Sonos' new budget soundbar / CNN Plus is shutting down / Netflix loses subscribers for the first time in over a decade

David Pierce rejoins The Vergecast with Nilay Patel and Alex Cranz. The crew discuss Netflix losing subscribers for the first time in over a decade, CNN Plus shutting down only a month after it launched, and a whole lot more. Verge editor Chris Welch joins the show to discuss Sonos' new budget soundbar that is set to release in June. Relevant links: gone90.biz Netflix just lost subscribers for the first time in over a decade The writing may be on the wall for sharing Netflix accounts CNN Plus is shutting down only a month after it launched The Obamas are leaving Spotify for a new multiplatform podcast deal Spotify opens up video podcasting to everyone in the US and select markets Exclusive: this is the new budget soundbar from Sonos A year after LG left the smartphone business, Samsung is the big winner The latest leak of Google’s upcoming Pixel Watch shows off a familiar design Playdate review: all it’s cranked up to be A camera battery with a USB-C port is a gadget whose time has come Elon Musk lays out funding for ambitious Twitter takeover Delta confirms ‘exploratory’ Starlink tests Tesla earned over $3 billion in profit in the first quarter California net neutrality law to remain intact after appeals court says it won’t reconsider earlier decision Instagram is begging you to stop reposting TikToks to Reels This firm made Republicans go viral — now it’s falling apart Booming warehouse growth clashes with rural life in California’s Inland Empire Inside the pandemic’s PPE supply chain nightmare A former Foxconn executive tries to explain what went wrong in Wisconsin 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.

• 0:00Nilay Patel?

  This week on The Vergecast, David Pierce joins the show for the first time as one of its new hosts. We talk about what's going on with Netflix losing subscribers, CNN Plus shutting down. We do a little bit of a gadget scoop about Sonos. And of course, we talk about Elon and Twitter. That's coming up on The Vergecast now.

• 0:15Speaker 01

  This episode is brought to you by On Investing, an original podcast from Charles Schwab. Each week, hosts Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research, bring you fresh insights on what's happening in the markets and why, and what the implications might be for your portfolio. Join Colin and Lizanne as they explore questions like, how do you evaluate corporate bonds that look interesting? And what sectors are on the move right now? Download the latest episode and subscribe at schwab.com/oninvesting, or wherever you get your podcasts.

• 1:00Speaker 01

  This episode is brought to you by On Investing, an original podcast from Charles Schwab. Each week, hosts Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research, bring you fresh insights on what's happening in the markets and why, and what the implications might be for your portfolio. Join Colin and Lizanne as they explore questions like, how do you evaluate corporate bonds that look interesting? And what sectors are on the move right now? Download the latest episode and subscribe at schwab.com/oninvesting, or wherever you get your podcasts.

• 1:49Nilay Patel?

  Hello and welcome to The Vergecast, the flagship podcast of the Go90 scale of doob streaming services. A joke which I started five years ago, but is newly relevant today. That's The Vergecast. I'm your friend, Neelai. Alex Krantz is here.

• 2:04Alex Cranz?

  I am really excited about talking about Quibi today.

• 2:08Nilay Patel?

  This is all we do, is we talk about Quibi. Please rotate your phone.

• 2:13Alex Cranz?

  Rotate it so you can hear this better.

• 2:15Nilay Patel?

  We have a big announcement, very exciting news. New host of the Vergecast, new member of the Verge staff, David Pierce is here.

• 2:23David Pierce?

  Hello, I'm your friend who will always share his Netflix password. Always, no questions asked.

• 2:29Nilay Patel?

  No matter what, you can VPN into my house.

• 2:32David Pierce?

  And even when we break up and you keep ruining my Netflix recommendations, I will not take away your access because I'm just that good a person.

• 2:39Nilay Patel?

  It's funny because I want to take away Max's access because she's really ruining my recommendations.

• 2:43David Pierce?

  It's a huge problem.

• 2:44Nilay Patel?

  It's the children, once they're in there, Netflix has no idea what you're doing.

• 2:48Alex Cranz?

  Is it just all Cocohellen now?

• 2:50Nilay Patel?

  It's all Cocohellen. Liam, our producer on the Vergecast, and Creighton, the producer of Decoder, both worked on a kids' show called Gabby's Dollhouse, which is great. And Max likes it, and I'm happy to support those two. I just don't need it in my recommendations.

• 3:06David Pierce?

  I've always thought Netflix needed a button that's just like a regret button, where you're like, I should never have watched this. I'm so sorry, please take this out of my recommendations forever.

• 3:15Alex Cranz?

  They were supposed to give us one. We were supposed to get like a forget button.

• 3:18Nilay Patel?

  Okay, I want to talk about that in a minute. First of all, I just want to point out, David was like employee one at The Verge in 2010.

• 3:23David Pierce?

  True.

• 3:24Nilay Patel?

  You've been on a journey through the wilderness, and now you're back.

• 3:27David Pierce?

  Yeah, I was just, I was just looking for you, looking for love and looking for new life. That's all it was for years.

• 3:32Nilay Patel?

  I miss you too.

• 3:33David Pierce?

  No, it's, it's both very weird and very good to be back. It kind of feels like no time has passed. It also feels like it has been a literal eternity since I have done a Vergecast.

• 3:41Nilay Patel?

  Yeah, you were on stage with us at the 10 year event with Joanna, but I think the last time was like seven years ago formally that you did a Vergecast with us.

• 3:49David Pierce?

  Yeah, still mercifully the only time anyone has made me cry on a podcast. So, which is a thing I would very much like to keep.

• 3:55Nilay Patel?

  Welcome back, David. We've got a new goal for you, buddy. If we don't get to tears the next 90 minutes, I don't know what we're doing here.

• 4:02David Pierce?

  Listen, if CNN Plus can't do it to me, nothing can.

• 4:05Nilay Patel?

  So that's, so let's talk about the news. David's here, everybody welcome him, you can tweet at him, he's at Pierce. It's great, it's great to have you here. We're very excited, we've got big plans to expand the show with David. You're going to see him on the site in a bunch of ways, it's going to be fun. All right, let's talk about streaming. And really what I want to talk about is not CNN Plus or Netflix losing subscribers. I want to talk about this very simple idea that you just brought up, which is you, every streaming app should have a button. It's like play, but don't count it.

• 4:32David Pierce?

  Yes. I call it the I feel bad about this button.

• 4:35Nilay Patel?

  Yeah. Don't put this in your data.

• 4:37David Pierce?

  I want it for Spotify. I want it for everything. Like I want to listen to this thing or watch this thing, but please don't tell anyone and don't remember that I did it. Like it's, I would use it all the time. That's all I want.

• 4:48Alex Cranz?

  Incognito mode, basically.

• 4:50Nilay Patel?

  Yeah, this show ain't a hit. That play, but don't pretend that this was, I did this. Right? This is how I feel about Moon Knight. I'm watching that shit, but I don't think that this is a good show that anyone should be watching.

• 5:03David Pierce?

  Right. Yeah. I don't want you to hold this in your, in your viewership metrics. I don't want you to use it to decide how much money you're going to pay Oscar Isaac. Like this sucks and I want you to know it, but I am going to watch it.

• 5:12Nilay Patel?

  If ever Disney plus releases metrics on Moon Knight, I'm just going to follow the rhyme being like, but minus one. I didn't, I didn't do that willingly. It was just Wednesday and nothing else was happening.

• 5:25Nilay Patel?

  I feel very badly about that. We're gonna have Charles William Moore, our new TV critic on the show soon to talk about all the startup shows. And I really just want to talk to him about Moon Knight the whole time. So don't tell him. He thinks he's coming on to talk about super pumped and we crashing all that. It's just an hour of me being like, why did they make an ABC TV movie from the nineties on Disney plus? Like that is the level of quality of the show. I'm sure there are Moon Knight fans out there and I encourage you to tweet it, David.

• 5:54David Pierce?

  I have not watched Moon Knight and now it's a really, it's a hell of a sales pitch you just did. I cannot wait. I'm in.

• 5:59Nilay Patel?

  It's so bad. It has the production quality of, uh, do you remember Sequest DSV? It's like, it's right in that pocket, man.

• 6:07Alex Cranz?

  Also has a talking dolphin. It's wild how similar they are.

• 6:11Nilay Patel?

  It's like, what is going on in the show? Anyway, the actual streaming services we were going to talk about. Let's start with Netflix because Netflix is a juggernaut. It's, I think it's going to be fine, but they just lost subscribers the first time in over a decade. They announced they're going to do an advertising tier and they are going to crack down on sharing Netflix accounts, the same password across households. That's a lot of change. And I would say people lost their minds.

• 6:39David Pierce?

  Yes.

• 6:40Nilay Patel?

  When all this happened.

• 6:41David Pierce?

  So I would say my big take on this is that two of those three things you just said are super, super interesting. I think the fact that Netflix lost 200,000 subscribers in a quarter is like a small thing worth noting, but not ultimately like the harbinger of anything long term. Everything changes. Like, there are only so many humans in the world who will ever subscribe to Netflix. Like, those numbers are going to go up and down a little more than they have. That does not strike me as all that interesting. I think the ad future of Netflix is fascinating. And I think the password thing is going to be super interesting. And it was really incredible to watch the response to this, because everybody went from Netflix is the juggernaut, it's the future of TV, to like, in the course of one earnings release, being like, well, Netflix is over.

• 7:25Nilay Patel?

  So I have to, I have to do the disclosures. Vox Media is a company, we all work at it. NBC, which owns Peacock, which streaming service, NBC is a minority investor in Vox Media, which we all work at. That's owned by Comcast. Comcast doesn't like, doesn't like us. So there's your disclosure. The Verge is making a Netflix show. It's actually coming out soon. It's gonna be really exciting. I'm the EP of that show. Vox Media, as a company, makes shows for all these streaming services. There's a show on CNN Plus, which we're gonna talk about. There's Vox has a show, Netflix, like, all the things you could think of. But our show is our show, and we get to say whatever we want. I just make the disclosures. That's the disclosure. You can't tell me I didn't.

• 8:04Alex Cranz?

  You did it. That was great.

• 8:06Nilay Patel?

  I wear it like Moon Knight. Where's the suit?

• 8:09Nilay Patel?

  All throughout Moon Knight, they're just like, wear the suit. And he's like, no. And it's like, that's your whole job.

• 8:14Alex Cranz?

  That's the one thing we want to see from you. How do we segue that back to Netflix? The one thing we want to see from them is more subscribers.

• 8:21Nilay Patel?

  Yes. So you want it. So Netflix loses 200,000 subscribers. There's some underlying data stuff to think about there, because they left Russia. So if they hadn't left the Russian market, maybe they would have ticked up slightly, but it doesn't matter because net they lost 200,000 subscribers. They are focused on that subscriber loss, particularly in North America, which is a big, big deal, right? This is the market that's saturated and they are attributing it to, there's a lot of competition now. There is Disney Plus, there is Apple TV Plus. Apple TV Plus just won an Oscar, their show's really good, everyone likes Severance. There is HBO Max, which we should talk about because now it's part of Discovery and they're going, undergoing changes, but HBO Max has the Batman.

