Sharp Tech with Ben Thompson - A Disastrous (and Resonant) New iPad Commercial, The Future of Google Search, Tom Brady and the Netflix Roast

Episode Date: May 9, 2024

The iPad commercial that made the Internet angry this week, a question about Google search spawns thoughts on the various futures of Google's business, and a few observations on the Tom Brady roast as a reflection of Netflix strategy. Plus: A final word on the iPad and its utility.

Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing? Doing well, Andrew. Just sort of relaxing, luxurating in the fact that basketball is over. You're free. You know, looking for it. Yeah, it's all good.

You don't have to watch this really depressing Eastern Conference battle between the Knicks and the Pacers, the Celtics and the Cavs. You're living free and I'm doing well as also. And as of this morning, I was all set to come on here and tell you that Apple had won again because I watched the damn iPad event. The event itself, very tedious per usual with Apple, at least my experience of Apple events. It is the fact, the fact they're sticking with, I mean, it makes a certain sense that they're sticking with these pre-recorded events because they really are just glorified sort of commercials in many respects. But, but yeah, they are tedious. You know what I don't need for my commercials?

I don't need them to be 35 minutes long. So tighten it up. Apple, free tip. But that being said, you have turned me into an OLD guy. I'm an OLD snob these days. I think it's OLD and you usually say OLED, but anyhow. Okay, well, I'll work on that for the future. But the O LED.

Actually, no, what you just proved is you are an OLD guy, an old guy. Yeah, yes. Sorry. Guilty is charged, unfortunately. You've turned me into an O-L-E-D guy and watching the event. O-L-ED. OLED. Just say O-D. Okay, I'm not going to say O-L-L-ED. I guess that's the full nerd category, whatever. The point is I want one of these damn iPads, and I have no justification for buying one. All I use my iPad pro for is my Kindle app, and yet the technology does look really cool. So Apple will get. $1,300 or whatever one of those things cost sometime over the next couple months from me. Well, before we get to, I think, the topic de jure. The thing that occurred to me is, look, there's, you know, because, like, why do these different levels of iPads exist, right? If you're just sort of watching TV or at least for a lot of people, that's sort of the use

case. And then it's like, well, why do different levels of TVs exist, right? You can get a big TV that costs 500 bucks. that Costco or whatever it is. Why are you spending $3,500 on an OLED? Well, because it looks better. And like, that's a legitimate reason. And it's funny because I feel like you could sell a high-end iPad that just has this

incredible screen and could have the crappiest, like the processor doesn't matter. It's like this accidental supercomputer that actually, no, you're just buying it for the really great screen and you know what? That's perfectly legitimate. Exactly. That's what you use it for. That's me. I'm completely indifferent to the M4 and everything else that Apple is trying to sell with this new generation. I don't care that it's thin. But if it's an OLED screen, tandem OLED, oh my God, I need to experience that. I can't imagine how cool my Kindle app will look on an OLED display. But that was going to be my brief follow-up to the iPad discussion earlier in the week. But then I opened Twitter this morning and Apple released a commercial

Ben. And in the commercial, this is from The Verge. A hydraulic press slowly descends onto a whole amalgamation of artistic endeavors. And as the large metal plate drops, it crushes musical instruments and destroys classical sculptures. Tubes of paint pop like balloons sending a cascade of color across Apple's carefully constructed canvas of stuff. Finally, it accomplishes its job. And then, as the press slowly rises, all of that artsy mess disappears. What is left behind is Apple's new,

beautifully sleek iPad Pro. And so for a sample of the reaction that that... Well, just wait, before we get to the reaction, what Apple was clearly going for is all of, of this capability is in this very small thin device. Yeah. Not necessarily what was interpreted. Well, I'm going to read two viral tweets from an ex-user named James Clark.

Tweet number one, Apple's new crush ad is a visual and metaphorical bookend to its 1984 ad. In 1984, a monochrome conformist industrial world is exploded by a colorful, vibrant human. In 2024, colorful, vibrant humanity is crushed by monochrome conformist industrial press. And then tweet number two, he follows up, says, I can't believe how bad this is. If I was a rival brand and wanted to create a parody ad as a protest at what Apple has become in 2024, I couldn't come up with better. Incredible. And I read those tweets only because that is the universal center.

in the wake of this Apple advertisement. So do you agree that it's a disaster? And if so, why do you hate it? Well, I do want to start by talking about myself in that I, this ad irritated me in the presentation. Now, part of the problem was I was, you know, the presentation happened when I was in bed. So I, or no, I was still writing. Actually, I was I forgot.

I was super late that day. And, and so I was catching up to record. dithering and get ready for it. And the very end of the pressing, there is a little emoji that rolls away and is on the edge. And he looks terrified as he's getting pressed and then he explodes. And I'm like, WTF. Like I could not believe they just did that.

And then I was just, you know, I was so focused on getting dithering out. And then when I was writing about it, I kind of wanted to make this sort of broader TV point. I wanted to revisit one of my old articles about the tragic iPad and sort of say, you know what the iPad's fine it is what it is that I totally forgot to write about that moment and then for my sake I get on Twitter and everyone's going on about it like I felt that too why did I write about that total missed opportunity um so I'm very irritated at myself to be totally honest but yeah no it bothered me in the moment and it's funny because

the like I said the emoji is what really got yeah it's like you're you don't have to murder an emoji That's a really good point, actually. That is the tipping point where it becomes creepy. I mean, but no, but the broader point, you know, so there's a sort of, yes, I do think it is an absolute disaster. And the reason it's an absolute disaster is because of the truth embedded in it. There is that saying from, you know, I think it's Bill Gates, we overestimate what can happen in two years and underestimate what can happen in 10. Well, we are, you know, if you want to go back to 1984 and that, you know, that commercial that was created for the Mac, we're not talking about 10 years. We're talking about 40 years.

And when you step back, broadly speaking, and think about the impact of tech, Apple wants you to think about the positive idea, this idea that all these capabilities, what was the monetary value of everything that was crushed? Very high, right? And you get all this capability and all this power in one device. It's sort of the democratization of creation. It's the thing that I loved about sort of that iPad 2 introduction where everyone can make music now. And that is almost certainly the mindset with which Apple was approaching this ad. But when you step back and you think about popular culture broadly over the last 40 years, You think about world culture broadly.

