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When Your Dream School Accepts You (But Only Online)

This spring, Caleb Kinsella was one of the thousands of high school seniors around the country anxiously waiting to find out if he got into the college he wanted. At 6 p.m. one day, his top school, the University of Florida (UF), would update its website with every applicant’s acceptance status all at once. UF is a great school, in the top 50 in the country according to U.S. News and World Report, and Kinsella (who, full disclosure, is my nephew) wasn’t sure he would make the cut with his just-okay grades and test scores. So he was thrilled and a little surprised when he found out that he’d gotten in. Except, the more he looked, the more it seemed like something wasn’t quite right.

“It kind of fooled me at first,” Kinsella told me. “It said, ‘Congratulations, you’ve been admitted to the University of Florida.’ But shortly after, I discovered it was actually the ‘Path to Campus Enrollment.’ Is that what it’s called? The PaCE program.”

Kinsella had been accepted to a year-old program at UF that lets students who don’t quite make the cut for traditional admission take their first two years of classes online or at a community college for a 25% discount in tuition. They can start taking classes on UF’s campus only after they earn 60 credits, and start as juniors. This combination of online and offline education is new, but gaining in popularity. Many institutions around the country, including the University of Colorado and , offer so-called hybrid degrees for bachelor’s or master’s students in many fields of study.

This is all part of an expansion in online education that’s been progressing fitfully for most of this decade, an experiment involving millions of young people whose results are far from certain. While U.S. News and World Report ranks more than 200 online bachelor’s programs, fewer than half of them report their graduation rates. Of the 69 programs that did, only 16 graduate more than half of their students. And those who did manage to complete their courses took a long time: Only 35% of programs had students who graduated within six years.


Online education began to capture the educational world’s imagination in a serious way in 2012, which the New York Times called “the year of the MOOC,” or massive open online class. Startups like Coursera, Udacity, and EdX promised to permanently change the way young people learned. In a TED talk from that year, Coursera cofounder Daphne Koller spoke about MOOC’s ability to solve problems as diverse as the legacy of apartheid in South Africa and the burden of student debt in America. Coursera’s goal, she said, was “to take the best courses from the best universities, and provide them to everyone around the world, for free.”

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Ben Maddox, New York University’s chief instructional technology officer and one of its primary online education pioneers, calls this time “MOOC fever.” It was “a time of heightened awareness and expectations,” he told me, which “caused us to think about instruction in new and different ways. It was energizing.”

One of the earliest MOOC providers was Udacity, founded by former Google VP and professor Sebastian Thrun. He started the company in early 2012 after being involved in an online education pilot program at Stanford. “MOOCs didn’t come about because of years of careful planning,” he told Fast Company. “They came about because I put my Stanford classes online, and I had no idea what would ensue.”

But just a year later, it was clear that MOOCs were far from changing the world. A study by the University of Pennsylvania found that student engagement with courses fell drastically after the first week, and that completion rates averaged just 4%. By the end of that year, Thrun was giving interviews to outlets including Fast Company, saying Udacity had “a lousy product.” He pivoted his company’s focus from changing the world to helping people in life-change careers.

MOOCs are of course separate from the online classes offered by a university (for one thing, university classes aren’t free). But the volume of attention MOOCs generated made traditional educational institutions interested in offering online classes, as well, whatever the problems might be; many universities continued to design and expand their own online programs, even as enthusiasm for MOOCs waned. According to a 2016 report from the U.S. Department of Education, 5.5 million American students, or 25% of all college students, were taking some online classes. That was in 2013, and the number has continued to grow, if slowly.

There are several reasons that online classes are particularly attractive to today’s colleges. For one, they have the potential to drastically increase revenue to institutions facing lower traditional enrollment. College enrollments fell by almost a million students between 2011 and 2013, the largest two-year drop since the U.S. Census Bureau began to collect these statistics in 1966.

With an online course, a professor can design a curriculum once, and her university can run it again and again, with minimal updates, into the far future. The number of students isn’t limited to those who can physically move to your campus and attend classes, or dependent on the availability of a professor who’d maybe rather be writing a book. Anyone, anywhere, can take classes at any time.

NYU’s Maddox disputes that online classes are a revenue generator for schools. “It’s like cloud computing,” he said. “It has all sorts of advantages, but the decision to go to cloud isn’t a lot of cost savings in the end.” It’s the same with online education, he says. “To promote a high-quality, adaptive educational experience? We’re still seeing if that’s a cost savings in the end.”

In the best cases, universities have been learning lessons from MOOCs’ failures as they design their courses.

For one, online classes tend to do best when students are a bit older and pursuing a specific educational goal. At the new Udacity, Thrun told me, the typical student is now 24 to 50 years old and looking to gain skills to help in their lives and careers.

“They rarely come to us and say, ‘I want to learn something interesting,'” he explains. “This attitude increases their chances of success, because there’s something tangible they want from us. It’s not just self-enlightenment. That motivation is important.” NYU also focuses its online offerings around graduate programs in areas that lend themselves to concrete truths and remote evaluation of progress, like computer science and engineering.

Education providers are also realizing that online classes are especially attractive when they offer cost savings to the student. Not only is crushing student debt one of the primary reasons a student might second-guess college attendance, but a lower price tag matches the “less-than” perception of online classes. Recognizing this, Udacity now offers a complete master’s degree in computer science through a partnership with Georgia Tech and AT&T for only $7,000.

Many online programs are finding that students succeed best when they’re engaged with the content. “If you go to Stanford, and instead of teaching students and mentoring them, you just gave them all the books for all the classes, I think you’d see the same low completion rates” that many MOOCs have, Thrun told me. “To me, the MOOC is the book. The video book. It’s a component, but not all there is to it.”

Increasing engagement is also driving another Udacity project. Thrun said he is “actually experimenting with meetups,” and looking at “what happens if someone takes charge [in a class]. And it does positively impact the outcomes.” Students getting together to learn, in person, with “someone taking charge.” Interesting (and familiar!) idea.


So how do these trends look on the ground? At UF, officials tried to tick all these boxes with its online offerings, though it has faced several major problems. Elizabeth D. Capaldi Phillips was recruited from Arizona State University to run the new program, now dubbed UF Online (of which PaCE is a major part), only to resign after two months. Her position went unfilled for a year. The new head, Evangeline J. Tsibris Cummings, was appointed in July 2015, just months before PaCE admitted its first class of students. Meanwhile, the university cancelled its contract with Pearson to administer UF Online after it failed to attract out-of-state students who pay higher tuition.

