Tech Rewind: Taylor Swift Disrupts Digital Music, Obama Takes Sides on Net Neutrality
President Obama spoke up on net neutrality, and Amazon and Hachette, well they buried the hatchet -- this is your tech rewind of the week.
Not days after reports surfaced that U.S. Postal workers had been hacked, news broke that a vulnerability in Apple’s (NASDAQ:AAPL) mobile operating software could potentially allow hackers to falsely update a legitimate app replacing it with a malicious one. The cyber security mask was first reported by FireEye and later confirmed by Apple, putting customers and officials from the Department of Homeland Security on alert.
On the heels of a Republican midterm election blitz, the president came out swinging on Monday, taking sides on the net neutrality debate. Obama is calling on the FCC to regulate Internet service providers like public utilities to make sure they grant equal access to all content providers, big and small. And much to no one’s surprise, the White House intervention drew criticism from large telecom companies like AT&T (NYSE:T) as well as GOP lawmakers. Midweek, AT&T paused its fiber connection development until clear net neutrality rules pass.
Good news for e-bookworms: Amazon (NASDAQ:AMZN) and Hachette Book Group ended their months-long dispute over e-book prices with a brand new, multiyear deal that allows the book publisher control over prices. This isn’t the first fight over pricing Amazon has had. In October Simon & Schuster also struck a deal with the e-commerce giant in which it too got to set prices.
S&P gave Twitter (NYSE:TWTR) a junk-grade rating on Thursday, citing the microblogging site’s business risk profile as just “fair.” Still, S&P noted it believes Twitter will continue to see healthy growth. The rating comes the same week as Twitter’s first analyst day as a public company, where it attempted to assure investors its growth strategy is on track. Twitter’s CEO outlined plans for new apps and enhanced private messaging, saying, “the goal is to build the largest daily audience in the world.” Shares of the social media company are down 37% year-to-date.
In digital music news, Google (NASDAQ:GOOGL) is remixing music on YouTube with a paid, ad-free subscription service, Music Key, and a format re-design to make it easier for fans to find new music as well as song that can still be played for free. Music Key, which is expected to launch in December, will cost $10 per month, challenging a sea of streaming rivals including Beats and Spotify, which had its own trying week with newly-minted pop star Taylor Swift. Swift’s label Big Machine pulled her entire catalog off Spotify, saying it believed it would hurt sales of her latest album “1989.” Spotify’s CEO voiced his frustration, stressing the company was founded to help protect music artists from piracy and to pay them for their work. The streaming service disclosed that to-date it has paid artists $2 billion royalties. (Full disclosure: According to Reuters, YouTube confirmed Swift’s catalog will be available in its entirety on Music Key.)
Meanwhile, Alibaba (NYSE:BABA) shattered e-commerce records on its busiest shopping day of the year, reporting $9.3 billion in sales on Singles Day in China. The online titan flexed its muscles as CEO Jack Ma confirmed Alibaba’s financial arm Alipay will indeed go public.