And the reality is there has been a great flattening. You know, as someone that sort of lives abroad that has traveled all over the world, one of the reasons, I mean, I still travel more than the average person for sure. I also, to some extent, have less interest than before, in part because a lot of places are the same. And part of it is just I'm old and lazy, right, to define the truly interesting stuff. You have to like, you have to really sort of work for it. if you want just a nice vacation, everywhere is kind of the same.

And the implication, the, I don't want to say, say, say, say dark side, but there's sort of just the reality. The reality of the democratizing of access is this sort of flattening effect that is sort of a real thing. And you see in things like aggregators and what's the implication of an aggregator?

What's the implication of getting a strategic advantage by controlling demand. It's that you completely commoditize supply. There's like the goal, the, all the incentives is to fit in, to be like everything else and to sort of beat the algorithm sort of as it were. And that is you end up with stuff that's all the same. You end up with the biggest stars today are people that happen to be stars 10, 15 years ago and they can thus carry through.

You know, you watch how like the Taylor Swift effect or something along those lines in the fact that we probably will never have a star like that again. We will have more stars because there's so many niches and everyone can be a star in their own category. But the universalism of sort of that moment last summer is part and parcel of Swift just being around for a long time. And being around in the pre total. It's interesting because this flatness is a. The high level is flat. Underneath, it's total sort of everything split up in the niches.

There's no universalism. So it's like the perception of one single blob and the experience of almost more isolation. This is, this is the, again, sort of the dark side of tech in many respects and the dark side of globalization, all of which is a tech story sort of in its own right. Maybe not an IT one so much, things like containers, things like supersonic or not supersonic, but transcontinental airlines are flying over the ocean, all these sorts of things. And what this ad did in a far more powerful way than any essay could or sort of anything else is give you a 60 second encapsulation of the frustration and angst that everyone feels. And in that regard, it was brilliant. It was a brilliant ad. It was just a brilliant ad that is not necessarily in Apple's interest.

Yeah, it's definitely not at Apple's interest. I'm waiting to see whether it gets pulled off of Tim Cook's Twitter account at some point because that's how visceral the hatred was. The first thing I did was grab the ad, was downloaded. I'm actually surprised. I thought by the time I woke up today would be taken down. But it's still there. We'll see what happens. I mean, I will be honest, I didn't hate it as much as everyone else.

I saw the ad when I was prepping for Sharp China, and there were a few of our friends tearing into it in our tech group chat. And I was busy, so I didn't have the time to chime in and disagree. But to me, if you want to read the ad with the absolute worst faith possible, then sure, it's a powerful metaphor for a company that's crushing humanity. I am not a fan of Apple whatsoever. So I understand that reading. But purely as an ad, just aesthetically, I'm not going to say it was good. but I understand what they were going for, and I didn't have the overwhelming reaction

that seemingly everyone else had. Did you see the person who put the ad in reverse? No, I didn't. So they basically just played the ad as it was, but did it in reverse. So you start with this super thin iPad, and you expand out into all these things. It is powerful.

Remember what life used to be? Again, this is, no, no, not that. It actually delivers the idea that within this, device, you get all this capability, right? Like it just went in the opposite direction. Oh, a simple fix for Apple, yeah. It's one of the most brilliant ads of all time. It really, really is.

And that sort of gets to it because it captures the duality of what has happened over the last 40 years. And there are absolutely good sides and there are absolutely bad sides. And the fact you can go in either direction captures that so brilliantly. Again, like the reason that the ad is engendering such a response is because there is truth in it. It's not dishonest. It's not mean. It's stating a reality.

And again, that reality runs in both directions. Everyone can make music. Like that was the Steve Jobs said that. Like people want to paint this as some sort of, oh, if Steve Jobs was in charge sort of idea, this is the articulation of the vision he put forward for. or the iPad. It's not wrong. Well, and it's a little bit ironic because as far as commodifying all of human creativity, it's not really Apple that's doing that as much as companies like Facebook, Spotify, Netflix, Amazon's doing it to businesses. Like Apple is the hardware that makes all that possible, but the hardware itself unlocks a lot of human creativity. It is just a

Yeah, it's a good point. It's sort of, it's more an ad about tech in general, as opposed to necessarily like Apple specifically. That is a good, that is a good distinction that I would agree. Yeah. I mean, this is just a flashpoint that is interesting because of what it says about big tech generally. I mean, it reminds me of what you wrote about Spotify and Joe Rogan years ago, where you were saying agree or disagree with Spotify's decision making regarding this controversy. The environment surrounding speech has shifted and companies from a strategic standpoint need to be mindful of that as they make decisions. There's a similar dynamic here. the environment shifted without Apple realizing it.

And they released this tone deaf ad that triggers a lot of what people don't like about the net impact of tech on society. And watching people just flip out for now going on like 16 hours is pretty interesting, you know? Maybe. I mean, I think there is something to that. I mean, I would say what I'm hearing from you is you're characterizing it. I think this is a fair response. You know, I was I was talking to Twitter, uh,

uh, rogue DHH about this ad. And he's on this big excising Apple out of his life sort of thing. You know, he's going to Linux. Uh, God bless his soul and all these like sorts of changes. And,

you know, I think he was, you know, there's this bit about, he was making this point. Apple doesn't get the benefit of the doubt anymore. And I think there is a bit, you know,

you're saying tech in general doesn't get the benefit of the doubt. There's this sort of, angst in the air. Yep. And I think that is, there's probably something about that going on. I'm not going to sort of dispute that from you. But I do think it's not even just an interpretation thing. Like, this is what has happened.

Like, it is, it's sort of a reality thing. And I think, again, that's why I think it's so resonant. It's not just a mean-spirited, let's interpret this in the worst light possible. I think you can interpret it exactly as it's presented and sort of have that sort of introspective takeaway. It's an ad that's too true. Like that's the issue. And, you know, this is a one of the challenges of this environment that you're talking about,

which I do agree with you about the sort of general more skepticism is it's almost more difficult. You know, I was having this conversation with someone in tech sort of a while ago. and it took us a long time to even get to the point that I was trying to make. Yeah. Which was, you know, there's questions about like the impact of social media on teens, for example, right? And, you know, this person had a thought that there are certain ways of looking at the world and kids not being resilient and XYZ and, you know,

everyone looking for a manager to fix their problems and blah, blah, blah, all these cultural things and certain things that have been issues on, say, like universities for years and years and years, now being, you know, in the broader world. And it's like, look, no, there's, there's an ideological sort of issue in that, you know, helicopter parenting, like all, like all these sorts of like stuff in the air. That sort of makes it worse. And to blame technology is to sort of miss the point. My argument in response is, and this has always been sort of my case about technology. is technology is a amoral force, but by saying it's a moral, that's not an excuse to dismiss or ignore its impact. If you build sort of channels for information to flow and the information does flow, sure, you can point to the information, but that doesn't mean the channel isn't also a reason to point to why something may or may not be happening.

