Recode's Kara Swisher, AT&T - Time Warner, and IGTV

Instagram announced on Wednesday a standalone app called IGTV, a place for watching long-form vertical video. Casey and Ashely — who went to Instagram’s event that announced the app — talk with Nilay, Dieter, and Paul about their initial feelings about the platform and predict how it will fit into the social mediasphere. Also, Nilay Patel sits down with Kara Swisher to talk about the recent AT&T and Time Warner merger. Kara published a book in 2003 about the AOL and Time Warner merger There Must Be a Pony in Here Somewhere (the merger split off in 2009) so the two discuss the similarities and differences between the two mergers and what they can potentially mean when distribution companies own content. There’s a whole lot more in between that — like Paul’s weekly segment (now up for sale) “Shaavoop” — so listen to it all and you’ll get it all. 01:54 - Instagram announces IGTV, a standalone app for longer videos 19:33 - AT&T launches new WatchTV streaming service at aggressive $15-per-month price 27:26 - Tinder parent company buys anti-Tinder dating app Hinge 35:51 - Kara Swisher talks AT&T - Time Warner merger 1:07:12 - Paul’s weekly segment “Shaavoop” 1:11:51 - What happens if Apple loses its Supreme Court App Store antitrust appeal? 1:19:27 - Apple’s AirPower charging mat rumored to ship in September following ‘technical hurdles’ 1:19:48 - Apple and Oprah are teaming up to make videos Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Nilay Patel?

  Hello and welcome to The Vergecast, the flagship podcast of The Verge Podcast Network, which is part of the Vox Media Podcast Network, which is part of Vox Media, which at this point is not going to be part of a larger conglomerate, as near as I can tell, but will probably happen soon, given the current environment. Anyway, I'm Neelai. I'm your friend. We have an all-star crew today. Paul is here.

• 0:24Speaker 01

  Hello.

• 0:25Nilay Patel?

  Speaking of Vox Media Podcast Network, Casey Newton, host of Converge, is joining us.

• 0:29Speaker 02

  Hey, everybody.

• 0:30Nilay Patel?

  Ashley Carmen, host of Why'd You Push That Button, is joining us.

• 0:33Speaker 03

  Hello.

• 0:34Nilay Patel?

  And Dieter is here, host of Processor.

• 0:36Speaker 04

  Hey, how's it going?

• 0:37Nilay Patel?

  Which is not a podcast, but a video experience.

• 0:39Speaker 04

  Yeah, it's a whole thing.

• 0:40Nilay Patel?

  Dieter makes the moving pictures.

• 0:42Speaker 04

  Yeah, I dance like a monkey in front of the camera. It's great. Hey, Casey, if we're the flagship, what is Converge? What kind of boat is it?

• 0:48Speaker 02

  Converge is a... what kind of boat is it? It's like, you know the kit, the car from Knight Rider? Imagine if that were a boat. That's what Converge is.

• 0:59Nilay Patel?

  So Corvette.

• 1:00Speaker 02

  It's a lot of technology in there, very smart and also kind of funny.

• 1:05Speaker 04

  Is it like the... oh, it's the Lotus from the James Bond movie that converts into a submarine.

• 1:10Speaker 02

  Exactly.

• 1:11Speaker 01

  Ashley, what kind of boat is Why'd You Push That?

• 1:13Speaker 03

  Honestly, it came to me immediately. A jet ski.

• 1:15Nilay Patel?

  Ooh.

• 1:16Speaker 03

  Me and Caitlin speeding off into the sunset on a jet ski. She would be like scream crying and I would be driving.

• 1:24Nilay Patel?

  I'd be driving. It's the end of the Big Pimpin' video with like the boat zooming out and Caitlin's like, "Ah!"

• 1:33Speaker 03

  Exactly. That's exactly how it would go.

• 1:35Nilay Patel?

  All right, there's a lot to talk about. There's a reason I wanted Casey and Ashley on our show, Casey and Ashley, not Casely and Ashy, which is what I just said. There's a reason I wanted Casey and Ashley on our show. I would say this is news that's going to feed into almost everything we talk about on the show this week, but Instagram announced IGTV, which is, as near as I can tell, a direct competitor to YouTube that feeds off of all of the video stuff that's been happening on Instagram lately. Casey, I was watching your Twitter feed yesterday. It sounds like the event... Was just a pure disaster. So just walk us through what happened with the announcement and then what the product is.

• 2:15Speaker 02

  You know, it really was. And first, let me say, everything I'm about to say, none of it matters even a little bit. But you have to understand that tech demos are incredibly well-produced. They spend incalculable amounts of money on them. These things are choreographed down to the last, you know, like where the napkins are placed. And man, Instagram went all out on this event. They rented out a concert venue in San Francisco that hasn't even re- it is apparently about to reopen. It's called the Fillmore West. There's a Fillmore East. Anyway, they had, they had created like seven rooms where you could take these funny Instagram photos against beautiful backdrops. They had a make your own acai berry bowl. They had four different kinds of fancy toast, right?

• 2:59Speaker 02

  It was like the ultimate Instagram event. And when it came time for the thing to start, it didn't. And 45 minutes went by. Forty-five minutes that, you know, doors were at nine.

• 3:10Nilay Patel?

  What did you do for 45 minutes?

• 3:11Speaker 02

  Well, honestly, I wrote a story because there had been so much reporting that, that had happened leading up to the event that I thought, you know, this is a really good time to sort of pour out my, my thoughts and feelings about, you know, what this new Instagram video experience is going to be. The last thing I'll say about the, the sort of failure is they had brought in all these very famous Instagram stars who had collectively tens of millions of followers. And they had told us to, to anticipate a 30-minute-long event. And so I thought we were going to sort of get to hear from all these people who we knew were backstage because they were posting about it to their Instagram. Well, Kevin Systrom, the CEO, comes out on stage. He starts the event and they wind up just doing the entire thing in 10 minutes. So the entire thing was over in an incredibly short amount of time.

• 3:55Nilay Patel?

  Did they tell you why it was so late?

• 3:57Speaker 02

  I'm told it was technical difficulties. They were trying to have simultaneous events in New York and Sao Paulo. And, and something happened where like the, I think it was just basically a Zoom conference call issue. I shouldn't say that it was Zoom because I don't, I don't know what software they use. But if you've ever used any work video conferencing software, you know that it's the bane of your existence. And I think Instagram ran hard into that reality. You know, you know, they make a live video product. Maybe their next pivot is just they're going to do work video chat.

• 4:22Nilay Patel?

  I mean, that's everyone's final pivot. Every company eventually is like, what's the biggest problem we can solve that we have every day? And it's, it's video conferencing.

• 4:30Speaker 04

  It's a very hard problem. Apple only just now managed to solve it with FaceTime.

• 4:36Speaker 02

  No, listen, I've been, I've been down at Google and I've, and I've said, like, what, what is the deal with, with video, like, work, video chat? It doesn't seem like it should be that hard. And they just, they shake their heads and they're like, hey, like, we wish we knew. No one can figure out why it's so hard. The smartest people in the world, it baffles them.

• 4:51Nilay Patel?

  Yeah, Apple didn't just figure it out. They, they literally like opened the drawer where they stored the iChat code. And they were like rifling through the file folders. And they're like, all right, I guess we're to hear this one. Like, I found the envelope within it.

• 5:04Speaker 04

  Rendezvous, what's that?

• 5:06Nilay Patel?

  Anyway, uh, we should not talk about video conferencing for an hour. So IGTV, Casey, what is it?

• 5:12Speaker 02

  So IGTV is, is two things. One is it's a new section of Instagram, which you'll now see as a glowing orange orb at the top of your feed. And it's a standalone app. And if you tap in video from people you follow and things that Instagram thinks you'll be interested in, will automatically start to play. It's, again, it's vertical video. And, uh, now you, as a user, can upload up to 10 minutes. And if you're a super fancy account with millions of followers, you can upload up to an hour. And Instagram says that eventually they hope to get rid of all time limits and you can just upload, you know, however long a video you want to. Here's why I think this is a smart move from Instagram.

• 5:56Speaker 02

  I think historically, social networks have been terrible places to watch video because we just don't go there for video, right? You think about how you use a social network. Your thumb never stops moving, right? You're always scrolling through the feed. You're tapping around, you're clicking. And social networks like Facebook in particular, although also Twitter, have been building these experiences where they just sort of accept that, they expect that you're going to stop scrolling and watch, you know, Game of Thrones, or, you know, their, their cheap ripoff of it. Um, where I think Instagram was really smart was, they said, the only way to get people to watch a video on their phones is you have to make a first-class destination for it that you actually seek out. And that's what IGTV is. So, so yes, you can find it inside the Instagram app, but even there,

• 6:39Speaker 02

  it's a home for video. You only tap on it if you're ready to sort of lean back and watch. The standalone app functions the exact same way. This is the move that Snapchat should have made with Discover, but never did. And I think that ultimately, if you believe that you have really good video on your platform, you have to make a standalone destination for it, or you're ultimately not that serious about it.

• 7:00Speaker 04

  I think the app is very well made. It's very clearly a first gen app. Like notifications are still coming in on Instagram when you get comments on your stuff or whatever. I posted a video and because it's a brand new video platform, I did what you must do on a brand new video platform is take a video somebody else made that's also a copyright infringement. And I put that up. It was Ruben, our engagement editor, did a video of me lip syncing Slim Shady from one of the Microsoft video I did a while ago. It's incredible. So I posted that. But what I love about the interface is it's autoplay, which, fine, whatever. But while you're watching a video, you can just swipe up and kind of like browse through other recent videos and other channels. And if you get bored, you just tap on the next one and it starts right away and then you can swipe up again.

• 7:45Speaker 04

  And so this like, it has a sort of a video native feel to sort of browsing around that is much better than like, I don't know, even like a TV channel interface, a really good guide. You can kind of just like watch something and if you get bored with it, you've already sort of scrolled through to find something else to look at.

• 8:03Speaker 03

  The animations are super cute, too. They have like little static TV stuff.

• 8:07Nilay Patel?

  So I want your take on it because you're my link to what the teens love.

• 8:11Speaker 03

  I also uploaded a video I didn't make just because, you know, I had to try it.

• 8:16Nilay Patel?

  Wait, is everyone's reaction to a new video platform to see if content ID exists? It's just like, I can be illegal here.

• 8:25Speaker 03

  But I just feel like eventually this platform is going to be overwhelmed with terrible content. Like The Verge posting videos there is going to be fantastic. We should shoot for vertical.

• 8:34Nilay Patel?

  I think the future of our Curb Your Breaker show is on IGTV, I'll be honest with you.

• 8:38Speaker 03

  Yeah, like that. I could totally see that being awesome. But as soon as you start getting some kid in his bedroom, all these kids in their bedrooms being like, I'm going to talk to the camera for an hour. No one wants to see that and you're going to have to go through a bunch of crap to get to actually good content.

• 8:53Nilay Patel?

  Yeah, so this is like a RIP Vine, but Vine had a forcing function of six seconds, which led to an explosion of creativity. Instagram stories and stories on every other platform have whatever timeline of 15 seconds and you have to tell a story in that chunk. Led to an explosion of creativity. Do you think this sort of like unlimited time zone is at, right?

• 9:13Speaker 03

  I mean, that was like, everyone had issues with when Twitter expanded the tweet limit. It was like, oh, well, we had these creative constraints that really bred this beautiful thing and now we can do more and that's bad. I do think giving people more is never good.

• 9:27Nilay Patel?

  I think 280 on Twitter is an unmitigated good thing.

• 9:30Speaker 03

  I'm fine with Twitter, but I just think that an hour-long video of a teenager in his room, there's gonna be a lot of bad and then eventually maybe you'll find a gem that'll be good.

