a16z Podcast - a16z Podcast: Apple Gets Its Music Streaming and Gives News Another Try

Episode Date: June 10, 2015

Apple’s annual developer conference is cranking away in San Francisco, and a16z’s Benedict Evans examines the latest from the world’s most valuable company in this segment of the pod. Software is the star of WWDC and Apple highlighted updates to iOS and OS X, but the big news was in part Apple News -- a curation and aggregation app for periodicals. Newsstand, Apple’s earlier attempt to tackle news outlets on your Apple device didn’t catch on, but Evans gives Apple News a better chance. And Apple Music? “It was a bit wooly, frankly,” Evans says. Translation: it didn’t amaze. Evans explains why.

Welcome to the A16Z podcast. It's that time of year. Apple is hosting its annual developers conference, WWDC. As a reminder, this is not when Apple releases all its shiny new hardware, but the focus is on software. So we hear about updates to iOS, to OSX. This year, Apple announced Apple News and Apple Music, plus something called proactive. To take us through all of that is our own Benedict Evans. Benedict, welcome. Hello? I just want to say at the front here, we're going to save Apple music and news for the end. So be patient. We're going to pick it apart from beginning to end. Benedict, where do we start? So I think it's interesting to contrast this with Google I.O.

So we have OSX, which is the platform that has about 80 million users. And there's some good solid, sensible stuff in there. Nothing kind of particularly mind-blowing. Split screens. Yeah, our colleague Steven Sinovsky said there was something in there that vaguely reminded him of something you've seen before. Yes, something called Windows, maybe. Yeah, exactly. But, you know, that's the legacy platform.

That's not the platform of the future. And then there's a platform with 7 or 800 million active devices, iOS. And so we have iOS 9. And iOS 9, a bit like Android M. Excuse me. It feels like a bit of a maintenance release in that there's lots, you know, obviously there were a bunch of huge structural changes in iOS 8 with extensions and a whole bunch of other. stuff. And iOS 9 feels like there's been a lot of tidying up and what cleaning up and so on

under the hood. They made it easier to install updates and there's better power management and so on. There's a couple of interesting things that are worth putting it pulling out, though. One is the split screen on iPad. I will say people were going, I was watching, you know, the tweets during it were a little going nuts for that. I think it's something you're going to have to use. And the thing about using an iPad as opposed to using a laptop is, particularly if you've got a keyboard on it is you feel like this ought to be if you're using Word on an iPad

you feel like this should be just the same as using it on a laptop and somehow it isn't and quite why and what experience differences there are is kind of hard to put your finger on but I think you know the ability to have two windows next to each other to look at two things at the same time

in a more fluid way than using an application switcher which you can do on iOS or indeed on an Android tablet I think is part of it and it's It's going to be interesting to, you know, to see, to get the update on my iPad and sit and use it and saying, oh, does this change things? The suggestion is that it's meant for people at work, right? And I sort of get that, but I don't think it's that particularly. I just think, you know, how does this change what it means to use this device?

And we'll just have to sit and use it. It's not going to, you know, suddenly reignite sales of iPad growth, but, you know, it may change what it means to use it a bit. And so then there's another interesting layer across iOS. which is the use of sort of, well, there's sort of several ways to come at it. One of them is there's lots of bits of machine learning and intelligent that's kind of dropped in all over the place, sort of scattered all over it, like, you know, the mail app will now look into your contacts. So the contacts will now look into your mail to see who else,

what other addresses this person might be. You get an incoming phone call, the phone will look at your emails to see if it recognises that number from somebody's email signature or something. So this is what Apple is calling. proactive, and it's the kind of thing Google does a lot of as well. The difference, of course, is that Apple says it's all being done on the device. It's not going into the cloud. And so this is part of the point of Apple's push on privacy. So proactive versus Google Now on the Google side? Yeah, well, Google Now, yeah, I'm Google Now, which sort of watches your email and then

pops up to tell you, hey, you've got a meeting, you should really be leaving now. And it's a kind of a similar thing. It's an attempt, I mean, there's an old computer science saying that a computer should never ask you a question, it should be able to work out the answer to. And both Apple and Google are kind of poking away at, well, what more ought the computer really to be able to know and suggest and help you with. I think there's another strand in here, and you see this in, you know, the other thing Apple has done is they've really bolt up the search on the device. And so the, for example, you know, you swipe left into the search window and it suggests

people that you've called recently and, you know, gives you quick links to do a search for nearby gas station or a restaurant. apps that you've used recently. The really interesting thing now is that you have search within apps and you have deep linking to within apps. And so it's search, describe it's, it's not search where there's a box, it's search that kind of happens in context. So the search on the device now search, it always searched your emails and your address book and what have you. Now it searches the apps that you have if those apps support it. And that means that I can go and search for a bar and I will not just get results from Apple Maps. And the Yelp integration,

