🚀 AI music climbs the charts
Plus, is Bytedance building an empire?
trending 📈
💸 Banks bid for First Republic. Six weeks after SVB failed, another bank popular with Silicon Valley startups - First Republic Bank (FRB) - faced a crisis of confidence that sent its share price tumbling 50%. What happened? FRB released a quarterly report which revealed that withdrawals were greater than expected, raising questions about the bank’s long-term viability. Federal regulators stepped in over the weekend to run an auction for FRB, and JPMorgan was announced as the buyer this morning.
🎶 AI music goes mainstream. Remember the AI-generated Drake cover that popped up on TikTok, racked up millions of streams, and was swiftly taken down by UMG? That was just the beginning for AI music. In the past week, we’ve seen hundreds (if not thousands) of AI tracks pop up - you can find some of them here, or join the AI Hub Discord. The space is rife with potential legal issues, as labels are raising the red flag about copyright violations and invalid uses of an artist’s likeness.
However, a few artists are beginning to embrace AI. Grimes have taken the strongest stance - she promised to split royalties with any creator who produced a successful AI-generated song using her voice (and even made a website to make this easy).
🗣️ Bluesky builds buzz. Last week marked a breakthrough moment for Bluesky, a new social app that combines a decentralized protocol with a Twitter-esque social feed. The app launched in February, and it’s in closed beta for now - but celebrities are beginning to join and other users are jostling for invites. Bluesky has an interesting history, as the product was originally incubated at Twitter under Jack Dorsey and is now a standalone public benefit company that has raised external funding.
📊 Earnings updates. It’s officially tech earnings season. Here’s the major updates from last week:
Meta had an unexpectedly positive outing, beating expectations with an increase in revenue for the first time in a year. The company also announced that time spent on Instagram has increased 24% since the launch of Reels.
Alphabet also exceeded expectations for both revenue and EPS. In a conference call with analysts, company executives highlighted their commitment to cutting costs while doubling down on progress in AI.
Snap had a tougher earnings report, with a 7% YoY decline in revenue and a drop in free cash flow. However, daily active users (DAUs) increased 15% YoY and short-form video feed Spotlight continues to scale - it’s now at 350M MAUs.
what we’re following 👀
An entirely AI-generated episode of MasterChef, but with Marvel superheroes!
How AI startups can navigate the high cost of compute.
Reddit is headed into Discord territory with tests of community chat channels.
Hospitals are piloting GPT-3 to draft responses to patient messages faster.
While TikTok dominates consumer social, parent company Bytedance has another app climbing the charts - Capcut! Capcut is a mobile video editor that powers features like animation, AI effects, slow motion, and auto-captions.
Capcut had a slower rise to “fame,” but it recently passed TikTok in number of monthly U.S. downloads. Capcut is now the #1 app in the Photo and Video category on iOS, and the #2 downloaded app across all categories in the U.S., with an estimated 1M downloads per day according to SensorTower.
Capcut recently turned on monetization via a premium subscription to unlock new features - and per AppFigures data, the company has more than quadrupled daily net revenue since January. This past week, it reached $82k in daily revenue, which annualizes to $30M in yearly revenue (though this is continuing to grow every day).
Capcut’s growth is, in large part, due to TikTok itself. TikTok trends like the blonde filter, which has been used more than 188M times, require a Capcut download to participate. When users click to try the effect within TikTok, they are directed to a Capcut portal, where they can create the video and post it back to TikTok - with the hopes that they’ll return to Capcut to make other videos in the future.
Bytedance is also the developer of Lemon8, a new Pinterest / Instagram hybrid, that launched in March at #1 on the U.S. Lifestyle charts, and #10 overall. Lemon8’s ascent was fueled by…TikTok ads, as well as Bytedance paying TikTok creators to migrate over. And Bytedance is also the maker of Hypic, an AI photo editing app that launched in the U.S. this year, and hit the top 30 of the Photo and Video category.
This kind of cross-app promotion isn’t new. We’ve seen companies like Meta (Facebook, Messenger, Instagram, WhatsApp) and Alphabet (Gmail, Chrome, Maps, YouTube) build “dynasties” in the App Store. Of the top 24 apps in the U.S. App Store as of 4/28, almost half belong to Bytedance, Alphabet, or Meta.
Can Bytedance expand its dynasty? Last year, we probably would have said yes - especially with the ascent of Capcut and early success of Lemon8. But the potential impending ban due to the company’s ties to China opens up a lot more questions. If there is a ban, will it impact TikTok alone, or also Bytedance’s other products? 🤔
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puppies of the week 🐶
Meet Louis and Lance, two brothers who live in New South Wales, Australia! Lance (first picture on the left) is a new arrival who came home with his family in April.
They are both mini-dachshunds - Lance enjoys biting the bars of his cage during naps, and Louis enjoys running around on the beach.
Follow them on Instagram @louie.minidachshund!
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