• 9:41Speaker 01

  I think the question is what sort of norms are going to arise on the platform, right? Like on YouTube, we know what a YouTuber video looks like. We don't really know what an IGTV video looks like. The other question is, what is the algorithm gonna do? Because if there's a bunch of teenagers for an hour in their bedroom, maybe just their friends will watch it and that'll be fine. But what kind of content is Instagram gonna have its algorithm aggressively push when you open the app up?

• 10:08Nilay Patel?

  Okay, so you have answers to these questions?

• 10:10Speaker 02

  In terms of what is the algorithm gonna push at you?

• 10:12Nilay Patel?

  I mean, when you were at the event, when you were talking to Instagram, you were writing your story, do they tell you what they want the experience to be like? Or are they just kinda like, check it out?

• 10:22Speaker 02

  Well, you know, it's an open platform. People can make whatever they want for it and the algorithm will sort of figure it out, right? You know, part of the stuff that I think got cut out of the presentation is what are the famous people gonna do with it? Which at least should offer us some early indications. The one thing that they did tell us was there's this Instagram star, who I was not familiar with, named Lele Pons. Actually, I don't know if maybe you're familiar with her. She has 25 million followers, she's a model comedian, and she's gonna do a cooking show where she brings on some other influencer and they try to cook something and then they decide amongst themselves, like, who did the best thing? And it's incredibly low-rent, like, cable-access TV stuff, but you're doing it for an enormous audience and some of it's gonna be really popular.

• 11:05Speaker 02

  So, you know, frankly, it's not gonna be that different than what you're seeing on Facebook Watch, right? Like, it's the same idea, just in very different surfaces.

• 11:13Speaker 01

  It really seems to me, I feel like there's gonna be a lot of content that's what people currently do as a Facebook livestream, but where they just talk to their phone and editorialize about something, but it doesn't actually need to be live, and that might work better on Instagram.

• 11:29Nilay Patel?

  Well, I actually follow...

• 11:31Speaker 01

  A lot of YouTube is somebody made a video and then they edited it, or it went through a program and then got uploaded as an MP4 file. And that is clearly an old, dumb way to do things.

• 11:47Nilay Patel?

  I don't know. So I actually follow Lele Pons on Instagram because once you like follow one influencer, it becomes very clear that like there's a whole universe that you should like get sucked into. So I followed King Batch and somehow I ended up following like 10 more and there she is. She actually has like a number one Billboard single because she is so popular that they put her in a song. And everybody downloaded. It's like crazy, right? So like it's there. The ascendancy of the major influencers to me is one of the most fascinating things that these platforms can enable. And our friend Marques Brownlee made a great video yesterday, which everyone should go watch about his thoughts on IGTV. And his main point was YouTube is great, but I need to be everywhere.

• 12:29Nilay Patel?

  There's not a platform like YouTube that gives me sort of the audience scale, potentially the revenue scale. Everything else is sort of a feeder into YouTube, but I needed another place. And it seems like this is the other place that feels native to YouTubers because they're already doing tons of stories. And so I think the question is, this is why Instagram had tons of influencers there. They're already capturing so much of their creative attention. They can capture even more. That means they can capture more audience attention. And presumably sell more ads. So I think the question, Dieter, like what's going to be here? I think it's going to look a lot like Instagram stories crossed with YouTube.

• 13:10Nilay Patel?

  And you're going to see that same class of people sort of immediately take over in a way that Snapchat, Discover. They went to big legacy media brands and you know, like whatever People Magazine is doing on Discover just looks embarrassing. It doesn't feel made.

• 13:27Speaker 04

  Yeah. How insane is it that Snapchat missed that influencer boat? It was sitting right there. Vine was collapsing. It was sitting right there for them.

• 13:36Nilay Patel?

  They were always suspicious of the influencers because they never saw themselves as a place for people to be influenced, right? It was always about bringing you closer to your real friends and not about how many friends you have. It's about how do we sort of let you talk to the people who matter the most in your life and like King Back like might not have a great role to play there. That's why I thought Discover was always such a weird fit for their app though, right? Is because they have been so suspicious of the influencer crowd. So I don't know.

• 14:06Speaker 03

  Casey, did they say they were going to pay the influencers to make content?

• 14:10Speaker 02

  Uh, no, and it's sort of strange. The only way that I can explain that is that this thing is still kind of an experiment, and so they're just gonna kind of roll it out. And, and I think they don't want to promise creators money until they know that it is going to be a hit. I think it'll be enough of a hit that they can pay the audience money. But my guess is you'll hear about that within the next six months. But, you know, in the meantime, it is a bit icky that Instagram is like, hey, like, come make stuff for our platform, and like, we'll probably pay you eventually, right, from one of the richest companies in the world.

• 14:44Speaker 04

  One of my favorite stories from this disaster of an event is Ninja, Twitch livestreamer. He, Janko Rogers from Variety, great reporter, interviewed him, and he tweeted, "Video game livestreamer Ninja was busy resetting his Instagram password as I interviewed him about IGTV, so that he could get access to start using IGTV."

• 15:04Nilay Patel?

  Yeah, I mean, look, there are Twitch stars, there are YouTube stars, there are Instagram stars. If you are any one of those companies, you're trying to figure out how to capture the other, right, to bring them over to your platform.

• 15:17Speaker 04

  Yeah.

• 15:18Nilay Patel?

  It's like, I don't-

• 15:19Speaker 04

  What's so fascinating is they've, they got, they got the attention of people like Ninja and Marques Brownlee to like, jump over to Instagram in like, a pretty big way. Like, they did a really good job, like, getting a bunch of big names to pay attention and, like, try out the platform right away.

• 15:35Nilay Patel?

  Right, because I, we talk about all the time, YouTubers are frustrated, right? And like, they're, they're happy to look at something new.

• 15:43Speaker 02

  Well, you know, there, something that I think we should watch is, I mean, look, once you have 25 million followers on any platform, you're gonna be fine. But, you know, there is also a downside to the availability of so many platforms, and so many platforms like coming after these influencers, because it, it actually seems to not be paying off for them all that much, right? You're, you're one person, you only have so much time in the week that you can create new content, and now I feel like there's this expectation that if you are an MKBHD, you're expected to make your weekly YouTube video and your weekly IGTV video, and, and you've got to go stream on Twitch for a little bit, and- Something about it feels messed up to me like, you know, like Ninja is this is the probably

• 16:25Speaker 02

  the most famous streamer in the world right now and he's broadcasting himself 12 hours a day like these are not good jobs. We talk about these like these are really great jobs. Like if I only have enough Instagram followers like life would be great. And yet I see stuff like this where it's like, okay, great. Now you have to go master a new platform and we're not going to pay you for an indefinite period of time. Like some of this stuff is kind of messed up.

• 16:45Speaker 01

  Yeah. Then I mean, the nice thing about Twitch though is they have really figured out monetization. Like you can, if you get like a thousand people watching you on a regular basis, you can make that your full-time job. That's fair.

• 16:59Nilay Patel?

  Hang on, I have to even start my Twitch channel.

• 17:03Speaker 01

  First, you need to know what a video game is, Deli.

• 17:06Nilay Patel?

  Which I manifestly do not. No lies there. All right. I want to end on this. Our friend David Pierce tweeted this yesterday. No, it's just true.

• 17:15Speaker 01

  I'm sorry.

• 17:15Nilay Patel?

  Truth is an absolute defense to libel, Paul.

• 17:19Nilay Patel?

  Our friend David Pierce tweeted this yesterday and I could make arguments for this with absolute certainty and arguments against this with absolute certainty. So I want to hear whatever he thinks. Here's what David said. Snapchat wants to be the future of communication, which is a cool idea and a near impossible business. Instagram wants to be the future of TV, which I think this is $6 signs. Casey, do you think that's the right read?

• 17:40Speaker 02

  Does Instagram want to be the future of TV? Yes, with an asterisk. Facebook wants to be the future of TV and almost all of their moves that they've made around video over the past year have been about going after TV advertising budgets. They see that as this giant pool of money that is going to go away because the younger generation is not watching TV anymore and all the eyeballs are on Facebook-owned property. So they might as well go get those ad dollars. So to the extent that like TV ad dollars are the future of TV, then then yes, like that's what Facebook and Instagram want to do. Does Snapchat want to be the future of communication? Sort of. But you know, it's interesting. They don't really talk about their vision in such grandiose terms, right? They talk about wanting to bring you and your friends closer together, but they don't talk about connecting every

• 18:23Speaker 02

  person in the world. They don't talk about, you know, being like the number one global destination for all communication. I see it Is more of like a boutique art project studio that comes out with a bunch of like weird widgets. And some of them are amazing and show these really cool insights into human behavior. And others of them just kind of like disappear. So to me, that's more of like a Willy Wonka's like chocolate factory than, you know, some grand statement about the future of human interaction.

• 18:50Nilay Patel?

  Ashley, what do you think?

• 18:51Speaker 03

  I mean, I totally agree with Casey because Instagram is also spinning off its own DM.

• 18:55Nilay Patel?

  Yeah.

• 18:55Speaker 03

  App like they want to be everything. It's Facebook. Facebook just wants everything, anywhere they can stick an ad, whether that's a chat with your friends, an hour long kid in his bedroom, talking, whatever. They're going to do it.

• 19:08Nilay Patel?

  You really hate this kid in his bedroom.

• 19:10Speaker 03

  I just have this like idea of a kid who thinks he's funny in his bedroom being like, here's some jokes.

• 19:16Nilay Patel?

  I would like you to send Ashley a one hour long monologue.

• 19:20Speaker 03

  I'm not here for any stand up.

• 19:22Nilay Patel?

  Wow. Well, so this leads me actually, at the end of the show, I want to ask Casey and Ashley about the amazing consolidation of the dating app market because I think that will be very entertaining. But talking about these companies of future TV leads me into a little bit of policy news. Like I said, IGTV leads me kind of into everything because last week AT&T Time Warner closed. This week, AT&T put out AT&T Watch, which is their streaming TV service. If you are an AT&T customer, these plans are horribly named and you sign up for the unlimited space ampersand more plan.

• 19:59Nilay Patel?

  One of the richest companies in the world doesn't know about spelling. $70 a month for a single line. You have 22 gigs of limited data, right? You've got that bucket and then they throttle you after 22 gigs. But you get this app for free with CNN, HGTV, whatever tiny little selection of Time Warner channels in it. Those are outside of your data cap. AT&T's plan is to turn everyone's phone into a little TV. Right? It's like very clearly, they're putting a TV app on your phone. That TV service is outside of your data cap. They're going to do incredibly targeted ads. That's they're about to buy a big app, ad tech company called AppNexus. And they want you to watch TV on your AT&T phone all day.

• 20:42Nilay Patel?

  And then they're going to figure out where you are and they're going to be like, you're by a subway. Try this subway because like here's a subway ad inside of your CNN feed. This is explicitly their goal. And I look at Instagram and I look at YouTube and they also want to turn your phone into little TVs. But you gotta pay the data charges because they haven't signed the deal with AT&T. Like, how are these companies gonna contend with that as all of these carriers start to zero out more and more services? Because that attention is finite and I really think people are gonna pick free HBO over IGTV. Or are they gonna keep picking their creators? Like, I just, I honestly don't know how any of these companies are gonna contend with that. Because Facebook is after TV dollars. The TV service is now there and they've already got the existing relationships and dollars.

• 21:27Speaker 04

  And people are gonna start, like, they'll watch their creators and their, their fans when they're on wifi. And then they'll watch HBO when they're on LTE. Like, that's surreal. That's super weird.

• 21:38Nilay Patel?

  Wait, that, that's, it could be a real thing that you do, right? Like, yeah.

• 21:41Speaker 01

  Wait, informal survey, though. I'm guessing most of us have subscriptions to some sort of entertainment that we could watch on our phone. Like, I could watch Netflix, I could watch HBO. How much time do you spend on your phone watching, like, Game of Thrones or Downton Abbey? Versus scrolling through Twitter and Instagram and Facebook?

