Welcome to Stuff I Thought About Last Week, a collection of topics on tech, innovation, science, the digital economic transition, the finance industry, the winter solstice, and whatever else made me think last week. Please grab me on Twitter with any thoughts or feedback.

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In today’s post: Mainstreaming Arm in the data center; movie making on a holodeck; app stores; the balancing act of multi-sided marketplaces; Netflix speeds up and goes audio only; humidity helps fight viruses in winter; genetically engineering against swine viruses; and lots more below...

Stuff about Innovation and Technology
Tweets via Arm on AWS
Twitter is migrating algorithmic timeline feeds to Amazon’s Arm-based Graviton2 processor on AWS. It’s hard to overstate how big of a milestone it is to have a large-scale platform with complex real-time computing needs running on an Arm-based processor in the cloud. Implementation of the latest, 5nm semiconductor process node has finally opened the floodgates for low-power Arm chips – from the Graviton2 in servers to the M1 in Apple computers. Microsoft is rumored to be playing catchup with their own Arm-based silicon for servers and PCs (recall that two weeks ago I suggested Microsoft should consider acquiring a large Arm chip designer to catch up more quickly as shifting from x86 to Arm is increasingly existential). The switch to Arm in the data center and computers will put significant upward pressure on the supply chain as processor demand is increasingly handled by TSMC and Samsung more so than Intel. The previous chicken-and-egg hurdle of shifting the entire software stack is fading away quickly. This shift continues to underscore the strategic, global importance and extreme vulnerability of Taiwan, and it continues to argue for a JV between US chip companies, Internet platforms, and hardware makers for building $100Bs in US-based semi fab capacity. In related meta news, Amazon is now using Graviton2 to run Synopsys software to design its own chips.

StageCraft a Cinematic Paradigm Shift
Buried in the middle of a long and impressive look at the enormous amount of content coming to Disney+ over the next couple of years was a discussion of Industrial Light and Magic’s new StageCraft filming technology. Developed in conjunction with Jon Favreau (who, we’ve noted in the past, is a big fan of filming in virtual reality worlds like Unreal and Unity), the tech appears to have moved from VR to the real world with a holodeck-like giant, circular, high-def LED screen surrounding a sound stage. The projected world can be completely controlled much like a video game. There is a good video on the first version of StageCraft used in The Mandalorian Season 1, and if you go about 1 hour and 17 minutes into this analyst day video you can get a good peek at the latest version. The newest generation of StageCraft, recently used on The Mandalorian Season 2, merges all stages of production (including pre and post) – with big efficiency gains – and has been vastly improved since The Mandalorian’s first season. This advance seems likely to have a huge impact on film making in the post-COVID world, and appears vastly superior to green-screen filming, where actors must imagine the background rather than experience it. In addition to the current StageCraft facility, Disney is building three more – in LA, London, and Australia. And, yes, I want one.

Spotify now on Epic as Music Streaming Growth Slows
Epic Games announced the availability of Spotify in its app store last week. The move portends a bigger effort by Epic to compete with mainstream app stores in the future. While Epic is still locked in legal battles with Apple and Google, beginning late next year with the launch of Version 12, Google will make it easier for 3rd-party app stores like Epic to run on Android phones. Assuming standard terms apply, Spotify will keep 87.5% of revenues from the app on Epic compared to 70% on iOS and Android, which could incentivize Spotify to make the app cheaper for Epic signups. Epic’s app store has over 100M users. In other music streaming news, Billboard reports a leveling off of listening, perhaps due to people spending more time on social apps, playing video games, and listening to podcasts.

Shopify vs. Amazon: Merchant vs. Consumer Centric
Amazon’s Webstore, the long-time effort to provide an online marketplace for vendors, failed and shuttered in 2015. It’s likely that merchants feared giving Amazon access to transaction data (tending to view Amazon as an enemy) but I don’t know if it was those concerns or a lack of focus on Amazon’s part (or both) that ultimately killed the initiative. Similar concerns are preventing Amazon from selling its Just Walk Out checkout technology to other retailers. BI Premium reported last week that Bezos, in his return to overseeing daily operations at Amazon this year, has taken a renewed focus on the threat from Shopify. Shopify has been successful, in large part, by maniacally focusing on merchants. This approach is in direct contrast to Amazon, which I believe has been successful because of its maniacal focus on consumers, sometimes at the expense of merchants. As I wrote in SITALWeek #273, marketplaces have historically struggled if they prioritized merchants over consumers, and it therefore makes little sense for Shopify to launch a marketplace to compete with Amazon. Likewise, Amazon choosing to prioritize sellers in a (semi)independent webstore product would likely conflict with Amazon’s customer focus if the new marketplace had any sort of Amazon branding and/or connection to Prime and Amazon payments. This long interview with Shopify founder and CEO Tobi Lütke at The Observer Effect is well worth a read to understand how and why Shopify has been successful.

