The Economist (2022-01-08)

TheEconomistJanuary8th 2022 Business 55

media  apps  such  as  TikTok,  one­third  of
whose users may be under the age of 14, ac­
cording  to  internal  data  seen  by  the  New
York Times. 
Fortunately, help is at hand. Disney, ar­
guably  the  child­friendliest  brand  of  all,
has created a new role tasked with seeking
out  external  children’s  programming—
part of a reorganisation to separate content
creation  from  merchandising.  Para­
mount+  is  promoting  its  Nickelodeon
trove  to  parents.  Its  own  parent,  Via­
comcbs,  is  reportedly  in  talks  to  buy  the
“Alvin and the Chipmunks” franchise from
its creators for as much as $300m. 
In  September  Netflix  paid  more  than
$700m for the Roald Dahl Story Company,
which  owns  the  rights  to  the  eponymous
author’s beloved tales such as “Charlie and
the Chocolate Factory”. In November it an­
nounced  the  launch  of  Kids  Clips,  which
offers  curated  short  videos  from  its  ex­
panding  slate  of  children’s  programmes.
Last  autumn  hbo Max,  best­known  for
edgy grown­up fare, launched Cartoonito,
a portal dedicated to pre­school shows.
Upstarts  are  getting  in  on  the  action,
too. Kidoodle.tv, an ad­supported app that
specialises  in  children’s  shows,  has  seen
its downloads balloon during the pandem­
ic. In November two former Disney execu­
tives agreed to pay $3bn for Moonbug En­
tertainment, the company behind hit pro­
grammes like “Cocomelon” and “Blippi”. 
Youth  programming  is  attractive  to
streaming  services  for  several  reasons.
Children’s television shows, especially an­
imated  ones,  often  cost  less  to  produce
than  entertainment  for  adults,  observes
Erin  Meyers  of  Oakland  University.  They
tend  to  have  a  longer  shelf  life,  too,  since
young  children  are  less  fussy  than  older
viewers about what is hip at any given mo­
ment.  And  children’s  programming  offers
vast  merchandising  opportunities  in  the
form of toys. Most important, if you get it
right you may be rewarded twice over: with
current custom from gratefulparentsand,
if their offspring like what theysee,a guar­
anteed stream of future viewers.n

More TV for Mike Teavee

United States, demand* for

subscription-video-on-demand content

By genre, January 31st 2020=100

Source:ParrotAnalytics

*Weightedaverageoffactorssuchasvideostreams,

social-mediamentions,WikipediaorIMDbsearches

175

150

125

100

75

2020 2021

All other content

Children’s

TheTheranostrial

Blood will

have blood

O

njanuary 3 rd, aftersevendaysofde­

liberation,a 12­memberjuryinSilicon

ValleyfoundElizabethHolmes,theentre­

preneur behind a blood­testing startup,

guiltyoffourcountsoffraudulentlyde­

ceivinginvestors.Eachcountcarriesa pri­

sontermofupto 20 years;nodatehasbeen

setforhersentencing.Shewasacquittedof

fourchargesofdeceivingpatientsanddoc­

tors;onthreeothersthejuryweredead­

locked. The verdict, against which Ms

Holmes’slawyersareexpectedtoappeal,

marksthecollapseofa careerthatbeguiled

themedia,politiciansandinvestors.

AfterdroppingoutofStanfordUniver­

sityin 2003 attheageof19,MsHolmes

foundedTheranostodevelopa radicalad­

vanceinblood­testingtechnologythatshe

hopedwouldallowhundredsofteststobe

performedusinga singletinydropofblood

ratherthana fullvial.Thetantalisingvi­

sionpromisedtomakehealthcaremore

effectiveandefficient.

Unfortunately, Ms Holmes could not

bringittofruition.Invotingtoconvicton

fourcounts,thejuryconcludedthat,aware

ofhercompany’sfailures,MsHolmesin­

tentionallyliedaboutitsprospectsandca­

pabilities,andsocrossedthefinelinefrom

promotiontodeliberatefraud—astepshe

explicitlydeniedinherowntestimony.

InmanywaysTheranosdifferedlittle

from manyhot startups. Itraised more

than$1bn,reachedanextravaganttheoret­

ical valuation (in its case $9bn) before

crashing without evergoing public and

disintegratingintoa vastgraveyardofun­

feasibleideas.Typically,executivesbehind

such  ventures  are  quickly  forgotten.  But

Ms  Holmes’s  path  differed  at  least  in  part

because  even  though  her  company’s  pro­

ducts failed, her presence and broader sto­

ry proved unusually compelling.

In  building  Theranos,  Ms  Holmes  as­

sembled  a  remarkable  collection  of  aco­

lytes. Her board was filled with several for­

mer secretaries of state and defence. Joe Bi­

den, while vice­president, called Theranos

“the  laboratory  of  the  future”  and  Ms

Holmes  “an  inspiration”.  The  company’s

shocking failure suggested her famous fol­

lowers  had  fed  merely  on  hype.  The  fash­

ion  press  was  besotted  by  Ms  Holmes’s

ability  to  present  herself.  The  Steve  Jobs­

inspired  black  turtlenecks  she  wore  at

work were seen as reflecting authority. The

open­necked  shirts  and  blouses  she

donned during the trial were a sign of ap­

pealing  vulnerability,  augmented  by  the

nappy bag she carried to court, which sig­

nalled  to  the  jury  the  costs  of  a  potential

prison term to a young mother and her in­

fant  child  (who  was  born  in  July).  Report­

ers and other onlookers waited for hours to

nab a seat in the packed courtroom.

Ms Holmes’s defence followed two dis­

tinct  lines.  The  most  obvious  hinged  on

naivety.  She  may  have  been  wrong  about

Theranos’s  prospects,  the  argument  went,

but  that  is  not  a  crime.  Startup  investors

are supposed to be a sophisticated lot, will­

ing to wager based on deep insights in the

hope of a big return, while understanding

that  long  shots  can  fail.  The  prosecutors’

counterargument  rested  primarily  on  the

presentations  which  Ms  Holmes  made  to

investors.  These  appeared  to  exaggerate

potential  sales  and  trumpet  non­existent

endorsements  from  the  armed  forces  and

big pharmaceutical companies. The single

substantive  request  made  by  the  jurors

during  their  deliberation  was  to  rehear  a

presentation that had been recorded, sug­

gesting  they  were  parsing  what  precisely

she had been telling her backers.

Ms  Holmes’s  second  line  of  argument,

the so­called Svengali defence, was partic­

ularly appealing to Hollywood, but its im­

pact  on  the  jury  was  unclear.  She  claimed

at the trial to have been sexually and emo­

tionally  abused  and  manipulated  by  Ra­

mesh “Sunny” Balwani, her ex­partner and

Theranos’s  former  chief  operating  officer.

As such, her lawyers posited, she could not

be held responsible for her actions.

Mr Balwani has strongly denied all alle­

gations. His own trial for fraud charges will

begin  next  month,  ensuring  the  Theranos

saga will not end soon. And even after the

last gavel is pounded, there will be more to

come. In the lead­up to the verdict Hulu, a

cable  network,  released  photos  from  an

upcoming mini­series on Ms Holmes’s sto­

ry,  starring  AmandaSeyfried.  Ms  Holmes

may  end  up  goingtoprison,  but  she  will

not be going away.n

N EW YORK

A jury finds a former Silicon Valley

star guilty of fraud

Unmasked