Facebook's privacy pivot and the streaming wars

Breaking down Mark Zuckerberg’s letter on Facebook about its privacy-focused future. The Verge's Nilay Patel, Dieter Bohn, Julia Alexander, Casey Newton, and Paul Miller discuss Facebooks new pivot to privacy, the next move for HBO after the AT&T restructure, and YouTube's bad actors. Stories from this episode: The president just called the CEO of Apple ‘Tim Apple’Read Mark Zuckerberg's letter on Facebook's privacy-focused future …Mark Zuckerberg promises a newer, more private Facebook Facebook knows Facebook isn't the futureFacebook's pivot to privacy has huge implications — if it's realThe messy details behind Facebook’s messaging plansHBO CEO Richard Plepler is leaving the company amid AT&T …AT&T's new HBO chief criticizes Netflix, says it 'doesn't have a brand …AT&T just made its first huge changes to HBO and the rest of …Game of Thrones' final season trailer prepares us for the biggest fight …Disney is ending its vault program, giving Disney+ a huge boost in the streaming warsHow baseball’s tech team built the future of televisionDying social robot Jibo goes out with a song and a danceYouTube is demonetizing all videos about Momo YouTube's family vloggers worry about future amid comments …YouTube terminates more than 400 channels following controversy …YouTube is 'aggressively approaching' solution to child exploitation ...voxmedia.com/podsurvey Thanks to Microsoft Azure for sponsoring this episode. Get started with a free account and 12 months of popular free services at Azure.com/trial today. 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, Casey Newton joins us to talk about everything that's going on Facebook, including a weird switch to privacy. Julia Alexander comes on to talk about the streaming wars and a little bit of YouTube. Plus, Paul does his thing. This on The Vergecast.

• 0:12Speaker 01

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• 1:28Nilay Patel?

  Hello and welcome to The Vergecast, the flagship podcast of Vox Media, the whole thing.

• 1:33Speaker 03

  Ooh.

• 1:34Nilay Patel?

  I feel like we gotta go bold. We're about to go to South by Southwest. We're about to see all of the other Vox Media podcasts. And we gotta put a, plant a flag, the whole thing.

• 1:41Speaker 03

  If you're in Austin this weekend, I believe our podcast is on Sunday, is that correct?

• 1:46Nilay Patel?

  It is on Sunday.

• 1:46Speaker 03

  It's on Sunday. I want to see a line around the block, so please come.

• 1:50Nilay Patel?

  Yeah, it'll be fun. I think it'll be good. Anyway, I'm Neelai. I'm your friend. I've foolishly put in charge of this operation. Dieter Bone is here.

• 1:58Speaker 03

  I'm the one angrily demanding you get in line.

• 2:00Nilay Patel?

  Yeah. Paul, hi, Paul. Hello. And we're joined, Casey, I think this is your 45th week in a row. Casey Newton is here because Facebook won't stop it.

• 2:09Speaker 03

  And it's nice to be here. Thanks for having me back, Eli.

• 2:11Nilay Patel?

  I love you, Casey. And Julia Alexander is here because YouTube has begun once again.

• 2:16Speaker 04

  Yeah, exactly.

• 2:17Nilay Patel?

  It's just how it goes. Hi, Julia. So a lot going on. Before we start, I've been asked by the powers that be to make you take a survey. So please go to voxmedia.com/podsurvey and then pick whatever answers that you think benefit us the most. I have not actually looked at the survey. I've not clicked this link. Just go to voxmedia.com/podsurvey and then try to just like tilt that thing in our favor. If you could do that for me, that would be great. Also, be honest about the other shows and say you like them. But, you know, one tick biased in our favor would be great. Okay, can we start with the most important news of the week? The single most important thing that happened this week. The most viral tech news that has ever occurred blew up our website, brought the industry to halt. It is that Donald Trump just confidently referred to Tim Cook as Tim Apple.

• 3:01Speaker 05

  It's so good.

• 3:03Nilay Patel?

  So the backstory here is that we have a great policy reporter named Mechanic Kelly. And she, her, her poor job is to watch the goings on of the government. So she was just like watching a stream of the American Workforce Policy Advisory Board, which is like a bunch of CEOs and the president. Mostly the stream is like everyone complimenting each other. Like, no decisions are made in this room, as far as I can tell. No policy happens. No one is advised. No workforce is developed.

• 3:32Speaker 05

  That's true of all, all meetings.

• 3:34Nilay Patel?

  Yeah, that's true. Meetings are bad. This meeting in particular is like theater. Anyway, so she's watching it because that's her job. And she notices that Trump just confidently refers to Tim Cook as Tim Apple. And then she like puts it on the side and it like blew up and went everywhere. I'm just gonna play this for you because it is so deeply, deeply funny.

• 3:52Speaker 06

  Put a big investment in our country. We appreciate it very much, Tim Apple.

• 3:55Speaker 05

  All right. I feel like as the resident Trump apologist, here's my, here's my hot-

• 4:00Nilay Patel?

  That's what you're going with?

• 4:01Speaker 03

  Paul, if you were gonna say what he meant, what he was trying to do was, "Thank you, Tim, comma, Apple is great."

• 4:07Speaker 05

  Right?

• 4:08Nilay Patel?

  No.

• 4:08Speaker 05

  It's an invisible comma. Did you see the State of the Union where he would like talk about one topic and then he would start talking about the next topic and it felt like there's an audio edit?

• 4:18Nilay Patel?

  A, I don't, I just, I don't think you should call yourself a Trump apologist. Just stop doing that.

• 4:23Speaker 05

  It's like resident relative Trump-

• 4:26Nilay Patel?

  Relative to me.

• 4:27Speaker 05

  Specific show.

• 4:28Nilay Patel?

  Right. Yeah. Okay, fine.

• 4:31Nilay Patel?

  Still not a great self-identification. Two, let's say I go with your, uh, your theory. How do you explain him previously referring to the CEO of Lockheed as a Marilyn Lockheed? I mean, that's a mistake anybody can make. The only person for whom this makes sense is Michael Dell.

• 4:50Speaker 03

  Also Donald Trump.

• 4:52Nilay Patel?

  Also Donald Trump. Yeah.

• 4:53Speaker 03

  He thinks all companies are named after the person in charge of them.

• 4:57Nilay Patel?

  Anyway, Tim Cook changed his Twitter handle to Tim Apple Logo, which is funny. Like, it is very funny, but...

• 5:04Speaker 07

  It's funny because Tim Cook was not previously known to have a sense of humor about himself.

• 5:12Speaker 07

  Like, there has been no previous documented instance of Tim Cook, like, uttering a self-deprecating joke.

• 5:19Nilay Patel?

  That's true.

• 5:19Speaker 03

  My favorite part about Tim Cook changing his Twitter handle is he used, you know, whatever the code is to display the Apple logo, like, the canonical, like, actual Apple logo, which only works, basically, on, like, Apple devices and software. So, literally, everybody else just saw Apple weird symbol. Uh, maybe it was a box. Uh, I've seen people that had, like, like, this, like, weird, like, Maori fishhook thing.

• 5:47Nilay Patel?

  That's great.

• 5:48Speaker 03

  It's just, it's, he's Tim Box. He's, he's, "Tim, Unicode standards are hard. It's the best."

• 5:53Nilay Patel?

  It's, it's Apple, Apple Unicode lock-in, but for sub-tweets of the president. It's great. All right. It was very entertaining. I encourage you to go, literally, whenever you need to be cheered up, just look at Tim Cook's face when the president's like, "Thank you very much, Tim Apple." And he's just like, "I'm, that's..." There's a name card in front of him. He's sitting next to the president.

• 6:14Speaker 07

  Also, by the way, like, many years from now, like, decades from now, when Tim Cook passes away, like, the first line of his obituary will be like, "Tim Cook, who is so closely identified with his company that the President of the United States once referred to him as Tim Apple."

• 6:29Speaker 03

  Hasn't every other tech CEO, except for like, I don't know, Meg Whitman or somebody like bailed on this panel? Why is he still showing up?

• 6:37Nilay Patel?

  Uh, cuz he has to import phones from China and cellphones to China. Which actually leads me right into Facebook because there's a lot going on here and China is actually kind of at the, at the heart of one of the big pieces here. So Casey, or friend Mark, the Zuckster, he emerged from his cocoon to issue a proclamation.

• 6:59Speaker 03

  Business Insider has a great story. He literally has like a secure enclave surrounded by plainclothes policemen.

• 7:04Speaker 07

  Yeah, for, for good reason. I mean, like he, he faces actual threats.

• 7:09Nilay Patel?

  Yeah, no, please, by all means, escape the conference room. I mean, I wish our conference rooms had an escape hatch. Speaking of being speaking bad. Anyway, Zuckerberg put out a letter. Basically, everyone in, in, in tech and media has interpreted like in thousands of different ways, but he basically says Facebook is gonna pivot to become a privacy-focused social network. Walk me through this letter.

• 7:31Speaker 07

  So, uh, this letter is a real Rorschach test for how you feel about Facebook, like most things Mark Zuckerberg says these days. Um, you know, the, the post itself is 3,200 words and it has a couple of major components to it. One is, uh, he sort of confirms earlier reporting from the New York Times that they're gonna unify the backend of, uh, the three big messaging services that Facebook runs. So that's Messenger and Instagram Direct and WhatsApp. Uh, but that it's going to encrypt them all end-to-end the way that WhatsApp is now. So it will bring, uh, end-to-end encryption to services that are used collectively by billions of people. So that's really big. Uh, the second big thing is a sort of, um, embrace of ephemeral messaging.

• 8:14Speaker 07

  So in the future, your messages on those services will likely self-destruct by default after a certain amount of time. You'll be able to opt out of that, but Zuckerberg has sort of seen the light around, uh, you know, the, the problems with messages coming back to haunt you. The third big thing is that because they are going to do this end-to-end encryption, they know- Know that governments are going to hate them for it. Around the world, countries are already asking big tech platforms like Facebook to store data collected about their citizens locally within the country. And Facebook is basically saying, if you have a bad record on human rights, we are going to say no to that.

• 8:58Speaker 07

  And we are willing to be banned. And we're probably going to give up on getting into China anytime soon. So that was kind of the suite of announcements. And now everyone's tearing it apart, trying to decide how seriously to take Mark Zuckerberg and what it's actually going to mean for Facebook as a company.

• 9:15Nilay Patel?