Amazon Care as Haven Fails
Amazon is also looking to take Amazon Care, it’s healthcare service for employees, and sell it to companies, bypassing insurance companies and brokers, according to BI Premium. The new effort follows the failure of Haven, the Amazon JV with Berkshire and JP Morgan, which is no longer focused on primary care. The BI article paints a picture of chaotic fits and starts and failure to execute in healthcare for Amazon. While it would be great to see technology completely upend the failed US healthcare system, that day might still be far in the future.

Netflix's Ambient TV
Netflix continues to experiment with its Android app by allowing for variable playback speeds of 0.5 to 1.5x (if you want to have some real fun, watch a Hollywood production at 0.5x). And, their latest move is to allow audio-only playback in the Android app. Creators aren’t thrilled with the changes, and it will be interesting to see if Netflix expands these consumer-friendly modifications to other streaming locations in a way that underscores its seemingly increasing role as ambient TV – video entertainment as background noise.

Overdraft Fees Eroding Entrenched Banks
Conor Witt at Armchair Quarterbacking highlights the rise in US bank service charges to $34B. Despite a 50% drop in fees in Q2 of this year, as savings balances rose and overdrafts were less common, a number of startups are going after those fees by offering much more consumer-friendly banking services.

Not Just Leading-Edge Semis in High Demand
Strong demand across the board for analog, sensing, power, and RF chips has led to a shortage of trailing-edge 200mm chip manufacturing capacity/machines.

Miscellaneous Stuff
CRISPR Bacon
Genus, a British animal genetics firm, used CRISPR gene editing to remove the CD163 gene from pigs. CD163 is a receptor on white blood cells that makes pigs susceptible to porcine reproductive and respiratory syndrome (PRRS). The pigs suffer greatly from the virus and it claims up to $600M annually in the US ($2.5B globally). The tech was published several years ago, but Genus now thinks the modified swine will soon be commercially available, possibly within five years. And, given that pigs are a primary vector for the human flu, work is underway to see if pigs could be made immune to that as well by removing genes for proteases that aid viral infection. Technology Review suggests that: “the pig hatchery shows that CRISPR might be able to give people inborn ‘genetic vaccines’ against the worst infectious diseases they might encounter”.

Engineering Behind COVID Vaccine Campaign
There are a lot of complexities in the road to making billions of vaccine doses. Beyond the obvious cold storage, logistics, and jabbing challenges, there’s the special Valor glass from Corning, and a potential shortage of cholesterol (which is combined with fatty acids to encapsulate the mRNA for delivery). IEEE Spectrum walks through the various challenges and how it will all be possible.

Fight Viruses by Boosting Winter Humidity
It turns out colds/flus don’t proliferate more in winter just because people are packed together indoors and get less sunlight than in warmer months. Coronaviruses are also more stable in lower temperature and lower humidity (as well as in very hot/humid air – it’s the in between that poses a problem for viral stability). National Geographic reports: “Lower humidity evaporates droplets to a smaller size, making it easier for the virus to bump into other chemicals in the droplet and inactivate–but only up to a point. If the droplets get too small, the naturally occurring salts in the fluids we exhale crystallize and trap the virus, preserving it for awakening when the drop gets dissolved in a new host’s airway”. Further, cold air and low humidity negatively impact the immune system and mucociliary clearance – the body’s mechanism for trapping viruses and moving them back out through the nose and mouth. An immunologist interviewed for the article suggests using a humidifier indoors and wearing a scarf over your mask outdoors to boost humidity and help limit viral infection.

Stuff about Geopolitics, Economics, and the Finance Industry
CCP Censored Zoom Calls of Americans Outside of China
A Zoom executive was charged by federal prosecutors for disrupting video calls and terminating accounts of Americans convening “video calls about the 1989 massacre of pro-democracy activists in Tiananmen Square”. The FBI alleges the Zoom employee “worked as Zoom’s primary liaison with Chinese law enforcement and intelligence services, sharing user information and terminating video calls at the Chinese government’s request”. As explained by Foreign Policy: “The presence of CCP cells in Western companies operating branches in China is unremarkable. The party’s constitution requires companies with three or more members to form a cell. Cells are much less prevalent in foreign firms than in domestic firms. In the majority of cases, cell meetings are tedious box-ticking affairs, although they’ve increasingly become a tool of direct influence inside private business under President Xi Jinping. Foreign firms have raised concerns about party cells influencing business decisions under the new regime, but their presence is well known.”

❄️
Happy winter solstice to everyone! We will see you all in two weeks in 2021. In the meantime I will be playing the anthem of 2020, This Year, by The Mountain Goats.🤘✌

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