• 9:03Alex Cranz?

  That's, that's why you subscribe.

• 9:06Nilay Patel?

  But like, that's HBO Max, like they've got the big catalog of HBO stuff.

• 9:12Alex Cranz?

  They've got like the whole Turner collection. They've got like all the old movies that nobody else has.

• 9:17Nilay Patel?

  You can watch Pump Up the Volume on HBO Max whenever you want. And then, yeah, the Batman was a sensation in theaters and it quickly hit the streaming service and like, then everyone watched it again and it had another cycle. Like that's real competition regardless of the corporate chaos of AT&T and Warner Media and Discovery, like they're executing.

• 9:37David Pierce?

  Yeah, well, and it's an interesting thing because it, I was thinking about this in the course of prepping for this, that like, I almost couldn't describe to you what Netflix is the streaming service for anymore. Cause it's like HBO is starting to lock down the sort of really like blockbuster-y prestige stuff more and more. Disney is the place you go that has all of the stuff that like your kids want to watch and it's like the family friendly one that has all the Marvel and Star Wars, like that pitch is easy. Peacock is where you go to watch The Office. Paramount Plus exists.

• 10:08Nilay Patel?

  No, Paramount Plus is going to have Top Gun Mavericks.

• 10:10David Pierce?

  Okay, there you go. So there's a sales switch and I'm kind of at a point where like Netflix's big thing is just that it's Netflix, right? Like it is, it is just the one everybody already has and that's super powerful, but it does seem like we're getting to a point now where like, if I have subscription fatigue, like how long is the list of things that are like dragging people back to Netflix every single day anymore? And it feels like that list is getting shorter.

• 10:31Alex Cranz?

  This is what Netflix has been scared of for years though, right? Like they started losing their catalog, they started losing Friends and The Office and Star Trek and everything else and those went to smaller, smaller services. And so they've been terrified of this. That's why they've been investing. They've been trying to build this catalog. And I honestly think that this is all because they screwed up. Because they're like, we know we got to build a catalog. We got to do like Apple TV. We've got to make like a reason for people to come here. But instead of everybody else who goes and like, figures out what shows people want to watch and make them, Netflix was like, we're going to use an algorithm to figure out how to like min-max this shit. And that's how we're going to make content. And now everybody's like, but it's all boring and bad and blasé.

• 11:15David Pierce?

  Well, because the algorithm told them the thing to do is go all in on like niche weird dating shows.

• 11:21Alex Cranz?

  Yeah.

• 11:21David Pierce?

  Which I've watched all of them.

• 11:22Alex Cranz?

  There's the international selection's incredible, but it's mainly through like partnerships with other, other channels. And then there's like, all the American stuff is like, stuff they canceled after two seasons.

• 11:33Nilay Patel?

  When I say people went crazy because Netflix lost 200,000 subscribers, like, literally got all the way to this is the end of prestige TV.

• 11:41David Pierce?

  Yeah.

• 11:42Nilay Patel?

  Right? Like, it was like, what are you talking about? Right? Like, they were sort of not making it. When they were making it, it was like House of Cards. And it was like one specific era. But what is Netflix like very famous for is like, two seasons of a thing that a small, very dedicated crew of fans likes, and then cutting it, and then moving on. Right? And like, we've heard from TV executives over the years, like Netflix doesn't promote our work the way the other streamers do. That is, in contrast to a lot of TV people saying Netflix is the best to work for, because they'll cut you a check and then get out of your way. Which, I always think of that as like, a blessing and a curse. Like, it's a lot of smart creative people without an editor. And as an editor, you know, you know, I have a very specific feeling about that, which is like, everybody needs

• 12:26Nilay Patel?

  an editor. It's like, there's a lot of just like bloat in the middle of Netflix shows.

• 12:30David Pierce?

  Well, and it sounds like even now Netflix is aware of that. Like, I think it was Matthew Ball was tweeting about this earlier, after the, the news came out, that Netflix is aware of the thing that you're describing, and is kind of 18 months into a plan to fix some of that, where they're like, and they've been saying, we need to reinvest in, in quality over quantity, which is like a very funny thing for somebody like Netflix. To say it's like, well, yeah, we all could have told you that that was going to be the case. But they just made so much stuff for so long that I think they were maybe later than they needed to be to realizing like, oh, what we actually need is a handful of really good, really sticky, really long lasting things. And the problem is they're halfway into the process of making some of that stuff.

• 13:14David Pierce?

  And making that stuff is really, really, really hard. Like they made squid games. Everybody's like, cool, but like, there's not 80 more seasons of squid game that people are gonna watch.

• 13:23Nilay Patel?

  Oh, they're gonna, now they're gonna find a way.

• 13:25Alex Cranz?

  I want to push back on that idea that they're redoing things because they aren't like they just this week. Got rid of their head of animation. That was one of the places where they were really standing out and they were really competing and starting to like, take all these really cool creators from Disney and Cartoon Network and building out this thing under this guy, Phil Renda, who had started at Cartoon Network. He found like Adventure Time, which kicked off this huge animation Renaissance. And like, they were building a new animation Renaissance at Netflix. And then they're like, no, we're gonna fire that guy and like, cancel everything. Oh, you wanted bone? We've been trying to make it for 25 years. Never mind. You're not getting it. And he was one of those rare people that was actually thinking about, okay, what is good content?

• 14:05Alex Cranz?

  How do we make good content? I will not just listen to the algorithm and they get rid of him and like, that seems very, very stupid.

• 14:12Nilay Patel?

  Yeah, but I don't ever really know how to evaluate those things, right? Like, how big was the audience for that? Netflix won't give us the numbers.

• 14:20Alex Cranz?

  Right.

• 14:20Nilay Patel?

  Maybe they're spending a lot of money on animation. No one was watching it. Or they were spending a lot of money on animation and a very small number of very loyal people were watching it and tweeting a lot. And that just like skews our perception of everything. One of the core problems with all of these services is that they're utterly opaque.

• 14:36David Pierce?

  Yep.

• 14:37Alex Cranz?

  Yes.

• 14:37Nilay Patel?

  In a way that, I don't know, broadcast TV and cable TV all had Nielsen. So we could, we had some way of measuring something, even if Nielsen wasn't perfect.

• 14:47Alex Cranz?

  But that's going to change soon, right? Because like, all of these, all of these people are also pivoting to advertising.

• 14:52Nilay Patel?

  Yep.

• 14:52Alex Cranz?

  And you can't do advertising without metrics. Like, nobody's, I mean, I hope they do try. I hope they go the Tumblr route and like, just have the worst ads on all the Netflix shows. Like, that would bring me personally joy, but at some point, we're gonna have to get metrics because like, who's gonna wanna, like, they're gonna say, oh, yeah, everybody watched squid games. Did everybody watch squid games? Or are you just telling us that? Because you can do that, but you can't do that to the advertisers.

• 15:16Nilay Patel?

  Well, so Netflix has started releasing some numbers. They've got a website now. You know, the, it's like total engagement minutes or something like

• 15:24David Pierce?

  Yeah.

• 15:24Nilay Patel?

  Some number that no one else uses, so you can't measure it exactly. But the thing you're saying about advertising and the password sharing thing is really interesting because it connects directly to what David was saying about you kind of run out of people in the United States.

• 15:36David Pierce?

  Yeah.

• 15:36Nilay Patel?

  You sort of have and you sort of haven't, right? They've got 200 million people around the world, more or less.

• 15:42David Pierce?

  I think it's like 220, yeah.

• 15:44Nilay Patel?

  Yeah, 220 something accounts, 220 million something accounts around the world. There's more people than that in the United States. So you haven't like maxed it out yet. There's like billions of people in the world and like, you know, the hyperbolic headline of maybe this is as big as any streaming service can get. Like, oh, you can do a lot of things. So one thing you can do is eliminate password sharing. And the way that they have hinted at doing is they won't just cut you off. They'll tell the person whose password you're sharing, hey, you could just pay some more money to support your friends or your ex or whoever it is.

• 16:18David Pierce?

  Sure, I'm gonna do that.

• 16:20Nilay Patel?

  Right, so like, I'm gonna get the note about my parents.

• 16:23David Pierce?

  Yeah.

• 16:23Nilay Patel?

  And I'm gonna be like, yeah, I just pay the money for mom and dad. So like, they will attract some revenue in that way. Then if you're like, I'm not gonna pay for my ex, I'm gonna cut them off. You'll, what they'll drop down to is a lower ad-supported tier. So then Netflix will retain you on a cheaper tier or maybe even a free ad-supported tier. And so you still have Netflix. We didn't take it away from you.

• 16:46David Pierce?

  Right.

• 16:47Nilay Patel?

  We just put some ads in it.

• 16:48David Pierce?

  Is it gonna be like punishment? Like if you don't pay, you have to move to ads?

• 16:53Nilay Patel?

  Well, no, because like, maybe you're like, I just don't want Netflix. But what they're not gonna do is like penalize everyone. They're gonna like have these off-ramps into either more money or ads. And that like increases your number of users, which is like very, like very clever way of doing it.

• 17:07David Pierce?

  It is. I am fascinated by what the like copyrighting meetings are gonna be like for how they tell your parents and my exes what just happened. It's like, Neelai decided he doesn't want to pay for you anymore. He doesn't love you enough to pay for your Netflix profile. So here's some ads. Thank Neelai.

• 17:27Nilay Patel?

  Yeah, I mean, and they've got to find ways to solve for people to travel. So like if you're traveling out of your household, like they'll, they'll do this stuff that quite frankly, all the live TV services have done, like YouTube TV has figured this out. Hulu has pretended to figure it out, but Hulu is just like, are you somewhere else? Go to jail, wherever you are. If you're not in your home, this is probably jail of some kind that you should be in. So all these services have these like geolocation restrictions, but the idea that they will initiate new people into advertising. They've got a ramp with password sharing into here's a soft landing on the ad supported tier that you're not paying for. And if you want to pay, you can still pay for the new thing. They've got to execute all of that, but that's actually how you end up growing your business. You add pricing tiers.

• 18:10David Pierce?

  Right.

• 18:11Nilay Patel?

  You make a cheaper one and a more expensive one, like every, you know, there's an, there's an iPhone at every $50 price point that you can think of. Cause it's like, do you have some money? You should spend it on this. And right now Netflix is like, to your point, David, like they've just acted like the default.

• 18:25David Pierce?

  Yeah.

• 18:26Nilay Patel?

  Your first $15 in your streaming budget goes to Netflix and I think that might be over.

• 18:30David Pierce?

  I kind of think so. I, if I had to pick one as the default right now, I think it's probably Disney plus. Like if, if you're only going to get one streaming service, it, it feels increasingly to me like the answer is Disney plus.

• 18:39Alex Cranz?

  Do you have small children in your home?

• 18:41David Pierce?

  I don't, but I know a lot of people who do. So it's possible that I'm very biased. I also think that's what HBO Max is after and has a real shot at pulling off with the whole discovery thing.