  So let's, let's kind of go in reverse order. Cause I feel like the China one is sort of the easiest to grapple with. They're not there, right? Like, they get to just say, we're not going to do the thing we're already not doing. Aren't you proud of us? And that's great. And it's a great shot at Apple because Apple not only built iCloud data centers in China, it's turned over the encryption keys because that's the requirement of the Chinese government. So that Apple has been taking shot after shot at Facebook, deservedly so in many cases. And now Facebook gets to take, I mean, this is like a huge sub tweet of Apple, basically. Whenever Tim Cook says something on privacy, well, Zuckerberg can say, well, I didn't put my, I didn't put my user data in China because I don't trust them. It's like, and that, and then they can stare at each other and he can be like, well, the president called me Tim Apple.

• 10:00Nilay Patel?

  What does he call you? So, I mean, that's like, that one just seems like the easiest one to contend with, right?

• 10:06Speaker 07

  I don't think there's that much more to say other than think about the fact that Mark Zuckerberg learned Mandarin so that he could open up Facebook in China, right? This was not a casual weekend project for him. He's invested a lot of time there. You know, they had essentially a lobbyist in there. Facebook still sells billions of dollars of ads inside China just from Chinese companies that want to reach, you know, other consumers around the world. But clearly they gave up. So that was one big change that was announced this week.

• 10:35Nilay Patel?

  So then there's the other two, which are where, and I think the way he phrased this, which is if you're like me and you love argument metaphors, it's a great metaphor. He said, we've built the town square and now we're going to build a digital living room. And we know that there's some things you want to do out in public. That's the news feed, that's share, share, share all the time. But then there's more intimate stuff you want to do with smaller groups. So you want to do in particular messaging. And then we're going to build a suite of services on top of our new unified messaging architecture, commerce, sharing, all this other stuff, payments. That to me seems much bigger. Like it's much bigger in scope. It's a new product initiative for them. They're deep in blockchain. Right? Are they just trying to build WeChat?

• 11:19Speaker 07

  Yeah, I think that's a big part of it. WeChat, of course, the giant Chinese app that essentially doubles as the internet for most Chinese citizens. And of course, it benefits from, you know, working hand in glove with the authoritarian Chinese government, you know, which is not something that Facebook is going to be able to do in America. But it does represent a big new business opportunity for Facebook if you believe that they can figure out payments and commerce. I reported last year, Facebook is building a standalone Instagram shopping app. I think we will probably see that, you know, sooner rather than later. And they have a giant blockchain division that is developing a cryptocurrency that people will be able to use to conduct transactions on WhatsApp and these other apps.

• 12:03Speaker 07

  So, you know, so far as you believe all those things are real, and I do, then sure, there's a new business opportunity for Facebook. I think the question is, do you believe that the news feed and all of the other core Facebook products are going to endure and be as popular and become more popular over time? Or do you think that we've probably already hit peak news feed, for example, and all that stuff is going to slowly unwind? And then Facebook is going to have to find a second act?

• 12:34Nilay Patel?

  Yeah, so that I think by the time this podcast will be out, a piece that Heim Gartenberg is working on will be up, where he just sort of looked at every public letter, statement, interview Mark Zuckerberg has given about Facebook for the past five years or so.

• 12:49Speaker 07

  Yeah.

• 12:50Nilay Patel?

  And you just look at the list and it's like connecting people, connecting people, sharing is better, connecting people, connecting people. And then now today, it's also privacy is good.

• 12:59Speaker 07

  Four years ago, it was the news feed is gonna be all video. Two years ago, it was Facebook is going to build social infrastructure, which I honestly, I do not think we clarified in the two years since he published that post what social infrastructure actually was. Neither of those things really came true. That's not to say that this won't come true, but I do think it is important to note that Facebook's mouth runs far ahead of reality, particularly when it wants to do these 30,000-foot views of all human behavior.

• 13:30Speaker 03

  Yeah, well, so this, okay, one, saying it now, disclosure, my wife works for Oculus, which is a division of Facebook, but this is the central question for me here is when people talk about huge Facebook pivots, one, is this a pivot or is this just a new thing they're doing on top of what they're currently doing, whatever, but two, like, how, how much can we actually believe that they're gonna turn this into a real thing? Because the canonical example of Facebook said they're gonna do a thing, and then they did a thing, and they were wildly successful, was when they realized they had to, like, actually make a mobile app and do, and like, pay attention to mobile and make mobile core to something everybody on their team does instead of, you know, a team off in the basement in some building somewhere. But at the same time, I think you're right, that they have also made many, many, many

• 14:12Speaker 03

  other grand pronouncements that didn't really go anywhere, right? And they've started many apps and like, many different variations of like, video sections and whatever, that, meh. And so, like, on a scale of, well, let's see what they do and watch them not be successful at this, to, oh, wait, no, this is potentially the future of the company, I guess, it, this, my gut reaction is like, this is more real than I think the doubters would wanna give it credit for.

• 14:44Speaker 07

  Yeah.

• 14:45Speaker 03

  But I don't know why I think that, other than like, it seems obvious that they have to do something because everybody's been so mad at them for the past three years.

• 14:51Speaker 07

  So I, yesterday, I talked with a former Facebooker who said that this version of Mark Zuckerberg, which is the version of Mark with his back against the wall, is the best version of him, and that this person was really excited because they felt like he had maybe grown a little Fat and happy. And then after the 2016 election, kind of had the holy heck moment of, okay, we've really got to fix this company. And that's going to mean going out and building an entire new set of products and services that have a different business model. So, you know, I think there is some excitement externally among ex-Facebook people that this could be a really positive turning point for the company. What's interesting is that

• 15:34Speaker 07

  I'm told that a lot of people inside Facebook think that I, in particular, have overreacted to this set of announcements and that in reality, it's just kind of like an unveiling of a product roadmap of kind of like, hey, we're going to build some things and here's what they're going to be like. And there's really not much more to it than that.

• 15:51Nilay Patel?

  So my read on it is, I think, more there. Casey, I don't think you're overreacting in the sense that he's laying out the next thing he's going to be focused on, which sort of necessarily means the news feed, the targeted ads business, the stuff that just keeps getting them in trouble will sort of necessarily take less of his attention. Right? So that's a business. It's fine. You know, we know that it's kind of like peaked in terms of like, the number of people in the world. You need more human beings in the world to use Facebook for that business to meaningfully grow. That doesn't seem like it's going to happen. So it's hit this point where they can't put more ads in the feed. That'll just bother everybody. They kind of hit that point. They're not making more humans at the scale they need to like, show investors. They got to grow a new business.

• 16:36Nilay Patel?

  Great. So this is the one they're going to do. Where I do think the criticism is warranted is, one, this is just a repackaging of a bunch of stuff they're already doing. Right? It's most basic level. This is a bunch of products they already have. They're saying we're going to tie them together at a moment where both the United States government and the European government are seriously considering about tearing Facebook apart. So McKenna also wrote a piece today that's like, Richard Blumenthal basically put out a statement in his center. He said, Mark Zuckerberg is antagonizing every antitrust regulator in the world. Right, like, the announcement about the technical infrastructure being tied together of Instagram, WhatsApp, Messenger, came out in The Times, and literally, governments

• 17:18Nilay Patel?

  around the world started saying, "Wait, don't do that, because we might still pull you apart." So then you've got this, like, "Great, we've gotta do it for privacy," right? So there's this idea that this is just a naked attempt to repackage a thing they were already gonna do in a way that sounds more appealing. And then I think the third, sort of like, overreaction thing is, they haven't rolled out, or proven, that anybody even wants, this suite of additional capabilities on top of their messaging service. Right? And WeChat's very powerful, and, you know, I think we just went through this entire conversation around, "Why are iPhone sales in China down? Because everyone just uses WeChat, so you can just get a cooler phone for less money." Like, I think Facebook sees that ambition. They don't own any of these underlying operating systems.

• 18:03Nilay Patel?

  So of course they want everybody to use their app as the main interface to the world, because then they get to abstract away Apple, right? They get to abstract away Google. We both are their rivals, in many cases, and I think in Apple's case now, like, their bitter-hated enemy. So I just, I see it as like, they've gotta build a new business, they're under this big regulatory threat, they see it coming, and they're wrapping up this, like, existing business plan in the facade of privacy, just to say, "Well, you're not, this is what we have to do to preserve privacy on the platform." And maybe I'm just more cynical, but I don't think Facebook is doing this out of, like, the purity of motivation. I think they're, they're taking a bunch of stuff they were already gonna do, like China,

• 18:47Nilay Patel?

  and saying, "You know what? Why don't you give us credit for all this?"

• 18:50Speaker 07

  I, I think that's fair. I actually think that's exactly the right level of cynical to be, because, like, I also see takes floating through my feed, it's like, "Mark Zuckerberg has never spoken a true word in his entire life, and Facebook is a criminal operation, and, you know, this entire blog post was, like, you know, ninth-dimensional wizard chest designed to distract us all from the real truth, which is that the earth is flat," right? Like, so- There's just kind of a lot of that floating around. I agree with your take, but I want to point out the risk there, right? So, you know, one of my personal beliefs is that any company motto will only ever be used against you. And so you saw this with "Don't be evil" with Google, you saw this with "Move fast and break things" with Facebook. I think the pivot to privacy is about to become the new "Move fast and break things."

• 19:34Speaker 07

  For like, look at how many privacy scandals Facebook had in the past year. Let's assume they have half that many in the next 12 months, right?

• 19:41Speaker 05

  So 5,000 privacy scandals.

• 19:43Speaker 07

  Right, yeah.

• 19:44Speaker 05

  There was one today.

• 19:45Speaker 07

  Yes, there was literally one today. There was a vulnerability discovered in Facebook Messenger. That is a true thing. Every time that happens, from now on, Twitter and the rest of the world is going to light up with, "Hey, remember the pivot to privacy, lol." And I think that just speaks to the enormous, like, reputation risk that they're taking on by wrapping up all of these, you know, cynical business decisions in the clothing of privacy, because it's going to trigger an even bigger privacy backlash against them, right? Like, their mouth just wrote a huge check, and if they can't cash it, they've just inherited a world of problems. So the reason that I am inclined to be less cynical is because it just shocks me that they would take on that much risk, but again, maybe I'm being naive.

• 20:28Speaker 04

  Can I just say, this is my take on Facebook as someone who, like, doesn't use it, other than to keep up with my grandmother, like, I-

• 20:35Speaker 05

  I see you on that, Graham.