that Apple has done, I will also get search results from Foursquare if I put Foursquare in my phone. If I do a search for hotels in New York, then I will see Google search results at the bottom of the screen. Above that, I will see search results from the Airbnb app that's on my phone. And so what that means is, first of all, you're pulling people more into using the app rather than going out to Google, because I'll go into that Airbnb tap on that link on that Airbnb, and I will show me the result within the Airbnb app. I think what Apple and Google are both doing is killing the list of 10 links. blue links. Right. And for Google, it's sort of about you're not doing that search in the first

place. Right. And for Apple, it's also, well, you, okay, you now without, you'll get those results inside Airbnb instead of going off to Google. The interesting thing from a user is it means you're kind of getting to filter what search results you want, because instead of you seeing whatever comes top inside page rank, you're seeing, well, if I've installed Airbnb, I get to see Airbnb results. If I haven't, I don't. If I've installed Hotels.com, I see Hotels.com results, or I see whatever it is. And so again, it's kind of, it's interesting to see Apple and Google from kind of climbing the mountain from opposite sides, thinking about, you know, how do we get you away from having to have a thought, go to a web page, type a query into a text box, just press enter and then

click on a link. Right. How do we find ways of making that much more fluid, you know, getting ahead of you, solving that problem for you before you come to it? If I'm an app developer, though, is it so fluid that I sort of get pushed to the side, or does it highlight, my hard work even more. Well, the highlight, the idea is it highlights your hard work even more, because now, you know, I, now, I mean, it's actually something that Google has done as well. So if I go to Google.com on an Android phone and I search for, you know, rooms in New York, and I've got Airbnb on my phone, I will see links into Airbnb at the top of those search results. Apple is basically doing exactly the same thing, but I don't have to go to Google.com. I do it in

the search on the device if I've installed the app. So as I said, they're both kind of climbing the mountain from both sides in lots of different ways and sort of unbundling the web browser and unbundling those 10 blue links and moving further up the funnel to earlier places where you might need that information and giving it to you at a kind of a much earlier stage. So that's interesting.

Then, of course, there was a watch. And again, the watch OS, I don't think there was anything surprising there. We knew they were going to release an SDK for native apps. They're giving you access to most of the stuff as a developer that you would want. There's a bunch of incremental features. It basically, it looks like this is all the stuff that Apple wanted to have in the launch,

but they didn't have time to make the deadline. Was there anything we just talked about this? Was there anything that you had anticipated or waited for that, you know, you're starting to see? In the Apple Watch OS2, I think, is what? It's kind of too early at the moment. I mean, again, you see the delights. I mean, like, there's a nice feature worth mentioning. There's a bunch of watch faces where you have several different data types.

So, like, you have your calendar, and you can have the time in London, and you can have the weather. and now if you rotate the crown that's sort of the wheel on the side of your watch all of those will scroll so your diary will scroll the time in london will scroll the weather will scroll if you've got a third party app that's now showing your flight time it will go from the check-in time to the boarding time to the in-flight time to the landing time so you can sit and pan forward and kind of see okay what time will it be when i land and what will the weather be when i land in london tomorrow it's a great kind of example of kind of tying all of those things together into one place. It's an interesting contrast

incidentally with the home screen of an iPhone or an Android where you still kind of have like this grid of icons. And it was slightly reminiscent of what you got on Windows phone, where there was an attempt to kind of surface data up to the home screen. And Apple is doing that on the watch in a way that it's not done on other devices. You know, it's an interesting sort of sense of the future where everything's going to get. So for the developers, for developers, they're getting access to, you know, developer kits right now. For the rest of us. Yeah. So historically fall for OSX, iOS 9, and Apple Watch. So the way that Apple Watch works work today is they're actually running on your phone

and all the code is running on your phone and all the watch is doing is effectively acting as a remote display, which means they're quite slow because you've got to wait for the watch to let the app to start on your phone and then it's got to send stuff back and forth. Whereas what Apple is now letting you do is put actual run native code on the watch. so the battery implications of that are going to be interesting but it means that they will run as fast as the built-in apps on the watch run and the built-in apps on the watch run really fast the third-party apps load really slowly then they work fine but they load really

slowly so Apple's kind of that was clearly like step to it doesn't seem like yeah also one small step to the Apple Watch being a standalone thing yeah I mean oh the other thing is the Apple Watch can now use known Wi-Fi networks if you don't have your phone with you so you can leave your phone downstairs go up three floors in the office building and as long as you're still on Wi-Fi, the watch will still be online and still show you new emails and what have you.