That first class ended up being very small, despite its reduced price tag. PaCE accepted 3,000 students its first year, but had only 235 people agree to take part in its online experiment (for comparison, about 50% of students accepted to UF in a more traditional way choose to enroll). Part of this, perhaps, was a focus in the first year on the fact that students hadn’t gotten full campus enrollment, and not that they had gotten into PaCE.

“We got less than 10% of the students that we sent letters out to,” Cummings told Fast Company, “but frankly I think that is tremendous, considering it was brand new. There was some consternation in the initial launch where folks didn’t know what it was. I think there was some initial confusion about how it related to their on-campus admissions decision, and so we’ve learned from that.”

Paige Fry, a member of that class, remembers calling her mother in tears when she read her PaCE acceptance. “I didn’t know what it was or what it meant, and I was very upset,” she told me over the phone. However, after evaluating UF’s program, she thought their online journalism program was a good match for her.

Students of that first class were encouraged to move to Gainesville, where UF is located, she says, but were faced with a complex network of school activities in which they weren’t allowed to participate. They couldn’t use the school gym, but they could rush fraternities and sororities. They couldn’t live in the dorms, but could sit in the student section at football games. For two years, they are literally not allowed to officially participate in university classes.

This was because the university had decided that in order to make the program as low cost as possible, PaCE students were not required to pay university activity fees. The school has since reconsidered this position, and now allows PaCE students to pay additional fees and use all student services.

Fry eventually accepted, and took six classes her first semester, in which she got straight As. She also told me that many PaCE students semi-secretly sit in on the classes in which they’re officially enrolled online.

“In general, I’m a self-motivated person,” she told me. She works part-time, lives at home, and does her coursework whenever she wants. “I wake up at whatever time, and then sit down to do it,” she told me, describing a pretty enviable daily routine. However, it must be said, it’s a routine that’s not overly different from one I experienced in college and graduate school, which I attended in person.

Fry is obviously the kind of focused, goal-driven person who succeeds in online education. But what about someone with less focus? In other words, a typical college freshman, who may feel a little overwhelmed? And even more specifically, one who didn’t have the drive in high school to excel enough to receive a regular enrollment slot at a state school like UF?

“Honestly, if you asked me as a friend what recommendation I’d have about this, I’d have no recommendation at this point,” said Thrun. “I can see the general concern: Oh my god, maybe it’s not the right fit, he’s not going to be successful, he’s going to lose interest, and he’s going to give up on college forever. I understand that logic, and, boy, I wish I had a word of wisdom.”

In general, Thrun says, the education a student gets can vary widely from program to program, and even class to class. UF, for instance, is one of the few that reports graduation rates: 63% of online students graduated within four years, just slightly under its 67% rate among traditional students. This is likely among the reasons its online bachelor’s program comes in at number 11 in the nation in the rankings. But this doesn’t guarantee the success of the PaCE program.

So, is Kinsella, whose best friend was also accepted to PaCE, going to attend? How does he feel about being part of this experiment? “Excited, obviously,” he told me. “It felt great. It’s like, our favorite school.” He’s confident he can succeed. “I’m going to be there, and it’s going to be a lot of fun, but it just comes down to me, myself.”

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Everything You Think You Know About Interruptions Is Wrong

What do you think happens to your productivity when your boss butts in to ask you questions, or when a coworker needs a file? Many people assume interruptions slow them down and hurt the quality of their work. But research shows it’s just not true.

Little interruptions actually cause people to work faster. More importantly, the quality of their work remains uncompromised.

Interruptions Speed Up Work

In two companion studies, workers in a simulated office environment were asked to edit text while they were interrupted at different rates by researchers. The subjects didn’t know that the interruptions were a part of the study, so the researchers made the interruptions seem relevant to the task. Much to the researchers’ surprise, subjects who were interrupted completed their work faster than a control group, and their finished products were just as good. The fact that the text editing was chosen as the task is significant, because it reflects real-world work that requires concentration to do well.

The researchers believe that when workers are aware of interruptions that could potentially slow them down, they develop strategies to compensate or even overcompensate.

A different group of researchers had a hunch that if interruptions were unrelated to the task at hand, the outcomes might be different. But they were wrong.

In their experiment, subjects had to reply to emails with information that they could look up in a documents that they were provided. Like text editing, answering emails is a representative office task that requires focus. One group faced interruptions that were related to the task at hand, while another group faced completely irrelevant interruptions. A third control group carried out the same assignment without any interruptions. The two groups that were interrupted finished their work faster than the control group, regardless of the nature of the interruptions. The control subjects took on average two minutes longer to complete a roughly 20-minute assignment.

Quality Of Work Remains High

The research team also wondered whether the emails from the interrupted groups might have gotten snippy or sloppy, assuming that people become frustrated and reckless when they’re constantly interrupted while trying to work. Nope! Just as with the text-editing study, the quality of the work remained high. Typos, length of email, and politeness were steady across all three groups.

What’s happening? Why do interruptions cause people to work faster while maintaining the same quality of work?

External Versus Self Interruptions

Studies about a different kind of interruption—self interruptions—might be key to figuring it out. Researchers largely classify interruptions as either being caused by something outside of ourselves (external interruptions) or something within (self interruptions). When people task-switch, for example, without being prompted by an on-screen notification or other external force, that’s a self-interruption.

Sometimes we self-interrupt to take care of things that we remember we need to do. If you’re in the thick of working and suddenly remember you never picked up some long-forgotten dry cleaning, you might stop what you’re doing to write it down or send a text message to another person who can pick it up for you. Once that urgent matter is off your mind, you can go back to what you were doing, perhaps with one small weight lifted off your shoulders.

But it’s also possible, according to some researchers, that the bigger reason we self-interrupt is to self-regulate. In other words, we may be taking short mental breaks from our work because they help us stay on task for longer.

Whether interruptions come from our environment or from our own brains, it seems clear that they do help us stay productive. But external interruptions do have a cost: They seem to increase stress, frustration, effort, and other pressures.

A little extra stress and frustration might not cause a dip in productivity or quality today—to the contrary, they probably will help light a little fire under you to get your job done—but they could take their toll over time. So while interruptions do seem to give us a little immediate productivity boost, we should be aware of their potential harm in the long term.

Jill Duffy is a writer covering technology and productivity. She is the author of Get Organized: How to Clean Up Your Messy Digital Life.