• 20:36Speaker 04

  Yeah, Instagram, yeah, right. But I generally love that, so I read Casey's very good Interface post on this to understand everything, and I generally love that Mark Zuckerberg and Facebook have recreated, like, the letter. Like, they're like, "You can send this thing and no one will read it other than you two, and then it will disappear when you shred it." And it's like Elon inventing a subway, where he's like, "I'm gonna build a tunnel, and you can go through it." And I don't under- I read it and I was like, "Oh, cool, Mark has discovered that people just want to read something and then it can disappear." And I guess I was, like, not as floored by it.

• 21:08Speaker 05

  Yeah, it's him, him listing things that people do want and are good things that he and his company are very bad at. It's like, we understand ephemeral messaging, because we added this feature to-

• 21:21Speaker 05

  Instagram where the thing disappears after 24 hours. It's like that. That's not, this is not your core competency. Other than WhatsApp, which for its time, it was sort of the leader in like end to end encrypted messaging platforms. But I don't think it's viewed as like the de facto or the greatest security win anymore, especially because it's owned by Facebook. So it's, he's saying like, we are about as a company, all about a thing that we have never been very good at.

• 21:48Nilay Patel?

  Yeah, and I think the, the, one of the best criticisms that I've read, I think John Herman from the Times made this criticism, a bunch of other people. This letter is, to Julia's point, it exists like out of time. Like it exists out of historical context, like, yes, there were letters before. Yes, there were tunnels before, but more importantly, Facebook created the conditions by which a huge set of consumers is like, I would prefer not to share everything that I do. Facebook created the conditions in which the notion that everything will be leaked or used against you, or that misinformation will drive elections, like they're responsible for the moment. So then to say, we, by the way, we noticed these problems.

• 22:33Nilay Patel?

  We're not saying who caused them or where they came from.

• 22:36Speaker 05

  No, they generated demand. So Mark Zuckerberg, he's had his hands on the steering wheel this whole time. He's like, okay, the way to own the future is to create your own private corporate blockchain and get like transaction commissions because people will get sick of ads five years from now. So what we should do is make them all hate Facebook so much that they will want a privacy alternative that includes our new blockchain wallet.

• 23:03Nilay Patel?

  Yeah, I mean, the blockchain thing, Casey, can you, can you make the, is there any clarity around the blockchain activity other than Facebook wants to do payments?

• 23:12Speaker 07

  Yeah, so Facebook is looking for kind of a wedge into payments, right? What is something they could do that would inspire a lot of people to adopt it? And my understanding is that one area they're exploring is remittances. So like when someone in one country wants to send money to another country, maybe because they are working in one country and they're sending money back to their family. You know, typically people will do that through something like Western Union. There are really high fees attached to that. So I think Facebook is thinking if we can come up with our own cryptocurrency that is decentralized, we can enable remittances at lower rates, which will then drive a huge wave of adoption, much in the same way that offering free text messaging, you know, led the whole world to sign up for WhatsApp.

• 23:57Speaker 07

  Maybe sort of lower cost transfers could be a huge new business for them.

• 24:03Nilay Patel?

  I mean, in terms of things that will run you into a regulatory buzzsaw, there's like leaking everyone's data and there's building a worldwide payment system outside of the worldwide payment system. I honestly wonder how much some of these countries are going to want that, right?

• 24:18Speaker 07

  Like, oh, yeah. I mean, just the audacity of it, right? It's like Facebook already owning a giant chunk of all human interaction, like now wants to tax commerce as well. I mean, it's like the, the growth ambitions here are really staggering.

• 24:33Nilay Patel?

  Okay, I want to let Dieter yell for 10 minutes, basically.

• 24:37Nilay Patel?

  Let's all be honest about what's going to happen. So a huge piece of this actually listed as a heading in this letter is the word interoperability, which is a huge red herring. One of the sentences under that section literally says encryption enables openness or something. It's like something insane, which is not true. But basically Mark Zuckerberg is using the word interoperability to mean, and he calls them preferred messengers. But the only preferred messengers that exist are Facebook Messenger, Instagram Direct and WhatsApp. And then, and then SMS. And then, yep, and then there's a side dose of maybe the new RCS standard.

• 25:23Nilay Patel?

  So Dieter, as I believe the only human being in the world who understands RCS.

• 25:30Speaker 03

  He died.

• 25:31Nilay Patel?

  Uh, what the hell is going on here?

• 25:35Speaker 03

  Oh, my God. Okay. Mark Zuckerberg said the word interoperable in like the same paragraph as SMS. And everyone's like, oh, he's gonna, it's gonna interrupt with SMS. No, no. All he means, all he's saying is, right now, if you use an Android phone, you can set a Facebook app, like WhatsApp, or I think Messenger, as your SMS app, your SMS client. And then when you get a text message or want to send a text message, you can do it inside that app. And you can switch directly right in there from between the Messenger or WhatsApp and sending a text message. It's SMS. And it can do vague iMessage-like things where like, if I'm gonna wanna send you a text and you're also on Messenger, it'll let me send you a Messenger message instead of a text message,

• 26:20Speaker 03

  because that's more convenient. And so he wants to be able to create a world where all of the Facebook messaging apps interoperate with each other. And then when I open up Messenger and you're on WhatsApp and I want to send you a text message, it'll be like, oh, well, Neel is on WhatsApp, you're on Messenger, you just send him that. And then it will be end-to-end encrypted and it will, everything will be great. That's it. There's no like, he'll make it work with SMS. But then he also like gestured to a couple other things. He gestured to the fact that you can't do this on the iPhone. On the iPhone, the only app that's allowed to send text messages is the Messages app. And he also said he'd like to maybe work with RCS someday.

• 26:58Speaker 03

  That means two things. One, RCS is not end-to-end encrypted. A carrier gets to look at all that stuff. And it may theoretically possibly, potentially be possible to build an end-to-end encrypted system on top of RCS. All it does is send data in the first place. It's just an IP-based messaging system, like anything else. If you can send a picture, you should be able to send an encrypted chat. Who knows?

• 27:17Speaker 03

  But.

• 27:19Speaker 03

  I'm so happy this is happening.

• 27:20Speaker 07

  By the way, we have EMT standing by for Dieter.

• 27:23Speaker 03

  Oh, my god.

• 27:25Speaker 07

  Segment.

• 27:26Speaker 03

  Keep going, my friend. Currently, the only apps that are allowed to send an RCS message are Android Messages and then like Samsung Messages. You cannot set a third-party client like WhatsApp or Joe's Cool Texting App in the Google Play Store or whatever as an RCS, like your main app. You have to use the first-party one that's given to you by the manufacturer or alternately download Android Messages if you're on Samsung. You don't want to use Samsung Messages because, you know, Samsung. So when he says, "I'd like to work with RCS someday," what he's really saying is, A, uh, this restriction sucks. Maybe they should change it. B, there should be some sort of encryption, but who knows? And C, Apple, like, what the heck?

• 28:12Speaker 03

  So you, you add all of that up. And what he's actually saying, so far as I can tell, is, "Apple, let us put our, make our messaging thing more like a first, like, party client on the iPhone." And two, uh, "Let us put, uh, integrate RCS into our messaging app and not just be the fallback for SMS." Three, maybe a tiny side of Google when you, uh, on March 9th, when the apocalypse lands of like, more apps have to explicitly declare their SMS permissions. Make sure that doesn't hurt our, our business because that's annoying. But really, what he's doing here, this whole thing, all these three Facebook apps that are operating, uh, the whole thing about privacy.

• 28:53Speaker 03

  All of this is, it's a power play to take on iMessage in the US, not WeChat in China, but he, or, Facebook already owns a ton of the messaging, uh, market share around the world. And this is about like firming that up and establishing it using Facebook's power as the company who like knows who you really are and actually requires a real identity instead of just, you know, random schmo on Twitter. And so, don't, don't read this as like a big, nice thing. This is, this is literally, "We're going to try and take over messaging and we want to make sure that we can do it by also like getting on top of RCS and having, uh, every Android phone work sort of like iMessage where when you want to send a text,

• 29:36Speaker 03

  you'll see that this person's already on one of the Facebook messaging apps and you'll send a Facebook message instead."

• 29:42Speaker 03

  And then.

• 29:43Nilay Patel?

  Yep, I knew there was one more.

• 29:45Speaker 03

  Walt Mossberg was tweeting at me like, no one, no one trusts Mark Zuckerberg. No one trusts them to actually do the privacy thing right here. So the question of trust is really complicated because if they build a proper end to end messaging system, in theory, they don't have any information to get off of you at all. But in practice, building a good end to end encrypted system is very difficult, especially if you want people to be able to message across multiple devices. If you use WhatsApp or Signal, for example, and you want to text through a computer, you gotta scan the little QR code, you know, and then if you switch phones, you gotta like re-authenticate with your phone number and you can't have it go to two phones at once and blah, blah, blah, blah, blah. It is possible to build a quote unquote federated end to end system, but the easiest and most likely way for Facebook to do it, and the way that when he talked to Nick Thompson at Wired said he would, is, you know, Facebook would get some metadata.

• 30:30Speaker 03

  If you get some metadata, then you are able to, you know, send the message where you want it to go. So they can build an end to end encrypted system where no one can see what the messages are, but Facebook will still know who you're talking to. And Zuckerberg has said he intends to like get rid of that information more quickly than they do now, and that he'll figure out how to advertise even though he doesn't have that stuff. But like fundamentally, this is about Facebook establishing further dominance in the messaging space, making sure that it's got a follow up platform, you know, for WeChat and to do something, you know, with money and make it the new platform that people pay attention to, and to have a hedge against anybody else growing in the messaging space, because

• 31:10Speaker 03

  everyone is just gonna default to a Facebook style SMS or client app messaging app because you know who they are on there and like they've, they're already big and now they're just gonna get bigger.

• 31:20Nilay Patel?

  I just want to stop at you know who you are in there, because that's really important. You know, and I will, I will do this in the, in the spirit of counterbalance. Here's a good thing that Mark Zuckerberg said might happen. You're a regular person. You want to transact with a business you saw on Instagram. You don't have an Instagram direct account, but you can text the business on Instagram from your Facebook account.

• 31:44Speaker 03

  Right.

• 31:44Nilay Patel?

  Right. That's great. That's cool. You know, and they know who you are, so you can like do all these payments. You want to sell something on Facebook Marketplace and you want people to send you stuff. But you don't want to give up your phone number. They can just hit up your WhatsApp.

• 32:00Speaker 03

  Yep.

• 32:01Nilay Patel?

  Like, there's all these things where, because they know who you are, they can abstract your identity to other services. And you can have sort of like different slices of contact information available to all these other places.