• 22:01Speaker 02

  I, I, I agree with Paul. Like, in, in a way, the content that, that AT&T is adding to watch is the worst. Like, your phone is the worst place to watch that stuff, right? And your phone is the best place to watch IGTV. And so that's the advantage that I think that, that Facebook and the platforms have. In addition to the fact that that is where the creators are, who are inspiring so much passion among this younger generation, right? Like, there's not a seven-year-old who's gonna beg their mom to sign up for Watch so they can watch CNN on their way to school. But like, a kid who doesn't have access to YouTube when he's eight is probably gonna be miserable.

• 22:36Nilay Patel?

  I mean, that's, that's the idea. And I, to me, the idea that AT&T is gonna preload their TV service, probably an Android. Like, you can't see Apple letting AT&T put their garbage TV service on the iPhone by default. Like, that, that won't happen. But every Android, like, Samsung's gonna be like, "Yeah, another app? We could do that."

• 22:56Nilay Patel?

  "You want, you want Big Spie to open that for you? We got it." Like, LG is gonna be like, "Yeah, that can be the whole home screen." Like, they don't do shit.

• 23:04Nilay Patel?

  The idea that AT&T is going to try to turn all these phones into little TVs that prioritize the AT&T service and then hyper advertise that all of their things are free while everything else isn't free and everything else also, by the way, this is true, limited to 480p streaming unless you pay $10 a month more.

• 23:20Speaker 01

  Yep.

• 23:21Nilay Patel?

  Which is crazy. That is all, those are the things that we described as evils when the net neutrality stuff was happening and now they're extremely real and it, it just feels to me like if Facebook's goal is to capture those TV dollars, they now actually have to compete on the phone with TV companies and that is new. Like, I don't think that's ever existed before.

• 23:45Speaker 04

  The, the war between TV companies, broadband companies and cellphone companies up against basically Facebook and Google is very real and about to get super real. They've been complaining for a super long time about, you know, all the stuff that Facebook and Google are doing and it like was this weird undercurrent that made no sense to me in the original, you know, net neutrality debate in the past few years, but now it's just crystal clear that those companies are just ready to fight. You remember back in the day when like, uh, Google was trying to like make cable boxes and like get in on the cable box game and they just got iced out by every single cable company and because they were

• 24:27Speaker 04

  afraid of Google and I was like, why are you afraid of Google? They just do like double click ads, chill out. But no, no, like they're afraid and like this, this fight is going to get really cutthroat. And so when we talk about, you know, net neutrality is over, like everyone's like, it'll be fine. Don't worry about it. A bunch of people are like, it'll be fine. Don't worry about it. But it's not going to be fine if there is a, if there is a giant war amongst huge companies over like the next great bucket of money that's TV ad dollars, like a knock down, drag out, no holds barred fight for that stuff. You know that the stuff that we've taken for granted when it comes to stuff like net neutrality is gonna, it's gonna just start falling down left and right.

• 25:09Speaker 01

  Here's, here's my vision of the future.

• 25:11Nilay Patel?

  Ooh.

• 25:13Speaker 01

  You pay AT&T $80 a month because you don't want to watch video for 80p.

• 25:17Nilay Patel?

  Yeah. By the way, you're still only limited to 1080p. True.

• 25:24Speaker 01

  Uh, you, you pick HBO as your included service. You don't watch HBO on your phone, except in, on, in air, airports.

• 25:34Nilay Patel?

  Yeah.

• 25:34Speaker 01

  You watch HBO on your TV. You watch all your TV and movies by paying money and, um, and, and watching it ad free.

• 25:46Nilay Patel?

  Okay.

• 25:46Speaker 01

  So TV ads and movie, well, movies don't typically have ads.

• 25:50Nilay Patel?

  They have product placement.

• 25:51Speaker 01

  Product placement, yeah. Hey, see, hmm.

• 25:54Nilay Patel?

  I'm always thinking about the dollars, Paul.

• 25:55Speaker 01

  All the ad dollars.

• 25:57Nilay Patel?

  Tony Sarkis as a Huawei phone. Now, I'm gonna use a Huawei phone.

• 26:00Speaker 01

  Ashley's arch nemesis, the bedroom monologue. He spends thirty-five minutes explaining how he was bullied at school or something. And then he's like, he's like, but you know, great news. I just got a car and I needed auto insurance.

• 26:18Nilay Patel?

  Oh, my God. This is a nightmare.

• 26:21Speaker 01

  And I chose Geico. And Geico was great.

• 26:24Nilay Patel?

  This is a Cory Doctorow novel. I'm just letting you know.

• 26:26Speaker 01

  No, but there's so, so much ad money. I don't know if it's moving or if it's expanding, but there is a ton of ad money going to the quote unquote influencers, especially on Instagram, for product placement.

• 26:39Nilay Patel?

  So a thing, uh, I don't, we, we don't need to get in the weeds of this and we should move on. But there's actually a, a series of articles in like the trade publications like Digit Day and Ad Week. And they're like, maybe these influencers aren't influencing anything. And like, there's, like, the industry is starting to like, wonder if they're actually getting any return on this or if they just like, were in a hype wave. And so it's all gonna shake out. Okay. I want, I really do want Casey and Ashley to tell me why one company owns Evergating.

• 27:05Speaker 01

  Disclosure, Instagram is on my Facebook, which also owns Oculus, which my wife works for. The end. And I bet Comcast was involved in something with it.

• 27:15Nilay Patel?

  Comcast is a investor in Vox Media, which, uh, that's great. I will say the CEO of Comcast personally hates me, so don't worry about it. True fact. Okay, real quick. I mean, you talk about dating apps and why do you push that button all the time? It seems like one company now owns every major dating app.

• 27:31Speaker 03

  Yeah, so Match Group, yes, well, this will be two days now. Match Group now owns Hinge, which I was personally very sad about because I use Hinge. They bought Hinge and now they basically own every dating app. They own OkCupid, Tinder, they own a bunch of, they own over 45 dating apps. I didn't even know there were this many in the world. But there are. There are international brands, Match.com, obviously, Plenty of Fish, I don't know, like a bunch of apps. And they literally just own every dating app and it freaks me out.

• 28:00Nilay Patel?

  Are there any holdouts?

• 28:02Speaker 03

  There's Bumble. And Bumble, they just sued Bumble. Match Group just sued Bumble because as some people might know, the, I believe it was the co-founder of Tinder went to Bumble because she had like a whole issue there and now they're suing Bumble for copyright stuff, I think.

• 28:17Nilay Patel?

  Yeah, like the swipe interface or something?

• 28:19Speaker 03

  I think it's the swipe.

• 28:20Nilay Patel?

  So I said, oh, Casey, do you have deep thoughts on this?

• 28:23Speaker 02

  Oh, I mean, I do. It's a fascinating thing and in its own way, it reminds me exactly of what Facebook does, which is they're just sort of hyper alert to any app that comes along that gets a significant number of users that has to do with communication, particularly apps oriented around communication that younger people use. And once they hit a threshold, Facebook swoops in and buys them and then they don't have to worry about anyone ever competing with them. And Match Group has done the exact same thing with dating apps.

• 28:53Speaker 03

  But that's what's funny, isn't that Facebook is going to compete with Match?

• 28:58Speaker 02

  Yes.

• 28:58Speaker 03

  It's the best smackdown that's going to happen.

• 29:00Nilay Patel?

  So I said I could get from IGTD to every single story and I can. This is, Facebook bought Instagram and not being prevented by buying Instagram or WhatsApp is now, in retrospect, being seen as an antitrust failure because it clearly reduced competition in this market. Do you think anyone at the FTC or DOJ is even flagging the fact that Match Group is literally just reducing competition in this market? Because AT&T and Time Warner went through because it was a vertical merger, number of competitors in each market stayed the same. Literally, they're just reducing the number of competitors in these markets.

• 29:39Speaker 03

  There's a 0% chance anyone in the government is thinking about this.

• 29:42Nilay Patel?

  But there, anyone in the government that's on Hinge?

• 29:47Nilay Patel?

  I told you I could get there. I think it's super funny. Like, we are talking about these like behemoths combining. And Facebook and Instagram to me is the example of maybe that should have been scrutinized more closely. But at the time, Instagram was just like some silly photo app and nobody cared. And now it's like effectively the future of Facebook. And if they were, if Facebook was made to compete with them more directly, it might be a very different situation. But all these little dating apps, it's, to me, the comparison, Casey looks like I'm crazy.

• 30:18Speaker 02

  No, I think you're totally right. And I think, you know, in a world where Facebook owns most of the social networks, it's also fair to say that innovation has really slowed, right? Like, the only major innovations that come out of social networks in the past three years, I would argue, have come out of Snapchat, right? Or sort of derivatives of things that Snapchat did, which speaks to the reason why you want there to be competition. Dating apps are actually super innovative, right? The only way that you can grow to a big number of users in a new dating app is to have some new insight into human behavior. Tinder is a great example where there was something really just kind of pleasing about through swiping through a deck of cards and they were able to build a great business out of that.

• 30:58Speaker 02

  So yeah, I am concerned that Match Group is just kind of swooping in and consolidating the space because traditionally, dating apps have given us a lot of really interesting new ways to meet people.

• 31:09Speaker 03

  And they're totally stealing all of the innovative features, like from Bumble where women could message first, that was their big thing. Now Tinder's gonna let people do that. Tinder also is launching Tinder Places, which gives you a map of places you've been and you can view people who've also been there, who use Tinder. And that's exactly like this app Happen that did that first. And now Happen actually today had news saying they're gonna have a map as well. And I just felt sad. I was like, Happen, you're not getting acquired. Tinder already ripped you off. But yeah, like, they're also just shamelessly taking features too. But yeah, so now Facebook is launching a dating app and it's gonna go head to head with Match Group. And it's like, to me, the battle of the monopolies.

• 31:48Speaker 02

  You guys wanna just hear some, I have some gossip about the Facebook dating app.

• 31:52Speaker 03

  Ooh, yes.

• 31:52Speaker 02

  And when I say gossip, I mean, this is information I have not verified with a second Person, but a former Facebook employee was saying to me like, you know, so this is a Facebook dating was announced at F8. There is a history of things being announced at F8 that never ship, such as anonymous login. And this person was saying that it was very notable that it that Facebook never said, who is working on Facebook dating? They never said what part of the company this is even supposed to be coming out of. And also, there was no timeframe for launch. It was just something that they're going to explore. So this person sort of, you know, tried to make a bet with me. I didn't, I do not bet sources when they come to me with information. But this person tried to bet me that Facebook dating will never launch. So.

• 32:33Speaker 01

  Do you think it was like a, like, just like a marketing thing? Like, someone made, like, made it up as basically an ad? And if, like, well, if people are into this, then we'll actually find somebody to build it?

• 32:44Speaker 02

  You know, it could have been a trial balloon. I mean, I believe they've had a lot of meetings about it. And I believe they've mocked it up. And I'm sure it's been proposed internally there forever. And I think it made for a really kind of cute, fun thing to talk about during an event that Facebook spent most of apologizing. So, you know, it definitely kind of helped to lighten the mood. So, you know, I do think there's, there's kind of something in the works there. But, you know, whether it ever launches is still an open question.

• 33:08Speaker 03

  I will say, I think it's gonna launch.

• 33:09Nilay Patel?

  You're in it.

• 33:10Speaker 03

  I think it's gonna launch.

• 33:11Nilay Patel?

  You should bet Casey's source.

• 33:12Speaker 01

  Okay, what about, what about dating TV?

• 33:15Nilay Patel?

  All right.

• 33:16Speaker 01

  You open the app, and there's a guy in his room telling you how great it is.

• 33:21Speaker 04

  Literally, that was how dating apps used to work. They'd like, record a VHS tape and send it in, and then you'd like, go in a room.