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How The Boardlist Plans To Get More Women Onto Startup Boards

Karla Martin remembers the phone calls. A recruiter would be putting together a slate of board candidates for a company and would reach out to see if she was interested. The hitch: She would have only until the next day to decide. Martin, a former director of global business strategy at Google with more than 20 years of experience advising companies on how to drive growth, was certainly qualified to sit on a board. But her mentors warned her to be wary of becoming the token female and African-American candidate: If recruiters were seriously considering her for the position, they would have reached out earlier. “I’m sure there’s a good number of women and people of color who respond, and they do get the board seat,” Martin says. “But my experience has been roughly what my mentors expected.”

When Facebook went public in 2012, its directors included venture capitalists and tech and media executives—but not a single woman until chief operating officer Sheryl Sandberg was added to the list a month later. Twitter went public the following year with no female directors (it has since added two). And it continues. Fitbit’s high-profile IPO last year was conducted without a woman on its board. Which raises the question: How can otherwise forward-thinking companies have such retrograde boards?

Sukhinder Singh Cassidy, a serial entrepreneur and former Google executive, wants to change that dynamic. Currently the CEO of the shopping site Joyus, she has plenty of board experience herself: TripAdvisor, Ericsson, and formerly J.Crew. But a few years ago, she started paying more attention to the overwhelming maleness of Silicon Valley boards. She saw how it could hamstring female colleagues, who miss out on invaluable opportunities to raise their profiles, meet other high-level executives, and learn important management skills. Just as important: A lack of gender parity can affect businesses. Companies with diverse boards mirror their customers’ demographics and have been shown to function better—a recent meta-analysis published in the Academy of Management Journal found that female representation is associated with increased board-level monitoring and strategy.

When Singh Cassidy recently polled male founders and CEOs for an explanation, she kept getting the same answer: Finding great female directors takes too long and is too hard. Singh Cassidy suspects that most people simply aren’t considering the right women. “You may not know her, but that doesn’t mean she doesn’t exist,” she says. In February, she launched the Boardlist, a searchable, for-profit database of female candidates, nominated largely by Silicon Valley businesspeople. The site, which operates as a benefit corporation, offers a fast and simple solution to the problem of locating qualified women for boards. But, as Singh Cassidy is discovering, the issue may not be so easy to address.

The standard board appointment process for tech startups—candidates advertise themselves, founders ask around—has been largely informal. And given the demographics of Silicon Valley’s elite, it has favored white men. Singh Cassidy’s insight in creating the Boardlist was to take that back-channel process and replicate it more formally online. (Though the Boardlist isn’t the only database of female candidates—see “Shattered Glass”—it is the most Silicon Valley–centric.) The site allows a curated group of executives and investors (including, yes, many men from Sand Hill Road) to nominate women for inclusion on the list. The site’s staffers create profiles for each candidate, populating them with information, such as whether the nominator believes a woman is best suited for an early-stage startup or a company that is further along. Women, crucially, are not allowed to nominate themselves (they can only submit a request for consideration), though they may edit their profiles once they have been created.

There are now more than a thousand women on the list. CEOs can search for potential board members for free, while frequent users such as venture-capital firms and recruitment companies pay a fee. If a board is interested in someone, the Boardlist’s staffers contact her to gauge interest and make introductions. The idea is not only to introduce founders to more women, but to make the process less frustrating for the candidates themselves.

A few months after the Boardlist launched, following a beta period, it touted more than five dozen active searches and one early success: The site facilitated Martin’s appointment to the board of Challenged, an app that promotes social media challenges along the lines of the ALS ice-bucket phenomenon. But no other appointments had followed. “It’s going slow,” Singh Cassidy admits. One issue has been that Singh Cassidy and her colleagues had to play executive recruiters—phoning Boardlist members to persuade them to take interviews, advising CEOs about attainable candidates. They hope this time-consuming process will eventually become more automated. But Singh Cassidy has also learned that boards’ gender imbalance isn’t just about supply, as people often claimed. At least as often, it’s about demand.

The root of the problem lies in the way startup boards are often constructed. Most of a typical company’s seats are filled by its founders and funders—who, in Silicon Valley, are disproportionately white men. The remaining, independent seat frequently goes to someone with CEO or founder experience (again, usually a man). The result: Only about 22% to 25% of private tech boards include any women, compared with 97% among S&P 500 companies. What’s more, when the Boardlist, with the analytics firm Qualtrics, surveyed CEOs and founders about their boards, 39% said their independent seat—the best hope of getting a woman appointed—was still unfilled. These habits stand in contrast to those of big public companies, which fill seats as soon as they’re vacated and seek people with specialized expertise (auditing finances, compliance issues), creating opportunities for female candidates who may not have CEO–level experience.

Clara Shih, who sits on the board of Starbucks and is the cofounder and CEO of the social media management startup Hearsay Social, has experienced both sides of the gender challenge. She joined the Starbucks board after Sheryl Sandberg stepped down and recommended Shih as a digital expert. While Shih is one of three female Starbucks directors, she’s the only woman on her own four-person startup board. Shih would like to fill a fifth seat, the independent one, with a woman—someone with a tech background who has been a founder and CEO. “I want to bring in someone who’s been through it,” Shih explains. That’s difficult to do. But Shih isn’t in a rush. As the CEO of a small, fast-growing startup, she has higher priorities. And so the seat remains vacant.

Similar stories have taught Singh Cassidy that the Boardlist can’t just focus on supplying female candidates. She also has to convince founders to fill their seats. “We thought it would be enough to build a self-service website,” she explains. “We actually have to make the market.” Today, Singh Cassidy makes a point of counseling founders on the importance of that independent board seat. She tells them that having an independent member mitigates their investors’ control, delivers an outside perspective, and adds a tie-breaking fifth vote to four-member boards. And since female board candidates with CEO and founder experience are relatively scarce in Silicon Valley, she encourages startups to consider lower-level executives who nonetheless have overseen growth—a group that includes far more women. Someone who runs a big division of Facebook, she argues, may be just as knowledgeable as a higher-level executive elsewhere.

On the Boardlist, CEOs can look for candidates by skill—an approach that may encourage some boards to broaden their searches. Lynzi Ziegenhagen, the CEO of the ed-tech startup Schoolzilla, is searching for an independent director. She wants a woman and, like Shih, prefers founder-CEOs of high-growth tech businesses. But when Ziegenhagen recently searched the Boardlist, she found, along with three impressive CEOs, two non–CEOs who had relevant experience. She’s considering them.