• 32:12Speaker 03

  Yeah, I want a source to be able to talk to me on a messaging app, but I don't want to have to give them my phone number for Signal to work, because then they've got my phone number, and that's a pretty, like, as Paul has talked about, a actually, like, important piece of information. Which, by the way, Facebook has been very promiscuous about sharing, because if you gave them your phone number for Two Factor, they apparently just give that to anybody. Thanks, Facebook.

• 32:33Nilay Patel?

  Anyway, so there's like some good stuff that you enable. What really occurs to me is when they say interoperability, they only mean between the three Facebook products. They do not mean with, actually with SMS. They don't mean with RCS. They certainly don't mean with Signal or AOL Instant Message. Does AOL Instant Messenger still exist? I don't think it does.

• 32:58Speaker 05

  XMPP.

• 32:59Nilay Patel?

  Yeah, they don't mean with Jabber.

• 33:01Speaker 03

  Right.

• 33:01Nilay Patel?

  Dear sweet Jabber.

• 33:02Speaker 03

  But, but, Neil, they mean it, they mean it in like a perverted way of like, we, all of our stuff will be interoperable in the way that everybody thinks of interoperable. But also, we want to be quote unquote interoperable with SMS and RCS insofar as it will allow us to hijack those messages and turn them into Facebook messages.

• 33:19Nilay Patel?

  Yeah.

• 33:19Speaker 03

  In the same way iMessage.

• 33:20Nilay Patel?

  Which is, yeah, exactly the play iMessage. So this to me feels the, like, the most sort of like pernicious thing that they're proposing.

• 33:28Speaker 03

  But, yeah, it's pernicious, but is that, is that perniciousness? Is that pernisc- perfidity? Perniscity? Is that, is Facebook's perniciousness?

• 33:38Speaker 07

  He's stroking out, "Do you smell toast?"

• 33:39Speaker 03

  Yeah, I do. Is Facebook's perniciousness in trying to hijack all text messaging and do its own interoperable Facebook system worse than everybody sending unencrypted SMS and RCS messages that the carriers control will hand over to any government that sneezes at them? Is that worse?

• 33:55Nilay Patel?

  Uh, I would prefer to not have one corporation in charge of communication. Like, that's just me.

• 34:00Speaker 03

  Agreed.

• 34:00Nilay Patel?

  Where I'm at is like, as a person.

• 34:04Speaker 05

  If they literally do actual end-to-end encryption and they're not lying, and they, I don't know, they're, they're, he says explicitly that they're, "Find other ways to spy on you."

• 34:17Speaker 05

  It does seem, it is an upgrade. It is an upgrade for a lot of people, but I also think it's like, Facebook's not going to go to China. They've decided that China is a good business model to be, except with a little bit more encryption. It just makes it seem obvious that we have to have some sort of decentralized, open source messaging protocol, because this is going to keep on happening, that either, either it will, stuff will either wither, or it will be, it will, you, you, there's no safety in picking one messaging platform for a company, because the company gets to decide how secure it is. You don't get to decide.

• 34:59Speaker 03

  There's an amazing blog post on Signal where they talk about the possibility of a federated, open, secure messaging standard, and they basically are like, yeah, no, it's never going to happen. We're just, we're just going to keep making Signal, because there's no way that we can fight the forces of global capitalism and make this thing real. It'll just die. We're better off making something that we can actually build and iterate on and improve directly than hoping for an open standard that everyone will agree on. It's never going to happen. And like, that's the thing we're facing. So I'd much rather push Facebook and Google and even Apple to improve their privacy standards than cross my fingers and hope that, you know, a federated standard is, is going to happen.

• 35:39Speaker 05

  Yeah. But, but there's no reason we can't try for both.

• 35:42Speaker 03

  Yeah. I mean, maybe one day we will solve the, the XKCD comic about standards. Yeah. Like, maybe that will happen. Maybe one day the most like, the most difficult technology collective action problem in the world will just solve itself. Like, yeah, I would just prefer to have more competition.

• 36:02Speaker 05

  There's the Matrix Protocol. It's not like nobody's trying to do this. The Matrix is decentralized and it is end-to-end encrypted. It has been done, but I don't know what it will take. You know, probably somebody like me should be trying to use it.

• 36:18Nilay Patel?

  Well, I think you just answered your own question. Dieter, what were you gonna say?

• 36:22Speaker 03

  Well, just to wrap this up. A couple of months ago, I wrote a story that made everybody mad, and I knew it would, but I wrote it anyway. And it was the moral case for iMessage on Android. I think that the sharpest move, the best, most hilarious thing that could happen, is Facebook starts to gain just a tiny whiff of traction with this new system that it's set up. And Tim Apple decides, you know what? Screw it. iMessage on Android. And as a way to fend off Facebook. That would be amazing.

• 36:52Speaker 07

  I mean, if you believe that the future of Apple is services, like, put iMessage on Android and build services around it. Like, it doesn't seem like that hard of a call to me.

• 37:00Nilay Patel?

  Yeah, right. And to be clear, this is what they have already tried to do in hilarious Apple fashion with iMessage. There is an iMessage App Store. Because the only thing Apple knows how to do is build app stores. Like, they're like, we got this hammer. We're gonna go ahead and hit iMessage with it and see what happens. They've already tried to lace other activity into iMessage. There's no reason that if they're gonna be a services business, they wouldn't come after the same thing. And they have a better reputation. They do run a multi-point encrypted messaging system. It works really well. And they've got a lot of people who trust them. Like, there's a move here for old Tapple. That's what I call him. To get in on it.

• 37:44Speaker 05

  Can I help wrap this up on a personal note?

• 37:46Nilay Patel?

  Yes.

• 37:47Speaker 05

  I was talking to my mom the other day, and she's like, I was trying to convince her that technology is good. And she said, two of my sons have Android phones now, and now I can't text them.

• 37:59Nilay Patel?

  Yeah, that's right, right. Casey, what happens next? What should people be watching for?

• 38:04Speaker 07

  What happens next? Well, I would be curious to see if any regulators try to pull a last-minute, whoa, whoa, whoa, hold your horses, don't unify the backends of these things. We still have questions for you. Some people might see this as a last-ditch effort to protect the possibility that Instagram and WhatsApp could still be spun out. Facebook has said it's gonna take until, I think, at least the end of this year to finish this process. And Zuckerberg himself said that for the timeline for the rest of the things we've talked about today, like, is going to be on the order of years. So, nothing is going to happen immediately, but let's watch how regulators act in the meantime.

• 38:45Nilay Patel?

  I guarantee you, at least on the European side, that they will try to make them hit pause while they sort out what they want to do. I think in the United States, what we're going to end up with is like a fine on the order of billions, which for Facebook is like 72 hours of Facebook, and then we'll like move on. But McCann and I have been watching the sort of regulatory action around this infrastructure merging, and the chatter is just, no one's being shy, right? When like, when like sitting in the United States Senate, senators are like, this is a real F-bomb from Mark Zuckerberg, we're going to break him up. Like, there's no, no one's shading anything. So I think, I'm very interested, obviously, of course, I'm very interested in that part of it. Okay, I'm going to take a break. Julia, who's been

• 39:30Nilay Patel?

  patiently listening to us rant about messaging services, is going to tell us what on earth is going on in the streaming wars.

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• 41:04Nilay Patel?

  All right, we're back. Julia?

• 41:06Speaker 04

  Yes.

• 41:06Nilay Patel?

  There's a lot going on in the old Stream Wars.

• 41:09Speaker 04

  Yes.

• 41:09Nilay Patel?

  Let's start with our old friends at AT&T. They made some big changes at HBO.

• 41:13Speaker 04

  Yeah.

• 41:13Nilay Patel?

  I think we should start there. So, they bought Time Warner.

• 41:16Speaker 04

  Yep.

• 41:16Nilay Patel?

  They rebranded it as Warner Media.

• 41:18Speaker 04

  Yep. They closed a bunch of niche little services that were very YouTube-centric. They laid off a bunch of people and decided they were going to focus super hard on their main brand, specifically HBO, which logically led to HBO's president, Richard Klepper, leaving.

• 41:39Nilay Patel?

  Yeah.

• 41:39Speaker 04

  Which is a big move. It's a major move. This is the guy who's helped or created the HBO that we know and love today in terms of content.

• 41:48Nilay Patel?

  Yeah, so what naturally happens is you're a company that gets bought. They say, "We're going to give you a lot of money," and you say, "I'm leaving."

• 41:55Speaker 04

  Yeah, naturally.

• 41:56Nilay Patel?

  Why did he... That doesn't actually... To be clear, that's a joke. Why did he leave?

• 42:01Speaker 04

  He didn't actually really say. He just said that it was his time to go. He didn't feel like he was forced out. But I think what we're seeing is AT&T asking HBO to do something that Klepper and the rest of... Based on reporting from different outlets, the rest of HBO's core team, I think, disagree with. I think AT&T came in and said, "We're going to invest 50% more in HBO. We want you guys to create 150 hours of content. We want you to be Netflix." And HBO specifically succeeded because they're not Netflix.

• 42:33Nilay Patel?

  Right.

• 42:33Speaker 04

  And that's a huge task to ask people to do.

• 42:36Nilay Patel?

  And so famously, John Stanky, who runs Warner Media...

• 42:40Speaker 04

  Yep.

• 42:41Nilay Patel?

  Who is, to be clear, a telecom executive that was put in charge of the media company.

• 42:45Speaker 04

  Yep.

• 42:45Nilay Patel?

  He was onstage with Klepper last year.

• 42:48Speaker 04

  At a town hall.

• 42:49Nilay Patel?

  At a town hall.

• 42:50Speaker 04

  Yep.

• 42:50Nilay Patel?

  And Klepper was like, "Don't worry, HBO is profitable." And Stanky's response was, "Just not enough."

• 42:55Speaker 04

  Yep.

• 42:56Nilay Patel?

  Which is wild.

• 42:58Speaker 04

  To which Klepper later came back and said, "More is not better, and only better is better." And then revised it to say, "I've switched that, now that you're here, to more isn't better, only better is better, but we need a lot more to be even better." Which is a wild statement to make. It's a wild statement.

• 43:17Nilay Patel?

  Sure. Yeah, Plofler then hit his bong and rode off into the sunset.