Now, for this specific issue, it's pretty complicated, especially when you look at international rates versus U.S. rates. I don't necessarily want to sort of dive into that. Rather than to note that as the environment has gotten more polarized, it's not just that people who are anti-tech are unfair. There's a bit where people in tech completely dismiss and act like nothing has changed in the broader sociological environment. Yeah.

Technology does change things. If you want to go back, like the written word did change things. The printing press did change things. The internet does, computers did change things. The internet does change things. Mobile does change things. Now, the fact that those changes are structural doesn't necessarily dictate the sort of ideology or view of the world that flows down those pipes. But to just blame one or the other is mistaken.

And the two sides sort of differ in which they target. And the answer is sort of yes, all of the above. Yeah. Well, and I think one of the reasons that tech is such an easy scapego and does, I think, play a role in reshaping the way teens interact with the environment around them. But one of the reasons that is so convincing to people is because they look at their own relationships with technology and recognize that it's a little bit disordered. So then there's confirmation bias when they look at teens generally or kids and how they interact with technology.

And the data can be manipulated in a bunch of different ways. But it feels true to a lot of people. And I think people in tech sometimes don't necessarily understand how many people have come to feel this way about tech on the outside. And days like this and reactions to that ad sort of underscore that there's a shift underwere that there's a shift underway in terms of how people view these companies. And the commercial, you said it was pretty straightforward. I want to jump in on that point. Okay. This is the other point that you said before that I do actually quite strongly disagree with. Okay. You earlier referenced big tech. And this time you just said the companies. And I think that's mistaken. It's not the companies. This is larger than that.

These are structural changes in the way in which information flows. Like, like you don't go back. don't look back to to the 1400s and say the Gutenberg company changed the world. The printing press changed the world. I don't even know if there was a Gutenberg company or whatever else there might be. And I think that applies to this period as well. What has changed is the internet. You know, I used to get in this debate, you know, back in the day where, oh, who's to blame for the, for newspapers like demise, right?

And everyone's like, oh, you know, it could be very short tactical. Oh, it's Facebook's fault. And then you'd post a graph saying, well, no, actually all of Facebook's revenue growth happened after all of newspapers revenue growth collapsed. And then so we go back, oh, it's Google's fault. And it's like, well, you know, there is actually more of an alignment there. But what's the driver? Is it Google?

Or is it the fact that Google was made possible by the Internet, which made everything online, flattened out competition completely? There was no more geographic monopoly. everything was accessible and then you had such an abundance again obviously i'm talking my book here to a certain extent that the the entity that helped you sort that out made it you know became very valuable that doesn't mean that entity was to blame what happened first was the abundance what happened first was the removal of distribution costs what happened first was the ability to reach anyone in the world that's the cause and so and this so this is where i sort of flip around

instead of, you know, it's bigger than that. It's like, these are structural changes to the way humanity works, society works, all these sorts of things. And these companies are big by virtue of riding that wave. Sure. I think it describes way too much sort of responsibility and credit and causality to these companies for being the drivers of the cause. There are beneficiaries just as much as other people are victims. Well, I can't quite get there. I think the companies benefited from people ascribing all the positives to technology and all the changes 10, 15 years ago.

People loved all of these companies and they've all become a lot more complicated. So I hear what you're saying where what people are actually upset with are structural changes that are bigger than anyone company. But I do think from a just reputational standpoint, it's gotten more complicated for a company like Apple because people just point at recognizable names that they know when, in fact, there are larger structural forces that are reshaping society in ways that they don't love. Does that make sense? That's fair. Yeah, I can go with that. The price of being the big company that benefits from this change is that you will get the blame when people, would people sort of get upset about that change?

And I think that's the bit about this ad is it just brings into really sharp focus, a sense that people have had. And you need sort of like a shelling point that sort of organizes people's feelings and thoughts. And a beautifully produced 60 second ad that is laced with truth does that in a very effective way. And you know, I will argue that. that it was not nearly as bad as the 10-minute Mother Earth skit we got from Apple back in June. So that was the one that made me physically recoil, but to each his own, and we'll see what Apple comes up with in the wake of that ad.

Maybe we'll have an update for next week's show. One final point. We had a sample of other comments, and a username Alex Roy tweeted, Apple should fire this agency, then fire everyone at Apple who failed to recognize the anti-Apple message at the ad's core. And then the agency should fire everyone involved with this ad who didn't voice reservations before showing it to Apple. Do you have any thoughts on that ad before we move on, or on that tweet? The irony of this is a few years ago, Apple stopped using external ad agencies. And it was sort of a thing at the time. I don't know for a fact that's the case for this,

but I am 95% sure this ad was conceived of and produced by. Apple itself. And, you know, there's a bit where it, I think it actually speaks to why that is dangerous. Because you, no kidding. You know, one of the critiques of Apple, broadly speaking, is they can get high on their own supply, right? And, you know, they don't, with the app store, the reason why they end up in this total mess is because they couldn't make a few small changes around the edges that would have preserved the vast majority of their income, which comes from games. and would have gotten the vocal critics off their back, which are mostly in non-game sort of areas.

I mean, Tim Sweeney would have been grumpy regardless, but there's a lot of the ecosystem that is influential sort of online and influential with journalists that would have continued to defend Apple. A critical point for Apple is they lost that sort of vocal contingent that doesn't make them much money. They could have given them a SOP, but they just, they're so convinced of their righteousness. that they didn't, and I think it's gotten them in a much worse place than I might have otherwise.