• 18:50Alex Cranz?

  Yeah. I was going to say like HBO Max would be where my like.

• 18:53Nilay Patel?

  That's where my first money would go.

• 18:55Alex Cranz?

  Like if it fixed its app first.

• 18:57David Pierce?

  Oh God.

• 18:58Alex Cranz?

  I refuse to have it be my only one with its terrible app.

• 19:00Nilay Patel?

  I think there was a secret update to the HBO Max app.

• 19:03Alex Cranz?

  There was. It now does a ba-bum like, like Netflix does.

• 19:06Nilay Patel?

  Yeah. And it has the weird circle spinner and I think the purple got darker.

• 19:10Alex Cranz?

  It did.

• 19:11Nilay Patel?

  And they didn't say anything about it.

• 19:12Alex Cranz?

  It just happened.

• 19:13Nilay Patel?

  So I'm just, I'm just there being like, is that purple darker? Should I read into this? And then the app is like ever so slightly slower. And I'm like, maybe it's not an update. But then it's like, ba bum. It's like, eh, it's different.

• 19:24Alex Cranz?

  I think they just like, don't actually test things before they push them live. I think we are the test subjects. They just push it live and I'm like, did anybody complain? No, no, keep going, keep going, keep going.

• 19:33Nilay Patel?

  They should just let me in there. Let me design your app.

• 19:36Alex Cranz?

  But do you really think that like Netflix is actually gonna add subscribers? Cause they, they give this bonkers number of like a hundred million people or a hundred million subscriptions are being lost to password sharing. Do you really think they're gonna claim all of those back? Or is the?

• 19:51Nilay Patel?

  No, that's the same number as like the recording industry being like, we would have made 50 million more dollars last year if not for piracy. And it's like, no, I just like, definitely wouldn't have listened to anything. Like, I'm sorry. Like, I definitely like ripped all of my friends CDs and I wasn't like about to pay for them all instead.

• 20:09Alex Cranz?

  I think we're also reaching this point where I'm seeing more and more people say, how do you use BitTorrent? Like, I'm seeing like this increase in like interest in piracy. I'm seeing this increase in like interest in not paying for the shit.

• 20:20Nilay Patel?

  Spoken like a true Nvidia Shield owner.

• 20:22Alex Cranz?

  I, right. I love my Plex. Very legally acquired materials on it. But like, I just really don't think that they're, that these, all these people, these hundred million households or whatever are gonna be like, okay, well, there's a cheaper version now. I'm gonna go get it.

• 20:37Nilay Patel?

  Yeah, but I think you can point to that and saying, we'll get some percentage of them.

• 20:40Alex Cranz?

  Yeah, I guess they will, they'll get their 200,000 back.

• 20:42Nilay Patel?

  Yes, I mean, that's a very small percentage.

• 20:44David Pierce?

  Yeah.

• 20:45Nilay Patel?

  Of a hundred billion people.

• 20:46David Pierce?

  I think, I mean, to me, the, the ad thing is much more about like other countries outside the US than it is the US. And like, there's some, like me, like, you're right. Not everyone in America has Netflix already. So there's some gain to be had there. But I think like the, the thing that I've heard over and over about India, for instance, is that like Netflix is just too expensive in India. And people have cable subscriptions that are not very expensive, that they're not eager to cancel. And so Netflix just has not been able to make the same pitch in countries like that that it has here, which is like, we have tons of stuff to watch and we're cheaper than cable. Like, that is actually not how it works in India. But something like additive, which is like a cheaper free Netflix, or not free, but a cheap. For ad-supported Netflix is going to be much more compelling to people in countries like

• 21:31David Pierce?

  that where $20 a month for Netflix seems ludicrous, but half that plus ads or a quarter of that plus ads might be a lot more compelling. So that's like, I think the the sort of fail gracefully into ads thing is really interesting, but my sense is the people who would pay for Netflix at what it costs now and the people who want it with ads are like more separate groups of people than than maybe I had been thinking.

• 21:54Nilay Patel?

  Yeah, we actually have a pitch in from an Indian reporter about why Netflix failed in India that I'm very excited to read when it comes in.

• 22:00David Pierce?

  That's exciting. I look forward to my theory being totally wrong when that sort of flashes. So that'll be great.

• 22:05Nilay Patel?

  I think that market is like particularly interesting for a wide variety of reasons. At the end of the day, though, what I think the real cause of this like day-long freakout about Netflix is is this market is now competitive.

• 22:17David Pierce?

  Yep.

• 22:17Nilay Patel?

  And everyone has forgotten what super competitive tech markets look like.

• 22:21David Pierce?

  It's great.

• 22:22Nilay Patel?

  You have a lot of choices and you can bail and spend your money somewhere else. And a lot of people looked at Netflix this past quarter and bailed. And like, most of these companies do not have that experience.

• 22:33David Pierce?

  Right.

• 22:34Nilay Patel?

  Like, no one's like, you know what? I'm gonna do an Android phone today. I think on this show, sometimes we pretend that happens, right? But like every, I mean, we do earnings every quarter and every quarter, it's like Apple had another record quarter or like Amazon is like, once again, an Amazon number of Kindles were sold. And they're like, what does that mean? And they're like, the most Kindles compared to the number of Kindles previously sold compared to the number of Kindles that I imagined. It's like, that's still not a number, but it sounds great. And the other number's gone up. And like, we just haven't seen any of the big tech companies take a hit in such a long time that when they do, it feels like something is over as opposed to just how markets work. Like, people left and came back.

• 23:14David Pierce?

  I think that's right. Well, I also think it's clearly the end of one phase of this industry for companies like Netflix, too, which is basically just the throw money at the problem phase, right? And yeah, even going back, Netflix basically was able to throw money at the problem and keep growing like crazy forever. And if there's one thing we know, investors in particular, like it's hilarious amounts of money being spent in service of. Areas amounts of growth. And now Netflix is saying, we need to spend less on dumb stuff and be a little more prudent about how we spend our money. And investors are saying, well, that freaks us out because, because like the, the freewheeling era of streaming growing is just, is just not going to keep being this freewheeling.

• 23:55David Pierce?

  Like as they got bigger, as they start to make a real dent in the cable industry, it was always going to happen like this. And I think Netflix, just unfortunately for Netflix, gets to be kind of the first through the gate of like, this is a real industry now.

• 24:07Nilay Patel?

  Yeah. I mean, um, the phone companies, as uncompetitive as that market is, right? AT&T and Verizon and Tima will track their churn amongst each other. And then they carefully manage their prices so that they're all the same all the time. Anyway.

• 24:22Alex Cranz?

  Now we're going to have a quadopoly? What's the streaming one? How many are there?

• 24:27Nilay Patel?

  No, streaming is just like this, like super competitive market. Like, I don't think it is a four sided race between Netflix and HBO Max and Disney Plus and Peacock. Like, there's a lot of entrance and there's a lot of ways to spend your money. And like, some of them are just gonna fail and some of them are gonna succeed and some of them are just trade subscribers. Like, I think it's actually relatively cool that unlike cable or your phone service, like you can just quit these apps like month to month.

• 24:56David Pierce?

  Yeah. Is there anything else out there like that? Like I, I subscribed to Showtime for a month so that I could watch Super Pumped and Yellowjackets. And I have two more episodes of Yellowjackets and when I'm done with them, I'm going to cancel them until another season of those shows comes out. And it's such an unusual mechanic that like I can, anyone who's paying attention can just do that with five different services, five times a year. And you end up saving yourself a bunch of money and it's going to make their numbers chaos all the time. It's so unlike anything else I can think of.

• 25:26Alex Cranz?

  Man, if only they had some sort of like hard copy version of these things that you could just buy for a lot more money and own. That would be wild.

• 25:36Nilay Patel?

  It'd be great, right? You can actually just buy the shows.

• 25:38David Pierce?

  I don't even know what you're talking about. That seems crazy.

• 25:40Nilay Patel?

  And then you have them and you wouldn't be like renting them. Anyway, so that's Netflix. I suspect Netflix will be fine.

• 25:46David Pierce?

  Stranger Things is coming, so Netflix is going to be fine.

• 25:48Nilay Patel?

  Yeah. Stranger Things is coming. All those people will come back.

• 25:51Alex Cranz?

  Squid Games 2 is got renewed.

• 25:53David Pierce?

  Everybody dies again.

• 25:56Alex Cranz?

  They're just gonna resurrect everybody. Who knows?

• 25:59Nilay Patel?

  It just seemed like they need hits, right? TV is a hits business. Netflix needs more hits. Apple TV, Severance is a hit, right? But we have no idea if it's actually a hit.

• 26:07Alex Cranz?

  It's a hit in the Verge newsroom. That's it.

• 26:10David Pierce?

  Yeah. It's, I mean, it's the best. It should be a hit everywhere. If it's not, I will, I will go to the grave telling people to watch Severance. But it does make me think like, I wonder if the other half of the strategy, which is basically like, you need hits, but you also need sort of the background, like, turn off your brain television. And people have been talking about that forever as like the thing Netflix didn't have. And Netflix has invested really hard in that. They have tons of house shows. They have tons of food shows. They have Is This Cake? They have all these different kinds of like deliberately non-prestige TV. And I'm starting to wonder if that is actually the hook to keep people that maybe a lot of people thought it was. And if we're gonna maybe get a swing away from that now.

• 26:51Alex Cranz?

  Was it Netflix that created the random button?

• 26:54Nilay Patel?

  Yes, they have, they have the shuffle.

• 26:55Alex Cranz?

  The shuffle, like, yeah, they just invented TV channels.

• 26:58Nilay Patel?

  The shuffle is great, but you need the I watch this, but don't count it button. Like, that's actually way more important than the shuffle button.

• 27:04David Pierce?

  The I'm so sorry button.

• 27:05Nilay Patel?

  So we should, we should pivot to Discovery because that idea that you'll have all the background noise, big part of the Discovery strategy.

• 27:11David Pierce?

  Yep.

• 27:12Nilay Patel?

  They make a lot of that stuff. They have it all. It's on Discovery Plus. And they just bought Warner Media. Warner Media owns CNN. CNN Plus launched less than a month ago under AT&T. The story, so it goes, is that Discovery did not want CNN Plus to launch, but they were legally prohibited from telling anyone at AT&T how to manage the business before the deal closed.

• 27:39David Pierce?

  So instead, they had to talk very publicly about their plans.

• 27:44David Pierce?

  It actually makes a lot of sense in retrospect, right? Because they gave an unusual number of interviews in the run up to all of this happening, being like, here is what we think the future should look like.

• 27:54Nilay Patel?

  Just to no one in particular, just like standing outside the office and screaming like, here's what I think. So the deal closes, it's less than a month I'd ever seen M+ and they shut it down today. They said it's going to be over on April 30th. This thing lasted 29.

• 28:09Alex Cranz?

  23 days.

• 28:10Nilay Patel?