Ziegenhagen’s board, however, is already atypical in that two of its three existing members are female. That’s because its CEO and an important investor (Shauntel Poulson of Reach Capital) are both women. “If you solve the investor problem and the founder problem,” Ziegenhagen notes, “this issue [of all-male boards] would go away.” It’s an important point and one that exposes a limitation of the Boardlist’s approach: No matter how many female directors they help place, Silicon Valley boards won’t get anywhere near gender parity until more women create and invest in startups. And that kind of systemic transformation is going to require a much bigger investment than Singh Cassidy’s fast and simple solution.

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Why Patients Are Getting Hit With Surprise Bills After Genetic Testing

Leslie Parks* was 34 and ready to start a family, but struggled for a year and a half to conceive. Before embarking on fertility treatments, her doctor required that she and her husband get screened to determine their carrier status for various genetic diseases. He recommended a Silicon Valley-based startup called Counsyl and assured her that the test would be fully covered by her insurance.

Weeks later, Parks received a bill for more than $1,494 after her insurer deemed the test “experimental.” Parks was shocked. As she later learned, that is the rate that Counsyl charges insurance companies; by contrast, their fee for uninsured patients is $349.

Under Counsyl’s guidance, Parks entered into a lengthy appeals process with her insurance company, writing letters and making phone calls for months. She asked Counsyl representatives if she could pay the uninsured patient rate of $349, but they declined and insisted she press ahead with the appeals process. More than six months later, her insurance company upheld their denial of the claim, and she was still faced with the $1,494 bill. She called Counsyl and asked again to pay the $349 uninsured patient fee instead. The representative finally agreed.

In the meantime, Parks got pregnant. Two months into her pregnancy, her ob-gyn recommended that she have an advanced version of the routine prenatal testing. While Parks didn’t have any high-risk factors, she would be 35 years old by the mid-point of her pregnancy, putting her in the “advanced maternal age” category. Her doctor said this would qualify her for a blood test at 11 weeks to determine whether her unborn child was at high risk of genetic conditions like Down Syndrome. Again, she was informed by her doctor that her insurance company would pick up the tab, or at the very most she’d have to pay a “couple hundred dollars” if the test was out of network.

Yet a few weeks later, “basically the exact same thing happened again,” she says. But this time, Parks received an $8,000 bill. The company, Natera, based in San Carlos, California, and founded in 2004, was a little more forthcoming when Parks called, distraught that she’d have to pay such a large sum. She says that Natera promised that they would handle the appeals process with her insurance company. If the claim was denied, however, they would send her another $8,000 bill but she could call and ask to pay the patient adjusted rate of $200. She asked if she would receive a bill for this adjusted amount. The representative said no, they wouldn’t put that rate in writing.

Parks says that the bills she received from both Counsyl and Natera made no indication that there was another tier of pricing, and it was only after calling and pressing for alternatives that the lower price was revealed.

A Counsyl spokesperson says the company doesn’t comment on individual patient cases, but that its goal is to offer transparency around billing. “Health care pricing is dynamic and complicated, but Counsyl is fully committed to providing patients with a clear and transparent assessment of screening costs,” a statement reads. The company also pointed to its new billing section, which explains the process to patients. A Natera spokesperson says, “It is unfortunate that the patient . . . experienced shock at receiving such a big bill. However, in the health care industry, a company’s “list price” is typically substantially higher than the price ultimately paid by a patient. The final amount paid by a patient is dependent upon the price for the testing that was negotiated by the insurance company, the patient’s insurance plan’s coverage, and the plan’s associated copayment and deductible.”

Stories like Parks’s are becoming increasingly common as hundreds of genetic tests flood the market. Forums for new and expecting parents, like Babycenter.com, are now filled with endless comment threads of patients fighting their insurance company after a claim is denied, or sharing feelings like being “misled” or “used” by the genetics companies, their doctors, their insurance—or a combination of the three.

When Regulation Lags Behind Market Demand

The crux of the problem is that genetic testing has exploded, but regulation has been slow to catch up. The U.S. Food and Drug Administration is still finalizing its guidance for how it will oversee the category of lab-developed tests, which includes some 60,000 genetic testing products already on the market.

Furthermore, insurance companies are in the midst of determining whether to reimburse for all or part of the cost of genetic tests that do not offer clear diagnoses, but instead dabble in probabilities. Some insurers have opted to cover genetic tests in cases where the patient is deemed high risk (a common case is the breast cancer risk test, which insurers tend to pay for only when the patient has a family history of cancer). Other insurance companies will only reimburse for tests that it determines are “medically necessary.”

“Insurance coverage of genetic testing is an underappreciated, but huge and important question,” says Patti Zettler, an associate professor at Georgia State University College of Law, who specializes in health policy.

According to Zettler, coverage will vary depending on the person’s medical history, their employer, and the state that they live in. The final bill is also dependent on the patient’s deductible, whether they meet certain medical criteria, and whether the testing company is in-network or out-of-network.

In short, it’s complicated.

“Private insurance companies can essentially make their own decisions about what are medically necessary services and what are not,” Zettler explains. And these decisions aren’t particularly clear cut to anyone, let alone patients.

“Too Frustrating For Everyone Involved”

“You’ve put your finger on why we got out of the reimbursement business,” says Troy Moore, chief strategy officer for Kailos Genetics, in response to hearing Parks’s story. “It was simply too frustrating for everyone involved.”

For two years, Kailos offered a reimbursement model. The company pulled in higher revenues overall by filing claims to insurers, but it also meant dealing with calls from confused and angry customers. According to Moore, many would demand the lesser, out-of-pocket rate after their insurance company rejected their claim, but it wasn’t always that simple.

Moore says many insurers don’t have a problem with a genetics company offering a lower cash rate to patients who don’t use insurance. The assumption is that it is cheaper to avoid insurance, as there’s no administrative burden in filing and dealing with claims. But that doesn’t apply to cases in which the claim has already been filed and rejected by the insurance company; in that case, it’s harder to justify a vastly different cost for the patient. Moore says it might be considered fraudulent to overbill the government in cases where the patient is using Medicare or Tricare.

For these reasons, his team recently made the decision to offer all their tests for a flat rate of a few hundred dollars. No insurance. No angry phone calls. No tedious billing process, which might involve faxing forms to insurers that are filled out with the requisite blue ink. But that also meant taking a good portion of the company’s revenues off the table, which had to somehow be replaced.

“Now, to make the same amount of money, we have to reach a lot of people and keep them happy,” says Moore. “If they order once, we hope that they’ll order again.”