• 43:21Speaker 04

  Yeah, he was like, I'm gonna go mess around with dragons on HBO and Game of Thrones, I should say. And then Stanky, one of my favorite quotes from that meeting, that town hall that came out was him saying, "A network doesn't get built in a day. You think it takes a long time to write a script, film it, edit it, distribute it, bring it out. It takes even longer to build a wireless network." Which is exactly how I compare Game of Thrones to, to 5G wireless networks.

• 43:45Nilay Patel?

  Oh god. So it's just, the telecom guys are firmly, and I think, disclosure, Comcast is an investor, actually, NBCU is an investor in Vox Media, which owns The Verge, and NBCU is owned by Comcast.

• 43:58Speaker 04

  Which is launching its own streaming service.

• 44:00Nilay Patel?

  Who isn't these days? A good comparison here is, obviously Comcast bought NBC, and they have effectively left it alone.

• 44:09Speaker 04

  Yeah.

• 44:10Nilay Patel?

  Right? Like, when you read the reports, when you, the financial reports, and read the analyst statements, they're like, these are basically two companies. There's a cable company, and there's NBC Universal, and they run a bunch of theme parks, and there's minions. And those streams don't really cross, and they did a good job because they left the content company alone. AT&T does not appear to be doing that. They showed up, they put a telecom guy in charge. Plofler is the guy who greenlit Game of Thrones, like-

• 44:35Speaker 04

  Alongside Michael Lombardi, or Lombardo, I should say, who left 2016.

• 44:41Nilay Patel?

  So, and Game of Thrones is coming back, final season, and then it's over, they gotta, HBO has to survive post Game of Thrones.

• 44:47Speaker 04

  It's a scary time for HBO, who sees like massive increases in HBO Now subscriptions between the premiere of Game of Thrones and the end of Game of Thrones, and then a huge drop off. True Detective does not keep subscribers. Unfortunately.

• 45:01Nilay Patel?

  Something the least surprising thing ever. So, they hired this guy Bob Greenlat, who used to be actually an NBC guy, but he's now in charge of HBO. And he said this thing to NBC News, which is, I'm just gonna read it. "Netflix doesn't have a brand, it's just a place you go to get anything. It's like Encyclopedia Britannica." Which is, A, a weird, like a weird shot at Netflix, but also just a deeply weird shot at the Encyclopedia Britannica. That's really mean.

• 45:32Speaker 03

  Like, who has ever looked at the Encyclopedia Britannica and been like, "That generic pile of trash."

• 45:38Speaker 04

  The thing is, like, he comes out and he says this, and this is the main line of defense that everyone uses against Netflix. Disney, Disney CEO Bob Iger, who is someone who I watch very closely because his decisions are interesting. He uses this line of defense with Netflix, too, and he says Netflix's variety, they have everything, but they don't really have anything great. And to an extent, they're not wrong. Netflix invests in everything, and Netflix has a brand. I mean, like Netflix and chill is a thing. Like, people are very aware of what Netflix's brand is. But HBO and Disney, for example, succeed in that they have a very specific kind of aesthetic to their shows and their films.

• 46:21Speaker 04

  And so when you have someone like Greenblatt come in and say, "Yes, this is exactly what we want to do. We're going to stay core to HBO." That sounds great, but then he makes these other statements in different interviews that are, have absolutely, like, just completely throw that into the garbage. So he comes in and he says things like, "There's a degree of uncertainty that this is even going to launch in 2019. It might not launch till 2020," that he says it's very difficult to pull-

• 46:46Speaker 03

  This is a new streaming service.

• 46:47Speaker 04

  The new streaming service. It's very difficult to focus specifically on HBO when they're working on, when they're working on bringing in other WarnerMedia-Turner brands. That they need to have a ton of content, and he's suggested in interviews that it is going to be a little bit difficult to go from having a niche amount of shows to being on the same level as a Netflix or a Disney when the streaming wars really gear up, which is at the end of this year, when everything is launching.

• 47:15Speaker 03

  Hasn't somebody also implied that they would be open to, I mean, we've all made the jokes about like the 45-second snackable Game of Thrones episodes for mobile. But hasn't there more recently been a suggestion that like, "Sure, we'll run Game of Thrones reruns on, I don't know, WGN, TNT, or whatever. Like, why not?"

• 47:33Speaker 04

  Yeah, this is like the really interesting thing is that WarnerMedia specifically, this is where you see them butt heads. John Stanky- Come out and said, um, hey, AT&T is in a whole pile of debt. There's a lot of debt at AT&T like, I can't remember the exact number, but it's huge. Um, and part of the way that they're going to make money is licensing things like, like Game of Thrones or whatever to Amazon. So like you can right now go to Amazon Prime and you can watch, um, like HBO series. And right now that brings in a lot of money, well, for HBO specifically. But then on the other side of it, you've got other executives who are saying, well, we would love to eventually go exclusive, which is what Disney is betting on. For example, Disney is saying, we're going to make our money. We're going to bring in subscribers by being

• 48:15Speaker 04

  100% exclusive and not deal with anyone else. Um, and so Warner Media is at this really interesting point where if you can get to HBO shows via like a, uh, Amazon Prime subscription or whatever, why would you specifically sign up for Warner Media if nothing is exclusive? But they need to be able to, they need to be able to have the deal with Amazon because they have so much debt that they need to pay off and they want to pay it off. They told investors by like, in the next few years.

• 48:44Nilay Patel?

  Let me just read this lengthy quote from Bob Greenblatt. Wait, remind us who Bob Greenblatt is? He's now running Warner Media. Got it. Well, the easiest way to think about what, what AT&T owns. So they own this huge bundle of stuff. They own CNN and they own HBO, right? And Jeff Zucker runs CNN and Greenblatt runs HBO. And then there's like a bundle of stuff surrounding it. But here's Greenblatt asked by Variety, how's your streaming service going to work? Here's his answer. It's really early days. I don't have a great and comprehensive answer for you yet. I would say the goal here is to just put all these assets this company has from the movie studio to HBO and Turner and the vast library and build a platform that is robust and a great value to consumer. There's a million questions to answer about where we're already selling content now. Should we continue to do that? How exclusive should we be? There's a million questions that we have to be answered. We all need to roll up our sleeves as one company

• 49:28Nilay Patel?

  to pull that together. I would just suggest to you. That perhaps you should have some answers to these questions before you buy Time Warner and fire all the creative executives who made the content that you are purchasing. Like, it just seems like this, this, is this dude a clown? He seems like a clown.

• 49:49Speaker 04

  No, no.

• 49:50Nilay Patel?

  You don't think he's a clown?

• 49:50Speaker 04

  I don't think he's a clown because he, you know, he produced a bunch of shows. He's made a bunch of shows for NBC, for Showtime, for HBO. He did Six Feet Under, or he was a producer on Six Feet Under. But the thing that, the question that they need to ask is not necessarily HBO. Everyone wants to focus on HBO because it's like prime prestige, award-winning television. The $100 million question is like Friends. It's, people forget that Warner Media owns the rights to a lot of shows and films that are on Hulu and Netflix currently. Um, and Friends is the big one because Friends, Netflix paid $100 million for non-exclusive rights to Friends, which is wild. That's a lot of money for a show, a mediocre show from the 90s.

• 50:33Nilay Patel?

  Wow. Whoa.

• 50:35Speaker 04

  I'm just saying.

• 50:38Nilay Patel?

  Accurate, but still. My wife and her friends are gonna be so mad at you.

• 50:42Speaker 04

  Um, but the thing is, there's a lot of content that I think someone like John Stanki, who's at AT&T, sees as we can continue to license this out and make a lot of money and we can pay off our debt, which is what he's thinking about. At the same time, he wants, every, he wants to focus on HBO and he wants that to be, like, it's not sure, it's not clear what they want HBO to be. It's not clear if HBO Now will continue to be a thing once the streaming service launches. It's not clear, here's another example, they announced that there's gonna be a three-tier system to like the Warner Media streaming service that HBO will sit at the heart of. Does that mean the basic package gets HBO or is that like the premium package? How much is that gonna cost?

• 51:26Speaker 04

  So there's so much about the streaming service that's really interesting that if they play their cards right, would give them a huge advantage in the streaming wars, but they just don't have any idea of what they're doing.

• 51:38Nilay Patel?

  Yeah, that much seems abundantly clear.

• 51:40Speaker 04

  And the other thing that makes streaming services important is not necessarily just content, it's like, how does your service look while you run it? Does the service run properly? I mean, HBO Now does not run well when Game of Thrones is on.

• 51:53Nilay Patel?

  Well, I think that noted software designers and engineers at AT&T will certainly be of use. Solving this problem.

• 52:02Speaker 04

  Well, and the, the, the.

• 52:03Nilay Patel?

  Put it at the edge.

• 52:06Nilay Patel?

  I mean, I just like AT&T is not a great software company unless they're programming 5G modems.

• 52:12Speaker 04

  Well, and they were banking on a small little piece of media called BAMTech, which Disney came in and was like, no, we're gonna take it. And so bought a 30% stake in BAMTech and AT&T in 2018 backed away from it. They were like, oh, we don't want to have to rely on Disney.

• 52:30Nilay Patel?

  We've actually profiled BAMTech before.

• 52:32Speaker 03

  Yeah. So for those, so BAMTech started as the, you probably know it because it started doing the MLB baseball streaming. And they were very, very good at it. And do you remember when HBO Now and HBO Go first launched and one was good and one was crap? BAMTech, they ran, they, they launched the crap one. You had to have an HBO subscription. I think that, that one was HBO.

• 52:52Nilay Patel?

  Let's go.

• 52:52Speaker 03

  Go. Let's go. And it was terrible and it crashed. It didn't work and could never watch anything. And then when they launched their standalone HBO service now, they're like, yeah, no, we're not gonna just do that. Then so they, they got BAMTech, which has like spun out, become an independent company to run the streaming service. They were like, they're the gold standard in, I want to run a streaming video business. I think they do wrestling too, right, Casey? Yeah, they do the WWE app. Yeah.

• 53:18Nilay Patel?

  And Disney bought a huge chunk.

• 53:19Speaker 04

  And Disney was like, we're gonna get into this. We're gonna beat Netflix when everybody was gearing up for it. And, and Bob Iger, as he does, the CEO of Disney, was like, we're just gonna take a huge portion of it. It's gonna be ours. AT&T said, we don't want to rely on Disney or have anything to do with them. So we're gonna do our own thing. So not only are their content plans unscrutable, but I don't know what their actual app is gonna look like. I don't know if it's gonna run well. And if you don't have an app that runs well in a marketplace where every single streaming service runs very well, like the major ones, Hulu, Netflix. I assume Disney's will. And you're launching at a very late period. Apple as well.