  23 days is today, but it's, you know, it's got like seven more. It'll be like 31 by the time it dies. Yeah. So a full month, Vergecast listeners may know, I will reintroduce everyone to this concept. Verizon was the first to doom streaming services. They launched a thing called Go90. It was so named because when you watch a video on your phone, you're supposed to turn your phone to landscape. Verizon, the phone company, did not think about portrait video when they launched their streaming service. So they're like, everyone's going to turn their phones, Go90. So they launched this weird mishmash of a YouTube competitor and they bought a bunch of cheap crap. They called it Go90. They spent 80 billion or 80 million dollars on this. They said it was a bet the company moment and it just collapsed into dust.

• 28:55Nilay Patel?

  We did an amazing story and video on it, Ben Popper, when he still worked here. His headline was Verizon is ready to show you its sexy side.

• 29:04Nilay Patel?

  Second all time Verge headline. It was nuts. The whole thing was nuts. This thus was born the Go90 scale of doom streaming services, which goes from zero to 90. 90 is death when you've gone 90. So Netflix is like a two, we would say. Netflix was for a long time lived at one. Okay. Every streaming service is doomed. That's like, this is the underlying conceit of the whole thing. It's just like, how close to 90 are you? So Netflix for years, just like was at one. YouTube is at one, right? You're, you're still doomed. Well, we're just not anywhere close to it yet.

• 29:39Alex Cranz?

  Yeah.

• 29:40Nilay Patel?

  Right? Like nothing gets to zero because everyone, you know, time is relentless.

• 29:46Nilay Patel?

  Death comes for us all, right? So Netflix and YouTube were always kind of at one. Quibi started life at 80.

• 29:53Alex Cranz?

  85.

• 29:54Nilay Patel?

  Quickly, quickly progressed itself to 90. I think 80 was generous as it turned out.

• 29:58Alex Cranz?

  Very generous.

• 30:01Nilay Patel?

  We, you know, we had a meeting with cats. He was very convincing. So I, so CNN plus fastest time to 90.

• 30:10Alex Cranz?

  Did a speed run.

• 30:10David Pierce?

  By a wide margin. Yeah.

• 30:13Nilay Patel?

  Launched at 85, left us 23 days later.

• 30:17Alex Cranz?

  Could be lasted like eight months and CNN plus couldn't last a month.

• 30:21Nilay Patel?

  So I encourage, if you have thoughts about where other streaming services are in the go 90 scale of doom streaming services, you can tweet them at me. I'm at Rick List. You can tweet them at David. He's at Pierce. Alex is Alex J. Cranz. Just let us know. Cause once you start thinking of these companies in this way, you quickly realize like, oh, they're all on it.

• 30:36David Pierce?

  We need a thing on the verge.com where you can make your own slider. We'll like, give you a bunch. You can put them on there.

• 30:41Nilay Patel?

  So Paul Miller made one for us. It's still up. It's gone 90.biz.

• 30:48David Pierce?

  That's amazing.

• 30:50Nilay Patel?

  It's not great. It's, it's really not great. He refused to label the chart, which is a real Verge house crime. It's still up. It still works. You can look at it. You can be like, oh, voodoo. That's, oh, we're at 98. Like it's fun to do. We're going to make another one, but right now, so I would put the things that are closest to life. One, I would put Atrio Max at like a one, like it's gonna survive. Netflix is like, maybe at a five now, right? Like it had a bad quarter. They need to rejigger. It's the first time they've moved off of that spot. Disney plus is looking like a, you know, they've got actually challenges. They've got investors worried about the reorg. We just had Julia Alexander on Decoder. Like they've got to pull off a lot of things. That's

• 31:32Nilay Patel?

  not a one. That's also looking like a five. So like, I just think this market is so hard and so competitive and they were all betting on endless growth and people signing up for streaming. And what they're kind of getting is like, people have a finite amount of money for entertainment and they're not just going to leave these subscriptions on forever. They're just going to quit on you unless you have something great to show them. And what you have is Moon Knight. Well, you better hope you have Bluey in the background. Cause that's.

• 31:57David Pierce?

  Well, and part of it is also, I think that the last two years in retrospect, kind of screwed them all because they all grew so fast and everybody's memory is so short that it was like, oh, explosive growth for two years because no. When went outside, that's the future forever and ever. And then you get a little bit of retrenchment back to like where these companies would have gone if they had gone on a normal trajectory for the last couple of years. And people start to panic. So it's like the, the, the whip sawing of it.

• 32:27Alex Cranz?

  So those 200,000 people were the ones with lives. They've all returned.

• 32:31David Pierce?

  Right. They've have all gone outside now.

• 32:33Nilay Patel?

  Or they're the people who went to HBO Max because they wanted to watch a square version of Justice League.

• 32:39Alex Cranz?

  Yes.

• 32:40Nilay Patel?

  Black and white.

• 32:40David Pierce?

  For nine hours.

• 32:42Nilay Patel?

  The greatest money AT&T has ever spent. Straight up the fact that AT&T paid for Zack Snyder to make a four, three, black and white version of Justice League. Will go down in history as the best money any phone company has ever spent. Like, it's like unbelievable that that happened.

• 33:00David Pierce?

  Yep.

• 33:00Nilay Patel?

  So CNN plus the discovery shuts it down. They have this meeting, the new guy who runs CNN plus Chris Licht, he's a discovery guy because Jeff Zucker was pushed out by Warner Media. He said they had built a beautiful house, but then this is a quote, then the new owner came in and said, what a beautiful house, but I need an apartment. That doesn't take anything away from this beautiful house you built. I am proud of you and I am proud of this team, but I am gutted by what this means for you. And what he means is I'm burning down your house.

• 33:28David Pierce?

  Uh huh. You built such a good house.

• 33:31Nilay Patel?

  No choice but to torch it. And Discovery's whole strategy is like basically bundling CNN plus into HBO Max. Bundling HBO Max with Discovery Plus and creating kind of David, what are you talking about? Just like a super app of content. That is always on, that has the first run movies, that has the kind of like background home shows that has potentially live news. That's a cable bundle and they want to make that.

• 33:59David Pierce?

  And this is the thing that the discovery executives have been unusually forthcoming about over the last few months. Like typically in a case like this, where you have a big merger coming and it's, it's one of, it's two of the biggest players in streaming. Everybody's kind of coy about what they're up to, right? Like they don't usually have a lot of incentive to like roll out their grand plan. But over and over, discovery executives just kept getting up there being like, we think bundling is the answer. We are going to have one app and like mincing no words about it. They were like, yeah, we think the best future for discovery plus and HBO Max is if they are one thing. And given the way this company works, it will be called discovery plus HBO Max CNN. That will be the name of this app.

• 34:38Nilay Patel?

  Disco Max plus.

• 34:40Alex Cranz?

  It's interesting because for for them, bundling is like just a path to to the merging. And like Disney is over there. Disney's been bundling for a while. They've got Hulu and ESPN+ and everything together. And like, they have zero interest in combining all of those together.

• 34:55Nilay Patel?

  Well, they do. So in markets that are not the United States, Hulu is basically integrated in Disney+ which leads to very weird moments inside the Disney Plus app. Where it's like, woo, that's a little spicy for Disney Plus.

• 35:06Alex Cranz?

  Because they call it also like Stars Plus in a lot of markets, right?

• 35:10Nilay Patel?

  Yeah, because they've got that. They've got another whole content arm that's international.

• 35:14Alex Cranz?

  They're partially doing it in the United States at least because they want everybody to still think of Disney as like for princesses and superheroes. And they want Hulu to be for adults.

• 35:23Nilay Patel?

  Yeah, but I'm saying if you leave the United States and you open Disney Plus, there's a real chance it's gonna be like Pam and Tommy is here. That's weird. She's not a Disney princess.

• 35:31Alex Cranz?

  She could be.

• 35:32Nilay Patel?

  And maybe she is at this point.

• 35:33Alex Cranz?

  Aspirational.

• 35:35Nilay Patel?

  But you know, Disney in the United States right now is like undergoing this massive culture war attack that might be destroying that. Like, they're in a tough spot with that bundle, but they also sort of acquired their way into that bundle. Like, they launched, like Hulu is like a part ownership. They can't integrate it. Now they have more of its catalog. You can see where they're going over time. ESPN is gonna be its own thing always, I think. Anyway, this is all just shaking out. I feel bad for the people at CNN, although they did cover their own streaming service launch. Just like in a completely ridiculous way.

• 36:06David Pierce?

  Fair.

• 36:06Nilay Patel?

  But I feel bad. We should feel bad. They're laying people off. People are gonna have to find new jobs inside of that company or.

• 36:12Alex Cranz?

  Like 400 people got laid off, I think.

• 36:14Nilay Patel?

  Yeah, is that the number? So that's all bad, but 23 days in a just a catastrophe of corporate miscommunication.

• 36:22David Pierce?

  Yes. And that's the thing. And I think it's like, it's it's important to note here, and it's kind of a bummer that this is the case that this isn't actually really about the performance of CNN Plus. Like, if CNN Plus had come out and gotten 50 million subscribers in the first month, like, we might be having a different conversation. But we also might not be, because like even even in the course of making these announcements, they've been very clear that like, this was bad strategy. This goes against what this newly combined company wants to do. And it. Basically, sounds like, like you were saying, they didn't want them to launch it at all. Jason Kylar and the CNN team, like two middle fingers to Discovery, decided to launch it anyway on the premise that if we've already launched it, they can't possibly shut it down. And then they said, oh, watch this and then shut it down.

• 37:05David Pierce?

  And so it's like, I don't know that it has anything to do with the streaming service. It's this weird like C suite fight that just spilled out into shutting down CNN plus, which is crazy.

• 37:15Nilay Patel?

  Yeah. And in the middle of all this, Jeff Zucker, who ran CNN was, one presumes if he had launched it and was at Discovery Warner Media or whatever it's called, things may have gone differently because he was just a personality, but he got run out of there too, like.

• 37:30David Pierce?

  Right. And Discovery was also reportedly mad that he got run out the way that he did. Like the, the whole process, they seemed to do all this stuff before they had new overlords and the new overlords were not fans.

• 37:40Nilay Patel?

  Maybe I need to rename the chart to like the Jeff Zucker Memorial Doom Streaming Service Chart.

• 37:47Nilay Patel?

  I'm gonna stick with Go90, a pioneer in the field of Doom streaming services. Remember, kids, when you watch a video, go 90.

• 37:56Nilay Patel?

  We should very quickly talk about like the other side of the streaming world, which is podcasts. That is undergoing change too. Spotify's head of podcasts left, Courtney Holt. He was the one who brought in Joe Rogan, signed other deals, notably signed the Obama deal. Obama leaving Spotify for another as yet unannounced deal. A lot of those deals have not borne fruit, right? They, they bought themselves a sort of always on Joe Rogan noise machine. And like, sometimes it's like louder and sometimes it's quieter, but it's always on. There's just always a level of white noise coming out of the Joe Rogan machine that they bought.

• 38:30Alex Cranz?

  Have we gotten the Harry and Meghan podcast that they bought?

