Category Archives: News Center
By: Mike Montgomery
“It is widely accepted that by 2050 the world will host 9 billion people. To accommodate this number, current food production will need to almost double.” So begins the 200-page United Nations Food and Agriculture Organization report from 2013 that advocates eating insects as an end run around a looming food crisis. When a handful of Western entrepreneurs read it, they sensed an opportunity.
Since then, startups in the U.S. and Canada have demonstrated that people can overcome their squeamishness and be persuaded to eat bugs such as crickets, lured by their high protein and low environmental impact. (In other parts of the world, of course, dining on insects is an accepted custom.) Exo, one of the leading makers of cricket-flour protein bars, announced in March that it had closed a $4 million round of Series A funding. The company, which I wrote about last year, will use the investment in part to increase production and expand its product line.
Chapul, another cricket-bar maker, recently moved into national distribution, selling products with flavors like Aztec (dark chocolate) and Thai (coconut, ginger and lime) in nearly 1,000 retail locations, including chains such as Sprouts and Publix. Chapul, which was featured on Shark Tank in 2014 — earning an investment from Mark Cuban — recently won a grant from the state of Utah to industrialize its process for making cricket flour.
It’s premature to say that eating crickets has gone mainstream, but the idea has lost its shock value. “For cricket farmers who were using their job as a pickup line, it’s not working anymore because it’s not as sexy,” jokes Mohammed Ashour, chief executive of Aspire Food Group, which sells cricket flour and whole crickets.
As the edible-bug industry has matured, here’s what its pioneers have learned about challenging cultural taboos and developing a new market.
By: Mike Montgomery
The Federal Communications Commission’s (FCC) plan to mandate technology standards for TV set-top boxes in the name of creating more retail competition is being opposed by an unlikely source: set-top box maker Roku.
On the face of it, the FCC’s scheme is designed to help companies like Roku. The mandate would deconstruct the video streams coming into your living room’s traditional set-top box so they could be repackaged and served to you by any company with an interest in building a set-top box.
Roku already makes a device that streams video to televisions. The FCC’s proposal would give Roku, already an established player in the market, access to a whole new source of video programming – the consumer pay-TV packages forced open by the FCC regulation. That would seem like a powerful supplement to Roku’s current line-up of streaming video from sites like Netflix, Hulu and Crackle as well as content that lives on apps from networks like ESPN, CNN and Fox. If the FCC proposal went into effect Roku could directly stream live feeds from every broadcast and cable network.
Despite this supposed opportunity, Roku submitted a filing with the FCC opposing the scheme. In an op-ed in The Wall Street Journal Roku CEO Anthony Wood said, “This might seem like a great deal for consumers and companies like mine, but once you start peeling back the layers, the picture changes.” In its FCC filing, Roku stated, “rather than accelerate the pace and change of innovation, the FCC’s proposed rules could actually inhibit the transition from traditional programming delivery models to OTT services.”
By Tim Sparapani:
Los Angeles is considering new regulations around Airbnb, and other home-sharing platforms, that should deeply worry anyone who cares about keeping their personal information private. If approved, the regulations would require people who rent out space via a home-sharing platform to hold on to three years’ worth of information about who rented their property for how long and at what price. The Office of Finance would have the right to inspect these records at any time.
It’s unclear exactly why the government is proposing this level of privacy invasion. The main thrust of the proposed legislation, which will eventually need to be approved by the LA City Council, is to set out guidelines and fines that would ensure a level of safety and accountability for home rentals. This market is growing quickly. According to a recent poll by Time magazine, 26% of the population has used a home-sharing service. As such, it’s not a stretch for the government to set some commonsense rules around the market and collect taxes from commercial activity.
But the invasion of privacy outlined in the Los Angeles proposal will create unnecessary risks for consumers.
Think about when you check into a hotel. If you pay with a credit card, the hotel will likely look at your driver’s license to make sure it matches the name on the card, but they don’t have to. If you pay with cash, they don’t need any kind of proof of identity. You pay your money and you get your room.
So why is the sharing economy potentially going to be held to a different standard?
The licensing mega-group’s settlement with the DOJ is proof that the consent decrees are as important and relevant as ever.
By Mike Montgomery
On Friday, the American Society of Composers and Performers agreed to pay the Department of Justice $1.75 million to settle allegations of anticompetitive behavior. Despite the presence of consent decrees that specifically bar ASCAP (and BMI) from interfering with songwriters’ ability to strike direct deals for the licensing of their works, the licensing behemoth was caught red-handed flexing its oversized market muscle to block – not once, not twice, but 150 times – its songwriter and publisher members from licensing their performance rights directly to streaming services.
ASCAP is basically agreeing to do what it was legally required to do all along, but now throwing nearly $2 million down the drain that should instead have been distributed to songwriters.
It would be unbelievable were it not so typical of ASCAP’s consistent bad behavior.
ASCAP (and BMI, which collectively hold the rights to 90 percent of all music licenses) has proven how willing it is to wield its market power to squash competition, which harms songwriters and the prospects of a healthy, modern music marketplace. They trot their members out to Capitol Hill to cry poverty then report record annual royalty revenues of $1 billion – where is all that money going? They claim to have the best interest of their songwriters at heart, but at the same time leverage their enormous market power and comfy relationships with publishers on their Board (a clear conflict of interest that DoJ also is shutting down as a result of the settlement) to prevent songwriters from negotiating direct deals that may actually be in their best interest.