This may be a very similar thing. The advantage of having someone outside of your company help you make ads that communicate to the outside world is they are outside your company, which is actually your target market. When you're trying to tell your story to the world and you only rely on yourself for insights, you're asking for something like this to happen. Guess what? If you're inside, you know the truth. truth. Guess what you just did? You communicated the truth. Guess what that was interpreted? Not how you thought it would be. Yeah. Well, and as far as shifting sentiments, I think Apple lovers in particular struggle to understand that Apple is part of that conversation because they see Apple as this unique,

holier than now counterpoint to the messy, evil social media companies. And the reality is Apple is not unique. And so having someone else on the outside communicate that message in a conference room might have been useful before releasing this ad, which again, I'm not sure it's quite as horrible as people are saying, but it certainly has taken on a life of its own here. It's not horrible. It's true. Yeah. And that's the problem. That's what's brilliant about it. Yep. All right. I'm telling you, it's one of the best ads techs ever released. Well, perhaps it will be as famous as the 1984 ad. Time will tell. Unfortunately, nothing is. as famous as big commercials used to be because we forget what's hot or relevant every like 36

hours or so. That's another feature. They should still do big commercials. Like you do a big commercial and everyone, yes, everyone ends up watching it on social media. Don't take the shortcut of just releasing on social media. You have to make it into a, like actually, this is sort of a broader point, right? And one of the shames of the loss of like, like, like, Win your TV and things like that is social media is best use as a sort of as a channel as an adjunct you need it's not a totem in its own right social media is shifting sand you can't build something meaningful and substantial on social media you have to build something and then leverage social media to get attention on that thing that you built and uh you know someone tell that to nike i was going to say that's my chief nike grievance there yeah

I missed the cultural touch points, you know, that everyone could relate to. In any event, a couple questions on the future of the internet here, and specifically the future of search. First, we have Stefan. He says, last week, Ed Zitran published a scathing article on the devolution of Google's search product as it came under the purview of former ads chief Prabhakar Raghavan. The article was titled, The Man Who Killed Google Search and was linked and commented on by John Gruber. on Daring Fireball. Earlier this week, Raghavan's ownership of search was alluded to by Alphabet executives on their earnings call as being part of a broader reorganization that has now spread to include platform and device efforts coming under one leader in Rick Osterlo.

Yet the two moves seem to have very different motivations behind them. The Raghavan move seems to be placing the search team in a position where it is subservient to the ads team with the goal of milking the cash cow for all its worth. The Osterlo move seems geared toward realizing new product opportunities that Google may not have been previously positioned to realize. My question is, is Google making the right decision by realizing that two parts of its business are at very different stages in their life cycles, or are they management theorying themselves into a position where their core offering is going to be diminished under Raghavon's leadership while they attempt to build a new core business under Osterlo.

So, Ben, what do you think? You wrote about Google's reorg with respect to devices last week. What do you think about the state of the search business? Well, this was an interesting article that's worth a read. You know, I mean, Edgetron is one of those folks that I think does interpret things in the worst possible light. And so that is certainly a lens I took to the article. At the same time, there's a lot about the article that does ring true with sort of

one's experience of search over, over the last several years, this idea that, you know, monetization is being prioritized sort of over quality. And, you know, that's definitely, I know that's the case because just broadly speaking, one of the things that I got wrong about Google in the wrong run is not just that they, you know, that the mobile market, for example, is much larger than I appreciated and they can monetize that better and better. I also underestimated the extent to which they can cram ads into the mobile experience in general and how much sort of money that can make. And you get an experience where you load, you know, particularly on mobile, the entire first page, sometimes the entire second page as you're scrolling is all ads. And so

it's just easy to click one of those instead of scrolling down to the organic source results. And yes, and they're harder ever, harder than ever to know that they're an ad. Just a little text there. It's not even a different color. Sort of all these sorts of changes. And so it does feel correct. you know, again, for what it's worth. Well, correct in one sense. I mean, Google search is not dead by any means. It's continuing to dominate that. Well, just correct that that ad seems to be calling the shots to a greater extent than it might have previously.

Yeah. And if you want to take that on, then there is sort of a generalized critique of, you know, Google and sort of under Sundarpa Chai of over emphasizing continued growth in revenue at the cost of sort of product stagnation and sort of a story we've seen before sort of again and again. Stefan's email is quite interesting in that I don't know if he meant this intentionally or not. There is, I think he was kind of making fun of the management theorying themselves, but there is an argument that this is a totally legitimate and correct thing to do, which is you milk your cash cow to give you space and time to build sort of what is next.

And the reality is, is Google is doing that. Like the question for Google, they're doing the right things. Like, like they're doing the right stuff with AI. They're doing the right stuff with Gemini. And they're doing the right stuff in particular with GCP, their Google's sort of cloud product, which has no ad problem. That's where you're actually selling access to sort of your infrastructure. And by doing the right thing, the question is, can they actually execute? Do they have it in them to do it well?

Do they have it in them to not sort of try to lecture the world about what they should believe in a context where they're delivering sort of singular answers, right? But those are cultural questions. The actual strategy for Google, like, again, the strategy makes a lot of sense. And is search actually, you know, the best, you know, the best way we would say, if you want to say in a world, we're going to have computers giving us answers. Why once you just milk search to the greatest extent you can, so you can? get to that world sort of quicker. Isn't that what we want companies to do to sort of disrupt themselves? You know, to a certain extent, wouldn't it be sort of a problem if they were handicapping

themselves and building the future by virtue of holding on to the purity of an experience that is increasingly obsolete? I mean, it could get. I'm not sure if I believe that. But there is, it's not also out of the question, right? And I think if you want to take the most favorable view of Google and what they are doing, it is that. It's that actually, yeah, you guys, everyone is focused on the product that won the last 20 years. Yeah.

But we are letting that product go. We're making as much money as we can so we can build sort of the future. And I joked about this with when I was talking to Thomas Curion, the head of GCP, like might we look back? in 2050 and Google is this dominant sort of infrastructure provider and the dominant streaming provider with YouTube and everyone's like, yeah, how'd Google get started? Oh, you won't believe this. They actually explain what a search engine was. That's right. That's conceivable. I mean, the reason I call out Google not being dead, Google search that is, the question is built on that false premise. Like right now, just as an example, Reddit CEO Steve Huffman, he reported earnings

this week and said that Reddit's daily users grew 37% to 82 million during the first quarter. And he said on the earnings call, 60% of those users are logged out and coming from Google. And so I just don't want to, even with the additional ads, there hasn't necessarily been any handicap to Google. And I think when people start parsing the changes, to the org chart and changes to the result page. All those changes to me are rearranging deck chairs on the Titanic, except in this analogy, Google's search business is more or less unsinkable.