• 38:34Nilay Patel?

  No, but they, they like assign people to it.

• 38:36David Pierce?

  Didn't they make like one episode and then never again? And now supposedly they're doing it for real.

• 38:40Nilay Patel?

  Yeah, like Archwell Media, their thing is gonna do something.

• 38:43Alex Cranz?

  Sure.

• 38:44Nilay Patel?

  So the person who signed all these deals is leaving. The Obamas are leaving and they're opening up, they bought this tool called Anchor, which is their like user generated podcasting tool now. Anchor is gonna let you start uploading video podcasts everywhere in the United States and other markets. I would just say that on the spectrum of companies that have figured out their approach to content moderation, there's YouTube, which is like, kind of figured it out, still not great because content moderation is unsolved. And then way over there, across the ocean, in a volcano, is Spotify being like, we don't know what we're doing.

• 39:19Alex Cranz?

  We're a tech company.

• 39:21Nilay Patel?

  Yeah, the combo platter of unmoderated open podcasting and unmoderated video is just going to open them up to a world of chaos. So we will see how this goes.

• 39:31David Pierce?

  Yeah, it's it's going to be a mess. I will say, I think there's this really interesting race happening right now where YouTube is pretty clearly investing in like the audio experience.

• 39:40Nilay Patel?

  Yep.

• 39:40David Pierce?

  Based on the theory that a lot of people want to watch podcasts and a lot of people want to listen to podcasts. And I think I think that's pretty clearly real and YouTube is trying to solve how to transition into like an audio first experience. While Spotify is trying to figure out how to make video work. And if I were a betting man, I would I would push all of my chips in the YouTube side of that fight. But I think Spotify, I think this is the right thing for Spotify to do. I think the moderation is going to be a mess and Spotify's approach, it has an approach. It is chilling in a volcano, but its approach is to chill in the volcano and hope you don't notice. And to say, we think moderation is important and then like disappear into the wilderness.

• 40:18Nilay Patel?

  Here's what I'll tell you. Again, I Decoder is a podcast about org charts. It's like I it's the secret of Decoder. It's just me being like, what's your org chart? And then like asking follow up questions. YouTube's moderation is run by the head of product. Trust and safety at YouTube reports to the head of product. It's in the product organization. It's a unique arrangement in all of tech. It's like 50 50, you know? But like product is like a meaningful place for that to live. It's on the roadmaps. It is literally baked into the product of YouTube. Spotify's trust and safety reports to comms.

• 40:51Nilay Patel?

  I don't know about that, man.

• 40:52David Pierce?

  Yeah.

• 40:54Nilay Patel?

  It's it's just like one of those things like I can just tell you that maybe all the people are great, whatever. But just that structure is like, you think this is a comms, you think it's a PR problem, not a product problem. And like, I can just tell you that based on where you've put it.

• 41:06David Pierce?

  Yeah, and they very clearly do. And that's been their response even to Joe Rogan things like they see it sort of as a as a hurdle to get past, not as a problem to solve.

• 41:14Nilay Patel?

  Well, see, it's just like interesting that they're still chasing after it. And, you know, they are the 800 pound gorilla in podcasting. They seem to be driving a lot of things, but they true that they have not figured it out.

• 41:25David Pierce?

  Definitely true. But the good news for them is I don't know that anyone has like the podcasting infrastructure across the whole internet is still such a disaster that like Spotify should be better at it, but I don't know that it's behind, which is so crazy.

• 41:37Nilay Patel?

  I should take this opportunity to say that if you are interested in podcasts, we have a paid newsletter about the podcast industry called Hot Pod Insider. She has a free edition every week called Hot Pod. You can just sign up for it. We just hired a great new reporter for it. It is Ariel Shapiro. She's amazing. We're going to be, you'll see her on the virtual chat soon.

• 41:52David Pierce?

  There you go.

• 41:52Nilay Patel?

  That shameless plug for our own work is a good time to take a break. We got to talk about some gadgets. We'll be right back.

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• 43:09Nilay Patel?

  All right, we're back. Chris Welch has joined us.

• 43:11Speaker 05

  Hello, everyone.

• 43:12Nilay Patel?

  We just did 45 minutes of corporate streaming strategy, so it's time to clear our palates. Old fashioned gadget scoop. Chris, you scooped a new soundbar from Sonos. Tell us what's going on.

• 43:23Speaker 05

  Yeah, so I don't know what it's called just yet. That's the one thing they can actually say for the announcement.

• 43:33Nilay Patel?

  Icy as shit ever.

• 43:35Speaker 05

  Somewhere Patrick Spence is just staring at the wall in his office, very frustrated.

• 43:39Nilay Patel?

  No, he's got a picture of you up on that wall.

• 43:42Speaker 05

  So it's gonna be their cheapest soundbar yet. Actually, it's gonna cost $249. And it's smaller than the Beam, which means it's pretty tiny, because like, seeing the Beam in person is like, you just, it's a tiny little soundbar, and this one is four inches smaller. So it's got, you know, quite a few less drivers. There's no Atmos, you know, there's no mics built in. So it's gonna be like a pretty rudimentary, just TV and music soundbar. And it'll come out sometime in June, I believe. So there are photos on the site, take a look. So I think they're just going after that really cheap market of like Vizio's and, you know, like Roku and TCL soundbars, and that's who they're really going for with this.

• 44:15Alex Cranz?

  I get taking out the microphones and a lot of the other processing and stuff, because it doesn't do Atmos. But why go so small? Because the whole point of speakers is the bigger, the better the sound. Couldn't they do bigger speakers without jacking up the price?

• 44:29Speaker 05

  I don't know. I think they just see this as like for pretty, fairly small TVs, same as the Beam. So if you've got like a Giant 65 or like 75 inch TV, you go for the ARC. And if you've got something smaller, you go for one of these two.

• 44:39Alex Cranz?

  Yeah, because these are like 20, you have here in the measurements, 550 millimeter width. And then the Beam 2 is 651. That's like 25 inches. I definitely search that, guys. I do not just switch between millimeters and inches in my head.

• 44:54David Pierce?

  That was gonna be very impressive.

• 44:56Alex Cranz?

  I had to, had to let everybody know. But yeah, that's like, that's a tiny baby of a speaker.

• 45:01Speaker 05

  It's a tiny little thing. And one of the things is, so there's a new mount for this, so you can mount it vertically. And so they think people are gonna like buy two of these to use with the ARC as like rear surrounds. And if you look closely at the image, you'll see like the tweeters are like curved. So like when you mount it vertically, it might do a better job of like just sending audio upwards toward the ceiling than like something like a 1SL or one of those speakers. So if you want to spend $500.

• 45:24Nilay Patel?

  Oh, I see. So you can bounce off the ceiling?

• 45:26Speaker 05

  Yeah, on your surrounds.

• 45:28Alex Cranz?

  So you would use these instead of like, right now, if you're really into building a 5.1 Sonos system, because you have all the money in the world, you would do like two Sonos 5s, right? And now you'll be able to do these much cheaper, actually built for movie audio.

• 45:44Nilay Patel?

  Well, yeah, the best part of this entire Sonos thing is like anything you have like lamps that surrounds because they make the speaker lamps.

• 45:50Speaker 05

  Picture frames.

• 45:51Nilay Patel?

  But this is like, so they're going after like the dorm room market or like the second bedroom market here.

• 45:55Speaker 05

  Right.

• 45:55David Pierce?

  What is the state of that market right now? I feel like it's been a while since I bought a soundbar, but my impression of it is like you can get a pretty good soundbar at this point for not a lot of money. Like, does does Sonos have a move here?

• 46:07Speaker 05

  I mean, I think they want to have a move. I think Vizio has kind of owned this whole space for years.

• 46:10David Pierce?

  Yeah.

• 46:10Speaker 05

  And now you've got like Roku and, you know, some other companies like TCL coming in as well with like, you know, $99 or like $150 soundbars and Sonos won't go quite that low, it seems like. They're kind of like Apple in that they will, they'll only go so low for a product price. But 250 for a Sonos soundbar, you know, sounds like a pretty good gateway.

• 46:26David Pierce?

  Sonos definitely does have the shiny brand where like, I think if you just, if you just show people a Vizio thing and a Sonos thing, they'll mostly just assume the Sonos thing is better.

• 46:35Nilay Patel?

  The Vizio thing is always really funny because they will like the, you know, Vizio soundbars are fine. They sound really good. Some of them are great. But like the classic one is like, you know, the long box with the big hump for the subwoofer.

• 46:46David Pierce?

  Yep.

• 46:47Nilay Patel?

  Or like, here's like half a dozen weird little speakers with like the fiddly wires.

• 46:52David Pierce?

  And it sort of hangs off the edge of your TV stand. Yeah.

• 46:55Nilay Patel?

  And like, people buy them, people have always bought those kits, like, but that's like where Vizio lives. I think Sonos wants to be that sort of like premium, plug it in once. We just assume that over time you will have more money and have more rooms in your house and we'll just follow you along that journey.

• 47:09Alex Cranz?

  I'm still going back to the fact that it doesn't have microphones because it seems like Sonos kind of finally abandoning, oh, we're going to be the voice assistant hub in your home.

• 47:19Speaker 05

  I don't know. I think like, the other two do have mics built in and also like they make like the ARC SL that you can buy at Costco that like doesn't have mics. There are just some people who like don't want.

• 47:26Alex Cranz?

  Right, right. They like, they make a lot of those now, but this is like a new speaker from them. This is one of the first speakers I think we've seen from them without these microphones. So it's like.

• 47:35Nilay Patel?

  No, they make the 1SL, they make the ARC SL. They have been pretty clear, like some people do not want more microphones in their house.

• 47:41Alex Cranz?

  It's me. That's me.

• 47:42Nilay Patel?

  If you're, and I think they've also learned like, what do people do with microphones? They ask for music. And so like, it's, it's actually kind of like odd to have it in your soundbar. Maybe this one would have worked, but like, that's how you get the price down.

• 47:55Alex Cranz?

  Yeah.

• 47:55Nilay Patel?

  The thing that really gets me about this whole thing is we've also seen all these rumors. They're hiring people for like a home theater OS. Oh, right. Right. And they've put up job listings. They've been tweeting about it. Some of their employees have been tweeting about it. That, like, this is just a regular plug in a soundbar to your port. Off you go. There's no operating system or anything. But that next big move from Sonos has gotta be either a streaming box, a smart soundbar, or, you know, I'm gonna say now, a TV. Every company should make a TV.

• 48:29David Pierce?

  Everyone should see the face Chris is making right now. Like, when you said the OS, Chris got like visibly excited.

• 48:37Nilay Patel?

  Do you think it's gonna be TV? I think it's gonna be TV.

• 48:39Speaker 05

  I don't want a TV. I just want a cheaper subwoofer, man. And apparently they are working on that, the sub mini. And it would make sense to have that come out with this at the same time, I think.

• 48:47Alex Cranz?

  Yeah, because right now it's like $700 for a Sono sub.

• 48:51Speaker 05

  Yeah, it's absurd.