• 33:28Speaker 01

  Exactly.

• 33:29Speaker 03

  This is, it could be. It really could be.

• 33:31Nilay Patel?

  Tinder TV.

• 33:32Speaker 03

  Oh, my.

• 33:33Nilay Patel?

  All right, here's what's gonna happen. We've been talking a lot about merger mania. There is a woman who works at this company, named Kara Swisher, who is one of the best big company reporters, best tech reporters, best media reporters to ever do it. And this is a fact. When AOL bought Time Warner, she wrote a book about it called, There Must Be A Pony In Here Somewhere. She knows all the characters. I talked to her about half an hour to compare AOL Time Warner to AT&T Time Warner. So, listen to, just listen to Kara, in general, in life. But we're gonna play that real quick. Well, I'm gonna read an ad. We're gonna play that. Listen to Kara. Come back. And Paul's gonna do a thing.

• 34:10Speaker 01

  Ooh.

• 34:11Nilay Patel?

  All right, let me read this ad.

• 34:14Nilay Patel?

  This episode of The Vergecast is brought to you by ExpressVPN. With all the news lately about data hacks and breaches, it's hard not to worry about digital privacy. No matter what you do online, your mobile carrier, internet service provider are tracking it all. Comcast, Verizon, Time Warner, the list goes on. Companies like these have a record of every single thing you do, every website you visit, every email you send. This ad is incredible. Oh, no. That's why you should take back your privacy by using ExpressVPN. Don't use the internet without it. With ExpressVPN, internet data is encrypted and your IP address is hidden. ExpressVPN costs less than $7 a month. It's rated the number one VPN service by Tech Radar and dozens of reviewers. ExpressVPN has easy to use apps that run seamlessly in the background of your computer, phone, and tablet. Turn on ExpressVPN with just one click.

• 34:59Nilay Patel?

  No matter what you do online, whether you have something to hide or think that you don't, ExpressVPN is for you. This is by far the best ad we have ever read on this show. If you are on unsecure Wi-Fi and you want to keep hackers and spies away from your data, ExpressVPN is for you. And if you don't want providers like Verizon recording your entire online history and then selling it to the world, ExpressVPN is for you. So take back your innocent privacy today. Find out you can get three months free. Go to expressvpn.com/verge. That's express, E-X-P-R-E-S-S-V-P-N dot com slash verge. Get three months free with a one-year deal. Every day you use the internet without ExpressVPN, Paul, you are putting your information at risk. Do not put this off.

• 35:44Nilay Patel?

  Protect your life with ExpressVPN today. That is expressvpn.com/verge. Kara Swisher is here. Hey Kara, thank you for joining us.

• 35:53Speaker 05

  Thank you for having me. Congratulations on your baby, by the way.

• 35:56Nilay Patel?

  Oh, thank you. She's, uh, she's very cute. She's a lot better than work, but I, I'm lost to buy.

• 36:01Speaker 05

  Yeah. Are you a good dad? Have you been a good dad?

• 36:04Nilay Patel?

  I think so.

• 36:04Speaker 05

  Very important. It's your most critical job. It's your most critical job.

• 36:07Nilay Patel?

  It's certainly the thing I enjoy doing the most, so I hope that makes me, I hope that leads me to being a good one, but...

• 36:13Speaker 05

  Yeah, I think so. You're not going to enjoy every part of it, just so you know, FYI. I'm, I'm in the road ahead and I'm here to tell you.

• 36:19Nilay Patel?

  Oh, yeah. Well, this is, this is great. This is why you're here. Cause yeah, right now Max thinks every idea I have is great. So she hasn't begun yet to disagree with me whatsoever, except for a couple of stuff. But anyway, uh, so speaking of the road ahead, Kara, you are what I would describe as a legendary technology and media journalist.

• 36:34Speaker 05

  Wow, thanks. Don't you have Walt around to praise now? You gotta praise me? All right, okay.

• 36:40Nilay Patel?

  Yeah, I'm just going down the Recode staff. We're gonna...

• 36:41Speaker 05

  All right, I guess so.

• 36:43Nilay Patel?

  No, but it's true. And you're obviously doing a bunch of great stuff on the media as exists now. And you've got your MSNBC show and obviously Code Conference. But you've been at it for a long time. And we are covering in great detail the AT&T Time Warner merger.

• 36:59Speaker 05

  Yeah, it's always some giant company merging with another one.

• 37:02Nilay Patel?

  And it struck me that in particular, it is Time Warner that seems to just get battered around these access companies. So AOL was an internet access company. They sold dial-up internet. Steve Case was the CEO. He bought Time Warner. He had grand pronouncements about the future of the world, disaster. The deal literally fell apart. I worked for AOL when they unmerged Time Warner, which was a strange moment in sort of my corporate life.

• 37:31Speaker 05

  Well, the Time Warner people liked it.

• 37:33Nilay Patel?

  The Time Warner people were very happy. We have a colleague who worked with us at Engadget, Thomas Ricker, and he was very unhappy when that deal happened because he had to start telling everyone he worked for AOL. He'd previously just said-

• 37:43Speaker 05

  Oh, dear.

• 37:44Nilay Patel?

  Anyhow, and now it's AT&T, which is a wireless internet access company, a little bit more stable than AOL, but they're buying Time Warner again. And you wrote a book about the AOL-Time Warner merger. It has an amazing title, "There Must Be a Pony in Here Somewhere." You can go read the book. It's on Amazon. You can buy a Kindle edition. Everyone should go do it if you're interested, that sort of thing. And your book was all about why they did it, why it was a disaster, how it fell apart, and what you could learn from it. And you have this line right at the top of the book, just before you get into it. And I just want to quote from it.

• 38:19Speaker 05

  Sure.

• 38:20Nilay Patel?

  This is Kara in her book, "There Must Be a Pony in Here Somewhere." "I am still a believer that someday the distinction of the old and new media will no longer exist. That this is the end of the beginning of the digital revolution. It is from the ashes of this bust that the next really important companies of the next era will emerge."

• 38:35Speaker 05

  I'm a genius.

• 38:36Nilay Patel?

  You're great.

• 38:37Speaker 05

  I really am. I'm like a prophet of some sort. I can't decide. No, you know, let me just say, directionally, the AOL Time Warner merger was correct. Like, I will never, I'm very interested in directionally stuff. Like, I think, for example, that Google Glass is directionally correct. I think that, you know, way back when, when there were all kinds of devices that looked like iPhones, they were directionally correct. And so I think the idea of marrying distribution and content was the right one. And it was unfortunate, there was so much pushback, especially from Time Warner people on that. Because if they had done it right, it could have been incredibly powerful, combining their cable assets with the online app. Like, we are there today where they were then. It just was the timing was off.

• 39:22Nilay Patel?

  So is that really what fell apart? Because that is the dream, right? You know, Randall Stephenson, the CEO of AT&T, was on stage at Code, and he said he wants to build this advertising business to rival Google and Facebook. He wants a direct-to-consumer business for HBO to rival Netflix. Is it the same, is this just the same idea that AOL had, but now it's the right time?

• 39:43Speaker 05

  It was a similar idea. The idea at the time, you know, it was funny, years later, when they, they put AOL over cable, over the Time Warner Cable system. I think I texted Bob Pittman, I said, "Oh, now they're doing what you said, like, seven years later." You know, you were right. And he's like, "Yeah, thanks." Like, I think they really did have the right concept, which was that digital distribution and the ability to distribute things in homes, and that time via cable especially, was a critical differentiator for that company, to get the content into people's hands. I think the problem was, the devices didn't exist. There wasn't a mobile. I mean, mobile changed everything, right, to be able to do that. And people just weren't, it still wasn't a commercial thing,

• 40:25Speaker 05

  even though AOL was the most commercial, consumer-focused company at the time. And so I think they had, like I said, it was the right, it was the right concept, but there was an enormous pushback, especially from the cable groups of people, who were so old-school, you couldn't even, you know, it was hard to even speak to them, because they were so in an old way of thinking. You know, there was a lot of pushback from the movie studios over all, even online advertising. They thought it was stupid at the time. Now, you know, they wanted to be in newspapers. They wanted to advertise in newspapers or get reviews. And now, everything that they, I remember them talking about AOL was, is stuff they're doing today without even thinking, such as clips and online ads and debuting trailers online. That was, that was in the

• 41:10Speaker 05

  thinking back then. It just was, it was too early, I guess.

• 41:13Nilay Patel?

  Was it really just a culture clash? You have this, I pulled another amazing line from the beginning of this book. This is Kara again in the book. "It was like watching someone fall down a flight of stairs in slow motion and every bump and thump made me wince."

• 41:28Speaker 05

  Yes. So many internet companies later would have that description by me. I was thinking of Uber and Yahoo and others. Yeah, I think it was a huge culture clash. Look, they came, they came in and they essentially bought the company, even though they talked about it as a merger, they bought it. They took over the culture, they took over the lead.

• 41:44Nilay Patel?

  AOL bought Time Warner.

• 41:45Speaker 05

  Yeah. They took over the leadership, they were in place. And look, these guys were arrogant, like, and they were all guys, by the way, mostly, and, almost largely. And they were super arrogant. Some of them had, had some sketchy backgrounds. There were a couple of deal-making people that were sketchy, like, no question. There were some ways they made money that was sketchy, a lot of Ponzi scheme, round-tripping that was disturbing, that they, you know, they played fast and loose with how they created themselves. And there was also the, the dot-com bubble. The price of AOL at the time was so inflated. And now, today, when you look at Facebook and others, it doesn't seem that way, right? It was, it was a little bit ahead of its time in terms of being high-priced. But it was, I think it really sent the people at Time Warner around the bend, thinking they've

• 42:29Speaker 05

  worked all this time, you know, doing, you know, the basic work of media, and then these guys come in with this fake stock and run things and tell us what to do. And so, it was, you know, both were wrong, how they approached it. In that AOL, people were wrong to be this arrogant and so lechery, even though they were pretty much correct about what they were saying. And then the Time Warner people... You know, being so stubborn and unwilling to understand that things were changing so drastically, not just in television, but the magazine business of which they had an enormous business that it was dying, even before they realized it. The movie business had changed, that every, every part of their business, the cable business, had changed.

• 43:09Nilay Patel?

  Well, you know, it's interesting, because I look at it as what, you know, at the time, the connections were slower, the, you know, we were using desktop computers, CRTs, there was no video streaming to speak of.

• 43:21Speaker 05

  Right.

• 43:21Nilay Patel?

  And Time Warner, at that time, still owned Time Inc. Time Inc. has since been spun off.

• 43:26Speaker 05

  A critical part of the company, then, critical, in terms of revenue and everything else.

• 43:30Nilay Patel?

  And it seemed like what they wanted to do was AOL was going to distribute Time Inc. news and magazines.

• 43:37Speaker 05

  Yep.

• 43:37Nilay Patel?

  On the AOL service. And they, you know, one day they would get to the video side. And now we're just, you know, 20 years hence, or whatever. And now the plan seems to be, well, Time Inc. is gone, it's, you know, it's its own company, but AT&T is going to distribute Time Warner's video assets over its devices and services.

• 43:55Speaker 05

  Right, right.

• 43:56Nilay Patel?

  It's, it's like, it's literally the same idea.

• 43:58Speaker 05

  Same as it ever was.

• 44:00Nilay Patel?

  It's wild to me. The difference, as you talk about the culture, is AT&T is not a fast and loose company, right? It's among the most conservative companies in America. It is, from all accounts, extremely well-run, you know, they've been going at it for a long time. They've got, you know, good leadership, they, people seem to like their executives. And the, it seems like the culture clash will come the other way, right? Instead of a bunch of, you know, arrogant, sort of internet cowboys telling the stodgy media company what to do, it's a stodgy telecom company telling a bunch of Hollywood types what to do. Do you think that's going to go any better or worse?