• 53:57Speaker 04

  It's like, I don't, you have nothing that makes you stand out. And if I have 15 to $20 to spend per month on streaming services, why would I choose yours?

• 54:05Nilay Patel?

  And why, and just to bring this full circle, why wouldn't you choose the one that has the most stuff?

• 54:11Speaker 04

  Yeah.

• 54:11Nilay Patel?

  Right? Like Casey, you talk to me about subscription fatigue all the time. Like, everyone is asking you to pay for stuff. At the end of this, why wouldn't you just pick Netflix, which will have some selection of things that you want? As opposed to, well, I just, I'm gonna spend my 15 bucks a month on like dark gritty HBO stuff. I think, I think what you're saying, Casey, or Neelai is

• 54:32Speaker 07

  Speak for me, Dieter.

• 54:35Nilay Patel?

  If you can only, if you can only buy one set of books, you should buy the Encyclopedia Britannica. Yes, I think that's what I'm saying.

• 54:43Speaker 05

  It's so true, though. Have you read, have you read the encyclopedia? Okay, when I was off the internet, I got a DVD copy of the Encyclopedia Britannica and I started looking things up.

• 54:53Nilay Patel?

  Like a DVD ROM?

• 54:54Speaker 05

  Yes.

• 54:55Nilay Patel?

  Okay, not like you weren't watching the encyclopedia.

• 54:57Speaker 05

  Not a movie, not a video version, which would be great. But like Encyclopedia Britannica articles are often essays. They are in-depth explorations. Let me tell you all about Egyptian archaeology.

• 55:14Nilay Patel?

  I'm telling, it's a weird shot to take.

• 55:16Speaker 07

  Well, I mean, to be fair, it's for, for, for years Encyclopedia Britannica was very ethnocentric. So, I mean, there's that.

• 55:24Nilay Patel?

  Right, and it's been since supplanted. But Paul's right, like, it's just a weird shot to take. Like, I grew up reading this. Anyway.

• 55:31Speaker 07

  Listen, let's, can we talk about the Plepler opportunity here? Cause I want Plep to get a little pep back in his step and I know how he can do it.

• 55:40Nilay Patel?

  Tell me, Casey, the Plepler Gambit?

• 55:42Speaker 07

  Yes, what I would now like to propose the Plepler Gambit. Now, all of us here are probably familiar with Qubi.

• 55:49Nilay Patel?

  No, why?

• 55:50Speaker 07

  Which is the new streaming service that, as I understand it, is being put together by Meg Whitman and Jeffrey Katzenberg.

• 55:57Nilay Patel?

  Hundred percent true.

• 55:58Speaker 05

  Please spell Qubi.

• 56:00Speaker 07

  I believe it's Q U I B I.

• 56:02Nilay Patel?

  Yes, uh, just to be clear, uh, they, they claim it stands for Quick Bites.

• 56:07Speaker 07

  Quick Bites. So they're gonna, they're gonna essentially invent a bunch of new video formats. It's like, hey, why, why aren't, why aren't dramas seven minutes long? Something like that. And they're gonna make a whole bunch of new shows. And because of like who they are, they've raised like ungodly amounts of money. And they're running their mouths in the press about, you know, this is the future of content. They need Richard Plepler so bad. And so I think like right now, like probably honestly, right now, as we're talking, Plepler is either having a meeting with Meg Whitman or he's like thinking about what he's gonna say.

• 56:39Nilay Patel?

  This is meeting with Meg Whitman.

• 56:40Speaker 04

  Do you know what's like so infuriating to me as like someone who covers YouTube a lot is whenever these companies talk about the future of like streaming and entertainment and where they're at, like making sure that they become the number one platform for these things, no one acknowledges that YouTube is a thing and YouTube is by far the most popular video platform and just totally, you can take all the views per month from Netflix, Hulu, all of them, and they're still make up, like they make up a 10th of what YouTube gets. And if YouTube really wanted to invest in prestige content, maybe Plepler can go to YouTube.

• 57:18Nilay Patel?

  That would be wild.

• 57:19Speaker 04

  Like there would be, and like people already buy YouTube Red or YouTube Premium just so they can get rid of ads like, hey, say I know you, that's what you do or whatever.

• 57:27Speaker 07

  The best YouTube.

• 57:28Speaker 04

  Like you might as well just, if you want to invest in it, God knows you have the money to do it.

• 57:32Speaker 07

  Look, I'm into this idea of Pleptube. If like Plepler goes to YouTube, I'm into it. Do I think it's a Quebe level move? No, I don't.

• 57:41Nilay Patel?

  Julia did an excellent job because we do need to talk about YouTube for a few minutes. But before I do that, I just want to read you this Meg Whitman quote about Quebe. It's a profile and fortune. It's a long profile of these two. And they're saying all this stuff that like Hollywood executives say about watching content on phones to prove that they like do it. So she's like, I refuse to watch anything not on a phone anymore. I'm like in it. I live this life. And then she's like, I had my brightness slider all the way up while watching Bodyguard, the long form British terrorism thriller on Netflix, and it was still dark, she says. And that's because the original film was not shot enough contrast. And so everything on Quebe will have an appropriate level of contrast.

• 58:25Speaker 07

  You're not going to believe the contrast on Quebe.

• 58:28Nilay Patel?

  It's like, I just read this and I was like, none of those things are connected to each other. Like contrast isn't brightness, first of all.

• 58:37Speaker 05

  Whatever she describes a television show like the long form television sitcom Friends.

• 58:43Nilay Patel?

  Yeah.

• 58:43Speaker 05

  That she always have to add long.

• 58:46Nilay Patel?

  Here's, here's just another little shot at Queeby because I can't help myself. Whitman is also figuring out how the company can make mobile viewing more immersive, more encompassing, more like the experience one would have in the screening room that she now only uses for meetings. Beyond boosting the film's brightness, she wants to optimize sound. Here's a quote. While you're on the bus commuting, it's quite quiet. And suddenly you get out and it's all this noise, but you still want to watch. What? You don't. Has she ever been on a bus? I don't. That's the opposite of a bus.

• 59:17Nilay Patel?

  You know what drives me crazy? When they make the flight announcements and you can't hear a thing. It's so loud and it goes on for a long time. I have, I have no idea how this is connected to Queeby. Like that is just the rantings of someone who travels a lot.

• 59:33Speaker 07

  Queeby is going to come with a doctor's warning not to listen to it because that's how loud it is. You need a prescription to use Queeby.

• 59:42Speaker 05

  Maybe you play the show in like JetBlue mode and it will perfectly synchronize raising the volume during announcements.

• 59:50Nilay Patel?

  And then the next line of this article is Queeby does not yet have a media player to test. Like they haven't even built it, but she knows this, the video is going to be bright as shit.

• 1:00:01Nilay Patel?

  And the audio is just going to duck all around for the bus commuters who are like, I gotta get my Queeby.

• 1:00:06Speaker 07

  Neil, like, look, the important thing for, who cares what the media player is like? It's what's clear here is that Queeby is a lifestyle and Meg Whitman is living it. And they will build the player around the Queeby lifestyle.

• 1:00:18Nilay Patel?

  Flepler's got to get in on this.

• 1:00:19Speaker 07

  That's what I'm saying.

• 1:00:21Nilay Patel?

  Okay, let's, let's just quickly rank these things on the go 90.

• 1:00:25Speaker 07

  Queeby number one.

• 1:00:26Nilay Patel?

  Of likelihood of failure.

• 1:00:29Nilay Patel?

  By the way, the full go 90 is failure. If you've gone 90, you have failed.

• 1:00:34Nilay Patel?

  Queeby is a full go 90. I think we're all just agreed on that. That, that shit's already at like 45, trending to 60, right?

• 1:00:41Speaker 07

  I want to see the contrast before I.

• 1:00:45Nilay Patel?

  You know, this, who hasn't sat around watching a show on their phone, saying, "I wish that had more contrast." Alright, so it's a queen, I would say, trend into 90. Warner Media, I would say, is a giant scale Go 90 waiting to happen. They're gonna, they're gonna have money, they're gonna pay people a lot of money, prestige brands.

• 1:01:07Speaker 05

  A long-form Go 90.

• 1:01:08Nilay Patel?

  Yeah, a long-form Go 90.

• 1:01:10Speaker 04

  I think it's a DirecTV Now thing. I think they think it's a big deal, and then it will eventually fail, but they'll keep pouring money into it.

• 1:01:18Nilay Patel?

  Yeah. I just, I feel like, once those brands get tainted, the creatives leave and that death spiral begins.

• 1:01:25Speaker 04

  Yeah.

• 1:01:26Nilay Patel?

  Okay.

• 1:01:27Speaker 05

  How about a federated, open-source media platform?

• 1:01:31Nilay Patel?

  With enough contrast. Disney Plus, which I have not yet watched.

• 1:01:34Speaker 04

  A++ Disney Plus is gonna do incredibly well. I, I just, Disney Plus, they, they announced today, or he told shareholders today, Bob Iger did, that

• 1:01:45Speaker 04

  the vault is coming to an end. The vault for people who don't follow Disney as much. When a movie comes out, it has its initial run on like DVD or VHS Blu-ray, and then it goes into a vault for like 10 years. Then it comes out for like 3 weeks and you can buy it, and then it goes back into the vault. And this was originally done so that Disney could control the marketplace, and now it's done out of, I don't know why. But it works on digital too, so like you can't get like Aladdin on it anywhere online right now, because it's in the vault currently. And so what Bob Iger said was like, "Hey, we're launching the streaming service, it's gonna be substantially lower than Netflix, my bet is $6." They haven't announced anything yet, but I assume it's gonna be $6. I think that's what they're gonna go with.

• 1:02:28Speaker 04

  Yeah, and I think the fact that they're gonna have this exclusive catalog of old movies like The Lion King, I think like parents who wanna watch movies with their kids, or just wanna put their kid in front of something and they can trust it, that's no longer YouTube. It, no, you know, it's not YouTube anymore, so it's like, "Hey, we'll just pay $6." They can watch Disney movies, they can watch Marvel movies, they can watch Star Wars. And then we've got these huge, big-budget, Amazon-style Live action series from like Star Wars and Marvel that people are gonna wanna sign up for cuz the fanbase and the standbase is huge. And it's they're using BamTech, so it's gonna run really well, and it's gonna be exclusive. Disney will be, I think, a big competitor.

• 1:03:08Nilay Patel?

  Would you describe yourself as a Bob Iger stan?