• 48:52Alex Cranz?

  It's really, really good. It sounds amazing.

• 48:54Speaker 05

  Here's your $250 soundbar. Now you just have to buy a $700 subwoofer to go along with.

• 48:58Nilay Patel?

  There's, but there's a lot of people online that will find ways to hack other subs and they're working with, like, you can, uh, there's, I don't know, I will, just be careful, kids. Like, you're gonna break out that soldering iron and you're gonna disassemble, uh, one a Sonos one S L, or like an Ikea lamp to make your subwoofer. Just be careful. That's all. I'm just, I beg you, save yourself. Yeah, but the idea that they need to expand their market, I mean, this is kind of what we're saying. This is a super competitive market. They can make cheaper products and get a new base of people. But at the end of the day, they're always plugging in as somebody else's TV. They're always at somebody else's mercy. Somebody else's streaming box.

• 49:36Nilay Patel?

  There's only one answer, man. Patrick, if you're listening, make me that OLED TV.

• 49:41Alex Cranz?

  It's gonna be the box. It's gonna be the streaming box.

• 49:43David Pierce?

  It's gonna be the box.

• 49:45Nilay Patel?

  You think it's a box?

• 49:46David Pierce?

  It's gotta be a box. Like, A, I think Sonos has a lot to gain from a future where you have dumb screens and smart boxes and would be very interested in being those smart boxes. I also think that is the correct future. Like, stop selling me smart TVs. Sell me smart boxes and dumb screens that will last me a decade.

• 50:04Nilay Patel?

  No one's gonna sell you a dumb screen.

• 50:06David Pierce?

  I know, and I would, I wish they would, and maybe Sonos will.

• 50:09Alex Cranz?

  They want you to buy a new TV every time your screen gets too dumb.

• 50:12David Pierce?

  Every third Roku update, I have to buy a new television. It's fantastic. But no, I, I also just think, like, if I'm Sonos, the TV market is a mess, especially right now, and it's not gonna get better quickly. And, like, they could build better home theater software without trying very hard, because most of it is trash, and Sonos has a pretty good track record of building good software, and then put it in a box and sell it to the same kinds of people who would buy something like this. And it feels like Sonos seems to just be relentlessly pushing down in the market. And that feels like where it thinks all its growth is. And I don't know that Nilay's OLED TV solves that problem.

• 50:51Nilay Patel?

  All right, let me make the opposite problem. We'll let Chris be the judge. You ready?

• 50:53David Pierce?

  Okay.

• 50:53Nilay Patel?

  Yeah. Here's the opposite argument. Selling a box in a market where Roku and Amazon will just give you one for free, and they are already the market leaders, is stupid. Right? Like, you, like, blink at Amazon. You're like, huh, I'm interested in books. They're like, have you heard about Prime TV? Here's one.

• 51:12David Pierce?

  Yeah, one just appears at your door.

• 51:13Nilay Patel?

  It just like happened to you, right? Roku, like, their entire business is giving away that hardware for as cheap as possible and subsidizing with ads and all this other stuff they want to do. Being in that business where you're selling a box and you've got to make a new software experience, and you're still just kind of at the end of the day, just like looking at your same old TV with your, that's not like Sonos. Sonos is like experience and like the speakers, you know, I have a lot of Sonos speakers. I think they're great. I think the company's great. I think it all works great. Like they're not the best sounding speakers you can get always.

• 51:45Alex Cranz?

  No, they're actually not that great. Like I currently have a 5.1 Sonos system and almost every night I spend way too much time trying to figure out what bookshelves, speakers or giant towers I'm going to get to replace it. And we from like 5.1 to two.

• 52:00Nilay Patel?

  Yeah.

• 52:00Alex Cranz?

  Cause all the home theater nerds are like, you know what? Your speakers suck and I truly believe them. I like, haven't heard comparisons, but like.

• 52:08Nilay Patel?

  Every night you're on the ABS.

• 52:09Alex Cranz?

  ABS is like convinced me, man. I'm like, no, I get it. I get it.

• 52:13Nilay Patel?

  Yeah. Like a great 2.1 system is better than a Sonos 5.0. Like I've been there.

• 52:17Alex Cranz?

  I'm like, I'm there right now. The only reason I haven't done it is because I have neighbors and I don't think they would be as excited about my new speakers as I will be.

• 52:25Nilay Patel?

  But what I'm saying is Sonos owns the brand in the Best Buy of one of the best things you can buy. That has a complete experience. It makes you fancy and trying to sell like trying to hawk some box at people. That's like, that's why you gotta build a TV and be like, this is the best TV you can get because it has our brand on it. And it's got our software in it. And then you sell a lot of those. And then you go to the HBO Max of the world and be like, you want to be on our TV because everyone likes it. You gotta pay us the money.

• 52:53Alex Cranz?

  Nah, it's going to be a box. It's going to be a really, it's going to be the, what Cavvo? Was it Cavvo? The HDMI port? Well, we were promised.

• 53:01Nilay Patel?

  It was indeed. But Cavvo has now pivoted to like assistive tech for older people, I think.

• 53:06Alex Cranz?

  Oh, that's awesome.

• 53:07Nilay Patel?

  I get an email from them every now and again, being like, it's, you can't wait to show you. And I'm like, if we can, I would love to see a software update for the one I bought my mom. Look, I'm just saying, if you're going to build that thing, the way to package it isn't a new kind of, isn't TV. People like things. If you, if you send us some Android TV box with a skin on it, like, come on, man. Don't be doing that. All right. Chris, you've heard the arguments. You're the judge. Which way do you think it's going? I don't know if it's a sound idea, but I go with the TV. Ah, it's gotta be the TV.

• 53:40Speaker 05

  But first will come this in June and then these headphones that they've been working on for years, apparently, are taking quite a long time to hit the market. So hopefully those will be along.

• 53:48David Pierce?

  Yeah, I'm no longer convinced that's real. I think it's, it's just, I've given up on Sonos ever making headphones.

• 53:53Speaker 05

  I think there are challenges there. Like, how do you do handoff from like headphones to a speaker? Do the headphones have Wi-Fi? Like, where do you go from there? So I think there's a lot to figure out in terms of.

• 54:01Alex Cranz?

  The headphones always just seemed very stupid. Like, that always just seemed like a bad idea. That just, from the beginning, it's like, we're gonna do, we're in speakers, so we're gonna go for tiny speakers on your ears. That's not.

• 54:13Nilay Patel?

  No, this is like the Dyson story. Dyson's like, we invented a fan. What things suck or blow, we'll just make all of those things.

• 54:19David Pierce?

  Make all of them.

• 54:20Nilay Patel?

  I'm just saying, like, when Dyson was like, we're gonna do a car, like, they quickly realized, like, oh, the fan is not the most important part of the car. We're way out of our depths, guys. Fan-powered cars are never gonna happen.

• 54:35Alex Cranz?

  Just blowing across the highway.

• 54:38Nilay Patel?

  Oh, boy. This prototype is not what we thought it was.

• 54:41Alex Cranz?

  Very loud. Very loud.

• 54:43Nilay Patel?

  It's like 500 air wraps, like, mounted on the back of the Toyota Civic.

• 54:47Alex Cranz?

  Just going in circles.

• 54:50David Pierce?

  Sounds amazing, though.

• 54:51Nilay Patel?

  All right, so that's Sonos, which I think ended in the only place it could. A bunch of other gadget stuff. David, you were really taken with the story. I'm still thinking about the Civic fans. I apologize. David, you were quite taken with this story about LG leaving and how it benefited Samsung.

• 55:10David Pierce?

  I just think it was fascinating. So basically, the thrust of the story was.

• 55:12Nilay Patel?

  It's Allison Johnson's story, yeah.

• 55:14David Pierce?

  Yeah. She went to find out, basically, what happened to the smartphone market after LG left and did a bunch of really great reporting, found out a bunch of really funny stuff, and essentially got to the end of it and was like, well, it was already a two-horse race, and now it is still a two-horse race. And. The thing that was so striking to me is like, it just made me realize, like, those of us who cover phones, we, we think about it as this like, big, teeming market full of lots of companies, and you have the big guys, and you have the challengers, and the actual, like, facts on the ground are that there are Apple and there is Samsung, and absolutely nobody else matters. And they come, and they go, and everybody gets really excited about OnePlus, and then nobody buys OnePlus phones, and we all move on with our lives. And it just, it's, it's

• 55:57David Pierce?

  also really incredible to me how much of everything that happens in the Android market just accrues to Samsung. Like, it has just so decimated the rest of that market, that anything that happens to anybody else somehow accrues to Samsung. And it was just really eye-opening to read that story for me.

• 56:12Nilay Patel?

  Yeah, it's fascinating. I mean, I like to blame carriers for this, right? Like, United States, like, a carrier has to certify your phone, they've got to prove it for the network, they get in between you. But even in other countries, where there's theoretically more competition, it all kind of just accrues to Samsung.

• 56:29David Pierce?

  And all of a sudden, it made me realize, like, Samsung has made a lot of noise with its mid-range phones over the last couple of years, and this story really sort of opened up why. And it's like, because Samsung realizes it's just going to beat everyone out of the market, as long as it has a phone at the same price point. And so it's just gonna have phones at every $10, from a billion-dollar foldable phone, all the way down to 50 bucks, and that'll be that.

• 56:52Nilay Patel?

  That will be that. Other little gadget stuff we should talk about, and there's a leak of the Pixel Watch. We're thinking it'll be next month at I O. It's a circle.

• 57:02Alex Cranz?

  It looks like the LG Watch, the really bad LG Watch from 2017.

• 57:08Nilay Patel?

  Yeah.

• 57:08Alex Cranz?

  I hope that's not true.

• 57:10Nilay Patel?

  I mean, I like it. It's not a very Google, like, that watch already had a very Google look to it.

• 57:14Alex Cranz?

  Yeah.

• 57:15Nilay Patel?

  This watch has a very Google look to it. I like that they've added this crown. Every time I see a crown on a smartwatch, I think back to when Apple announced the Apple Watch.

• 57:23Alex Cranz?

  They invented it, you know?

• 57:24Nilay Patel?

  We were told that the digital crown was the next great input method on par with the mouse and touchscreen.

• 57:31Alex Cranz?

  You don't believe it?

• 57:32David Pierce?

  You can twist it and press it.

• 57:34Alex Cranz?

  It's gonna change the world!

• 57:36Nilay Patel?

  Just go back and watch that sometime. Obviously, Apple Watch, they've rebooted it since it's very successful. People love it. I get it. But you go back in time and watch that and be like, oh, this is the definition of the words high here in supply. Like, you really believe that you invented the mouse again. I think we'll see this watch. You know, the big question for the Pixel Watch always, we've hearing rumors forever, is like, can they get the battery life and like, just general support that the Apple Watch has around it? They do have Fitbit now. We'll see, right? Like, it's been a long time coming for Android smartwatches.

• 58:12Alex Cranz?

  They've acquired enough stuff at this point that'll be kind of sad if they can't get it right. Or at least chase Apple's coattails better.