• 44:35Speaker 05

  You know, I think they probably do understand how to stay away from things. I mean, you might look, I mean, I know Comcast has an investment in Vox Media and stuff, but they've been relatively hands-off of a lot of their investments in NBC and everything else. You don't see them wandering or over, telling, you know... Telling the people of NBC what to do or that I can discernibly see. And in fact, I've been pretty supportive of some, you know, especially as the Trump administration has attacked a lot of people on their, on their networks. You know, I, you know, they just, the first thing that Randall Stevens had a, had to deal with, obviously, was Samantha Bee, but he didn't because he didn't own it at the time. But he's going to see stuff like that, and I think they fully expect controversies like that. There's the talent controversies, there's, you know, a different way of doing business

• 45:18Speaker 05

  that Hollywood still has from, from a telephone company. But in, in a lot of ways, this is critically important because they have to have some sort of defense against internet companies right now, like in terms of who will be also sucking up this content. And so they have to have a growth story beyond mobile. And, and, you know, it's, it's weird to say that AT&T is the one in trouble, but they kind of are, given their competitors going forward.

• 45:42Nilay Patel?

  How do you mean?

• 45:43Speaker 05

  Well, I think that they're fighting off major incursions in, in consumers' time from companies like Google and Facebook and Amazon and Apple. And so they have to, they have to do a deal like this because I think their current business, as strong as it is, is not one that's the high-growth one, and it's not the one that creates differentiation. And I think creating differentiation is, is critical for any company going forward.

• 46:07Nilay Patel?

  So you're saying AT&T has a solid business that isn't going to grow very fast, which is true, right?

• 46:12Speaker 05

  Yeah.

• 46:13Nilay Patel?

  I mean, the number of mobile subscribers in the United States is not on some exponential curve. So they can, AT&T has this problem where they might be able to churn customers with Verizon all day and night, but that's that business. And to get growth, they have to start competing with the tech companies.

• 46:26Speaker 05

  Absolutely. I think that's where we're headed. We're headed into this distributor-owning-content kind of world. And you sort of wait for when one of the big, you know, Amazon's already moved into that space really aggressively. Now, in their case, they're doing it in order to sell toilet paper, right? That's their end goal, is to sell more toilet paper. And by the way, here have a show, kind of thing. You know, Facebook is here, use more of our thing, and here's more content. Like, everyone has a different take on why they're doing it, but I think you're going to see a lot, just... A lot more of this face-to-face competition between distributors of content and owners of content, and not competition between those, but them getting into those businesses. You already see it, it's already happened.

• 47:06Nilay Patel?

  Yeah, I mean, I think, as you know, I cover net neutrality very closely, I think about it a lot, and here, you know, Instagram yesterday announced IGTV, their new YouTube competitor, and just the reality is that HBO, if you watch it on AT&T phone with an AT&T connection, will be free to watch, and IGTV will cost you some money on your data cap.

• 47:28Speaker 05

  Right, exactly.

• 47:29Nilay Patel?

  Do you think the tech industry is prepared for that reality?

• 47:32Speaker 05

  Well, I think the big companies are running the internet. I mean, we have a difference of opinion on this, only because I think that the big companies have made their deals, and I think I'm worried more about the small companies, you know, who are going to have to pay higher prices. I think these big companies, I think essentially Facebook, Google, Amazon own the internet. You know what I mean? They don't, you know, and Netflix made their deal with Comcast, and, you know, the big ones make their deals, and I think the smaller ones are definitely at risk of being sort of zeroed out in this data, the ability to move data, massive amounts of data over these lines.

• 48:06Nilay Patel?

  Yeah, I think about that. I mean, you started Recode, right? It was an independent business, and you had free access to distribution. We started The Verge, we had free access to distribution. I wonder even if you could start something like that in this climate without...

• 48:20Speaker 05

  Well, we have low data needs. I mean, especially in a video environment, certainly, like, you know, and when you're thinking about it, you know, I always, we do always worry about this, and then something else gets invented. Like, I don't know what it is, but it's something else happens. But it certainly is, you know, it's the giants fighting right now, and, you know, if you're not a giant, you're, you've got some issues, I think, even if you're thought, like, I always think about Netflix right now, like, what's going to happen to that company? Like, I think it's going to get bought, right? It seems that to me. But then they're like, oh, everyone's like, oh, they're too expensive. I'm like, are they, really? Like, these companies have pretty big market caps, and wouldn't you want to own Netflix? Or would it be worth that much money? I mean, I don't buy these things, so I'm not the one making these decisions, but you have to think long and hard about all these...

• 49:05Speaker 05

  Assets if something like you just think about that when I was writing this book, the idea that Time Warner could be bought like it was not no big deal like that merger was a big deal at the time. Or that Rupert Murdoch would be selling off his assets like he's getting out of the media business fast because he knows that he can't compete without the assets that the others have. And so, you know, we'll see.

• 49:28Nilay Patel?

  Right. And so what Kara's referencing, I'm sure, Rich has listeners now is this week, basically, the Fox took a new offer from Disney for I think $71 billion to counteract Comcast's $65 billion cash offer. And Rupert Murdoch has to decide. Seems like he wants to sell it to Disney, but Comcast, I'm sure will come back.

• 49:50Speaker 05

  He does. Yeah, because he's comfortable with Disney, right? But, you know, Comcast's got a lot of money. Like, it's a lot of that's you can't like ultimately, he, you know, he wants that money so he can shove it down Fox News's throat, I guess. I don't know what he's doing with his money, but thank goodness he has money to do that.

• 50:06Nilay Patel?

  Yeah.

• 50:06Speaker 05

  Yeah. Rupert Murdoch getting richer is one of my least favorite memes going on right now. So, so it just, you know, the fact that he's selling is really interesting to me. That's what I'm talking about is that that's that he's too small. Like Rupert Murdoch is too small. He's got to move to a bigger thing. In a lot of ways, when I'm thinking about Disney buying News Corp, for example, I'm like, oh, they may not be big enough to take on like, right? Disney is not big enough to take on. And so that's why AT&T, getting back to the AT&T thing is, is the concept behind the original merger of AOL and Time Warner was this idea to create this, this entertainment and communications and distribution behemoth. That was the idea behind it. And it was a great idea and it was the right idea. And here we are today.

• 50:50Nilay Patel?

  Yeah, a very smart.

• 50:52Speaker 05

  Maybe not great for consumers. I'm sorry, not great for consumers necessarily.

• 50:55Nilay Patel?

  Well, I don't think it's great for consumers, but, you know, very smart. Media CEO who we both work for told me that he thinks the AT&T deal is way smarter than the AOL deal ever was.

• 51:07Speaker 05

  Yes, yeah, but it's time has come. It looks smart today, right? I just, it's so easy to put off that like burst is the only history. I'm like, really? Because the concepts behind it are exactly the same. Like, they're very similar. It's just they were difficult people hitting up against each other and fighting over, you know, status. And at that time, media was so much more arrogant that they could behave like that. Now they're sort of not, which I think is different.

• 51:34Nilay Patel?

  Is there a model for a behemoth of this size being successful? This is something I've been thinking about as well, is companies of this size, you know, they're not nimble, they're not fast.

• 51:43Speaker 05

  No.

• 51:44Nilay Patel?

  They tend to trip over themselves all of the time and then sort of devolve into constituent parks. And even Time Warner, right, it was a behemoth and, you know, their CEO just started selling off pieces of it everywhere he could because he needed to break it up to create value. Is there a model for a behemoth of this size being successful over time?

• 52:04Speaker 05

  Well, you know, I've been thinking about this a lot lately because I think right now, there's a bit, there's a sort of a discussion happening in Silicon Valley that all it matters are these big companies now. Like, different people call them fang, different names. I think Farhad calls them the frightful whatever five. But there are, I think most, what's happening here now is the big companies are running everything. You don't see as many. Like, I was trying to think of hot startups, like in the Snapchat, Airbnb School, Uber. There aren't any, are there? Like, what's the next class? They don't exist.

• 52:35Nilay Patel?

  Bird. Only the CEO cashed out.

• 52:39Speaker 05

  You insist.

• 52:40Nilay Patel?

  I'm trying. I'm just throwing some stuff at you.

• 52:43Speaker 05

  Bird, you're going to bird. You're already down in birdland. Like, come on. Like, think about it. There isn't, there isn't. Like, we had like, one time it was Airbnb, Snapchat, Uber, Pinterest. There's a bunch. And then now, you can't come up with, I can't put five on my hands right now of that, of that excitement. You had Box then, you had Dropbox. There was like a dozen at least.

• 53:05Nilay Patel?

  Yeah.

• 53:05Speaker 05

  The unicorns, right? And now they don't exist because the big companies are sort of either sucking up everything or doing it pretty well themselves. Now, whether they can stay nimble, I don't know. But certainly, you don't see a lot of innovation coming from the small companies anymore.

• 53:19Nilay Patel?

  Do you think there's gonna be like a government or regulatory pushback on that? I mean, there's a lot of Interest in sort of rethinking how antitrust works. Are you?

• 53:29Speaker 05

  Yeah, I think you have to rethink antitrust completely. Like, that's the problem. I mean, some of these companies are like nation states at this point, I think.

• 53:36Nilay Patel?

  I mean, Mark Zuckerberg literally refers to Facebook as a country.

• 53:40Speaker 05

  Yes, it is. But it is, he's right.

• 53:41Nilay Patel?

  It's an insane conception.

• 53:43Speaker 05

  Well, he ain't lying. He ain't lying.

• 53:44Nilay Patel?

  Well, then he should act more like a... He should do more stuff.

• 53:48Speaker 05

  Well, you know, whatever. He's very earnest about his power. "Oh, am I really powerful?" "Okay." I'm like, "Yeah, you're a little powerful." But I mean, I think, you know, I don't think there'll be any to speak of. Maybe if they do something awful. I just, like, you watch those hearings. Come on. Like, come on. Like, really? Like, you know, everyone was talking about how well he did. They did terribly. He did not do well. They did terribly. That's all I can imagine has happened. And there won't be any regulation. You know that.

• 54:13Nilay Patel?

  Yeah, well, not, especially not right now. But the reason I ask is, if your frame is all the companies need to get bigger, including companies we think of as giants, like News Corp. or 21st Century Fox, they need to get bigger. So they're merging and we're getting, you know, we're just gonna end up with like two or three behemoths. You know, things go in cycles. And I'm curious, what makes them successful? Like, what do you think is a good outcome? And what is the outcome that you think is the disaster?

• 54:40Speaker 05

  Well, you know, I think the outcome is that nothing gets innovated. There's nothing fra... Like, you know, there's an AT&T. In the old days, AT&T sort of sat on top of everything. And once it was broken up, you saw all the innovation. But you don't know what you don't know, right? You don't know if they weren't there, what would be happening in the ecosystem. And so, I don't see anything stopping these companies. And I'm not just talking about AT&T, Time Warner, or Disney, Fox, or Comcast, whatever, or Amazon, or Google. I don't see them being broken up. Like, that's, you know, to create that kind of openness. And what's really interesting is usually, there was usually one company that really did that, like AT&T or Microsoft back in, even going back further, if you

• 55:23Speaker 05

  remember. You probably don't, you know, but it really did sit on top of everything and hindered innovation, I think. You could easily look at that. And the minute they were sort of gelded by the government in terms of the anti-trust thing, there were all kinds of companies, right? It just, everything blossomed. And so, you don't, now, there's five of them. Like, there's not, you can't, can you say Facebook is a competitor to Google? Really? Like, sort of. Is Amazon a competitor to Facebook? Not really. Like, they're all in their own giant lanes with their semis and they're just barreling down the highway. That's how I look at it. And you can't point to any of them and yet all of them together creates this, like, it's like the Game of Thrones. It's all the very different countries. You know that beginning map part?