Other genetic-testing companies remain divided on the question of whether to accept insurance and the hassle that comes with it. Most have settled on a mix of insurance (with different rates for in-network and out-of-network), flat cash rates, and financial assistance for those who need it. In that category: Counsyl, Natera, Myriad Genetics, and Invitae. Others, like Color Genomics, are taking a similar approach to Kailos by refusing to take insurance altogether.

For her part, Parks just wishes the process was more clear. During one of her countless phone calls she expressed her frustration, saying, “Can you imagine how upsetting it is to be surprised with an $8,000 bill?” The representative replied, “Yes, I imagine so.”

*Parks requested to use a pseudonym, as she is still in the negotiations process.

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Apple, Facebook, Google, And Alibaba Take Hollywood

The Imperial Hotel has been a fixture on Park City, Utah’s Main Street since it opened in 1904. Originally a spot for weary miners,it captured the imagination of Hollywood when an independent film festival came to town and its central location helped make it a hub for 10 days each January. It’s reputedly home to Park City’s most famous ghost, Lizzy, a prostitute who was killed by her husband. Legend has it that Lizzy still flirts with men there. During this year’s Sundance Film Festival, though, the Imperial was haunted by a different spectral presence: Apple.

While other tech companies craved visibility at the annual indie-cinema jamboree—Samsung set up a virtual-reality storytelling village, Airbnb staged a painstakingly curated artist’s retreat called Airbnb Haus, and Uber offered helicopter rides from Salt Lake City—Apple slipped into Sundance practically unnoticed. It set up shop in the Imperial, which was recently converted into a condo-slash–event space. Behind the now unmarked door at 221 Main, Apple hosted private, invitation-only events. On one evening, a group of young filmmakers were treated to cocktails and a farm-to-table dinner put on by the chefs from Eveleigh, one of Los Angeles’s hottest restaurants. The space was as sleek and understated as an iPhone 6S; one attendee described the decor to me as “very beige.” Unlike most Sundance brand-sponsored events, there were no press releases. There were no party pictures. There wasn’t any swag. The iTunes Lounge, as it was known to invitees, was as real to most festivalgoers as Lizzy. Says one guest who was in attendance, “They were definitely talking to the talent.”

The iTunes Lounge was in fact part of a stealth effort by Apple to establish a new, more active role in delivering entertainment. In the weeks that followed, Apple execs were in Los Angeles hearing pitches for original TV series that it plans to launch on an “exclusives” app on Apple TV and within iTunes. Apple wants to work with “triple A-list” talent, according to a source, and build up a roster of must-see shows available only on its platform. Naturally, the talks have been veiled in the utmost secrecy. Producers who have met with Apple will refer to it only as the United Fruit Company.

Apple isn’t the only tech giant zeroing in on the entertainment industry. In recent months, three of the company’s largest rivals—Google, Facebook, and Alibaba—have also amped up investment in Hollywood content, each in different ways and with somewhat different goals. Google’s YouTube has launched a new “originals” division that is pairing its homegrown talent with mainstream TV producers and filmmakers as a way to upgrade its typical fare. Facebook is urging—and even compensating—celebrities to live-stream video on its platform. And the Chinese e-commerce company Alibaba is licensing, cofinancing, and developing feature films.

The tech world’s most important players have suddenly embraced Hollywood for two reasons. First, they can no longer ignore the massive success that Netflix and Amazon have enjoyed by producing exclusive, high-quality programming. Since transforming from a DVD–by-mail service into a purveyor of buzzy series like Jessica Jones and Unbreakable Kimmy Schmidt, Netflix has morphed into a $40 billion business, amassed 75 million subscribers, and won Golden Globes and Emmys. Amazon’s forays into original video have helped Amazon Prime add tens of millions of new customers, according to analyst estimates, and awards of its own. This has stoked the competitive landscape. “They are in awe of the clout Netflix carries with both consumers and media companies,” says Blair Westlake, the former chairman of Universal Television and head of media and entertainment for Microsoft. “None of the tech companies have anything that even comes close.”

Second, they see a growing opportunity. The slow but inevitable fraying of the cable TV bundle has sparked a newly intense battle to win over audiences who have never been more in play. “If I stop paying $200 a month for cable and I’m willing to parse out my $200 a month in a more à la carte fashion, is Verizon going to get some of that? Is YouTube Red?” says Jeremy Zimmer, cofounder and CEO of United Talent Agency. “Who’s gonna get it?”

Alibaba, Apple, Facebook, and Google each want a piece of that action. They are among the richest companies in the world, with a combined market cap of $1.5 trillion, almost four times the size of the five largest media conglomerates. Apple alone, with its $216 billion in cash, could acquire Net­flix, Paramount Pictures, HBO, and Warner Bros. (all of which observers have suggested CEO Tim Cook actually purchase) and still have plenty left over. But so far, none of the tech firms seem interested in buying their way into Hollywood. Instead, they want to establish their own presence. “The goal isn’t: ‘We’re going to build Netflix,’ ” says Michael Yanover, CAA’s head of business development. “It’s: ‘We’re going to build our own thing, based on our own strengths.’ ”

At Sundance, Amazon and Netflix, which rely on subscriber growth rather than advertising or individual sales to drive profitability, waved around their checkbooks, buying more films at higher prices than the usual players, according to Variety. They stoked bidding wars for festival darlings such as Kenneth Lonergan’s Manchester by the Sea (which Amazon purchased for a rumored $10 million) and The Birth of a Nation, a slavery drama (which Fox Searchlight bought for $17.5 million, a Sundance record, even after Netflix reportedly bid $20 million). As four of the biggest companies on earth join the competition in an effort to cement their hold on their audiences of more than a billion people each, Hollywood may never be the same. Here’s how their tactics are shaping up—and the implications for the entertainment industry, the tech world, and consumers around the globe.


Apple: The Star Chamber

Apple has been in the entertainment business for a long time—even if the public hasn’t realized it. Eddy Cue, the amiable Apple lifer who oversees the company’s Internet software and services, is a well-known face in Hollywood: He’s been negotiating licensing deals with the studios and networks since the birth of iTunes in the early 2000s, gaining access to content for Apple customers.

In Apple’s 2015 annual report, the company revealed $19.9 billion in revenue for its services business, which includes sales from the iTunes Store (as well as the App Store, Apple Music, AppleCare, and Apple Pay). Company executives have signaled that it sees these services—notably “apps, movies, and TV shows”—as an important part of the company’s growth strategy moving forward. CFO Luca Maestri explained why during Apple’s quarterly earnings call in January, saying that they’re “tied to our installed base of devices, rather than to current quarter sales.” Translation: Stop obsessing over new iPhone sales and look at how much quarterly revenue Apple can get out of its more than 1 billion users. The company went on to share that sales of these services are growing at a healthy 24%.