• 58:20David Pierce?

  Well, and I think they've realized that the thing that Apple took a long time to realize is like, it's tell me the time, it's do like, basic dumb assistant stuff, and it's health. Like, those seem to be the things that people want from their watches. And I feel like Google is at least as well positioned as Apple to actually successfully do some of those things. All the other crap, I don't care about. Like, every time I get an Apple Watch, I put a million apps on it and I never use them ever. I just wanted to do like, four things. And I feel like if I'm Google, and I had a, I had a long talk with a Google executive like, years ago now about this. And, and they were basically like, what, like, if you were gonna make a smartwatch, what would you do? And I was like, less. Like, much, much less. And I, I have no idea how this'll land, but

• 59:05David Pierce?

  just from like, if, if they're gonna do the simpler thing, which is kind of the move with Pixel in general, I could be into it. I don't know. Chris, what do you think? You're, you're into dumb smartwatches as much as I am, or at least once were.

• 59:18Speaker 05

  I once was a pebble person back in the day. But I've had the Apple Watch for a few years, obviously. I think, I mean, it sounds like a good recipe. But like you said, with phones before, the only thing that, that stands in their way is Samsung. Like Samsung's watches business does really well. And I'm not sure like, how big that market is of people who don't want a Samsung watch and want the Pixel so-called watch. We'll see. But yeah, I think if they go big on Fitbit stuff, that'll be a hit.

• 59:40David Pierce?

  Is the Galaxy Watch any good? I have not used it, ever.

• 59:43Speaker 05

  Apparently it is.

• 59:43David Pierce?

  People seem to like it. Yeah.

• 59:45Alex Cranz?

  No, the Galaxy Watch is like, really, really good. Yeah. Toria Song reviews all those watches and she's still like, this is the best Android watch you can get. It looks like a real watch for the most part. It's huge.

• 59:57Nilay Patel?

  See, this is the thing. This is the bar. Like, my watch looks like a watch and tells me the time. It's like, that's the bar.

• 1:00:03Alex Cranz?

  That's, you don't need a lot from your watch. I mean, I was just looking at all the apps on my watch while you're, while you were talking about all the apps we never use. Like, when was the last time you used the walkie talkie app?

• 1:00:12Nilay Patel?

  Oh, I use it every day. What are you talking, you're crazy.

• 1:00:14Alex Cranz?

  Only like when you want to inflict violence on family members.

• 1:00:18Nilay Patel?

  The second you have a child and then you spend all day in your house raising said child, the walkie talkie app starts to become like a key parenting tool. And there's literally nothing funnier than your wrist erupting with your wife going, code brown. That was like a hilarious part of the first two years of Max's life. All the time. Yeah, we use it all the time.

• 1:00:42David Pierce?

  I don't know. I feel like that's slightly less monstrous than the people who use the drop in features on like Alexa devices, but it's still pretty monstrous.

• 1:00:50Alex Cranz?

  I showed my mom how to use it and I had to turn it off because like nine o'clock in the morning, I just heard hello from my watch. And I was like, nope, nope, we're ending this. It's done.

• 1:01:00Nilay Patel?

  You gotta really limit it. I'm just saying, kids or pets? It's the, and you're like, you're co-parenting after a child or a pet, walkie talkie comes in handy. What I was gonna say is there's a new book called After Steve. It's by Tripp Mickle. He was at the Wall Street Journal and I think now he's at the Times. And I, it's coming out May 3rd, but I actually have a galley and a huge chunk of this book is Johnny Ive doing the watch and Apple's like journey from like fashion object to fitness object with the watch. This book is gonna make everybody mad. Like, everybody is gonna be mad, but it's great. And like, the report, I would say there's like very few sources for like Johnny Ive stood alone in his house thinking about the watch.

• 1:01:44Nilay Patel?

  You know what I mean?

• 1:01:45David Pierce?

  Yeah.

• 1:01:46Nilay Patel?

  Once you read this book, you're like, oh, they all talk to him. Um, uh, I don't know. That's true. I'm not going to burn trip sources. I'm just saying there's very few sources for it. Johnny Ive stood alone.

• 1:01:55David Pierce?

  Fair.

• 1:01:57Nilay Patel?

  And it is utterly fascinating. The story about the inside development of the watch that is all contained in this book. So.

• 1:02:03David Pierce?

  I wrote a story when I first joined Wired after I left The Verge. The first big thing I wrote for Wired was like, it was called The Secret History of the Apple Watch. And I wrote, I wrote the, the beginning of one of the paragraphs was Apple decided to build a watch and only then set out to figure out what it was for. And Apple was mad at me about that line for like five years.

• 1:02:22Nilay Patel?

  Yeah.

• 1:02:24David Pierce?

  Cause it's the opposite of what they want to tell you to do, right? But they were just like, somebody like Johnny rolled in one day and was like, we're gonna make a watch. And they were like, what's it gonna do? And he's like, I don't know.

• 1:02:33Speaker 05

  I don't know, but it's gonna be 24 karat gold.

• 1:02:38Nilay Patel?

  I, again, I can't, I cannot stress enough, if you're a Verge house listener, you will, you will love this. It will make you mad. No matter what side of this whole thing you're on. If you're an Apple fan, if you're not an Apple fan, you, you love Johnny Ive, you hate Johnny Ive. It will make you mad.

• 1:02:52David Pierce?

  Trip's a friend. We're gonna have to find some way to get him to talk to us about the book.

• 1:02:55Nilay Patel?

  Oh, we should get him to come on the show.

• 1:02:57David Pierce?

  Yeah, it'll be fun.

• 1:02:57Nilay Patel?

  The book is great. It is just, when you read, like, I'm curious for your take when you read it, David, like, cause if you're a reporter and editor and you read a book like this, like you cannot help but think about how it was sourced.

• 1:03:07David Pierce?

  Oh, for sure.

• 1:03:08Nilay Patel?

  And there's a lot of moments in this book where like, was he in the room? Uh, it's great. I cannot recommend this book enough. I had, I read it basically in like one and a half sittings. But like, it's all about the inside of the watch. And like, the core problem is what do people want from a watch? They want fitness stuff and they want to tell the time. I highly, if you have a smartwatch and you get like, live a two factor life, like any corporation in America, or like you should.

• 1:03:32David Pierce?

  Yes.

• 1:03:32Nilay Patel?

  Yeah. Morally, putting your two factor app on your watch is great. It's a little bit like you're a secret agent, but also the most tedious corporate bullshit you've ever done in your life. Anyhow, more quick gadget stuff. Google Assistant was supposed to roll out to the Galaxy Watch 4. That is not happening. We reviewed the Playdate, which is a super cool little panic with a handle.

• 1:03:52Alex Cranz?

  It's so tiny.

• 1:03:53Nilay Patel?

  Game. That thing is, it seems awesome. It's very hard to get. Andrew Webster loved it with his review.

• 1:03:58David Pierce?

  I'm so excited that it's good. So excited.

• 1:04:01Alex Cranz?

  Yeah. If you didn't order it, you have to wait a year.

• 1:04:03Nilay Patel?

  The photos from Viren are amazing.

• 1:04:05Alex Cranz?

  The photos are incredible.

• 1:04:07Nilay Patel?

  Intense Neuprin reference in the decor of this little yellow different. Love that. Great story. There are now camera batteries for weird Sony cameras to charge your USB C. That's a big deal. I just want to call that out. That's like Verge chess level stuff.

• 1:04:18Alex Cranz?

  That's a big deal for me personally, and it's really upsetting that it took this long.

• 1:04:22Nilay Patel?

  All right, we're cruising over. We've got to take a break. We're going to come back and finish this lightning round. We'll be right back.

• 1:04:30Speaker 04

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• 1:05:14Speaker 06

  Your heart can tell you a lot about your health. Apple Watch Series 12 measures your heart rate every five seconds with the most accurate heart rate sensing in wearable. So your vitals app, now with heart rate variability, can tell you when something is off. And your readiness score can let you know when to rest and when to push. Hear the story in every heartbeat with Apple Watch Series 12. The features described are for wellness purposes only and not for medical use. iPhone 11 or later required. Based on Apple conducted study of heart rate accuracy, August 2026. Visit apple.com/aplewatchseries12.

• 1:05:45Nilay Patel?

  Okay, we're back. Chris Welch is still here. This lightning round continues. This is not going to be lightning round. I don't know. I don't know why I said this later on. The next one is Elon Musk lays out funding for Twitter takeover. David, what's going on with our boy, little Lonnie?

• 1:05:57David Pierce?

  I don't know. So the big question about Elon Musk's takeover of Twitter has been, what the hell is going on?

• 1:06:06David Pierce?

  The other question is, does he actually have the money to do this? Right? He wants to offer 43 billion and change. And as we know about Elon Musk, dude does not have a lot of cash on hand, generally speaking. He like lives in a weird tiny trailer and all his money is tied up in Tesla stock. And he's very excited about this fact. So the question has been like, if in fact, he wants to do this, how is he going to do it? And so what happened on Thursday was he, I think amended an existing filing or did a new filing with the SEC, paperwork with the SEC, basically explaining how he's going to come up with, I think, 46 and a half billion dollars that would let him finance his purchase of Twitter.

• 1:06:47David Pierce?

  He also said that Twitter has not responded to him and is sort of, he's kind of angsty about the whole thing. But basically, the point is that I think Morgan Stanley has agreed to loan him 25.5 billion dollars and Elon says he's going to spend 21 billion dollars of his own money. Again, we don't know exactly where that's coming from or how he's going to get it or what happens to Tesla's stock if he sells another 21 billion dollars worth of it. But the theory now is at least he, you know, funding secured, right? He like has the money to buy Twitter.

• 1:07:18Alex Cranz?

  What if he secretly listened to his friend Peter and has just like a huge Roth IRA somewhere? Just enormous Roth IRA.

• 1:07:29Nilay Patel?

  So what Alex is making reference to is Peter Thiel started a Roth IRA when he started PayPal.

• 1:07:33Alex Cranz?

  Yeah.

• 1:07:33Nilay Patel?

  And put all of his PayPal stock in a Roth IRA.

• 1:07:36Alex Cranz?

  And he's so.

• 1:07:37Nilay Patel?

  Which accrues tax free.

• 1:07:39Alex Cranz?

  For years.

• 1:07:40Nilay Patel?

  Very good.

• 1:07:40Alex Cranz?

  Yeah. It's well paid. Billions.

• 1:07:42Nilay Patel?

  You know, I know, I know people are outraged about the story billionaires pay their taxes. If you have the foresight to be like, oh, PayPal is going to be a big deal. Let me put it in my Roth IRA. Like, I don't know, man. Like you're betting on yourself in a, in a fairly serious way at that point.

• 1:07:57Alex Cranz?

  It's incredible.

• 1:07:58Nilay Patel?

  It's still very funny. No, billionaires pay their taxes. I'm sorry. I don't mean like, but it's still like, good on you.

• 1:08:04David Pierce?

  Yeah.

