Sharp Tech with Ben Thompson - Google-as-Government and Netflix vs. HBO Max

Episode Date: August 24, 2022

A Google enforcement strategy gone awry, the pluses and minuses of horizontal integration, and the common thread among most big tech complaints. Then, the downsides of Netflix’s binge model.

Hello and welcome to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. How you doing? I'm doing good. August is drawing to a close, which is a good thing because you and I, obviously, our initial friendship is based on sports, not tech. And August is just the worst month for sports. So from my perspective, it's all outside when you run out.

It's been pretty barren out there. And as you pointed out before we hit record, F1 is coming back. So that's the ultimate sign that September is here. We got a triple header ahead of us. And at Spa this weekend in Belgium, the Belgian Grand Prix, albeit the Dutch Grand Prix, a lot to be excited about here. Oh, I think only you and I care. I mean, we're going to force our listeners to care where they want to or not.

Just submit, people, Mercedes is going to win a race in the 6th. second half of the season. But Ben, we've got a packed hour today. So we should get right into it. So for part one, I want to talk about Google. Earlier this week, the New York Times ran a pretty exceptional story about Google and its AI. The story was written by Kashmir Hill and its headlined, A dad took photos of his naked toddler for the doctor. Google flagged him as a criminal. And the Times story, it highlights some of the biggest questions about tech and its impact on society. So I figure we could walk through it piece by piece. But I'll start with an excerpt here just to give everybody some context for what's happening.

So this is from Kashmir Hill. Mark noticed something amiss with his toddler. His son's penis looked swollen and was hurting him. Mark, a stay-at-home dad in San Francisco, grabbed his Android smartphone and took photos to document the problem. so he could track its progression. His wife called an advice nurse at their health care provider to schedule an emergency consultation for the next morning.

By video, it was a Saturday and there was a pandemic going on. The nurse said to send photos so the doctor could review them in advance. Mark's wife grabbed her husband's phone and texted a few high-quality close-ups of their son's groin area to her iPhone so she could upload them to the health care provider's messaging system. In one, Mark's hand was visible, helping to better display the swelling. Mark and his wife gave no thought to the tech giants that made this quick capture and exchange of digital data possible, or what those giants might think of the images. After setting up a Gmail account in the mid-aughts, Mark, who's in his 40s, came to rely heavily on Google.

He synced appointments with his wife on Google Calendar, his Android smartphone camera, backed up his photos to the Google Class. He even had a phone plan with Google Fi. Two days after taking the photos of his son, Mark's phone made a blooping notification noise. His account had been disabled because of, quote, harmful content that was, quote, a severe violation of Google's policies and might be illegal. A Learn More link led to a list of possible reasons including child sexual abuse and exploitation. Mark filled out a form request. a review of Google's decision explaining his son's infection. At the same time, he discovered the domino effect of Google's rejection. Not only did he lose emails, contact information for friends

and former colleagues, and documentation of his son's first years of life, his Google Fi account shut down, meaning he had to get a new phone number with another carrier. And without access to his old phone number and email address, he couldn't get the security codes he needed to sign into other internet accounts, locking him out of much of his digital life. So great, great narration, Andrew. I feel very calm. I feel relaxed. I feel like I'm warning things.

I really appreciate it because I was anxious about that much reading. But here we are. And so having heard all that, what's your reaction when you hear about the initial complications that Mark encountered? We can take it piece by piece, as I said. I mean, there certainly is an aspect of, you know, there but the grace of God, Goli, to do something like this story. I mean, the, you know, the, I mean, it's just like, like you can envision.

I think this is what part of what made this story so gripping. And I actually do want to talk a bit about what made this story so good, you know, a little bit on the road. I think there are aspects of that that tie into this broader debate. But yeah, I mean, it's, it's like, oh, my God. Like, I can envision me doing something just like this and then boom, everything being gone. I mean, what was your initial reaction? Well, I think the degree to which we're reliant on Google, I'm not relying on Google.

I'm relying on Apple. But the degree to which I'm reliant on Apple in so many different phases of my life, such that if Apple decided to just delete everything or freeze my accounts. Like it would cause me all sorts of day-to-day complications that would be a real pain in the ass to resolve. And that's like a much better version of what Mark experienced where he's worried about the allegation that he's distributing child porn and right. Right.

Where you got to skid it over like the main point. Like he's clearly this happens. He gets this little bloop on his phone. And it's not just that his entire. digital life is gone. But you know, you kind of know what's happening next, right? You are now a suspect for child porn creation and distribution, which is, I think, you know, is kind of like the most, like is there a worst crime?

Like, like in our society, like, like broadly speaking. I mean, obviously you're not murdering someone, but the way, you know, there's like a, there's like a stack rank of like crimes and how much we despise someone that commits them. And this certainly is pretty much at the top of the list. And so, yeah, there's multiple aspects going on. And I think the other thing that jumps out to me is, like, Mark was the ideal Google customer. Like, he's the sort of customer that Google would feature in, like, one of their keynotes, right? Like, look how easy Mark's life is.

Look how everything works together. He uses our phones. He uses our phone service. He uses our storage. He uses all these sorts of things. And it's all integrated nicely. and everything, everything works together and flows back and forth. And the, sort of take, not to get, you know, again, I guess we should say it up front.

We categorically, you know, they think all this stuff is bad. We'll get in a lot of tradeoffs later. But there's an aspect here where the, what screwed him most as far as his digital life was the fact that he basically took Google up on their offer of do everything with us and will make your life easier. Yeah, well, when you wrote about this, you mentioned that piece and said the integration of all these different Google products highlights antitrust questions. And obviously, Mark, his experience highlights, like, the extreme scenario and the potential

dangers to consumers. But just out of curiosity, like, what are some of the benefits of that kind of integration that you see as weighing against any antitrust concerns? Well, I mean, this is this is one of the issues that's come up in some of the congressional bills about tech. You know, it's like self-preferencing, et cetera, et cetera. And like on a service level, on a politician level, you can see why that makes a lot of sense. Like, oh, you have a big platform. You shouldn't be able to give special favors to your other services, right?