• 56:07Nilay Patel?

  Yeah.

• 56:08Speaker 05

  Like, that's what I see. Like, I don't know, I don't know who is the center. But it's certainly, there's certainly a lot of very powerful companies and not one of them could easily be hindered by regulation, yet.

• 56:21Nilay Patel?

  Or

• 56:21Speaker 05

  We'll see.

• 56:22Nilay Patel?

  Because they're not directly competitive with each other, even by each other.

• 56:25Speaker 05

  Right, they're not.

• 56:26Nilay Patel?

  And that, to me, is like the particularly strange bit where, you know, Apple looks at Netflix and they're like, "We're gonna sign a deal with Oprah," but you can't see how that will ever be anything other than a reason for you to, like, maybe buy another iPhone. Whereas Netflix is just gonna keep running its business at Netflix's scale and Amazon's gonna, you know, keep selling you toilet paper. And the idea that they're not in this head-up competition also seems like it's, we're leaving a lot of potential startup investment or innovation on the table.

• 56:57Speaker 05

  Right. I mean, it's good for content makers, right?

• 56:59Nilay Patel?

  Yeah.

• 57:00Speaker 05

  It's gonna be good. There's so many places to sell now. Like, everyone's in the content business. And so, you're gonna see competition on that scale. It's like, who gets the sports rights, who gets the, you know, live stuff is really gonna be interesting. Like, who really runs that? Because that's still incredibly powerful and you can't replicate it in these, you know, live is live. But when you think about, you know, movie making and things like that, there'll be competition of who's up and who's down, who makes the good product and who doesn't. Like, that goes up and down, just the way TV networks went up and down. And that, they'll be competing there, but that's just gonna be a question of money and assembling talent, right? And seeing what the talent can create at each of those places. And you'll see that talent move back and forth and among and between

• 57:41Speaker 05

  them. But you don't, you don't see them competing with each other, really, on their, on their core businesses that are making all the money to pay for that content.

• 57:49Nilay Patel?

  All right. So, we've talked about Time Warner a lot and AT&T and its competition. And you brought up content. And it's funny to me, because I really did use to work for AOL. AOL is now part of Verizon.

• 58:01Speaker 05

  I'm the only person who hasn't worked for AOL.

• 58:03Nilay Patel?

  I always joke that Vox Media is founded on revenge. The whole company had some bad experience in AOL and they're out to prove that we can get it right.

• 58:12Speaker 05

  Yeah, there's a lot of revenge going on. You're right. I don't want to get into it.

• 58:18Nilay Patel?

  Anyhow, but AOL is part of Verizon, so it's another carrier that bought a content company. Tim Armstrong, CEO of AOL, went out and bought Yahoo. He bought a huge number of digital advertising companies and he's going to glue ads all over everything. But they're not in this, I mean, they have Go90 and like, you know, they're not getting-

• 58:37Speaker 05

  Whatever. Thanks for the money, Tim.

• 58:39Nilay Patel?

  Oprah's not going on Go90, right? It's not gonna happen.

• 58:42Speaker 05

  No, she ain't. No, she ain't.

• 58:43Nilay Patel?

  So, how do you see the future of AOL? Do they just sort of get subsumed into the muck?

• 58:48Speaker 05

  You know what? I don't care. Like, I wish I did. Like, this is someone who wrote a lot about Yahoo, right?

• 58:53Nilay Patel?

  Yeah, that's why I'm asking you.

• 58:54Speaker 05

  The other day, I was literally in New York. I'm like, should I call Tim and have, eh, not today? Like, you know what I mean? I love Tim. I mean, he's, Tim Armstrong is very funny and entertaining, but I just don't even, like, Verizon's got to jump on in here, like, with the money. They got to start buying up stuff like Toot to Sweet, you know? That's probably good news for Vox Media or some-

• 59:15Nilay Patel?

  Oh, no!

• 59:16Speaker 05

  Or BuzzFeed. Yes, your nightmare, or BuzzFeed, or, well, who's gonna buy Vice? I mean, really? Or at this point, someone eventually, but, but I like Nancy Dubuque, who's running it now. But it's, you know, you have to wonder what they, what Verizon's got to do now. They've got to sort, that's just Yahoo and AOL is not going to cut it, right? Like, at this point, they got to like, you know, they were, again, directionally correct, right? They were first out the gate with this stuff, but-

• 59:42Nilay Patel?

  I mean, they bought the Huffington Post too. I mean, their idea-

• 59:45Speaker 05

  Yeah.

• 59:45Nilay Patel?

  Was the original AOL idea. We're gonna buy a bunch of basically-

• 59:48Speaker 05

  Directionally correct.

• 59:49Nilay Patel?

  Print assets at scale, the Huffington Post and AOL's stable of websites and all of Yahoo's webpages, and we're gonna glue ads on them, and that's the future.

• 59:59Speaker 05

  Yeah. But then, what, AT&T is looking at AppNexus? Like, all of these are gonna get sucked up, you know?

• 1:00:05Nilay Patel?

  Yeah.

• 1:00:05Speaker 05

  That company was supposed to go public or bought by 90 different people, and now it's back in the play. So, you know, they're gonna assemble all the parts that are necessary, the advertising, the technology, advertising technology parts, the content parts, and then see if they can- Get people to buy it. Now, ultimately, which is a good thing for people like you and I, what matters in the content space is great storytelling, great content, great creation of content. And you can't digitize that so easily, even if you can distribute it, and it's good, people do find it. Like, they really do. It's like, very easy to find great content. Think about all the great television out there now. And so, anyone who's just a creative person, who creates great content, is in a really good situation, which is nice. Just

• 1:00:47Speaker 05

  the question is, can they marry the advertising technology, and the marketing, and stuff like that, to create, you know, bigger things? And that's, I think, that's the big question.

• 1:00:57Nilay Patel?

  I mean, it seems like the, you were saying, directionally correct, they had the right ideas, wrong time, certainly the wrong cast of personalities. Well, if it's the right time, and, you know, the technology's here, and mobile's here, is this the right, you know these people better than anybody I know, is this the right set of personalities to pull this stuff off?

• 1:01:13Speaker 05

  What, the AT&T stuff?

• 1:01:14Nilay Patel?

  Yeah.

• 1:01:15Speaker 05

  I thought Randall was smart. I mean, I don't know. I mean, I think that you're gonna see a lot of clashing. Like, there's Randall and John Stanky, right, at AT&T?

• 1:01:23Nilay Patel?

  John Stanky is the, if you don't know, he's the CEO of what is now called Warner Media, which is being, which is Time Warner instead of AT&T.

• 1:01:30Speaker 05

  You know, I've just met him casually, but he seems pretty conservative. You know, conservative is a, just like, a business guy, like, business guy. He doesn't, he doesn't, I'd love to see dinner with him and Richard Plepler. That, I would enjoy more than anything.

• 1:01:43Nilay Patel?

  Richard Plepler is the CEO of HBO. I'm just helping the Verge cast audience out on these things.

• 1:01:47Speaker 05

  Yes, thank you, sorry. So, you know, Richard's fantastic, if you've ever had dinner with him. Like, literally, just waiting in line with him is fun. So, that's gonna be an interesting thing, the people like that, who have had this track, incredible, Richard has had this astonishing track record at HBO, of great shows. And I'll go back to my book, Richard was the only person, Richard was the PR guy for HBO, by the way. He really was. That was essentially, he was.

• 1:02:12Nilay Patel?

  The dream is alive for PR people.

• 1:02:14Speaker 05

  I know, he was. And he worked for Jeff Buke, who ran, Jeff Buke ran HBO at the time of my book, and, and Richard was his marketing and PR person. So, he, he moved himself, and, like, his record's been really so impressive, and I really enjoyed talking to him all the time. But, he was the only person Jeff Beukas was a little bit upset by the deal, but Richard was the only one in that entire book and the entire time who was really objecting to what had happened and with the merger, largely because the stock of Time Warner suffered and a lot of people who had been there, you know, he's got a real soul, so he was really upset for receptionists and various people who got screwed when that stock tanked essentially.

• 1:02:56Speaker 05

  But he was always suspect, I'll never, he just was the only one who was like, this deal is not going to work and here's why, and he was super smart about it. And so now, he's the guy that's got to make it work with essentially another version of AOL, so I think that'll be, I mean, he's got a lot more power now and a lot more savvy, obviously, but at the time, he literally was the, all of those people went along with it, all the Time Warner people, except for Richard, so I think it'll be kind of an interesting moment for him.

• 1:03:23Nilay Patel?

  And, you know, AT&T's putting a lot of, a lot of pressure on HBO, not to change or whatever, but to be the competitor to Netflix, right? They're gonna-

• 1:03:33Speaker 05

  Right, they have to.

• 1:03:33Nilay Patel?

  They're gonna try to get the money back out of this deal.

• 1:03:35Speaker 05

  Sure, but what if he goes to them, hey, I need double the money, give me, Netflix is spending money like a drunken sailor over the left here, so I need double the money, and he's already got a lot of money, right? What if he does that? Are they gonna give it to him? I'd give it to him, I'd give Richard any amount of money to make something cool, but are they, are they gonna give him a hard time? Is he gonna want to sit there with like, like a committee that tells him what he can do? Like that, I mean, Jeff Beukas, he just handed him the money, right? To do it, but now he's gonna need really big money, and so that would be interesting, Richard in a room saying to John Stankey, I need twice as much money for HBO to make money.

• 1:04:11Nilay Patel?

  Yeah.

• 1:04:12Speaker 05

  What kind of people are they gonna be? They're gonna say, yeah, yeah, sure, Game of Thrones guy, like, sure, you can do it again, or are they gonna go like, well, give us an idea of what we can, you know, you could see that, that cultural clash, very obviously, but we'll see, maybe it'll surprise us, that the mobile guys will surprise us and be super-

• 1:04:32Nilay Patel?

  There was a very good Wall Street Journal piece that described the forthcoming culture clash and it just had one vignette that I thought said it all, which was all but nine AT&T executives, employees, period, if it's 100,000 employees, all but nine fly coach, whereas almost everybody at Time Warner has concierge service at the airport and flies first class. It's just that.

• 1:04:56Speaker 05

  Really? They fly, yeah, that'll be nice. That'll be, that'll be.

• 1:04:59Nilay Patel?

  So we'll see. But I'm very-

• 1:05:01Speaker 05

  They all fly coach? They do? They all fly coach?

• 1:05:04Nilay Patel?

  AT&T, they're like, no, they're flying coach and I guess they're paying for GoGo Internet.

• 1:05:11Speaker 05

  I just had dinner with Richard Plepler and he does not fly coach, let me just say.

• 1:05:18Nilay Patel?

  Yeah, I've been in his office. I was like, you're furniture in your office.

• 1:05:20Speaker 05

  It was a nice dinner. I enjoy, I always seek him out. You know what I mean? Like, he's a lot, all those, those executives are fun. They're all great. They're Hollywood people. So we'll see. Let's see how that works.

• 1:05:30Nilay Patel?

  All right. Well, Kara, thank you very much for joining us on The Vergecast. Tell the people about your podcast and where they can listen to you.

• 1:05:36Speaker 05

  Oh, my podcast's called Recode Decode and we interview all kinds of cool people. I just interviewed Craig Newmark, who was a founder of Craigslist, who's just given $20 million to the SUNY Graduate School of Journalism. And he, we talked a lot about on the need for tech people to really focus on the importance of reporting going forward and that he, I think he called it the immune system of democracy.

• 1:05:58Nilay Patel?

  That's pretty good. All right. Well, Recode Decode on Apple Podcasts, just the same as our show. Kara, it was lovely to have you. We'll have you back again soon.

• 1:06:05Speaker 05

  Thank you so much.

• 1:06:06Nilay Patel?

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• 1:07:13Nilay Patel?

  Paul, before you begin your segment.

