongfooted by the former striker’s sudden change of pace midway through 2021. One moment he was musing on the latest developments in the Premier League, the next he was evangelising about blockchain bank Babb (no relation to former Ireland teammate Phil) and musing that the “crypto market is on fire”.
Even in its infancy, the reputational risks of this new commercial pact between crypto and football have become all too clear. Last year, Manchester City’s deal with a mysterious firm called 3Key Technologies fell apart in a matter of days as it emerged that nobody seemed to know anything about the company or its executives.
In December, Arsenal were rapped on the knuckles by the Advertising Standards Authority (ASA), which banned a club promotion that it said was exploiting fans’ “inexperience or credulity, trivialising investment in crypto assets, misleading consumers over the risk of investment and not making it clear the ‘token’ was a crypto asset”.
“For those in sport looking for sponsorship, it’s a whole new market of opportunity but it’s a bit of a landmine you’re dealing with,” said Bill Esdaile, managing director of sports marketing agency Square in the Air.
“My gut feeling is that such a small percentage of people understand how [crypto] works that too many decisions are made on trust, thinking that if [crypto firms] say they’ve got the money, they do.”
The amounts on offer appear to be going up.
Premier League strugglers Watford have perhaps the country’s biggest crypto deal, a front-of-shirt sponsorship from Stake.com. The site offers crypto gambling, which isn’t legal in the UK but may appeal to the league’s hundreds of millions of viewers around the world.
The arrangement even means that Watford players’ shirt sleeves bear the logo of Dogecoin, a “joke” currency whose value swings around wildly, often in response to tweets by Tesla multibillionaire Elon Musk.
Kieran Maguire estimates that the shirt deal could be worth up to £8m, based on the typical value of such partnerships, while an insider at Watford told MSN in August that the Dogecoin sleeve display added £700,000 into the mix.
Sums like these will become increasingly difficult for clubs to ignore, he thinks, particularly if the government goes ahead with a root-and-branch overhaul of gambling regulation that could see football lose the cash cow of shirt deals with betting firms.
“They [clubs] see the token market as slightly to one side, it won’t get picked up by the gambling review and it will help fill the gap,” says Maguire.
“Those deals of £5m to £8m could be replaced by NFT advertising and by crypto.”
In a recent paper, psychology researcher and gambling expert Dr Phil Newall warned that football sponsorship may be about to swap one risky product for another.