So again, yeah, it's sort of standalone. There's a law of physics problem in putting a cellular radio in there and a battery to power a cellular radio. And so that will take a lot longer, I suspect. Well, you could have one, you're watching one wrist and then a battery and a radio on the other rest. Yeah, and you have somebody walking behind you holding a power brake.

So the answer is, okay, solid incremental movement, some interesting strategic moves that kind of parallel Google's interesting, strategic moves with things like now on tap about shifting you out of the web and rethinking how apps talk to each other and what the architecture of those is but basically a maintenance release.

And then you have these two interesting aggregations Apple News and Apple Music and I think it's interesting although Apple talked about them at different parts of the keynote it's interesting I think to think of them together that is to say

supposing you want to read one or you're interested in Farrell, Farrell. I'll go with Bruce Springsteen. I can pronounce that. And so you can follow them in Facebook and you'll see one in 10 of the stuff they post amongst all the other stuff that's in your newsfeed

and the same for Twitter. And then as Jimmy Ivine pointed out, okay, you've got to follow them on Instagram and Facebook and Twitter and go to the website and inside Spotify or iTunes or whatever. it is to get all the stuff. Now apply exactly the same thing to reading. Supposing I kind of like to get

the New York Times and Wired and the Wall Street Journal and so on. Okay, so I've got to have those apps installed. Supposing I only want them every now and then, well then I may not bother to install the app. I can follow them in Facebook or on Twitter. I'll see one in ten of the stuff that they post. It's kind of a pain.

It doesn't work very well. I also have this kind of suboptimal experience of loading web pages and doesn't work offline. I can't subscribe to them. There's RSS, but no one uses RSS. You know, Facebook killed RSS, but, you know, there's all these kind of contingent,

compromised ways of doing this. Unless you're actually just going to go to wire.com and spend half an hour reading it. Right. But if you don't want to do that, if you want to know when there's new stuff, if you want to get the new stuff once a month, then again, there's not like an ideal solution to that.

When I heard this or watched it, there was deja vu for me because didn't we do this already with Newsstand? Well, we did it with Newsstand, and we also did it with this whole wave of news aggregation and content aggregation apps that came out with the iPad. Right. So there was Flipboard and Zite and Pulse and like a dozen others, all of which really have sunk without trace except maybe Flipboard.

And then we had Newsstand. And so the thing with Newsstand was the iPad came out, and everyone in publishing said, my God, we can finally create like the vision of the interactive product that we want, we can create this rich bundled experience, we can turn the tide back on the unbundling of people reading one or two stories on our website, we can have a revenue model, we can have subscription payments, all the stuff that we couldn't do on the web, it was impossible to do on the web, finally we can do this and we can create this great rich experience. And it didn't work.

And it didn't work, I think, for three or four reasons. One reason is that almost no magazine actually has enough people that they can produce both a print edition and a web edition and an interactive edition. Yeah, I do remember at various publishing companies that all of a sudden you had to do the same thing three times. I mean, it was a monumental amount of work, more work than people had anticipated. It was more, but it's also like, you know,

it's a thing that you will know better than me. But, you know, when I was working with magazine companies, the thing you discover is that most magazines that you've heard of and could name and see every day a run by like eight people or nine people or something. There's more than that, but it's still, there's still, there's no more than you need to put out that addition. Yeah, exactly. You had another edition and then all of a sudden you had another edition.

You don't have 40 or 50 people just kind of hanging around going, oh, that's what I'm going to do today. Well, maybe now you do, but yeah. So there was that, there was a resource question. There was a second question, which was you had to install the app, which is this binary problem. And you've got to decide that you'd like the content enough to install the app as opposed to picking it up and browsing it as you might do in a newsstand or, you know, on the web. The nature of the magazine content lended itself to three or four or five hundred meg downloads, which was just not a good experience at all.

And then there was like a deeper problem, I think, which is there was this whole conversation that we have to reinvent the form for the web, for this digit thing. And A, of course, that was a massively resource intensive. B, it was a bit like taking a black and white magazine and saying, hey, we've got to reinvent this for color printing. And the answer is, no, no, no, that's not what you do. What you do is you create entirely new magazines. To Sinooski's point, you know, you do new things in new ways as opposed to, you know,

all things in new ways. Exactly. You create, you know, you create, you know, the glossy magazines as we know them today. You didn't just kind of add color to the things that you had before. But basically, Newsland didn't work a whole bunch of all these reasons. And so Apple have come, and so those news aggregators didn't quite work either because they had limited take up from publishers because they tended to break the ad model. So they were basically pulling RSS feeds.