ASCAP’s response to DoJ? They had the audacity to say, “(w)ith these issues resolved, we continue our focus on…key reforms to the laws that govern music creator compensation.”
Why should the government award such behavior by even considering altering the consent decrees? The consent decrees have protected artists and helped enable the rise of music streaming, which is proving to be the most promising new revenue source for artists since the CD came along. Clearly they remain not only relevant, but essential.
Allowing a few big players at the top to use their market power to artificially increase the pricing of music won’t help songwriters. What it will help do is divert revenue opportunities from songwriters, chill innovation and competition, and turn consumers away from legal sources of music.
It doesn’t take a Berklee degree in Music Business to see that this will ultimately lead to a depression, not acceleration, in royalty revenues for songwriters and artists and what’s needed is increased transparency and a continuing adherence to the consent decrees.
Whether ASCAP likes it or not, the consent decrees work. They keep those tempted by untoward acts in-line. If anyone thinks that wouldn’t happen without the consent decrees, they need only to look to ASCAP’s settlement for proof.
Mike Montgomery is executive director of CALinnovates, a technology advocacy coalition.
This piece originally ran in Radio & Television Business Report, and can be viewed here.
By: Mike Montgomery
Beating expectations on Wednesday, Tesla Motors TSLA -4.11% reported $1.6 billion in revenue for the first quarter on a 45% sales jump from last year. The fact that the climb came with a 57 cent per-share loss didn’t bother investors who were braced for a 58 cent per-share loss.
The Elon Musk hype machine rolls on as Tesla prepares to roll out 500,000 units of its newest car, the Model 3.
Cars are not the kind of thing people usually wait hours in line to buy. But that’s exactly what happened last month when Tesla Motors started taking down payments for the Model 3. The car won’t even be available until 2017 and certainly no one has given it a test-drive, but at $35,000, it costs less than half the price of a Model S — and that’s all most people need to know.
Silicon Valley types like to throw the word “disruption” around a lot, but Elon Musk is truly disrupting the car industry. Not only did he manage to create a car so exciting that people are lining up overnight just to put down a payment, but those locations where customers were dropping their money? They’re not even actual stores. You can’t buy a Tesla there — you can only purchase one online. The storefronts you see are simply places where people can test-drive the vehicle. This business model, which bypasses the dealership, is of course upsetting the car-sales landscape and is under attack by the dealership lobby.
But it’s important to remember that disruption in and of itself should never really be the end goal. Not every industry needs to be disrupted. If entrepreneurs are going to work to disrupt, they have to make sure there is a positive end goal — that consumers are going to benefit, that work is going to become more efficient or that some overall good comes from the disruption.
By: Mike Montgomery
The Federal Communications Commission (FCC) is developing a nasty habit of passing rules that end up doing more harm than good. These rules may initially be well intentioned but the end result is that some certainly stifle innovation. We’re seeing a very clear example of that right now in the Wi-Fi router industry.
Last year, the FCC put rules in place to stop people from messing with the radio frequencies (RF) inside Wi-Fi routers. They wanted to make sure that the RFs didn’t interfere with things like medical devices and weather radars. They didn’t mandate that router boxes be locked to all modifications, but they also didn’t think through the potential ripple effects of the mandate.
In response to the new rules, a router company called TP-Link went ahead and locked its boxes to all outside modifications, which could have a chilling effect on future innovation. The reason — it was too difficult to block users from one part of the box (the radio frequencies) and give them access to other parts of the box. It was easier and cheaper to just block users from tampering with the software all together. When customers complained, TP-Link told them to call the FCC.
This might seem like an obscure incident that only hard-core tech enthusiasts would care about but it points to a larger problem. The FCC is quick to make decisions that might work politically but don’t work practically.
By: John Eggerton
Commenters flooded the FCC Friday, the deadline for initial input on chairman Tom Wheeler’s proposal to “unlock” MVPD set-top box info and share it with third-party navigation devices.
“No demonstrable market problem exists to justify the kind of intrusive tech mandates proposed by the Commission,” said the Free State Foundation. “And it highly doubtful that any conceivable benefit could outweigh the heavy costs that the Commission now ignores – costs which will initially be paid by MVPDs or program content owners, but will ultimately be paid by consumers. The Commission performed no cost-benefit analysis of its proposal prior to its Notice. Nor did it even seek input to conduct such an analysis.”
Agreeing that it was an unnecessary and counterproductive government attempt to enforce tech policy on an innovative space was California tech advocacy group CALinnovates.
“Our analysis found that the FCC’s proposal would result in higher bills,” said CALinnovates executive director Mike Montgomery of the group’s filing. “It is apparent that with this set-top box proposal the FCC is missing the forest for the trees. Specifically, the Commission obsesses over the size of one ancient, crumbling tree – missing the thriving vegetation sprouting around it.”
The Telecommunications Industry Association, which represents the manufacturers and suppliers of communications networks, was another critic of the proposal. TIA said in its filing that the FCC is operating on the faulty premise that the marketplace is not “replete” with navigation choices. It also says the standards setting provisions “could lead to device incompatibility, and risk pre-determining which technologies will prevail over time, contrary to widely followed standards making protocols.”