• 1:08:05Nilay Patel?

  But you have to be like.

• 1:08:06David Pierce?

  Hate the player, but also hate the game.

• 1:08:09Nilay Patel?

  But it's like, oh, but the player was actually quite clever here. But the game is rigged.

• 1:08:12David Pierce?

  Right.

• 1:08:13Nilay Patel?

  It would be amazing if you're like, I have a $21 billion

• 1:08:17Alex Cranz?

  They're just incredible.

• 1:08:18Nilay Patel?

  Anyhow, Twitter has the poison pill. It is actually very funny to see all the tech people who didn't realize poison pills are a thing. Speaking of books, everyone should read Barbarians at the Gate, which is like one of the great 1980s corporate like novel books ever written. It's about the takeover of RJ and Nabisco. It's like nonfiction, but it's written like a novel. It's like this inspired many things about our culture that it's just like lurking in the background. This is just book talk on The Verge now. I've got a number of ideas for books for you to read.

• 1:08:45David Pierce?

  I don't know, there was so much homework on The Verge.

• 1:08:49David Pierce?

  I don't know how to feel about this.

• 1:08:50Alex Cranz?

  Signed every week.

• 1:08:51David Pierce?

  But what I can't figure out, I come to the end of this and it's like, okay. He continues to do things that make it seem like he genuinely wants to buy Twitter and is capable of buying Twitter. And this is not all like a hilarious drugs joke. But I get to the end of this and I'm like, is this? I don't know, like with, with Elon Musk, as with everything, I have no idea how seriously to take anything that he does or says. Like this seems serious, but I have no idea.

• 1:09:14Alex Cranz?

  I feel like he didn't actually answer the big question, which is where are the billions coming from that you're going to do this? Are you going to tank Tesla's stock and sell a bunch to do this? Because like all he's done is said, okay, instead of tanking Tesla's stock by selling off 40 something billion dollars of stock, I'm now going to just do 21 billion. Like, he hasn't changed. Nothing's changed.

• 1:09:37Nilay Patel?

  Have you ever tweeted about Tesla in your life?

• 1:09:39Alex Cranz?

  Yes, that's the best part.

• 1:09:40Nilay Patel?

  They'll be fine. They'll just keep, keep buying the stock. They're like, oh, the stock's for sale. We got to support Elon.

• 1:09:45Alex Cranz?

  Going to be there for our bro.

• 1:09:48Nilay Patel?

  He doesn't exist in like the normal market dynamics.

• 1:09:51Alex Cranz?

  Yeah, that's true.

• 1:09:52Nilay Patel?

  And I think, I think he's counting on that. I just think the Twitter board appears to be somewhat at odds with itself. Notably, Jack Dorsey, just like liking and replying to tweets that Twitter shouldn't be public.

• 1:10:05David Pierce?

  Yeah.

• 1:10:06Nilay Patel?

  Which is very confusing.

• 1:10:07David Pierce?

  And like on lighting the board on fire every chance he gets.

• 1:10:10Nilay Patel?

  Yeah, he's like, the board has always been the problem. So we'll see, like I said, or like David said, the core question here is what's going on?

• 1:10:18Alex Cranz?

  What's happening?

• 1:10:19Nilay Patel?

  This is hap- so it's still happening, you say? We are gonna bring back our newsletter this week in Elon, written by Liz Lopato.

• 1:10:26David Pierce?

  I have a story from Liz on what is going on here, waiting for me to edit when we're done verge casting here. So by the time people hear it, Liz will have some good thoughts on the site. Because the other thing that's going on is there are, as you guys have talked about on the show, there are, in theory and increasingly in reality, other people who might be interested in buying Twitter, who have very different ideas about what they could do with Twitter. Like Elon just wants to buy it because like he thinks it's hilarious and something, something free speech. But there are others who are going to make like a much more real case that there's a lot of money to be made from Twitter that it is not currently making. So like, it's all these different parties bidding against each other for something that they don't want for the same reasons. Like, this is gonna get messier before it shakes out, I think, one way or another.

• 1:11:09Nilay Patel?

  What's fascinating about all this is that Twitter itself rarely makes a case for its own existence. And they've got a new CEO who's been tasked explicitly with like growing it by 100 million people. We just came off the whole streaming conversation. Like, that's a hard 100 million people to find.

• 1:11:24David Pierce?

  Yeah, they're not all just password chairs.

• 1:11:28Nilay Patel?

  It would just be nice if Twitter started making a positive case for what it might do to grow, as opposed to what it's doing now, which is like, like a deer in headlights kind of situation. We'll see. Other last few things before we gotta get out of here. Delta confirmed exploratory Starlink tests, which is really fascinating because they're already getting satellite internet from VSAT, which is actually quite fast now. And Starlink is not compared to that. Like, you can stream movies on VSAT.

• 1:11:57Alex Cranz?

  But they're gonna get the Elon bump.

• 1:11:58Nilay Patel?

  You get the Elon bump. But Starlink is like about, you know, 100 down. They have a faster tier now, which is maybe 500 down, but you gotta support a whole plane with that. So I'm just curious how that's gonna work.

• 1:12:08Alex Cranz?

  Also, at speed, like, Starlink is like scared of trees sometimes. It's like, how is it gonna handle?

• 1:12:14Nilay Patel?

  Well, there's no tree, no trees in the sky, Alex.

• 1:12:18Alex Cranz?

  But you're going so fast!

• 1:12:22Nilay Patel?

  So see, they've started the test. I think it's fascinating. Of all the places starting could compete is like GoGo and VSAT. Like, yeah, go get them.

• 1:12:30Alex Cranz?

  Yeah.

• 1:12:30David Pierce?

  Well, I would also think if I'm, if I'm one of the airlines, like, I'm going to be so excited to, you know, have, have talks, quote unquote, with anyone who could maybe drive the price down for some of these other companies. Like, they're going to be so amped about competition in this space where there has historically been like less than none.

• 1:12:48Nilay Patel?

  Well, so there are two companies. There's GoGo and VSAT.

• 1:12:53Nilay Patel?

  What happens in America, David? When there's two companies, we'd like to get them down to one. That's, that's really how we like to do it.

• 1:12:59David Pierce?

  Keeps things easy.

• 1:13:00Nilay Patel?

  Tesla had earnings. They earned over $3 billion in profit, even with its various challenges with supply chain in China, all this stuff. So Elon's doing fine.

• 1:13:06David Pierce?

  It's only 18 billion left.

• 1:13:08Nilay Patel?

  Just got there. Net neutrality, actually, the law in California now went to court. The court said, no, you can have the law. This was actually very funny, just like legal procedure stuff. The FCC, under Ajit Pai, Donald Trump, they said net neutrality is no longer the law. And also, we don't think the FCC should have any authority to pass these laws ever. So we no longer have the authority to do net neutrality or not. We solved it. And then the states said, well, we have net neutrality now. Then the carrier said, no, that's traditionally an authority left to the FCC. And all they had to say was, no, the FCC, they said they don't want it anymore. And that's how they won. This is true.

• 1:13:47David Pierce?

  This is the Spider-Man meme where they're all pointing at each other.

• 1:13:49Nilay Patel?

  1,000% too clever by half. Like, they're like, no, if you just hadn't done this other part, you would have actually been able to preempt this, but you did the other part because you were greedy. And so now, Cal, net neutrality is a law of California. They could so appeal to Supreme Court, who knows if they will. But the fact that it's a law in California, it's a law in New York State. There's always that meme of like, nothing bad happened when net neutrality went away, except for the two states where it still exists and all the companies have to deal with it. Yeah, that's my personal thing. All right, that's it. We have all these things about AMP, but I don't want to talk about AMP.

• 1:14:21Nilay Patel?

  I don't, I just don't want to talk about AMP. I've done, I've done enough today. I will tell you that Instagram is begging you to stop reposting TikToks to reels, which is. A very good first David Pierce headline on our website.

• 1:14:34David Pierce?

  Thank you. I try. Adam Misery, he's just, he just wants you to make things. That's all he wants in the whole world.

• 1:14:39Nilay Patel?

  But only for him.

• 1:14:40David Pierce?

  Make them for him. Right. Send them to him directly.

• 1:14:42Nilay Patel?

  Some things to call out. We did the Decoder episode with Alan Yang from Foxconn. I will tell you this. I've never gotten so many emails from a podcast episode in my life. And same for Josh Jezza. The number of people in Wisconsin who still want to talk about that project. And they are just emailing us being like, thank you for pointing out that this is still nuts. But go listen to that Decoder.

• 1:15:04David Pierce?

  It's a good episode.

• 1:15:05Nilay Patel?

  The AI 8K 5G conversation truly just bonkers. No idea what that means. Still don't know why he reached out. He promises he's gonna write another book with answers in it. I don't know if he's gonna do that, but when he does, he promised he would come back. So we will see. Yeah, it's a lot.

• 1:15:22David Pierce?

  Glutton for punishment.

• 1:15:23Nilay Patel?

  McKenna Kelly has a great story on a firm that has like an influencer network that promised Republican candidates that could go viral. Bad company. Same stuff as every bad company. They didn't pay people, scream to people. Great story, though. Great reporting from McKenna. Justine Kalma has a great story about the growth of warehouses in inland California. Just one of those like, this is how the world works now. You need warehouses everywhere for all this delivery. Very cool. And then we have a huge feature from Amanda Chicago Lewis. It's basically just a heist story, like a caper story about people who were hustling their way into PPE contracts during the early pandemic. Just like a great read. Like, you got some time? You want a great yarn? This is a great story.

• 1:16:07Nilay Patel?

  Okay, that's it. That's the Vergecast. David Pierce is here, everybody.

• 1:16:10David Pierce?

  Glad to be here.

• 1:16:11Nilay Patel?

  We went over, as always. We gotta bring this down. That's your job.

• 1:16:16David Pierce?

  I have to rein in the Vergecast somehow. Wish me luck, everybody.

• 1:16:19Alex Cranz?

  Gonna shave like 40 minutes off.

• 1:16:20Nilay Patel?

  Chris, thank you so much, buddy.

• 1:16:22Speaker 05

  Thank you all. Have a good weekend, everybody. And sorry, Patrick.

• 1:16:26Nilay Patel?

  You can tweet at us. David is at Pierce, Alex is Alex H. Cranz, Chris is at Chris Welch, I'm at Reckless Decoder. Next week is the CEO of UiPath, a company that makes computers that use your computer.

• 1:16:40Alex Cranz?

  Oh.

• 1:16:40Nilay Patel?

  It's fascinating. It's like multi-billion dollar business.

• 1:16:44Alex Cranz?

  A virus?

• 1:16:45Nilay Patel?

  No, it's robotic process automation, my personal obsession. I'm so excited about this episode.

• 1:16:50David Pierce?

  Do you talk about domes at all?

• 1:16:51Nilay Patel?

  There are no domes. I had to start asking all the Decoder guests about domes. And then we'll be back next week with more Vergecast. That's it. I don't know.

• 1:17:20Speaker 07

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• 1:18:06Speaker 08

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