• 1:07:14Speaker 01

  Mm-hmm.

• 1:07:14Nilay Patel?

  I'm gonna tell a story about it.

• 1:07:15Speaker 01

  Okay.

• 1:07:16Nilay Patel?

  So many times on the Vergecast, we've introduced your segments, and I've said, advertisers, if you want to just buy the name, I'll sell it to you.

• 1:07:24Speaker 01

  Okay.

• 1:07:25Nilay Patel?

  Great. We had incoming, and the advertiser literally messaged our team and said, "We don't know if this offer is a joke or not, but we're interested."

• 1:07:36Speaker 01

  Okay.

• 1:07:37Nilay Patel?

  And we had to tell them it wasn't a joke. So I'm telling you now, advertisers, if you want to buy Paul's segment.

• 1:07:42Speaker 01

  Uh-huh.

• 1:07:43Nilay Patel?

  You, it's, I'm 100% real.

• 1:07:45Speaker 01

  Yes.

• 1:07:46Nilay Patel?

  You can name it anything you want. Anything? Not anything? Anything.

• 1:07:50Speaker 01

  You are allowed to sit in a 15-minute brainstorming session with me where we will determine the name.

• 1:07:57Nilay Patel?

  Yeah. One contingency is that will be on a broken Zoom call.

• 1:08:00Speaker 01

  [laughing]

• 1:08:01Nilay Patel?

  Paul, every week, but it has the same name.

• 1:08:04Speaker 01

  It's true. I'm for sale. It's called Shuvoop, which I've decided it's spelled S-H-U-V-O-O-P, and I think that is the, how the right, the, the sound that a phone makes when its camera exits its body.

• 1:08:20Nilay Patel?

  Oh, yeah.

• 1:08:21Speaker 01

  Shuvoop.

• 1:08:22Nilay Patel?

  Shuvoop.

• 1:08:23Speaker 01

  Oppo has...

• 1:08:27Nilay Patel?

  This is great.

• 1:08:27Speaker 01

  The Find X.

• 1:08:29Nilay Patel?

  I've played, we have one. I've played with it. It's great.

• 1:08:31Speaker 01

  Oh, really?

• 1:08:31Nilay Patel?

  Yeah.

• 1:08:32Speaker 01

  I haven't played with it. I've just been looking at it and laughing. So, so, obviously, the context is there's this Vivo Nex phone.

• 1:08:41Nilay Patel?

  Yeah.

• 1:08:41Speaker 01

  Where a tiny little camera.

• 1:08:43Nilay Patel?

  Yeah. A little, a little, there's a little camera bump comes up.

• 1:08:45Speaker 01

  A little tab comes out.

• 1:08:47Nilay Patel?

  But with that phone, you can change the sound.

• 1:08:48Speaker 01

  Oh, really?

• 1:08:50Nilay Patel?

  So it's inside, it's, the sound is software-defined, so when the camera comes up, it can either make a mechanical noise, it sounds like a motor warring, it can make a sci-fi noise, and then there's one that just literally sounds like a fucking parade.

• 1:09:01Speaker 01

  Okay, okay.

• 1:09:01Nilay Patel?

  And that's amazing.

• 1:09:02Speaker 01

  Everybody be real quiet for a second. Shuvoop. Okay, now you can put that as a...

• 1:09:08Nilay Patel?

  But the Find X.

• 1:09:09Speaker 01

  Oppo's like, psh. Cute little tab camera. No, we'll have the whole phone come out of the phone.

• 1:09:16Nilay Patel?

  It's amazing. It's so good.

• 1:09:19Speaker 01

  And it also is the rear cameras.

• 1:09:22Nilay Patel?

  Yeah.

• 1:09:22Speaker 01

  So the, the, the front cameras popping out, but also the rear cameras are popping out. It's incredibly, it's just terrible.

• 1:09:30Nilay Patel?

  No, it's wonderful. You're so wrong about this.

• 1:09:32Speaker 01

  It's so non-utilitarian, but it's just, it's beautiful and a technological.

• 1:09:39Nilay Patel?

  So it's a delight.

• 1:09:40Speaker 01

  Yeah.

• 1:09:40Nilay Patel?

  You're crazy. Also, it doesn't have a fingerprint sensor. It only has face unlock. So every time you pick up the phone and swipe up, it has to look at your face. It's incredible.

• 1:09:52Speaker 01

  Wait, so to unlock the phone, you have to make it shavoop and then look at it and then it unlocks?

• 1:09:57Nilay Patel?

  It's great. So every time you pick it up, it goes eh eh. Uh, so that's never gonna break. But what I love about it is it, some companies are like through the notch.

• 1:10:07Speaker 01

  Yeah.

• 1:10:08Nilay Patel?

  It's great. I love it. The software on this phone is a direct rip off of the iPhone. Like the most shameless rip off of the iPhone ever made, but it's great. I like it.

• 1:10:18Speaker 01

  Well, but gotta give them credit. The, uh, the aesthetics of the phone are very Samsung Galaxy-esque.

• 1:10:26Nilay Patel?

  Yeah, it's a, it's a, it's a merger.

• 1:10:29Speaker 01

  But they got the best shavoo- shavoop in the biz.

• 1:10:32Nilay Patel?

  They do. I love pop-up cameras. I hope, we, like, this is the stuff Samsung used to do, just like regularly. They just put out whatever crazy hardware they could make.

• 1:10:41Speaker 01

  A stylus in a phone.

• 1:10:42Nilay Patel?

  Yeah, they're like, whatever. We just like, here's some parts. We put them in a box. We shook the box. Now it's a phone. Samsung's like too, they're too good for that now. There's no, it's crazy Samsung is over. You gotta look to Oppo and Vivo. What's the third one? They, they all deny that they're the same company, but they share. OnePlus. Uh, but they, they literally will not cop to the fact that they are one company. Like, we've had reporters like try to dig up Chinese business documentation and be like, no, no, no. It's the same company. And they're like, we share an ownership, but none of us ever talk. And then like a OnePlus phone comes out and you're like, that's just that phone. Whatever.

• 1:11:19Speaker 03

  Well, pop-up cameras are beautiful.

• 1:11:21Nilay Patel?

  Are you into them?

• 1:11:22Speaker 03

  Dan, Dan had one.

• 1:11:23Nilay Patel?

  Yeah.

• 1:11:23Speaker 03

  As you know, and he showed it to me and I was like, I love it.

• 1:11:27Nilay Patel?

  I love it.

• 1:11:27Speaker 03

  Love it.

• 1:11:28Nilay Patel?

  It's so good.

• 1:11:28Speaker 03

  Until it snaps off, but I love it.

• 1:11:30Nilay Patel?

  It's not gonna, it's gonna do that thing where you drop it once and then it's, it's gonna start making the sound. And you're like, oh, this is, oh.

• 1:11:37Speaker 03

  Yeah.

• 1:11:38Nilay Patel?

  It's also not waterproof because it opens up.

• 1:11:41Speaker 03

  Yep.

• 1:11:41Nilay Patel?

  Yeah. You just can't do it. But I love it. I, I'm a unabashed fan of Harvard Innovation. I want to talk about two or three things before we wrap up. We're going a little over here, but there's a big case, the Supreme Court just took a case where a bunch of consumers are suing Apple over App Store pricing. I think this is very confusing. There's a lot of bad headlines out there and it's an antitrust case, so I, I just can't help myself. Here's what I'm gonna ask you guys. If there's an app that's only in the iOS App Store, do you feel like you as a consumer have, have enough, you would switch? Because that's really what this case comes down to. You, Apple is arguing that they are not a monopoly for consumers for iOS apps.

• 1:12:22Nilay Patel?

  What they actually sell is software services and distribution services to developers and that consumers should not be allowed to sue them. What the Consumer Class Action Group is saying is because you charge developers a 30% cut of their fee, they're passing that cost on to you. And because they have no other choice, we're paying this increased cost. So this is like a very thorny, the case is not even about the App Store. The case is about who has the right to sue Apple, whether it's users or developers.

• 1:12:51Speaker 04

  Right. Right. And no developer wants to sue Apple because they want to, you know, have their app in the App Store, which, I don't know, sounds like they're maybe afraid of a monopolistic power.

• 1:13:02Nilay Patel?

  Right. So the, the, Addie wrote a great explainer, you should read it on the site, but the thing that she and I were talking about, which is not a great parallel, but it illustrates the concept of, of cost passing is Spotify, if you just go buy it on the web, costs 10 bucks a month. If you buy it through the App Store, it costs $13 a month because they are literally passing the 30% Apple fee on to you, the consumer. So the big question here, and I think this, if the Supreme Court takes it and Apple loses, and they send it back down to the court and Apple loses again and doesn't appeal, most of the paths on this branching logic chain end in Apple winning.

• 1:13:40Speaker 04

  Hmm.

• 1:13:41Nilay Patel?

  But if Apple loses, this is a thing that breaks the idea of the closed App Store ecosystem. So like, this is the case to watch to see if consumers even have the right to sue Apple for App Store pricing because they have no other vendor for applications on their phone.

• 1:13:58Speaker 04

  But I guess like the, the flip side of that is, does Apple have the right to have a closed platform that is, doesn't allow you to install arbitrary apps on it?

• 1:14:06Nilay Patel?

  Right. So that's like a, because again, the, the first question is just, should it be developers suing Apple or consumers suing Apple? The press, Apple's precedent is, it should be the developers because we sell nothing to the consumer. We sell distribution services to the developer.

• 1:14:21Speaker 04

  Right.

• 1:14:22Nilay Patel?

  And the consumer saying, who gives a shit? You're the only people that we transact with. So that's like the foundational question. Then the question is, is the App Store tax justified? Or is it, does a consumer, should they have a choice because they cannot buy apps from any other vendor?

• 1:14:37Speaker 04

  Well, what remedy is this class action lawsuit seeking?

• 1:14:41Nilay Patel?

  Uh, money. Millions of dollars and, right, they're, they're saying you've, you've overcharged us by millions over the years for all these apps that we bought. They're not seeking a, you have to stop it remedy. But if the court says this is unconstitutional, you have to pay this money, there you go. Not unconstitutional, illegal. I don't think the founding fathers really thought this one through. George Washington was like, let me run any binary I want.

• 1:15:02Speaker 01

  From a practical standpoint, I think-

• 1:15:06Nilay Patel?

  Lincoln ran Linux.

• 1:15:07Speaker 01

  I feel like Apple gets so much goodwill from like, hey, we're the company that we make money by selling hardware.

• 1:15:13Nilay Patel?

  Yeah.

• 1:15:14Speaker 01

  And like, like, it's so frustrating to try to buy a, like a book. For Kindle or Audible, like going to like Apple or you go to Amazon's site because you have to buy it through Amazon's website because you can't even like shop from Amazon's apps for digital products on the phone and Amazon's site, hey, sure you want to go, you want to open the Amazon app? I'm like, oh, man, I can't remember. Like, it's just, it's just needlessly complex. And like, I feel like Apple could get a lot of goodwill in that sense of like, opening.

• 1:15:49Nilay Patel?

  Yeah, even opening that, if they don't want to do it.

• 1:15:51Speaker 01

  Just, just, why do they need to charge 30%?

• 1:15:55Nilay Patel?

  Because they don't have enough cash just sitting around.

• 1:15:57Speaker 02

  Apple doesn't care about your, about goodwill. I mean, you know, goodwill is nice, money's nicer. Also, I think it's incredibly important to Apple to be able to control the, the experience, right? And I mean, this is like, Apple's whole thing is that they have software and hardware that work better together. And you start allowing other stuff in and it kind of breaks their model. So, I don't know, I have to say, I've mostly just been listening because I find this discussion very interesting. My, my normal bias is toward like, the consumer being able to do whatever they want. But I don't want to be too hasty about it because bad things happen when you just let any old person start doing stuff on your hardware.