Or if it does sync, it's not going to be because the way the ads are labeled on the results page has changed and become more deceptive. It would be the sort of paradigm shift that they can't really control. And so I just, that aspect of the article, didn't really ring true for me. You put your finger on what is the hardest thing about sort of this article.

It does feel like Google search has gotten worse. Yeah. Is that because they are prioritizing ads and doing worse with their product and making changes to make sure they achieve revenue goals? And even if those changes, for example, made organic search results better since you're less likely to click on an ad because you had a better result right there, right? If the results are crap and the ads are better than the results, well, that's a reason to sort of click on ads, right? or is it the fact that this is just really freaking hard, right?

Like the challenge with these zero marginal cost sort of environments, and I think I've made a similar comment in the context of like Amazon, right? And you want to be a marketplace. You want to have everything in the way you make it easy to sort of come on. The challenge there is spam. It's what we saw with email, right? When anyone can send an email for free, unfortunately, that extends to the bad actors as well. And so you get into this huge cat and mouse game of trying to stop the bad actors who all their economic incentives are in their favor.

There's no limitation on how much they can send and how much they can do as long as they don't need a large percentage to work out. If 0.0001% of people respond to a spam email and they get some sort of benefit from that, it pencils out because of the zero marginal cost nature of this stuff. We all get stuck with a spam email as a result of that. But that applies to everything on the internet. This is one, like, and so one of the challenges, and this gets to that structural sort of take, in the early days when it's, when it's sort of more, you know, it's more specialized knowledge to sort of get online and to figure this out, the people that are online are, are, they're specialists. Right. And they're operating in a certain way. Once it extends to everyone, the dynamics sort of change.

You can make this analogy to go back to the ad, go back to sort of globalization, all these sorts of things. This is what undergirds the, we overestimate the two years, underestimate 10 years sort of observation. In two years, you who are living it, who are experienced with it, are like, where is everyone? Why is everyone doing this? We're experiencing this with AI right now. Like, how is AI not taking over the world?

Like everyone's jobs are going to be done tomorrow. In fact, the status quo, there's sort of multiple forces here. The status quo is very, very powerful. sunk costs are very, very powerful. They persist for a long time. In fact, they often persist and last longer than sort of the energy and impetus to do something different. However, structural changes last forever. And in the long run, whether it be because people die, because companies go out of business, whatever it might be, change happens over generations.

Yeah. And I would argue that the bigger the change, the more. more likely that change is structural and counterintuitively, the longer it takes to truly sort of break through. Because the stuff that exists today is so married to the current paradigm, it can't change. And there is strength in structure that comes from that. Probably the most important article I wrote about the NBA deal where the NBA is going to get all this money. And by the way, that Amazon deal sounds like it's bigger than I thought. so they might actually get close to tripling, like they said all along, was I wrote an article about TV advertising surprising strength and an inevitable fall, something like that.

The point of this article was if you step back and you look at TV advertising, who advertises on TV? And this was, again, this was like a decade ago. So it was even before, you know, before, well, that's the point. It's like, stuff's going to happen. It's just, why is it taking so long? Everyone's talking about the cord. Cord's cutting is going to happen. And then for years and years, it didn't happen.

Well, you had, I had a list of the biggest advertisers. I don't have it in front of me, but you had the big CPG companies, you know, the P&G and Unilevers of the world and all their brands. You had car companies. You had big box retailers or the products that were in them, right? You had, you know, the best buys of the world, whatever it might be. You had cell phone companies were a huge one. And my point in that article is all these companies are predicated.

on the same sort of world organization. You have this idea of people sort of in their houses, watching TV, being exposed to brands, getting in their cars, driving to the big box retailer, seeing an N-cap with the same brand, already having a positive association in their mind, buying that brand,

going home, using it, and then now they're in the habit of getting it. All the advertisers were predicated on TV. That's why they kept sticking. with TV because that's what they were built around. It was all sort of one system. And that's why advertising on TV stayed strong for so long relative to even though you can

reach way more people on sort of digital. These weren't products made for digital. They like the sort of fine targeting and like niche being super niche focused and sort of all these sorts of things. You fast forward to today, what's the sort of case for the MBA? at the end of the day, all these companies are actually pretty unsuited to be streaming companies. Because what it takes to be a successful streaming service is very different than what it took to be a successful sort of operator in the bundle. And so they're stuck.

They're trying to get to a future whose business model and cost structures and all these sorts of things and the skills necessary like customer acquisition and churn management don't align with their skill sets. They were actually created for a different world order. And so they recognize they're trying to shift. They need money. They need cash flow. So they have to hold on to the old world order. And anything that can anchor them in that old world order is actually insanely valuable. And so the NBA can have way lower ratings than it had a decade ago and yet get triple the rights or whatever it might be because it's an anchor in that sort of old world order.

This sort of, it's not a reticence to change. It's a reality that when your entire company and industry is structured around a certain way of the world, you are going to do everything possible to hold onto that vision of the world and you will make that world persist longer into the future than it would in sort of like normal conditions. Yeah. Well, they're also trying to do the management theory where they milk the cash cow while they try to grow a new cash cow for the future. and their outlook, unfortunately, is not as favorable as Google's as things shift to a new paradigm here. I mean, yes, but at the end of the day,

we over prescribe, in some cases, I think, I think like the whole question of like structural changes versus, you know, sort of great man theory or whatever it might be is, you know, it's one actually I cited at the beginning of shatuckery. And, you know, it's complicated. I think there's arguments in both sides.

In this particular case, when you're talking about sort of broad-based sort of reactions, I think this is a case where we're underrating the structural aspects of this. And my point here is I think the more structural a change, the actually longer it takes for it to infiltrate real life, precisely because all the intermediate power structures resist it because they have no choice but to resist it. But then once it goes, it goes hard, right?

Like the newspaper industry held on, held on and on. And once it went, it went hard. And I think we're going to see that again and again. And we will look back in 2050 and say, the world is going to be unrecognizable. But 2025 still recognizable. And I think you would make the same case of 1985 versus 2025. Okay. How does that relate to search?