Moving into original content, then, is a logical next step for Apple. Two weeks after Apple’s earnings call, The Hollywood Reporter ran with an exclusive: DR. DRE FILMING APPLE’S FIRST SCRIPTED TELEVISION SERIES. The story described a raunchy, six-episode program called Vital Signs, created by and starring the rapper turned entrepreneur, who sold his company Beats Electronics to Apple for $3 billion in 2014.

According to five different sources who have been briefed on Apple’s plans or spoken directly to Apple executives, the company is still a bit “disorganized,” and these Hollywood principals complain that Apple hasn’t presented a coherent strategy. That said, Apple appears to be taking a “two-lane approach” to original programming. The first, which Vital Signs falls under, is a slate of short films, music videos, and documentaries that will be built around musicians and friends of Dr. Dre and his Beats partner, Jimmy Iovine, a former record executive. The idea is to use this content (such as the two-hour Taylor Swift concert movie that Apple released last December and the Vice documentary The Score in late March) to promote Apple Music, the subscription streaming service that launched last year. These originals are seen as essential in goosing Apple Music’s subscriber totals. Apple says it’s happy with the 13 million people it’s attracted thus far, but industry analyst Horace Dediu notes, “They have 860 million iTunes accounts. Thirteen million out of 860 million is not a big number. They still have some way to go.”

The second lane—which for now is more deeply undercover—is an effort to do what Amazon and Netflix have done for their tens of millions of users: offer its own original TV-style entertainment. Apple being Apple, though, it not only wants to find its own House of Cards, but it wants several of them at once.

This daunting effort is being led by Robert Kondrk, Apple’s VP of iTunes content and Cue’s lieutenant. Kondrk, who looks like a buttoned-up Moby, is a low-profile Apple veteran who has mostly been associated with overseeing music on iTunes. (In Hollywood, Kondrk’s name can elicit the response, “Who?”) Among Kondrk’s challenges is how to square Apple’s aspiration—for several massive hits at once—with the risk required. Whereas Amazon made a $250 million deal for a new series with the Top Gear stars and HBO scooped up the popular sports-and-culture maven Bill Simmons, who could have helped Apple with both original series and podcasts, Apple is “definitely more cautious,” says Eric Jackson, managing director of SpringOwl Asset Management. “They probably see that as a strength, but I think it could hurt them if they end up being too slow. By all accounts, [Amazon and Netflix] are going to keep pressing on the gas in terms of making investments in this space.”

Another concern, asserts industry analyst Dediu, is “the way Apple operates; they’re very closed.” Dediu explains: “If they work on media, they will want to have control over every aspect of it.” In Hollywood, people from various fields come together on a project basis and then separate, but Dediu notes, “Apple doesn’t work that way. They are more in line with the old-fashioned studio system. How do you cross over?” For projects like the Dr. Dre series, that closed approach may be more realistic, but even then, word leaked out and infuriated Apple executives.

In late March, Eddy Cue quietly announced Apple’s first original, an unscripted documentary series celebrating apps and starring Will.i.am (curiously, Apple chose not to make it part of its new product announcement event a few days earlier). “This doesn’t mean that we are going into a huge amount of movie production or TV production or anything like that,” Cue told The New York Times, but then reportedly left open the possibility that Apple would look for more exclusives. Hollywood sources believe Cue is merely tamping down expectations, an instance of Apple’s caution limiting the splash it wants and perhaps needs to make.

As Apple moves forward into originals, it has leverage that neither Netflix nor Amazon had when they began making original shows: a strong, positive reputation among creators. Years of cultivating celebrities to be brand ambassadors has established Apple as an artist-friendly shop. Indeed, word that Apple is buying content has spawned a frenzy of interest among Hollywood cognoscenti. Some creators are so excited by the possibility of working with Apple, one agent tells me, “people are throwing shit against the wall with them, to every extent possible.”

Although there are plenty of unresolved questions—Will Apple use its massive resources to finance shows or build its own team of development executives to shepherd projects? What’s the business model for making money from the content?—no one is too bothered by the lack of specifics. Why? “Because it’s Apple,” one manager says. “Who wouldn’t want to take that flier? Especially artists, on a creative level, are saying, ‘Yeah! Let’s stick it on Apple!’ ”


Google: The Force Awakens

One afternoon in early February, Jim Berkus, the chairman of United Talent Agency, sent out a company-wide email. Berkus had just listened to Susanne Daniels, the former programming chief at MTV who decamped to YouTube last July, talk to a group of UTA agents about YouTube Red Originals. Daniels laid out her vision for the video giant’s lineup of exclusive TV shows, movies, and music available only through YouTube Red, its new $9.99-a-month, ad-free subscription service.

Susanne Daniels, global head of original content for YouTube, wants to pair homegrown stars with Hollywood talent for the video giant’s Red subscription service.Photos: Emily Berl

“It felt like a new day in Hollywood, and [YouTube] is a big part of our future,” Berkus wrote. “We always ask, ‘When will Google buy into Hollywood and acquire a studio or network?’ The answer is they already have by their ambitious plans for YouTube.”

Berkus was worked up, in part because Daniels is arguably the most impressive TV executive to segue to digital in this era. Her career spans stints at MTV, the WB, and Lifetime. (Her husband, Greg Daniels, is part of the Hollywood in-crowd as well, as the cocreator of the American version of The Office, Parks and Recreation, and King of the Hill.) Coming from her, the message that YouTube is serious about high-quality professional content resonated in a way that Google had struggled to convey to the Hollywood establishment in the past.

Though one of Red’s first efforts was Scare PewDiePie, a scripted series built around YouTube’s biggest star, Daniels’s ambition goes far beyond short videos of Swedish millennials playing video games. She says that, as with her previous network jobs, she’s working with talent to “arc out and develop characters over a season” and understand the “art of showrunning.” For now, she’s starting with YouTubers. But beginning in 2017, Daniels plans to “sprinkle in a couple more high-profile shows with more high-profile industry talent.”

Does this mean that YouTube, which has more than 1 billion monthly users, would eventually produce shows that had no YouTuber affiliation whatsoever? “Maybe,” she says. “As we grow and we find our brand and our niche . . . I wouldn’t say no.”