• 1:16:37Nilay Patel?

  Yeah, no, this is like a real thing that we talk about.

• 1:16:39Speaker 04

  I have the perfect compromise solution. You might even say.

• 1:16:43Nilay Patel?

  Oh, God.

• 1:16:44Speaker 04

  That this perfect compromise solution is a sweet solution.

• 1:16:48Nilay Patel?

  Peter.

• 1:16:49Speaker 02

  Why would you say that?

• 1:16:50Speaker 04

  Apple should make progressive web apps, first-class citizens in iOS, more than they have now. There should be, they should bless up a open store that doesn't require a cut, that can only sell web apps. And then people, they should give them more capabilities while still being sandboxed. And then if you don't want to go to the App Store, you can go to the Web App Store and install web apps on your phone from there. And you know what? I would put the verge on that web store in a heartbeat.

• 1:17:17Nilay Patel?

  Tim Cook is honestly more likely to completely shut down the iPad division and be like, I was wrong, everyone buy a Mac. What the fuck are you talking about? Casey, the reason he said it was a sweet solution is because when the iPhone was first launched, there were no apps. And Steve Jobs famously got on stage and said, we have a sweet solution for you. You can make websites.

• 1:17:36Nilay Patel?

  Like, one of the most, like, obviously cruel things he's ever said.

• 1:17:40Speaker 04

  Counterpoint, counterpoint, how many Electron apps do you have installed on your computer right now that you use on a daily basis?

• 1:17:45Nilay Patel?

  None.

• 1:17:47Speaker 01

  I really like Google's, uh, solution, uh, it's not my favorite thing in the world, but it's, it's pretty, pretty good compromise on Chrome OS. You can, one, you can go to like the unstable channel to get like new features and stuff, but also you can like switch to dev mode. And they terrify you. They let you know, you are so unsafe now, but you can do whatever the hell you want. But you're so unsafe. Like, are you sure? Press any key on the keyboard.

• 1:18:12Nilay Patel?

  Press this key for botnet.

• 1:18:13Speaker 01

  Like, yeah. Any key on the keyboard will revert it back to like a clean, safe state. But they allow you to do it. And I feel like, I mean, a nice result of this, I don't, I don't wanna like lea- wield the legal system at the club, but nice result with this. If Apple just...

• 1:18:29Nilay Patel?

  Paul, are you suggesting that the state uses latent power to regulate?

• 1:18:33Speaker 01

  Okay, you open up settings, right? Scroll all the way to the bottom. You press into something, you go like five deep into some sort of decision tree, and then there's a jailbreak button. Press jailbreak.

• 1:18:44Nilay Patel?

  Can you imagine if the Supreme Court decision is Ruth Bader Ginsburg, like, mapping out an entire UI for how you jailbreak an iPhone? Just straight up, she's like, the court has decided, there shall be a button.

• 1:18:56Speaker 01

  Have you guys heard of George Hots?

• 1:19:00Speaker 04

  I hate you guys so much for making me do this.

• 1:19:02Nilay Patel?

  Yes.

• 1:19:03Speaker 04

  But what if you entered the Konami code and that is what jailbroke the phone? Just like you could do in WebOS.

• 1:19:09Nilay Patel?

  Apple is no longer constitutionally whimsical enough to do shit like that.

• 1:19:13Speaker 01

  Wait, WebOS, you could Konami code it?

• 1:19:16Speaker 04

  Yeah, you typed in the Konami code and that turned on developer mode on WebOS.

• 1:19:20Nilay Patel?

  We are way over, I'm gonna say, I'm gonna, I'm gonna offer two more pieces of Apple news, one real fast, and then two, I'm just, brings us all the way back to the top of the show. One, the air power charging mat rumor to finally start shipping in September following quote unquote "technical hurdles," which is amazing.

• 1:19:33Speaker 04

  Also, it runs iOS.

• 1:19:34Nilay Patel?

  Yeah. It's great.

• 1:19:36Speaker 04

  Come on!

• 1:19:37Nilay Patel?

  They don't know, they don't have another operating system. They're like, I always, we'll put it in the charging mat, it's on your watch, it's in your laptop. How about a car? I mean, you know, they're, that's what they got. That's their thing.

• 1:19:46Speaker 04

  It works.

• 1:19:47Nilay Patel?

  All right. And then finally, I keep saying, everything, the entire world is just trying to make your phone a little TV. And to that end, Apple and Oprah are teaming up to make content. Which to me is just like, I don't know what Apple is doing with original content. They keep spending money to get it. They keep making deals like this. I don't think they're good at it.

• 1:20:11Speaker 02

  Well, and to, to really bring it full circle, like where is the home for this content supposed to be? Because my understanding, the last time I quit Apple Music, the, the video stuff was in Apple Music, which is not a good place to go watch video, right?

• 1:20:27Nilay Patel?

  They have a TV app.

• 1:20:28Speaker 02

  And so, so that's gonna be the home? I thought the TV app was for controlling your actual TV.

• 1:20:34Nilay Patel?

  No, that's the remote app.

• 1:20:35Speaker 04

  No.

• 1:20:36Nilay Patel?

  The TV app is like, when you have an Apple TV, all the services feed into this interface that shows you everything you're watching.

• 1:20:43Speaker 04

  Except for the ones you actually care about.

• 1:20:44Nilay Patel?

  Except for Netflix.

• 1:20:44Speaker 04

  Netflix doesn't feed into it.

• 1:20:46Nilay Patel?

  You know, they promised, uh, they promised a data sharing deal with Netflix when they launched it. That was like two years ago, still haven't done it.

• 1:20:52Speaker 04

  That's, they're gonna, they're gonna release that when they open source FaceTime.

• 1:20:55Nilay Patel?

  Yeah. You had so many, like, old burns from Dieter today.

• 1:21:03Nilay Patel?

  Anyway, but yeah, Casey, the idea is that you have this TV app and it will feed in everybody else's content. And then Apple's video content will be a first-class citizen in there. And I don't know, you're gonna watch Oprah.

• 1:21:14Speaker 03

  Everyone will watch Oprah. Like, people will watch Oprah. Like, Oprah is the original influencer.

• 1:21:19Speaker 04

  Who?

• 1:21:20Speaker 03

  She is.

• 1:21:21Nilay Patel?

  Write that headline!

• 1:21:22Speaker 03

  I mean, it's true. My mom would go anywhere for Oprah.

• 1:21:26Nilay Patel?

  I want that headline. The Vergecast is over because Ashley has a story to write.

• 1:21:29Speaker 01

  What part of your day do you open up your phone to watch Oprah?

• 1:21:34Speaker 03

  I think the morning.

• 1:21:36Speaker 01

  In the morning? It's like you're getting ready for the day.

• 1:21:38Speaker 03

  The question is, what's the better deal? Oprah or the Obamas on Netflix?

• 1:21:43Nilay Patel?

  Everything, the whole world is just trying to make you watch TV on your phone. I'm telling you, that's the future.

• 1:21:49Speaker 02

  Do we know what kind of show Oprah is making? Like, she's not doing a daily talk show, right?

• 1:21:52Nilay Patel?

  A representative said that together, Winfrey and Apple will create original programs that embrace her incomparable ability to connect with audiences around the world. Winfrey's project will be this as part of a lineup of original content from Apple. So if it's embracing her ability...

• 1:22:04Speaker 01

  But it sounds like a project.

• 1:22:06Speaker 02

  You know what it sounds like to me is like, it's Oprah Winfrey Network rejects is like what Apple is getting, right? Oprah already has a network. You really think she's giving her best stuff to Apple?

• 1:22:17Nilay Patel?

  Oprah's contract with her own network, which, by the way, is called OWN, which is great, the Oprah Winfrey Network, but it's her own. 2025.

• 1:22:26Speaker 02

  2020, okay.

• 1:22:27Speaker 01

  What, you mean it ends? The contract ends in 2020?

• 1:22:30Nilay Patel?

  Well, she just extended it.

• 1:22:30Speaker 01

  Oh, she's extended it.

• 1:22:32Speaker 04

  I can't stop thinking about what Ashley said, because Oprah did product placement on her show constantly.

• 1:22:37Speaker 03

  She gave people cars.

• 1:22:38Speaker 04

  Just like influencers do today.

• 1:22:39Speaker 01

  Giveaways, giveaways are huge in influencers.

• 1:22:42Speaker 03

  Advice, magazine, like, she had it all. She built an empire.

• 1:22:47Nilay Patel?

  Yeah. And now, she's going to be reduced to streaming on the TV app on an iPhone near you. Okay, well, congratulations, Oprah, we're very proud of you. Oprah's the original influencer.

• 1:22:57Speaker 03

  I mean, I need a weekend post.

• 1:22:58Nilay Patel?

  It's coming.

• 1:23:01Nilay Patel?

  That's it for the Vergecast this week. Casey, you look great, man. What you don't know is that the lights turned off in the studio where Casey is.

• 1:23:08Speaker 02

  And I've been gesticulating wildly for the last two minutes, and the lights aren't coming back on.

• 1:23:13Nilay Patel?

  He's waving his hands to trip the motion lights. It's incredible.

• 1:23:16Speaker 02

  I've just embraced sitting in darkness as a metaphor.

• 1:23:20Nilay Patel?

  2018 continues to pace. Thank you, Casey. Tell them about Converge.

• 1:23:25Speaker 02

  Listen, Converge is an interview game show that's easy to win, but not impossible to lose. I talked to some of Tech's most fascinating personalities and a new episode comes out every Wednesday. And this coming Wednesday, I talked to Mike Maples Jr., who was one of the very first investors in Twitter and has just made buckets of money because he's very good at investing. And we had a super fun conversation in which he makes me pitch him Twitter using only things that I would have known in 2005. And it all goes disastrously wrong, so.

• 1:23:53Nilay Patel?

  I love it. Ashley, thank you for being here. Button, season three? It's gonna happen.

• 1:23:57Speaker 03

  I hope so.

• 1:23:58Nilay Patel?

  Well, it's funny because I'm the person that makes this. It's gonna happen. We need the jet ski. Tell the people to binge watch your other two seasons. What's it about?

• 1:24:06Speaker 03

  It's about the choices we make with technology that we might not realize we're making. I'm trying to think, we have a streaming episode, very TV related about password sharing and why people do it. I personally don't password share because I suck and I'm mean.

• 1:24:21Nilay Patel?

  All right. Paul, thank you.

• 1:24:23Speaker 06

  You're welcome.

• 1:24:24Nilay Patel?

  Dieter, tell them about Processor and then we'll get out of here.

• 1:24:26Speaker 04

  Processor is a YouTube series that's about empowering you to better understand how technology works and what it means in your life.

• 1:24:34Nilay Patel?

  All right. You can also listen to-

• 1:24:36Speaker 04

  How's that?

• 1:24:37Nilay Patel?

  It was great. It was really good. You should watch Processor. You can also follow us on all the platforms. You can watch any number of Verge staffers doing copyright infringement on IGTV, apparently. Kara was on the show. You can listen to Recode Decode. You can listen to Recode Media, Peter Kafka. Everything's great. We love you all. Rock and roll. Goodbye.

• 1:24:52Speaker 02

  Paul.

• 1:24:53Speaker 04

  Promo code.

• 1:25:10Speaker 06

  Hello, listeners of the Vergecast. This is Peter Kafka. I am the host of Recode Media. I want to tell you about a free episode of this show that you can go listen to right now. It's the interview Kara Swisher and I did with Daniel Ek, the CEO of Spotify. You know what Spotify is. We talked about why Daniel Ek built Spotify, when it made no sense to build Spotify, why he took it public, how he took it public. We had a long and kind of frustrating conversation about his content policy, which ended up, I think, helping him decide that he wanted to change his content policy. It's all in there. You can listen to it right now for free at Recode Media with Peter Kafka. Enjoy.