Because basically, my question is whether an AI assistant is actually going to provide all that much new utility that's like incredibly disruptive to Google's business. But I think it's too early to say whether that actually happens. Yeah, I think the theory here would be that, yeah, search persists, searches a part of the world order as it is. And in the long run, in the future, in 30 years, it's like, why did we do that? Yeah. Like, why did we have the human in the loop to that extent? I don't know. I think the question for search is, are we in a moment that is a continuation of the broader internet moment of the sort of democratizing of information and the need for an entity to help us sort through that? Or is the sort of AI moment another distinct paradigm or paradigm shift that leaves the internet sort of moment behind?

My sense is it's all one moment. It's all this continuous shift that's predicated on the zero marginal cost of information transfer and information shifting. And we're adding on sort of the creation of information, which by the way, makes Google's job harder because there's all this AI generated crap on the internet. And yet also makes it more valuable because you need someone to sort through it. And who could do a better job than Google of sorting through it than sort of anyone else? To the extent that's correct, I think structurally Google will be okay, even if they'll have margin challenges and issues sort of in the long run. The question is more, as always, is the cultural question.

Can they sort of execute? By the way, about this reorganization, this bit about, you know, the Rick Osirlo part, the head of Pixel, now being in charge of Android, now being in charge of Chrome. Google's always been very clear, oh, don't worry, Android and Pixel are separate. They're in separate organizations. Pixel does not get undue sort of influence on Android to comfort their partners. And it was the right thing to do because Google is a horizontal services company. They shouldn't let their desire to have great devices injure the other parts of their business

when they're about being broad-based. I think the big question is will they be a, you know, this is a shift. It's putting Pixel in charge. It's saying the inevitable outcome of this, even if they say they won't do it over years, is Android does come to favor Pixel.

Android is the best experience on Pixel. And they'll say that's not, no, it's not Android that's better. It's the AI is better. Right. But if AI is sort of the interface, you know, and by the way,

I think this is probably the right thing to do. Again, with a caveat, I've been suggesting Google should probably go in this direction for eight years. That was obviously way too early. But I think there is a bit where this is the time to integrate. This is the time to shift the model to actually increase their average revenue per user by selling devices, by they already have sort of more and more subscription businesses. And to embrace and accept the fact that and leverage the fact that AI might make you mad,

you might want AI from someone else, but we're going to have our AI. and it's going to be really, really great and you can have the best possible experience by buying our devices. That is a logical response to these shift in sort of market dynamics that AI is sort of representing. I don't want to overread into this reorganization

precisely because it confirms what I've been wanting Google to do for a long time. Yeah, the moonshot, finally here. Right, but I don't know. It is pretty interesting. Yeah, I want to see more indications that their AI, their proprietary AI capabilities could actually differentiate a phone. And that is purely hypothetical as far as I'm concerned.

So I need to see more of that technology before I applaud them going that direction. Because right now, all of the AI is pretty good, but not necessarily life altering. And so the idea that they're going to go compete with the iPhone, it seems like they're putting their head in a wood chipper on that one. but maybe there are capabilities that I'm unaware of or maybe those capabilities are coming in the next couple years here. Strategically, it makes sense. I just feel like in practice,

the variable is whether they actually have that capacity. So I guess time will tell. Well, they have the capacity. That's the big thing is they do have the infrastructure advantage. I think the other thing, broadly speaking, is, again, we'll see what happens with sort of GPT-5 and whatever it might be, you know, but there is a real commodification happening with sort of, I think, models generally. And, you know, sort of, I think, as predicted by us that, you know, the channels are going to matter.

So you have meta putting AI in all their apps. That's sort of super accessible. And when I'm making joke AI images with my friends and group chats, it's just a lot easier to do it in WhatsApp than to actually go out, get somewhere else and paste it and sort of bring it over. Right. And it's like it doesn't really matter what you're pulling from in that scenario, you know? Right. And like, like that is meta AI actually the threat to Google. Not because people think of meta-a-I as being a search engine, but because it's right there.

And you might answer some questions sort of otherwise. Or is it the case that anything you ask there is not commercial anyway, so it doesn't really matter. The other thing is I will just sort of observing my own personal behavior. I have the on my iPhone home screen, which is very precious. I only have one screen on my phone. You're either on the home screen or you're in the big list of apps. I have chat GPT, perplexity, and Google. And while on the computer, I find perplexity and chat chTPT, like when I'm working, I have specific things I know those are good for and I will go use them and do it.

On my phone, I usually just want to look something up quickly. Number one, the chat cheap ET, the lack of, I mean, we could talk about them, you know, doing their own search engine or whatever it might be. But in general, the untethering to sort of what's happening right now is often not what I'm looking for. I will use it in cases, but I'm not sure it deserves the homescreen. Usually what I want it. It's very sort of intentional. Perplexity is too slow. It's just like, that's, you know, characteristic of a startup and the nature of what they're doing,

the combination of fetching information of the web and an L web, that sort of thing. I still mostly use Google, but Google now has a little tab at the top. You can do search or you can do Gemini. And when I'm already in that app, Gemini's right there. It's pretty easy to go to. and because it's Google, it's way faster. It's so much faster than the other two. And you feel that speed so much more tangibly.

When you pull your phone out of your pocket, you want information and boom, you get it right away. Right. Like just speaking from myself, again, not to over anchor on sort of anecdote, but I can feel tangibly the Google advantages coming to bear already. And it's only 2025. Yeah. No, exactly. And I would also say short term, there are just so many entrenched habits I have where Google is like a reflex at this point. And chat GPT can be really useful, but I have to be more intentional about using that app.

And I think not to overindex on my own antic data, but that habit is reflective of how like billions and billions of people use Google and experience Google. So I don't want to downplay how much crappier Google has gotten. I think the internet has also gotten crappier and also Google's main choices that have degraded the product itself. And yet it hasn't changed how often I use Google throughout my day. And I think that's worth considering when you talk about Google ruining the product and everything else. Well, to your point about just the core Google experience, the search generative results have also gotten massively faster and much more useful. So I mean, that's been a very very very very. for actually nine months or something.