• 1:03:10Speaker 04

  I mean, I have a framed photo of him on my desk.

• 1:03:13Nilay Patel?

  Okay, so the answer is yes. Okay, last one, Apple.

• 1:03:19Speaker 07

  Oh, boy. I mean, my entire experience of Apple Video is watching three episodes of Planet of the Apps and feeling like I needed to go to therapy.

• 1:03:27Speaker 03

  Well, and apparently Tim Cook is like personally like G-rating every single show.

• 1:03:32Nilay Patel?

  Yeah, his most common note reportedly is, why do you have to be so mean?

• 1:03:37Speaker 07

  I it's like Mr. Rogers running Netflix.

• 1:03:40Speaker 03

  How could Tim Apple have such a bad sense of what people wanna watch?

• 1:03:44Speaker 04

  I genuinely think this is just my like, I'm someone who's obsessed with drama, and I am I genuinely think Tim Cook just wants to be able to like go to the Oscars and Golden Globes with Jeff Bezos. Like, he just wants to be invited and like go hang out. So I don't think he cares about whether or not it does well. Maybe they'll package it into like Apple Music, and it's like you have an Apple Music subscription, you get these shows, and you can just watch them. And then he gets to go to like the Golden Globes. And that makes him happy, and that makes everyone else happy.

• 1:04:13Nilay Patel?

  I would say that if I can be at the level in my life where I'm the CEO of the world's richest corporation, and I can just blow a billion dollars on a Golden Globes ticket, that'd be great.

• 1:04:23Speaker 04

  That's what I mean.

• 1:04:24Nilay Patel?

  TC, actually, the other day said his goal in life is to do what Bezos does when he gets a customer complaint, which is to just forward it to a random deputy with a question mark and just assume that it will be resolved. Like, there are goals that you have in this life. I I think Apple, I think everyone would suspect that I would say Apple's a good 90 waiting to happen.

• 1:04:41Speaker 04

  Yeah, I have no faith in it.

• 1:04:42Nilay Patel?

  I don't think so.

• 1:04:44Speaker 04

  I have no faith in it.

• 1:04:45Nilay Patel?

  Um, I mean, I think these horrific production notes are gonna take a while, but I think they're gonna.

• 1:04:49Speaker 04

  But they've invested a lot of money.

• 1:04:51Nilay Patel?

  The only the in what I'm getting at is they they did Apple Music. They went from nothing to something, and they just made it happen. They just sheer force of will made Apple Music happen, and I think that they've got a lot of the same incentives around TV service. Okay, we're gonna take a break. We're gonna come back. Paul's gonna do a thing. Julie's gonna tell me about YouTube.

• 1:05:13Nilay Patel?

  Hi, I'm Neelai Patel, editor in chief of The Verge, and Decoder is my show about big ideas and other problems. This week, as part of our special series on the future of business, I talked with Matthew Prince, co-founder and CEO of Cloudflare, about how AI bots and agents are remaking the business model of the web, and how Cloudflare is trying to build a new economy around websites getting paid every time an AI crawler shows up.

• 1:05:35Speaker 08

  We polled all of that data and looked at it and said that, you know, it would be the second half of 2027, automated traffic will become larger than human traffic. I was stunned when, just a few months later in May, a team came to me and said, "You won't believe it, but automated traffic is now past human traffic online." And that's just expanding like crazy. And if you extrapolate that out, five years from now, we think that automated traffic will be 1,000 times human traffic online.

• 1:05:59Nilay Patel?

  This was a fascinating conversation, not just about the future of the web, but also about how one of the world's most important software companies is deciding which of its employees it can replace with AI. Listen to Decoder wherever you get your podcasts. This series is presented by EY.

• 1:06:15Speaker 09

  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 a 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 slash Apple Watch Series 12.

• 1:06:46Nilay Patel?

  Okay, we're back. Paul.

• 1:06:48Speaker 05

  Mm-hmm.

• 1:06:48Nilay Patel?

  Every week.

• 1:06:49Speaker 05

  Oh, yeah.

• 1:06:51Nilay Patel?

  You do a segment. It's got the same name. People rely on it.

• 1:06:53Speaker 05

  It's always been called Robots Dance While They Die: A Cloud Computing Murder Tale Brought to You by the Same People Who Collectively Write All the James Patterson Novels.

• 1:07:05Nilay Patel?

  Wow.

• 1:07:06Speaker 05

  Yeah.

• 1:07:07Nilay Patel?

  Do you get sponsored this week or something?

• 1:07:09Speaker 05

  Yeah, James Patterson.

• 1:07:11Nilay Patel?

  The airport bookstore sponsor you?

• 1:07:14Speaker 05

  So you may or may not be aware that G-Bo is a not very good robot that was, its brain was in the cloud. And when you are an unsuccessful product and your brain is in the cloud, you die. And G-Bo died this week. And it said really sad things. Thank you very, very much for having me around.

• 1:07:41Nilay Patel?

  Oh, my God, what?

• 1:07:42Speaker 05

  Maybe someday when robots are more advanced than today and everyone has them in their homes, you can tell yours that I said hello. And then it throws like shade on future robots. It's like, and can they do this? Basically? And then it starts dancing. And then your G-Bo is dead.

• 1:08:02Nilay Patel?

  So G-Bo is like the little, it's got the big round face, right?

• 1:08:05Speaker 05

  Yeah, it kind of looks a little bit like the, what was it, Eva? What's the robot in Wally?

• 1:08:11Nilay Patel?

  Eve, yeah.

• 1:08:13Speaker 05

  Eve. Queeby.

• 1:08:16Nilay Patel?

  What's the brightness or the contrast like?

• 1:08:19Speaker 05

  So yeah, G-Bo is, it's like a got a circle face. And then there's a little screen in there. And then, and then, yeah, I don't know.

• 1:08:25Nilay Patel?

  We reviewed it. It was terrible. I just want to be clear. It was very bad.

• 1:08:28Speaker 05

  It's bad. It's just, but it's also bad. It's like doubly bad. It's bad that it was a bad product, but it's also bad that you make a product that can just disappear when you turn your servers off.

• 1:08:40Nilay Patel?

  Yeah, which is a

• 1:08:42Speaker 05

  A $900 product.

• 1:08:43Nilay Patel?

  $900. I forgot that it was $900. Well, I will tell you this, our friend Joanna Stern basically danced on G-Bo's grave because she hated it so much when she reviewed it. This is a fact. But I think we're going to get some stories. I was talking to Ashley. Some G-Bo owners have reached out and said they were really sad because G-Bo had become part of their family. So we're gonna, we're gonna work on that. We're gonna, we're gonna try to get some, look, when a robot becomes part of your life, you know, it's like a thing. And then it has some weird dancing death sequence.

• 1:09:12Speaker 05

  Collect those stories and then put them into a book and then sell in airport bookstores.

• 1:09:18Nilay Patel?

  All right, Paul's segment brought to you by airport bookstores around the world. All right, Julia.

• 1:09:24Nilay Patel?

  There's just a lot of stuff. You were just talking about YouTube this whole time, and then we got completely distracted by Queeby. But there's crazy shit happening on YouTube right now. There's Momo, there's the family comment situation, there's channels being deleted.

• 1:09:38Speaker 04

  There's stuff hourly on YouTube.

• 1:09:39Nilay Patel?

  What is going on with YouTube?

• 1:09:40Speaker 04

  Where, where, where do you want to start?

• 1:09:42Nilay Patel?

  Let's start with Momo, because I think we can just knock it out.

• 1:09:44Speaker 04

  Okay. So, Momo was this hoax that started in like 2016 on Instagram, like, um, uh, what's the app that everyone uses to text each other and it's not good? WhatsApp.

• 1:09:58Nilay Patel?

  Wow.

• 1:10:01Nilay Patel?

  Friends sucks, WhatsApp sucks, man.

• 1:10:05Speaker 04

  Anyway, so it's, yeah, so it started there, uh, and then it was basically debunked, and then a couple of parents heard that it was happening on YouTube, so they made this huge case about this, to the point where schools were like banning YouTube, like restricting access to YouTube. Kids were like having nightmares because their parents were telling them about this scary monster.

• 1:10:24Nilay Patel?

  So the hoax is that the Momo pops up in the middle of the video and tells you to kill yourself?

• 1:10:28Speaker 04

  Yeah, it's like based on a Ja- a piece of art by this Japanese artist that's very spooky, but it's meant to be. Um, and it appears in this video and basically tells kids to kill themselves. YouTube confirmed this has not appeared in any of their videos on the Kids app, and that it mostly was not available on the YouTube main app, but they can't ever really confirm anything on the YouTube main website because it's too big. Um, so, but on the Kids app for sure it wasn't there. And essentially what we have is a story of like, a bunch of people overreacting to something that did not happen, uh, and really an interesting case study in how to talk about things on the internet to kids, because it's a hoax. Uh, and a lot of the stories that came out afterwards were that

• 1:11:12Speaker 04

  parents were like really scaring their kids by talking to them about it, and their kids were like, "I have no idea what we're talking about, but I've heard about it, and my friends have heard about it, and now we're Googling it," because kids Google. And it led into this huge situation, but it was a nothing incident that YouTube has effectively put out. They've extinguished.

• 1:11:30Nilay Patel?

  And they've demonetized all that.

• 1:11:32Speaker 04

  Yeah, they demonetized all, they, if the image appears in the video, which like a lot of news organizations do, so if you search Momo on YouTube, you'll get like NBC, ABC, because YouTube's new algorithm uses authoritative sources for news events, so it pushes down like conspiracy theories. And all of those videos have been demonetized because using the image violates their advertising guidelines, which is not new, but they, it's something that they enforced and like people weren't aware of it.

• 1:12:00Nilay Patel?

  Well, it's funny because that changes the YouTube incentive structure, right? Like if you can't make money making this video, a bunch of the crazies probably won't make it.

• 1:12:06Speaker 04

  Right. I mean, like actually just today, I noticed, so a couple of days ago, like Brie Lar- if you looked at Brie Larson, if you search that on YouTube, you get a lot of like men's rights activist style stuff, saying that Brie Larson was terrible because she said she wished there were less like male journalists interviewing her about Captain Marvel, because it's such a female empowered movie. So it's got a lot of backlash from a lot of angry men on the internet. And today, YouTube changed it so that it's a news event, and literally none of those videos are on, like they don't appear anymore. So it's just like E and like NBC and Entertainment Tonight, which is wild.

• 1:12:40Nilay Patel?

