The growing pains of Apple’s subscription addiction – TechCrunch

Good morning friends! Welcome back to Week in Review!
Last week we discussed how YouTube managed to keep its cool while Facebook was hammered over platform responsibility issues. We're going to be looking at another slippery slope Apple is on.

This article can be downloaded from TechCrunch's newsletter page. Follow my Twitter @lucasmtny for more information.

The big thing

Apple will have to make controversial decisions to become the first quadrillion-dollar company after first reaching that sweet trillion-dollar valuation. Jokes aside, Apple's business is changing significantly as it grows to mega-scale. The company is exploring growth strategies that could be seen as aggressive and bold or as too conservative.

Apple is starting to push harder than ever to get consumers to buy new iPhones and lock them into subscription software services.

Epic Games CEO Tim Sweeney criticized Apple's placement of advertisements in its Settings app. He also questioned why Apple was not following its own rules. Although his complaint was likely to focus more on Apple's anti-competitiveness, my first reaction after seeing an Apple Music advertisement in the Settings app was Damn! Apple isn't that a bit gauche?

It seems embarrassing for a $2 trillion company to ask consumers to purchase something in the same section of the app that they use to solve problems. Although it is just one ad slot and one slip-up, the absence of spamming and junkware has been a hallmark feature of the Apple device ecosystem. It was possible that you did not like the stock app or standard calculator pre-installed over the years, but it was nothing too troubling. But as Apple pushes paid subscription after subscription with a variety of services, including Music, News+ tv+ and Fitness+, one starts to wonder where all this leads.

Not new mine rotates between Arcade and Music daily triggered by new device purchase that comes with the services Rich Greenfield, LightShed (@RichLightShed) October 6, 2021

Apple is now building more complicated subscriber products that are not limited to a single app. Its iCloud+ service, which combines backups with advanced privacy features in Safari for paying customers, is now available. Different levels of Apple One memberships offer different services at discounted prices that can be shared with loved ones. This is true, Sweneys points out, for developers trying to compete against a product with home court advantage in perpetuity. However, it creates a less welcoming platform to consumers who want devices that connect them objectively to all the stakeholders and services of the wider web.

A general disclaimer: Apple is often criticized for seemingly small things. They have done a great job streamlining positive user experiences with their devices. Consumers have also become accustomed to other companies allowing these small things to snowball into misplaced incentives that gradually erode a product. It is alarming to see promotional push notifications that are more frequent than usual, or an ad that seems to be misplaced, or too many introductory offers for new devices.

While Apple is not guilty of turning into a service business, it is important to recognize that this will likely require a change in how they relate with customers. These changes are just beginning to be visible, but we may see more of them down the line.

Other things

I will be playing around with this section over the next few week. So it has fewer cold summaries. Let me know via Twitter if this is your jam, or if you prefer headlines that are more concise and less verbose.

Twitch hack causes trouble for the game streaming kingpin

Amazon's streaming service that is primarily focused on gaming suffered a bad week. Hackers released a lot of source code, creator payout data and other information. This is a huge loss for Twitch, and it leaves YouTube Gaming and Facebook Gaming with a list of data to lure exclusive streamers to their platforms. It is also likely to be demoralizing for streamers, as streamers can now see how much their competition are earning from streaming giants.

Due to YouTube and Facebook's efforts to attract viewers, Twitch's lead in the game streamer battles has been gradually shrinking. Although Twitch is still preferred by many early career streamers, YouTube and Facebook are far behind. Their success has largely been due to dumping money into paid partnership programs to bring in popular content creators. The data that was just leaked is quite pricey for them.

Facebook/Instagram/WhatsApps god-awful week

Facebook has had a rough few weeks, but this one was just too brutal. The company was engaged in a PR battle against a whistleblower. However, Facebook suffered its worst outage in a decade. It took down all global services and broke its internal tools. It was a frustrating experience for users who rely on WhatsApp for their social lives and business.

Last week I said that Facebook doesn't deserve to be the sole internet media platform being universally criticized. However, despite so much public anger, it seems that executives at the company don't seem to be able to see beyond the fact they feel unfairly treated and aren't trying to self-reflect. Facebook's brand is in a very serious state right now, but the possibility that it could spread to its subsidiaries such as Instagram should be something that leaders and shareholders can see.

Fake shares in real startups - Real money paid

Although I cannot say that this was as important as the other bits, I feel it is a great way to show where we are in this bull market. Visionrare, a NFT platform for fantasy startups investing, was launched earlier in the week. I did not cover its launch but had a lot of doubts. It was basically a pitch to treat Venture Capital investing as fantasy sports and to get people competing for their synthetic NFT shares from startups.

After my launch post, many investors and entrepreneurs reached out to me and explained the likely ways that it would be sued. It seems that the founders were able to listen. They shut down the marketplace less than a day after it went into public beta. However, they promised a return with a free-to play version. The NFT market is full of laughable money, but many top NFT project founders spend a lot of time discussing details with lawyers before they launch to ensure that they don't have to make difficult decisions after launch. This piece of generative art was sold for $6.9m this week. The toad was purchased for 420 Ethereum ($1.5 million). Enjoy your weekend!

Additional things

Here are some of my favourite reads from the TechCrunch+ subscription service, which we recently renamed:

In Q3, $158 billion was raised by global startups

Venture capital and startup investors discovered that COVID, and its associated economic impacts, were largely set up to miss the start-up technology market. Investors have been busy putting ever-larger sums of cash into new companies all over the globe since the beginning of 2020. Accelerating capital deployment has produced more unicorns, mega-rounds, and simply more dollars than any time in the history.

Make sure you get the details right in your pitch deck

Every Disrupt, we host a session called Pitch Deck Teardown. It's a friendly workshop in which founders from the audience send me their decks. I then walk through a carefully curated set of decks live before an extraordinary VC panel who review each slide. TechCrunch Disrupt 2021 saw us joined by Maren Bannon (co-founder and managing partner of January Ventures); Vanessa Larco (partner at NEA); and Ben Ling (founder and general partner at Bling Capital).

Top VCs share their tips on how to raise your first dollar

Nina Achadijan, Index Ventures partner, started by telling founders that they should first think about whether they really need venture capital. It's a great time to be an early stage entrepreneur. She said that there is more capital available than ever and businesses are willing to take on technology. There are many platform shifts that can be very exciting for entrepreneurs in the early stages. The first thing to ask is: Do you really need venture capital? You don't need VC funding to build amazing businesses. "

Thank you for reading. If you're reading this on TechCrunch, this can be delivered to your inbox via the newsletter page. Follow me @lucasmtny on Twitter.

Lucas Matney