You had to opt in in like Google Labs to sort of get those results. And I know they were so slow and like sort of iffy for a long time. In the last couple months, and it makes sense that are not just rolling it out broadly. They've gotten really good. Yeah. And you can just type something and you'll get the answer you're looking for and it doesn't take long to appear.

And like I said, I mean, just sort of anecdotally speaking, my experience, what you might have predicted given the infrastructure advantages are sort of coming to bear. And it does feel like for Google, with all the questions about culture and execution and all those sorts of things, the part of the company that does deal with actual infrastructure, actual, I think this is a benefit. One of the challenges of sort of digital is you can get lost in the ether. We talk about this is Elon Musk. Like when Elon Musk is dealing with cars and rockets, he is ultimately bound by the constraint of physics, right? And that actually enables tremendous creativity. And you can push to the limit because a limit exists.

One of the challenges with software is there are no limits. And so it requires a tremendous level of discipline and someone sort of overseeing it to basically impose limits such that you can actually ship something, and not get stuck sort of forever and ever and ever. And I think if Google, there may be a sort of bifurcation where the part of the company dealing in the ether, dealing in software is just a mess. It's lazy. They're political. Because why?

There's no constraints. They can sort of, they get, if you don't, and you haven't had that strong top down leadership that, say, a Mark Zuckerberg still sort of imposes onto a meta, you don't have that at Google. And so you get lazy and disorganized and political infighting and all the sorts of things. things that people get annoyed about as far as Google goes, when it comes to data centers and the timing of search results and infrastructure and TPUs or CPUs or GPUs or whatever it might be, you're in the real world.

You're dealing with real world constraints. And I think there's a bit there that retains a certain level of execution, excellence, and efficiency because it's so baldly apparent if it doesn't exist. And from what I can see, the parts of Google. in touch with the real world. And this has been the root of my sort of renewed optimism about Google the last couple of months is, look, if at the end of the day, it's not really the model and it kind of only existing channels matter. If this is just infrastructure, no one is touching Google. And I think that's coming to bear in an increasingly tangible way.

Okay. Well, let's close on a completely different note. we did get a request to discuss the Tom Brady roast. And in the context of Netflix strategy, why don't we start with a basic three-part question for you, Ben, as we close out? One, why is Netflix hosting an event like this? Two, did you watch?

And three, are you bitter that both Aaron Rogers and Brett Farve are too radioactive to ever get a deal from Netflix? No, it's probably better for everyone that, Rogers and Farva are not having a roast done of them. Yep. I've also pretty colorful, I bet. Yeah. I did, so I didn't watch the whole thing.

I saw plenty of clips on social media, all of which were very funny. Great admiration for Tom Brady. If I was married to like one of the goat supermodels who left me for who just who's instructor or whatever, I'm not sure I would follow that up by being subjected to a roast. A peer in public for two hours, yeah.

I mean, the jokes do sort of right themselves. And the, but what was interesting, and this was actually, this request came from a friend of mine in person. And so I'm in some respects relaying his points. So I thought we're pretty interesting. A couple of points. So number one, it is a, this was, in Netflix has been experimenting with this. Like, it was live, right? And so it was live, but now it's available on Netflix.

everyone can sort of go watch it. And that bit about being live, one of the critiques I've had about Netflix is for a long time is I think that they do suffer from their everything all at once release strategy for their biggest shows. Like, and now Netflix, the critique is do they have really like big social media moving shows?

You know, probably stranger things that everyone sort of points to in that you miss on the social media sort of a gestalt forming and everyone feels like they're missing out. The photo. Social media supercharges it just like it did with a, Taylor Swift tour. I mean, we were talking about that earlier.

Back in the day, like Mad Men, right? When the best parts about watching Mad Men, the reason was all the write-ups the next day. You had some brilliant writing in sort of reaction to that. And that was part of the pleasure of watching the show. And, you know, now, maybe a bad example

because actually relatively speaking in a few people watch Mad Men. Yeah. A certain type of intellectual really enjoys that virtuous cycle. Yeah. Are they missing out on sort of fomo aspect and this sort of being a part of the cultural conversation by virtue of of, you know, their sort of release strategy.

Again, you can make arguments back and forth about that. I don't dismiss their sort of approach whole hand, you know, focusing on the customer experience, what they are. They're more, we talk about the iPad being a personal TV. They are a personal cable division service. Like that's what is sort of different, right? Sort of the idea is to give you what you want, not to make you wait, sort of whatever it might be.

In this case, though, by being live, it does create this like social media showing point. I don't want to have the selling point sort of idea today. But everyone was online on Sunday night. Are you saying shelling point? Isn't it selling point? Is this a new frontier in mispronunciation? You keep saying shelling point instead of selling point. No, shelling point.

S-C-H-E-L-I-N-G. So maybe. I will read by my Google results here. In game theory, a focal point or selling point is a solution that people tend to choose by default in the absence of communication in order to avoid coordination failure. Basically, the context I'm using it in is it is a one, Taylor Swift was a shelling point for sort of like, it was something to, you have this world of total disparate, everyone in their own worlds, their own customized feeds. And actually my theory about why she resonated so much last summer and that

tour was such a big deal was people were hungry to, for that communal feeling of all being hyped up about the same thing. It's why the NFL is bigger than. ever. It's one game. It's a shelling point around which to organize and you get a sense if even for a few hours that me and everyone else is into the thing. It's why going to a game, even if you watch the game

on the big screen, because you're sitting up in the bleachers is such a thrilling experience. It's the energy of the crowd. It's something around which to organize and to regain that sense of community and sort of common spirit that can be so invigorating. In this case, showing this roast live,

if you were on social media on Sunday night, Everyone was going crazy and he's like, it's going on. You're like, should I tune in? Or the clips are starting floating around. And so that bit, I think is interesting.

And now people will go and catch up on it and we'll watch it in a way they might not have had it just been released onto Netflix. You did. I talked about this a few minutes ago with commercials. What you're, what you miss, what you want Nike to do is to create shelling points instead of just releasing flotsum into the ether. Right? Like to,

what can we actually? actually organize ourselves around. To the NBA's value, what everyone is fighting over is the playoffs. It is something that people actually jointly en masse sort of care about and the value of that relative, the difference in like 10 million people watching a playoff game compared to 1 million people watching a regular season game. It's not 10x the value. It's 10,000 X the value.