Talent wranglers are excited because Daniels and YouTube are offering real money, a stark contrast from smaller digital players that “pay you $10,000 a script,” as one manager gripes. “YouTube has absolutely stepped up their price point to where they can more closely compete with TV,” says Chris Jacquemin, partner and head of digital content at WME. “They’re not necessarily going after Game of Thrones–level budgets. But they’re very competitive, certainly with the basic-cable tier.”

The money may help Daniels overcome YouTube’s long-standing perception among traditional creators. “In the past, they’ve looked at [YouTube] as a pretty effective marketing tool,” says Jonathan Perelman, a former Google and BuzzFeed executive who’s now head of digital at ICM Partners, “but not necessarily the place to go when you want to create something.” While one agent predicts that some film and TV directors may resist the idea of collaborating with You­Tube stars, whom they consider “schlocky,” Perelman contends that “there’s a real opportunity to get talent to look at YouTube in a different way.”

YouTube’s new strategy is in part a bid to fend off Facebook, which over the past year has seen exploding video use and now boasts 8 billion video views a day. (As one source tells me, Facebook is “internally, the biggest existential threat at YouTube.”) It is also a defense against Netflix, which has poached homegrown YouTube star Miranda Sings to create an original series. Perhaps most important, though, it is an effort to diversify YouTube’s revenue stream—to add consumer revenue to the advertising base—in hopes of improving its reportedly break-even financial performance. Daniels won’t reveal how YouTube Red has done in the first four months since it was launched except to say that it is “meeting goals that were ambitious.” YouTube is also exploring other ways to boost profitability. According to a source with knowledge of the plans, it has been quietly developing a direct-to-consumer streaming platform that it has been shopping to media companies, much like the MLB Advanced Media technology that powers HBO Now. (YouTube declined to comment.)

Daniels says that ever since she arrived at YouTube 10 months ago, she’s been thinking a lot about the simultaneous power and fragility of YouTube’s brand. “Our core audience sees YouTube as a really positive force,” she says. “They see influencers as having social capital and themselves as having social capital for being associated with these influencers. It’s an essential, positive community.” She’ll be programming Red with those principles guiding her.


Facebook: Friends With Benefits

“So we’re on our way to the Oscars,” Whoopi Goldberg says, speaking directly to the camera. “My daughter and I, between us, have on 40 pounds of Spanx. Sixty-five, like, corsets. And we couldn’t . . . we had to have help getting in the car. Who knows what’s going to happen when we get out of the car!”

Goldberg isn’t delivering this monologue during the red-carpet proceedings or the morning after on The View. She’s live-streaming video on Facebook from the comfort of her limo on the afternoon of last February’s Academy Awards. The video received more than 2 million views, as part of a behind-the-scenes Oscars diary series that made use of Facebook’s new Live product, which allows users to create video streams that upload directly to the platform. Unlike Snapchat Stories, they don’t disappear after 24 hours but remain on people’s news feeds.

The next morning, Facebook’s head of entertainment partnerships, Sibyl Goldman—a gregarious entertainment junkie who’s done stints at Ryan Seacrest Productions and Yahoo—was pleased with the star’s efforts. Goldman says that Goldberg, whose post-limo experience, as it turned out, involved being misidentified by a fashion website as Oprah Winfrey, gave “this really nice, well-rounded view of what’s happening at an event like that.”

Sibyl Goldman, Facebook’s head of entertainment partnerships, is seeking edgy celebrities willing to riff with their fans live.Photos: Emily Berl

Facebook is giving live video a huge push. CEO Mark Zuckerberg is reportedly “obsessed” with it, and the company has been rapidly finessing its rollout. The company is also in talks with the NFL (update: in early April, Twitter signed a deal with the NFL to stream Thursday night games) and is negotiating with TV programmers about streaming live shows. Already E! is shooting a live gossip show exclusively for Facebook. Live video suggests the kind of urgency and engagement that advertisers love. And Facebook is eagerly enlisting professional entertainers to deliver it.

After the Oscars, Facebook deployed COO Sheryl Sandberg to pay a visit to all the major Hollywood talent agencies. Her mission was to urge agents to get their clients using Live, with an added bonus: Facebook would pay a select number of them. In particular, the company is after young, edgy stars—a distinction from Goldberg, Vin Diesel, and its other early adopters—who are “comfortable being unscripted and unfiltered,” Goldman tells me when we chat after news of Sandberg’s visit leaked. “People who like to riff really enjoy Live.”

Whether it’s comedians, chefs, athletes, musicians, politicians, or journalists, Facebook hopes to turn them into Live “stars” akin to YouTube celebs and will pay them based on how many times a week they broadcast. (In late March, reports surfaced that YouTube was creating its own live-streaming product called Connect.) Eventually, this could evolve into a revenue-sharing model based on ads that are served within the stream. Goldman stresses that everything is still very much in testing mode. “We’re trying to encourage partners to experiment with this new format,” she says. “Part of that is working with some partners to offer some short-term financial support.”

Like YouTube Red Originals, Live is Facebook’s latest significant push to get A-listers, and Hollywood in general, to view the platform as more than just a promotional tool. Because of its unparalleled reach, data, analytics, and targeting capabilities, Facebook has been hugely successful in getting studios and networks to make it a launch pad for trailers, sneak-peek content for event movies such as Star Wars: The Force Awakens, and even entire episodes of shows, such as Showtime’s Billions last January (though the nonexclusive deal meant YouTube and others also had the pilot). Now, though, as Facebook turns to original content created exclusively for its 1.6 billion monthly users, that very success has spawned a challenge: The entertainment industry doesn’t generally see the social network as a creative venue. The unevolved financial model doesn’t help: “The conversations that I have with our content creators is, ‘Yeah, I can do something. I can put that content on Facebook and get huge numbers,’ ” one agent says. “ ’But what’s the monetization going to be?’ ”

Another challenge is endemic to how Facebook works. The feed, an algorithmically derived stream of content customized to each user, remains a confusing concept for programmers still getting used to the idea of releasing an entire season of a show at once. “It’s not a destination,” says one source. “YouTube made a deliberate decision five years ago to be channel based. There’s a reason for that. The [Facebook] feed is very transient. It’s tough.” In early April, the company added new updates to Live to make it more user-friendly and fun (filters, real-time emoticons), and added a Live destination page—one way it is trying to address this concern.

When I ask Goldman about this, she talks about how more than half of Facebook content is shared friend-to-friend, meaning that not only is stuff on the site highly trafficked, it travels with the valuable imprimatur of someone you know. Nowhere is this more true than in the entertainment category, she says, “whether it’s this movie trailer or this funny post.” Facebook is betting that deep engagement can help draw creators, in the same way it has drawn both audiences and advertisers.