And then you'd get the RSS feed and you'd get like, you'd get just a snippet or you'd load the page and it would be a banner ad but the publisher couldn't track the banner ad and nothing worked. Or Flipboard kind of tried to solve this, but I'm not sure how successful they've been. And I think what Apple is trying to do is do all those news aggregators plus newsstand plus Facebook, but only the news part of Facebook

Facebook paper in fact which they've not launched anywhere else outside the US incidentally which tells you something about how well Facebook paper is doing and actually have like a place where you can subscribe to news stories and get the new stuff when it arrives and you get a pretty good reading experience

and you get recommendations of other stuff you might like and it's not buried amongst all the other junk that you have in Facebook will that work it's hard to say but it's an unsolved problem and it doesn't seem like it's the wrong approach the question is I mean Mark Andreessen made this kind of joke

in relation to Twitter the other day that it's like there's an inexorable law that every website beyond a certain scale tries to turn into the Yahoo homepage and you know this is this everyone keeps looking at the web and saying but like how do I know what to read

and is the answer Yahoo is the answer Facebook is the answer delicious Or is it Twitter, right? Or is it Twitter? Or is it Newstand apps? But it's not just the web. And then you layer any discovery mechanism that you lay onto that works until

you try and encompass the whole of the web and then it just collapses under its own weight. So, like, Yahoo's hierarchical director worked really well until there were three million sites in it. And Facebook worked really well until every average user, the average user now has, I think, a thousand items a day that they could see already be shown. Or maybe it's 1,000 items a week.

Either way, it's like catastrophic overload. So then you have an algorithm and say you follow Pharrell or you follow wide, but you never see anything they post because it's hidden underneath baby pictures or whatever. And then the same thing with Twitter. Twitter works really well until you follow 500 people and then you don't see everything. And, you know, Google works really well, but you've got to know what to search for. So it's like there's this kind of unsolved, maybe unsolvable problem. But this is great stat that Apple gave that I think that some, I actually don't have to go back and listen to it.

So it's like three people told me, but I didn't hear it myself. But that Apple Maps has three and a half times more users than Google Maps on iOS. Oh, well, I might believe, yes. And that is a combination of, A, the product not actually being as terrible as people in Silicon Valley think. B, most people not actually being incredibly dense power uses of maps. C, the power of the default. Right. Lasiness or power of the default.

Yeah, it's like it's fine. Right. It's actually fine if all you want to do is drive up and down the 280 or, you know, drive between your home and the mall and your work and, you know, remember where the turnoff is. And that's what most people are doing it for. And I think, you know, my suspicion is that Apple News might work quite well. The interesting question is, of course, a big part of Newsstand was the subscription payments, which have gradually expanded so you don't actually have to be a newsstand to get those subscriptions. But Newsstand has, there was absolutely zero mention of any kind of, never mind just payment.

There's also no mention of any authentication. So the FT have said that their content will be in there, but there's nothing in any of Apple's documents that says that you can have a way to make people sign in before they can view stuff. I presume there must be, or the FT wouldn't be there. And frankly, if all Apple news does is give me a way of reading the FT or my iPad that isn't unbearably slow using their HTML5 app, then I'll be happy. And then there's music. And music, it gives us why I said there's news in music,

and they're both kind of coming around this question of, yes, there is this underlying lowest common denominator commodity product you could use. And so there are lots of products that give you a catalogue of songs and a search engine. and maybe a few shared playlists or something. And that's a commodity. And it's interesting, you know, music used to be this key, and music used to be this key strategic lever for device makers

because you had this music library and it was DRM. And if you moved to another device from another platform, you lost all your music. And so you were kind of locked in. And now, of course, that's ended. Streaming music, Kindle streaming books. And, you know, Netflix mean there is no content lock in. You can buy whatever, any content, any device.

And so it seems like Apple is trying to, and interesting, incidentally, photos to some extent, have replaced music. as a lock-in. Right, because I do, in some sense, own them. You do own them and moving them from one platform to another is a pain. And yes, Google Photos is on iOS, but it's still like, I'm going to take 25,000 photos out of Apple Photos and put them in Google Photos. Well, vice versa. It's kind of a pain. So anyway, so Apple is trying to make music this strategic point again. And yes, you have the commodity play. You have the commodity library of tracks. Maybe they have more than other people.

Maybe they don't. I don't know. and then you have these three other components. There is a global 24-hour radio station hosted by these celebrity DJs because if you are a 17-year-old in Seattle or Manchester or Naples, you really need another radio station. His eyebrows are raised right now for those of you can't see them. The effort of empathizing with a 17-year-old in Manchester or Naples or Seattle. that feels to me a bit like the gold Apple Watch.