And that is just in in this world of everyone increasingly individualized, that value is larger and greater than ever. So you create, no, the Tom Brady roast was not at this level, but it was more at this level than a lot of Netflix content. Oh, yeah. That's sort of the interesting point number one. Yeah. Well, I would just add that it is Netflix being incredibly smart because this is the most

cost effective sort of event programming that you're going to find anywhere. So congrats to them, they're not paying $2.5 billion a year to air NBA games. but the Tom Brady roast works just as well, you know? A lot of people felt FOMO on Sunday night. Well, not just that. Who are half the roasters, right? They have Tom Brady's teammates and all that sort of thing. Yeah.

Then they have a bunch of comedians who have specials on Netflix. Yeah. Like, like, so there's sort of a cross promotional sort of aspect to it. And there's something about this that really, it's this creating moments is. And the thing about this is the Apple ad critique slash admiration. The reason it's so impactful is I think it created a shelling point for the general unease and angst people feel about technology's flattening of society. It quite literally showed that and demonstrated that in 60 seconds. The issue is not, as I say, I'm repeating myself.

The issue isn't the ad, that the ad is true. And again, you can rewind the ad backwards. That's also true. And these bits, this ability to create these points is going to be one of the most valuable things going forward. Yeah. And the other thing that I find interesting, I didn't watch a show like you. I consumed a lot of the clips on Twitter.

And I feel pretty confident that I got the gist of it and don't need to watch the entire show. So that's more anecdotal indication of why all sorts of live rights are not quite as valuable as they used to be. And it's just a different landscape. But you're a Netflix subscriber. Yeah, no, exactly. They have my money regardless. So they don't need me to tune in. But it's why, you know, spending gobs and gobs of money maybe isn't worth it for Netflix.

And they can be more nimble and targeted with specials like that. So there's a branding effect, though, right? So you're happy this exists. Somewhere in the back of your mind, there's this association that this funny thing on the internet that gave me lots of pleasure. Yeah. Exists because of Netflix, which I pay for it. And the next time you see that wine item on your bill, you feel less bad about it. Yeah.

Well, the other thing, the show had lots of jokes about Tom Brady's divorce. The clips, there weren't nearly enough clips about how strange looking Tom Brady is after 15 years on the TV 12. just the angles on his face. As someone who grew up watching him, I feel like not a comedian, but there's some material worth hitting there. Final note, Chris, this is how we end iPad week. Ben and Andrew, I'm ready to opine on Ben's recent update about the iPad.

One of the descriptions he used was calling it a simple computer. I work in technology, and this resonates with me. There are countless tasks I need my MacBook for that just can't be done on an iPad, or if they can, it's tedious and exhausting. However, I am always reminded of how my fiancé, a dermatology physician's assistant, uses her iPad. She exclusively works on her iPad for all her charting and patient management.

She never uses a computer for work, and I truly mean never. It turns out this is quite common in the medical field. While computers might be used for more advanced care, the day-to-day management of patients can be efficiently handled with an iPad. It's pretty incredible that our health care system can all, almost be run entirely from an iPad. Another point I'd like to make is related to my training for my private pilots license. Managing a flight, aside from the very sophisticated technology of the aircraft itself,

can be done from an iPad. This is the preferred method for most pilots. They use iPads for jotting down notes, gathering weather and traffic information, and planning routes. I often criticize the iPad for its restrictions, but I can't help but also consider how much of an impact it has had on internet-powered industries. Ben, I read that for two reasons. One, pretty important point, because I see lots of iPads out in the wild when I go into doctor's offices and stores. So there are probably more professional utilities than I was giving the iPad credit for on the last episode. But also, that sort of use case could make for a pretty good iPad commercial, you know,

a pilot or a doctor. It might be something for Apple to think about in the way. of this mess. You know, I got a couple, like, bits of feedback where people asking questions about what I wrote about the iPad on Wednesday. And I think I was insufficiently clear in that I was abandoning my tragic, my tragic iPad take. Yeah. Like, in saying, like, look, the iPad, it's great.

It's fine. Because what you had yesterday is everyone like, oh, Apple has this incredibly overpowered devices. The software story is terrible for it. And you know what? It's like, you can get all that hardware in a Mac and then you can do it. whatever you want and let the iPad be the iPad. It's fine. It's fine.

And maybe I should have been more exuberant. It's great. It is great. And honestly, as I look back over the last sort of 14 years of the iPad, by far, I said this at the time and I've held to it pretty consistently, my biggest critiques of the iPad is every single thing Apple did to make it more like a Mac. I hate the multitasking. I hate when stuff pops up I don't want to.

I always go into mine and everyone else isn't disable it because it's confusing. it's hard to manage. It's much more complicated than a max. It wasn't built for that. It was built to be one screen. It was built to be a device that becomes what you need it to be. It becomes a flight management software. It becomes patient management software.

It becomes a canvas. And you know what? It does a pretty good job of that. And the mistakes Apple made were the mistakes they made with the commercial. Yeah. They're a bunch of nerds who use Macs who tried to. make it into something that appealed to them. And maybe that is what they miss from the old Steve Jobs sort of concept.

And it's okay that, yes, they're doing final cut in logic. And I'm skeptical those who ever be sort of as compelling, ultimately as a Mac. Maybe it's a good intro. People can sort of learn about this stuff. Will they actually be better? Yeah, I'm skeptical. We'll see. But Apple's not making patient charts.

Apple's not making sort of pilot sort of things. that doesn't change the fact that the iPad is pretty great for it. And, you know, yeah, commercial, too true. iPad pretty great. I think that that's where we could shake hands on that one. There you go. iPad, a solid A minus. My favorite A minus in the world over the years.

Dude, the iPad, I said this on dithering, but there, it is the, there is no piece of technology, not iPhones, not computers, nothing else that without fail, every time a new version of it comes out, I desperately want to. it want to purchase it immediately. It's such incredible hardware. It really is. Oh, man. Yes.

Well, I learned OLED on this episode and Shelling Point on this episode. So the mispronunciation shoe was on my foot. Yeah, apparently I mispronounce platonic as platonic. Yeah, he got a number of platonics on the last episode. So the adventures will continue next week. But people can email us, email at sharptech. fm, Ben, enjoy a weekend without the bucks, and I will talk to you in a couple days. Sounds good.

I'll talk to you later.