Alibaba: Lord Of The Rings

Last September, Tom Cruise stood onstage at the Shanghai Film Center with Jack Ma, chairman of the Alibaba Group, at the gala for the Chinese premiere of Mission: Impossible—Rogue Nation. Alibaba had invested in the film and promoted it across its digital properties. “How can a man be that handsome?” asked Ma as he looked affectionately at the movie star. Ma, who is worth $22 billion, was dressed simply, in a white button-down and black pants. “You know, I’m considered the most ugly and unique-looking man in China. That’s why when I meet a handsome man, I’m always jealous.” With Alibaba behind the film, M:I 5 chalked up a dashing $86 million opening weekend in China, the biggest ever for both Cruise and the Mission: Impossible franchise.

A self-described film buff who cites Forrest Gump as his favorite movie, Ma has said that he wants Alibaba to become “the world’s biggest entertainment company.” Since raising $25 billion in a record-setting U.S. IPO in the fall of 2014 and with China galloping to surpass the North American box office next year, Ma has been looking to expand into entertainment and is hungry for Hollywood-quality content to drive purchases on Alibaba’s variety of e-commerce platforms, including Taobao Movies, its film-ticketing service.

Unlike the other tech CEOs, Ma has created his own movie production arm. Alibaba Pictures recently set up a 22,000-square-foot office in an art deco–style building in Pasadena, California, and Ma installed Zhang Wei as his Hollywood liaison and president. An elegant, Harvard MBA who started out as a TV talk-show host and once said she wanted to be China’s Oprah Winfrey, Zhang, along with Ma and other Alibaba delegates, has been very active in courting studios about producing, coproducing, and acquiring movies for Alibaba. (In October 2014, fresh off his U.S. IPO, Ma even scored that most coveted of Hollywood experiences, attending a Lakers game with WME co–CEOs Ari Emanuel and Patrick Whitesell, along with the actor Jet Li.) Alibaba has made deals with Lionsgate and Disney to bring their shows and movies to China via Alibaba’s subscription streaming services.

Zhang Wei, president of Alibaba Pictures, intends to use data to find movies that can be huge in China and around the world.Photo: Jasper James

As of mid-March, Alibaba Pictures has yet to release its first project. While Wanda Group, the Chinese real estate conglomerate, bought the AMC theater chain in 2012 and recently acquired Thomas Tull’s Legendary Pictures for $3.5 billion, Alibaba is currently more interested in being involved in individual films. That hasn’t prevented Hollywood wags from including Alibaba in its rumor mill. After Viacom stated that it would be interested in selling a minority stake in Paramount, which released M:I 5, Alibaba has been mentioned as a likely acquirer. “Huayi Brothers has put money into STX Entertainment and other companies. Hunan TV is putting money into Lionsgate,” says Janet Yang, the Joy Luck Club producer who is working on a feature film about Ma, citing two other Chinese entertainment firms that have bought into Hollywood. “[Alibaba] wants to feel like they can effect change.”

Alibaba’s ideas about how to disrupt entertainment production may prove highly unpopular. Last fall, a company executive said that it would not hire screenwriters, choosing instead to find movie ideas from fan-fiction authors. Alibaba then expected them to cobble together scripts in an online forum. The Chinese creative community was outraged, and the company quickly walked back the comments. Coincidentally, the gambit was reminiscent of Amazon’s initial efforts to enter Hollywood via a crowdsourced script platform before it got serious and started writing big checks.

Ultimately, Alibaba may end up acting more like Netflix, which relies on a combination of algorithms and personal taste when it comes to green-lighting projects. At the outset, Alibaba’s emphasis is more on data than anyone’s golden gut. All of the information that it has amassed about its customers’ buying habits and entertainment choices will inform which movies it’ll make. “[Alibaba’s] vision of what they are going to do quite precisely calibrates to what they know will also perform well in China,” says one person who has met with Alibaba Pictures executives. “They’re very focused on fanboy, a lot of fantasy, children-related content and not a lot of other stuff.”

Ma is very much an Old Hollywood–style showman. He throws group weddings for Alibaba employees and has serenaded his company with a rendition of “Can You Feel the Love Tonight?” while wearing a long, white wig and red-and-black leather biker jacket. As Ma finds his way in the entertainment business, “Give ’em what they want” may become more than just the mantra of a quant jock but also the populist cry of someone whose prime interest is keeping his customers happy.

Before Ma attains movie moguldom, though, his company has to overcome cultural hurdles as it tries to negotiate film deals. Unaccustomed to Hollywood’s highly specific way of packaging projects, Alibaba has frustrated some of its potential partners. “They don’t really get it yet,” says one. “They’ll draw a line in the sand on something that they shouldn’t. Then they will be very flexible on something they shouldn’t be. It’s a little backward, but they’re learning.”

As with the other tech outsiders acclimating to the entertainment industry, the question of how well that process goes may come down to how badly Hollywood feels they need Alibaba. The company represents access to the fastest-growing movie market. While the U.S. box office is seeing modest single-digit improvement, China’s is thriving with a 50% increase in 2015. The Chinese film business is notoriously unfriendly to foreigners given its censorship laws, not to mention marketing challenges (trailers do not usually play before movies in theaters there) and the fact that studios have no control over release dates. By partnering with Alibaba, American studios would have a trusted partner with e-commerce and social media prowess.

“People want muscle in China,” says Schuyler Moore, a partner at Stroock & Stroock & Lavan, who worked on a $500 million deal between China’s Perfect World Pictures and Universal to fund a slate of films. “Alibaba certainly provides it.”


As the tech titans bring their rivalry from commerce and community to original content, their attempts to best one another mean that the unintended beneficiary is anyone who can create or package entertainment. Not only does the industry get even more serious buyers—in addition to Netflix, Amazon, Apple, Alibaba, Facebook, and Google, don’t forget about Verizon, AT&T, Snapchat, and Twitter—but it also has a surprising set of new collaborators.

For decades, the tech and entertainment industries have not trusted each other, insisting that the other offered far lesser value. While Hollywood hollered, “Content is king,” Silicon Valley countered with “Platform rules.” Now the two worlds are more cooperative. “Fresno’s the halfway point between Silicon Valley and Hollywood,” says ICM’s Perelman. “And while neither I nor anyone else in this business is looking to move to Fresno, conceptually there’s this understanding, like, you need us and we need you; let’s find the best ways to work together.”

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