Why Facebook doesn’t want to ‘put an Apple Watch on your face’

At a company with as many interests as Facebook has, different days call for different kinds of stories. And so today’s edition will be a lot different from yesterday’s. The event, which was previously called Oculus Connect, gives Facebook an annual opportunity to discuss the latest advances in next-generation computing platforms. Facebook has sometimes faced doubts over why a social network would invest so much time and money into a hardware project with no certain payoff.

But a summer of escalated tensions with Apple have helped to make the case. If you want to control your own destiny, you have to own your platform. For those who have not been paying close attention to Oculus and what the company now calls Facebook Reality Labs, some background is in order. Facebook is not the only big company working on advanced headset computers.

Apple, Google, and Snap are also investing billions in research and development. But with the Oculus Quest, the standalone headset that Facebook introduced 2019, it arguably became the market leader in virtual reality (VR). Facebook is furthest along in developing a base of users and a developer platform for a standalone headset. Sony also makes a popular headset, but you will need a PlayStation to use it.

Today Facebook announced Quest 2, which is $100 cheaper than its predecessor at $299 and less heavy to boot.

Quest 2 is the new default for VR, if you are okay with Facebook. The Quest 2 represented a significant leap forward. With augmented reality (AR), Facebook is a few steps behind. Snap released the first generation of Spectacles in 2016. Facebook will not have an AR product on the market this year 2020. But Facebook says its first effort at consumer “smart glasses” will arrive next year 2021.

And in the meantime, the company announced Project Aria, a research prototype for more full-featured AR hardware that will soon be given to Facebook employees and contractors to begin testing. Taken together, the projects may represent Facebook’s single biggest bet on what the future may look like. And like other projects with global ambitions, it will also invite new scrutiny over privacy, data security, content moderation, and more.

VR is well on its way. Facebook had this milestone in mind that first the company needed to get the technology to the place where you could have a standalone headset, it could be portable, it could be high quality do the tracking and all that, and Quest was the big milestone on that. Then, from an ecosystem perspective, Facebook believed that if the company gets to 10 million units active, then that is kind of a critical magic number.

At that point, it is a self-sustaining ecosystem.

The next big push is to get the technology to be more accessible to more people, by making it more affordable and portable. Facebook is not at 10 million yet, but over the next few years the company will get there, and that will really be a new stage of VR. AR is just going to be a lot harder. AR is not going to be good until you get normal-looking glasses that can project holograms into the world.

And now, Facebook is not anywhere near getting all the electronics that you would need to get into a thin frame. Facebook hopes to get it into more normal-looking glasses in the first part of this decade or the first half of this decade, but that will be challenging. People will take different approaches to getting that to work. The biggest shortcut that a lot of folks are trying to take is basically trying to not do full holograms and just show some heads-up information.

That is just “putting an Apple Watch on your face”. That is not particularly compelling. It is not a product that Facebook is particularly excited about making. Maybe someone else will make it. It does not fit the kind of social use cases that Facebook primarily cares about. The thing that makes VR and AR exciting is the feeling of presence. The idea that this is the first computing platform in the history of computing, where you really feel like you are there with another person.

Delivering a sense of presence is the thing that Facebook cares about.

VR and AR are going to be the technologies that do that. VR by fully immersing you in a new environment, and AR by bringing people into your existing environment through holograms. So in the future, instead of a video chat, you will just be sitting on your couch and your friend’s hologram can just appear on the couch next to you, or you can hologram into your friend’s house.

And part of why that is going to be a lot better than video chat is that then people will be able to have virtual objects that they can interact with together. Imagine if you want to play a game of cards, you can have a deck of cards. That is going to be different experience than the kind of 2D video chat that we have today. Covid has shifted Facebook’s outlook on this.

The concept of remote presence with video is now much more mainstream than it was before. Before it was kind of a work tool that sometimes people used when they had to. But now everyone is on it all the time. So the notion of wanting to be present remotely with people is much more mainstream now. Over the next few years, VR and AR are going to just grow significantly faster.

Facebook is mapping out the hardware that the company is going to be shipping in 2024.

Facebook users in Australia may soon be blocked from sharing news. The social media network is threatening to make it impossible for users in Australia to share local and international news content on both Facebook and Instagram if the government passes regulations to alter the financial arrangement between publishers and online platforms. The new rules would force Facebook and Google to give news outlets a bigger cut of digital advertising revenue.

The new rules are the most aggressive effort yet by any country to curb Silicon Valley’s power over the news business. As Facebook sees it, the new regulations are untenable. The new regulations would force Facebook to enter into revenue-sharing agreements with publishers in which the final terms would be decided by independent arbitrators, and the social media network would have no recourse to back out of the deals.

Facebook tried to make this work by proposing its version of something workable. Unfortunately, there are so many things in this proposed legislation that just make it untenable. Facebook said Australia had left it with two choices. Either removing news entirely or accepting a system that lets publishers charge it for as much content as they want at a price with no clear limits, and no business can operate that way.

Assuming this draft code becomes law, the social media network will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram.

News organizations around the world have long chafed at Facebook’s and Google’s takeover of the digital ad industry. The two companies account for more than half of the annual digital ad spending in the United States and more than 70 percent in Australia. That has left publishers scraping for smaller pieces of the pie, even as their content reaches larger and larger audiences.

In recent years, European countries have tried and largely failed to force the platforms to give more to publishers. When Spain enacted a law in 2014 forcing Google to pay for headlines and news summaries in Google News, Google removed Spanish news outlets, dealing a blow to the nation’s news industry. France and Germany have also tried and failed to bring Google to heel.

Australia’s new legislation goes further by establishing a panel of arbitrators who would determine the price that Facebook and Google must pay publishers. The platforms would have no recourse to exit the agreements, and they could face fines as steep as 10 percent of their overall revenue in Australia for each offense. While news accounts for a relatively small part of Facebook’s and Google’s overall revenue, the ability to access and share news is seen as part of the appeal of the platforms.

Facebook’s decision to deprive users of the ability to share news could thus have larger effects on its reputation, especially if other countries were to follow suit.

Facebook is not worried about any such ripple effects as Australia is an outlier. Facebook is pushing ahead with its news investments in the United States and in new markets around the world. Facebook has found things that actually work, and it has no intention of slowing down. The social media network is going to accelerate its expansion of Facebook News into other markets.

For Murdoch’s News Corp, which started in Australia and controls the majority of the country’s news industry, the legislation is a clear win. Murdoch has been at the forefront of the fight against Facebook and Google in both the United States and Australia, criticizing the platforms publicly and even going so far as to launch a much-lampooned news aggregator called Knewz. In October 2019, Facebook finally agreed to pay publishers millions of dollars a year to feature their content in a dedicated news tab.

Google announced a similar plan to pay publishers for content in June 2020. Whether Australia’s effort is an overall win for the news industry is still very much up for debate. By inducing platforms to do away with news snippets and previews altogether, it will in all likelihood reduce publishers’ traffic, depress ad revenue, erode competition, impede innovation, and needlessly deprive consumers of a valuable service.

The New York Times is similarly wary of Australia’s move.

The more it becomes part of a long, extended, regulatory, and political process, the less likely it is to help in time and the more likely publishers are to get different kinds of adverse consequences.