It's like that's not the thing to focus on. It's an interesting piece of marketing. Then you have this way of subscribing to artists, and you have these curated playlists, and the curated playlists that learn from what you listen to. Does it sound familiar? It does, yes. And so again, it's an attempt at understanding what you care about

and finding ways of suggesting other stuff that might be interesting. And again, that's a problem, I would argue a bigger problem in music than in news, than in, you know, long-form content, because, you know, there's no longer five albums out every week and everyone's buying the same ones. There's enormous explosion in diversity in music as a result of digital and everything else. And, you know, there's a huge amount of new stuff coming out all the time and how do you know what to listen to? And this is why SoundCloud is a big deal.

You know, I suggested on Twitter maybe Apple should have bought SoundCloud. It's what drives this question of, you know, how what should I listen to after that what do I know about what band should I have what band have I never heard of that I would really like and that's that is a real issue and it's not an issue that I think is being solved it's an issue that at the moment requires you to spend a lot of work into surfing the web and reading and going to SoundCloud and following people and doing all sorts of other stuff and you can kind of see an argument that it would be kind of good if it came to you and if it could come to

you in a curated way at scale across different kinds of tastes that could have some value does that need to be algorithmic or does it need to be manual when you have 200 billion getting on for 200 billion dollars of cash you can pay for an awful lot of manual creation that a startup couldn't pay for so maybe

you know is this reinventing the magazine quote unquote is this reinventing rolling stone for ASU is like is this your own personal rolling stone so again like news for me this is a question of like how useful and how usable and does it become my source and you know do I tap it when I want to

listen to music, and I trust it and I believe in it. Applebot, Lala, I don't know, years ago. And so why did it take so long for them to get to this side of things? I mean, it was this kind of vestige of iTunes in the download business, and we can't let go of that? Orchle. iTunes, which still runs either on SAP or Oracle. I forget which. So the question would be, I mean, there's several answers. One of them is, and you see the same thing at Google, is you see things that appear mystifying from the outside, and you speculate wildly about what the kind of the deep purpose might be, or they might have taught

about this or might have thought about that. And you end up discovering when you talk to somebody who knows that it's all about internal politics, organization, or that guy was on holiday, or it was like something. The address book hasn't been updated because the guy who works on address book was moved off to work on this other project for six months because they were short of staff. It's not because they decided a dress book wasn't a strategic priority. It's just there's a waterfall, and that's not on the waterfall this year. So there may be all this. those organizational issues. I would suspect you could also say, and you know, that they kind of, that it took them a while to understand and really understand what they would want to do

and a while to think, okay, how do we do something that's fundamentally different as opposed to a Mutu product here? How do we fundamentally, you know, create a differentiated reason to use music from Apple as opposed to, well, let's just clone Spotify or buy Spotify. This felt, and a lot of people felt like it went on for half an hour. it didn't hammer home what are the real key reasons why this is amazing right it was a bit woolly frankly um i didn't think the news announcement was woolly the question for the news announcement was okay the people have tried this before is this going to work um the question for the music announcement was it's like how much of this is middle-aged men in untouched shirts who

like certain kinds of music and certain kind of ways of doing things who are kind of trying to adapt to the modern world. At least they didn't have Coldplay or YouTube performing. Yeah, they got the memo on that. I do feel like, you know, Apple for once, in a more obvious way than ever, is playing catch up. Yeah. I mean, I think, well, for music, there's no question. The music, Apple dominated music,

and they missed the transition to streaming completely, just as Google missed social completely. Right. Because it's just so totally different from the kind of the whole model that they had, which is really ironic because, of course, they created the platform that enabled streaming. You know, they create the smartphone. That's what, you know, in one level,

they created the, it's sort of multiple stages of irony here, because on one level, they were perfectly aware that smartphones were going to kill the iPod. And that's one of the reasons why creating the iPhone was so important. And they would, you know, solve the innovator's dilemma very well.

They created the smartphone revolution. And yet somehow music, got lost along the way. Somehow in that conversation, music got, music, music went away. And they said they missed that. And what they're now trying to do is to get out ahead again and say, okay, fine, well, what is that, how do we actually get to a point again where it's not just a list of 100 million tracks and a search box and kind of good luck, off you go, you're on your luck,

you're on your, good luck. How you solve that is hard, and it's not something anyone else has solved either. We'll check back in and see if you're liking Apple Music. If you, like a 17-year-old in Manchester, are tuning into the DJ every morning or every evening. And this is obviously evolving month by month and quarter by quarter. So we will be talking more about it. Thank you. Thank you.