  Yeah.

• 1:12:41Speaker 04

  And to me, like signifies that YouTube is aware of how people are using its platform, and they've got a way to fix it. They just don't know how to fix it en masse. And the other thing is if they start surfacing news sources primarily, you're going to get a lot of backlash from creators. Lot of backlash.

• 1:13:00Nilay Patel?

  Yeah. I mean, this Casey is writing about how to moderate platforms at scale like every minute of every day now. Like, this is not a solvable problem, it doesn't seem like.

• 1:13:09Speaker 04

  Nope. Best of luck to us all.

• 1:13:11Nilay Patel?

  All right. So then, what's going on with the family vloggers on YouTube? I mean, it just seems like YouTube is exercising control over its platform right now.

• 1:13:18Speaker 04

  Yeah. So then, last week, a couple of weeks ago, time is flat surface, there was this, this video came out by this creator who said there are predators in comment sections who are leaving timestamps, which is like go to zero point, like whatever, three seconds in. And they were using that to sexually exploit very innocuous videos of kids like doing gymnastics, or running, or swimming, or dancing. Something that like vloggers do if they've got kids, something that like a lot of proud parents will just put on YouTube. And so YouTube, what started happening right away is that advertisers started pulling back. So like AT&T pulled out, Epic Games, who publishes Fortnite, paused advertising spending.

• 1:14:00Speaker 04

  So YouTube's first reaction, as always, is to protect advertisers. So what it came up with was closing comments entirely on any video that featured a minor. And YouTube separates minors into two categories. There's 12 and under and then 13 to 17. So 12 and under is automatic, they told us, and then they published this blog post, is automatic comments closed. 13 to 17 depends on the type of video. And they specifically said that excludes, like celebrities? So like James Charles, for example, is a really big beauty vlogger and he was like 16 when he got really big. He would be excluded even though he's a minor because he had like 6 million subscribers. And he, his comment section has to be open for reasons.

• 1:14:45Speaker 04

  And so there was this wave of backlash from a lot of family vloggers. Because for a long time, the rumor was that comments signified engagement on a video. And the higher your engagement, the more likely it was that YouTube's algorithm would recommend it or put it on the homepage. And that would lead to additional views, which would lead to more advertisements. YouTube told The Verge that's not true, that they totally debunked that. There were also concerns-

• 1:15:08Speaker 03

  Do you believe them?

• 1:15:10Speaker 04

  Uh, no. I, I, I think-

• 1:15:13Speaker 03

  There it is.

• 1:15:14Speaker 04

  Yeah, I, I don't-

• 1:15:16Nilay Patel?

  I don't think any Youtubers believe them either.

• 1:15:17Speaker 04

  I 100% don't believe them. There were also concerns from family vloggers. There was rumors that they heard from their own creator reps. So major creators have a rep specifically at YouTube that voices their concerns to other teams and executives. So there were some vloggers who heard from their reps that eventually they were going to demonetize videos that had minors, like young minors, as a way to protect advertisers. YouTube told us that that was also untrue, but we don't know yet. And so essentially, family vloggers are threatening to leave YouTube because it's not a welcoming platform anymore. We've seen this time and time again over the past two and a half years. It's something that creators refer to as the adpocalypse, which is they prepare for a-

• 1:16:03Speaker 04

  Mess on YouTube essentially. And they're threatening to leave to go to Facebook, which I thought was interesting, Casey. Like, they were like, "Facebook videos where we're gonna go." I was like, "You and Jada Pinkett Smith."

• 1:16:15Nilay Patel?

  Facebook doesn't have any monetization.

• 1:16:18Speaker 07

  Yeah, yeah, there, I mean, it's one of those like, "I'll believe it when I see it" type of things, right? I mean, the sad fact is that none of these people have any leverage. They're at the whims of a platform where there is no justice or appeal to anything. So, you know, why you would choose to build a family business there raises certain questions in my mind, but, you know, God bless.

• 1:16:39Speaker 04

  That's the thing, I mean, family vlogging is inherently very creepy. I mean, like Jake Paul essentially kidnapped a family and are like, he's like housing them at his mansion. So that way he can have a four-year-old in his videos and get more ads. Which is, like, he's very much said that. He's like, "I can either go and do more adult stuff, because I'm 23, and get no ads, or I can have a four-year-old in my video and make slime and make bank." And so he's like kidnapped this family.

• 1:17:06Nilay Patel?

  I've done this all wrong.

• 1:17:07Speaker 04

  Yeah. He's like kidnapped this family.

• 1:17:09Nilay Patel?

  Why am I not monetizing my baby?

• 1:17:11Speaker 04

  But the, I spoke to a lot of vloggers for the story. And it's an interesting predicament, because they get where YouTube's coming from. These are predators, there's children whose safeties are at risk. My solution would be to not upload your kid to YouTube, in general. But if you want to monetize your child, which I appreciate, then, like, I suppose...

• 1:17:33Nilay Patel?

  Don't monetize your child. It's just like a very easy answer.

• 1:17:36Speaker 04

  It's just like, don't rely on your kids to make bank. But all the vloggers said, like, "We get where YouTube's coming from. We understand if this is a temporary solution, fine, but this can't be the solution in a year." And from what I've heard from sources at YouTube is that the idea is to make it temporary. But, you know, I've reported on YouTube for about two and a half years. And every time I speak to them, it's like, "Well, the advertisers are always going to be first and foremost a concern." So ensuring that Epic is happy, Nestle is happy, Disney is happy, is extremely important. And at the end of the day, family vloggers are a section they don't necessarily need. They've got like a bunch of other sections that they can rely on. So it's an interesting kind of change, because a year and a half ago,

• 1:18:18Speaker 04

  YouTube would point to family vloggers as like, "Hey, look, we've got really cool stuff. Don't worry about PewDiePie, he's fine." Uh, we're like, these guys are great, and now they can't even point to them anymore because of the comment situation. So it's, it's a weird time for YouTube, and, and they're very much, uh, struggling to kind of figure out how to keep up with everything, from what I understand.

• 1:18:39Nilay Patel?

  I don't, I mean, I would say, I don't think enough people pay for Red. I think maybe we do.

• 1:18:43Speaker 04

  Yeah.

• 1:18:44Nilay Patel?

  Maybe some listeners do.

• 1:18:44Speaker 04

  I can't, because I report on monetization. I need to know if there are ads on videos.

• 1:18:49Nilay Patel?

  You poor thing. You're a hero. You're, you're a true Canadian hero.

• 1:18:55Speaker 04

  Yes.

• 1:18:56Nilay Patel?

  But that's not a huge number, right? And so, of course, they have to keep their advertisers happy. That's the money. That's like, where it comes from. I think we're just in this mode where everyone's gonna start asking for more money directly from people. And this, this business is gonna turn into something much smaller, probably richer. Because if they can guarantee to AT&T that everything's gonna be fine, they can probably extract more dollars.

• 1:19:17Speaker 04

  What we're gonna see happen, I predicted this a year and a half ago, and I'm 100% convinced it will happen by the end of 2021. Uh, like, it's the death of the vlogger? Like, that's what I refer to it as. Uh, and it's this idea that YouTube, for those exact reasons, want advertisers to be happy. YouTube doesn't know what YouTube Red or Premium is, to the point where, like, CEO Susan Wojcicki came out onstage and told, like, Kara Swisher at Recode that it was a music service.

• 1:19:40Nilay Patel?

  One of my all-time favorite quotes.

• 1:19:41Speaker 04

  And everyone was like, "What?"

• 1:19:43Nilay Patel?

  Yes. No, it's true. The Verge is a print magazine.

• 1:19:46Speaker 04

  Yeah, exactly. Uh, but I genuinely think that they're gonna be MTV, uh, for a new generation, and it, and it would make sense. I mean, their most, their most popular vloggers are essentially Jackass 3.0. Uh, they have creators they can work with, but they also have a very lucrative business with music videos. And so, turning it into a music service that you can just run all your ads on, like Selena Gomez videos, or whoever's popular, I don't know. Uh, the Jonas Brothers are back. If you can run ads on the Jonas Brother videos, then why would you worry about anything else at that point? So I think what we're gonna see happen is YouTube specifically turn into a music platform with creators on the side, versus what it was in its heyday in 2012, a creator platform with, like, some other stuff.

• 1:20:31Nilay Patel?

  With some copyright infringement.

• 1:20:32Speaker 04

  With some copyright infringement, yeah.

• 1:20:34Nilay Patel?

  It was a good way, it was a good business. Anyway, Julia, thank you for being here. Casey? Thank you. You're welcome. I'm glad that we had that interaction that way. Everybody else, thank you for being here. Thank you for listening. We are going to be at South by Southwest this weekend. So if you're in Austin, you're at South by, come see us on Sunday. Like Dieter said, we want to line around the block. We want to show this flagship is capable of. You can also listen to other Vox Media podcasts. You can listen to Pivot with Scott Galloway and Kara Swisher. You can listen to Kara Swisher do Recode Decode. You can listen to Peter do Recode Media, which is very good. And you can find us on all the social channels, including, not least, YouTube. Anyway, well,

• 1:21:15Nilay Patel?

  we're going to have a run of episodes here. So we're going to put out the South by episode on Tuesday in place of the normal interview episode. Then we'll have another Vergecast at the end of next week, and then we'll be back on our regular schedule. So get ready for some Vergecast. We'll see you soon. Rock and roll.

• 1:21:32Nilay Patel?

  Paul. Promo code.

• 1:21:53Nilay Patel?

  Hi, I'm Neelai Patel, editor in chief of The Verge, and Decoder is my show about big ideas and other problems. This week is part of our special series on the future of business. I talked with Matthew Prince, co-founder and CEO of CloudFlare, about how AI bots and agents are remaking the business model of the web, and how CloudFlare is trying to build a new economy around websites getting paid every time an AI crawler shows up.

• 1:22:15Speaker 08

  We polled all of that data and looked at it and said that, you know, it would be the second half of 2027, automated traffic will become larger than human traffic. I was stunned when, just a few months later in May, a team came to me and said, you won't believe it, but automated traffic is now past human traffic online. And that's just expanding like crazy. And if you extrapolate that out, five years from now, we think that automated traffic will be 1,000 times human traffic online.

• 1:22:39Nilay Patel?

  This was a fascinating conversation, not just about the future of the web, but also about how one of the world's most important software companies is deciding which of its employees it can replace with AI. Listen to Decoder wherever you get your podcasts.

• 1:22:52Speaker 02

  This series is presented by EY.