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Another record low for Snap after 14% drop post-earnings

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Snap, the Snapchat parent, has had a very difficult ride in the stock market since debuting in March. After pricing its IPO at $17 and then reaching highs of $27, the company has fallen to less than half that. After losing 14 percent of its value in a single day’s trading, Snap closed Friday at $11.83.

The growing social media company revealed on Thursday that it has 173 million daily active users, up more than 20 percent since last year. But that wasn’t enough to impress Wall Street, which was expecting more than 175 million users.

Analyst expectations are always built into the stock price and missing them will cause shares to plummet. And Snap not only missed on user growth, but revenue and losses, as well. 

The company brought in $181.7 million in revenue, a 153 percent increase from last year, but investors were expecting more than $186 million. But losses also increased substantially, $115.9 million for last year’s quarter versus $443.1 million for this year.

The success of Instagram Stories is one of the main reasons that investors are skeptical of Snap. Instagram copied its short-form video feature last year and has seen tremendous success. The Stories feature already has 250 million daily users, over 75 million more than Snap.

Snap also recently found out that it won’t be in the S&P 500, which is a significant blow because a lot of investors buy that index. And it looks like the company’s Spectacle glasses aren’t selling well.

The bull case for Snap is that the team has been innovative. The company popularized disappearing messages and came up with the stories idea. Snap also has been clever with its use of AI-enhanced face filters. But in order to survive as a public company, the team will have to come up with something that can’t be so easily replicated.

TechCrunch’s Josh Constine has a few ideas. 

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IBM’s Watson Beat: who owns music made by a machine?

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We’ve seen IBM’s Watson politely annihilate humans in Jeopardy, make a movie trailer for Morgan, create never-before-eaten recipes and even understand nuance and tone… to say the least. Now it’s moving on to music.

Watson Beat is IBM’s music arm of Watson; an AI-driven music composing app that’s sparked some debate about music copyright.

Speaking on the panel at Amsterdam Dance Event’s Tech conference yesterday, IBM THINKLab Director, Elizabeth Transier, explained how this open sourced, AI-powered music generator works.

“Essentially you take monophonic melody input and pick a genre and Watson Beat will generate composition after composition after composition until it’s a non-deterministic model – so everything is always unique.”

This is made possible by the ‘cognitive technology’ developed by IBM researchers, Janani Mukandan and Richard Daskas. By teaching Watson Beat the nuances and characteristics of music keys and music theory, the AI technology creates completely original songs with varying moods or styles.

Developers foresee the technology being used to inspire musicians out of ‘writer’s block’, eliminate genre biases or simply to create music that’s never been heard before. 

However, when it comes to who owns the music created by a machine, no one seems to have a solid answer.

“I have some pretty strong opinions about copyright, but, I’m not a lawyer,” explained Transier. “I actually don’t think a machine can own a copyright. I think it’s the person who sees that spark and takes it and creates something with it. I think that’s the owner. But that’s not an IBM statement,” she added.

Entertainment Lawyer, Bjorn Schipper, who was also on yesterday’s panel, explained that copyright for AI-composed music is an extremely new area so it’s hard to give a definitive answer.

“In the past, you could always direct [a creation] to a human being. In the future, there’s no human spark anymore – maybe the spark is being made by a machine. So then, from a legal perspective, if it’s not traceable to anything, what do you do with it?”

Schipper went on to explain the issue of music copyright from current legal standards. “According to European copyright law, [a creation] must be the own intellectual creation of ‘the author’ and in the law it says [the author] must be a human being these days,” Schipper continued. “So without human intervention, it’s hard to say if there will be copyright protection.”