I think what's underappreciated and discounted by politicians is there's a sense they look at, at software like it's like it's any other sort of product and like like a store right like and the store is deciding what to put on shelves like that that aspect of like building shelves and putting stuff on shelves is kind of very straightforward and if you're favoring your own stuff it's it's a choice that you're making that you can easily not make right like and so it's kind of straightforward and it's discounting the fact that building software is super hard right it's it's very hard it's very difficult, it's very complicated, and the degree of complication dramatically increases in the difficulty, the more you have to sort of interact with things that you don't control.

And so there's an aspect where, you know, I think Apple's sort of the classic example of this, you know, they're famously much more integrated than their services, but that lets them offer sort of better experiences. Like, why is it that an iPhone tends to be, you know, this is super high level. I know there's lots of details here, but like what things are works more smoothly. Like like the stuff that that just happens more fluidly. And a lot of that is because Apple's building all the different pieces themselves. And so all that complexity, they can sort of internalize that complexity into their software

stack and they can smooth over the rough, rough edges. And that's lots of stuff you can't do externally. Number one, there's security concerns. If you're dealing with anything external, you have to completely lock everything down, make sure you can't break out of your box, do whatever X, Y, and so your typical app on on an iPhone that app is in a sandbox it's like completely locked in that's one of the reasons why iPhones are so much more secure than macOS apple says it's because the app store that's not true it's because ios was engineered from the ground up to make it so

no one single app can really interact with or affect other apps around it or the operating system and so if you like you've got like whereas windows windows the original was developed in a completely different era when there wasn't really thinking or concern about bad actors because everyone was just a bunch of nerds and no one wants to screw everything up. You have to Unix. I mean like like everything in Unix can touch

like everything else and you have access to everything if you know what to do. The problem is if you're a bad actor then you can sort of abuse that. And so we've shifted over time in our operating systems to a much more sort of lockdown model and that means the operating system provider then has to provide interfaces how things can interact with each other.

So on the iPhone, you have like the share sheet, right, when you want to share. And it brings up and it has all those different apps. And why is that the same thing in every app? Because that's Apple's standardized interface for passing data back and forth between different things. Now, that takes time to build. And you have to figure it out, what's the best way for it to work? And then you have to get the standards interfaces. And there's, like, it's complex.

It takes time. And what Apple can and does do is they build stuff themselves first for them. They get it working, they figure it out, then they figure out a way to sort of standardize it and open it up to other folks. Now this is the most charitable interpretation of the way Apple approaches it, but it's also a fair one. This idea that like if you control all the different pieces, your level of innovation and speed can be significantly higher

because there's all these complexities and risk factors you don't need to consider because you control everything. And so the reason why I worry about these bills in Congress is they'll, just cut that off at the knees. Like if every single change in innovation, the operating system has to be available to all third-party apps immediately, it's going to take years longer to get changes,

to get new things. And they probably won't work as well because Apple couldn't sort of test it out on themselves first to sort of get it working. So that's why, and then from a consumer perspective, you're getting better products more quickly. You're getting new innovations.

And so there's real, and also Apple can sort of, the more freedom they have to innovate, the quicker Android can come and copy them, or the more Google can sort of innovate, the faster Apple copy them. So these innovations spread very, very quickly. Sorry, just to back up,

this bit is so underappreciated by everyone that's critical of big tech platforms or like acquisitions. Yeah. If you have a new innovation, a new company, that company to stick with Americans, to provide benefit to all 300 million Americans will take decades to like get to scale, to spread out, to do XYZ. If Apple or Google acquire or Facebook acquires that company and integrates that innovation

in their product, all 300 million people or 150 million to join your smartphone share gets access to that innovation immediately. There is a time factor to the dispersal of innovation that is enabled by acquisitions. That's completely ignored and dismissed by people that are like, no, everyone, you know, he's been an independent company, build up, et cetera, et cetera. I mean, most of them will die because they won't make it. But even the ones that make it, you're delaying the sort of realizations of that innovation by a very, very long time. So, so we can get, so, you know, that's just big picture why there is benefits to Apple and Google integrating their own services and being able to iterate on them.

Totally. There's real past for the consumer. Well, and that's, I mean, there are costs and benefits to analyze. throughout this story in the New York Times. And so that's just one piece of it. But what I was curious about is what the countervailing considerations might be alongside the obvious problem with like for consumers, if you're that reliant on one company like Google or Apple.

And what I hear is it's more secure and it's more efficient. And I've experienced that. Like I have one pair of wireless headphones that is like a, a JBL pair and one pair that's a AirPods Max pair. And the AirPods Max works so well across my Apple devices that I look forward to using them. They work so well that I use them more often than I would otherwise. I mean, the real news break here is that you actually, one, have an AirPods product and two, you win for by far the most expensive one, which is hilarious.

It's terrible. I wanted to do it right. if I was going to betray my wired headphones roots. But anyways, all of that is just one aspect of this. And I do think if you're raising antitrust concerns, you're better off looking at this story and saying, this is a testament to how much power these private actors have. And we should ask whether that's a good thing for America.

The AirPods Max one is a very interesting example. Because you can say, oh, hey, Apple did this sort of innovation, to bring it to market and have all this sort of, like the Bluetooth standard is, is kind of pathetic. And Apple's layering a bunch of stuff on top of that. And they actually have dedicated chips like to, for like near term communication and all these sorts of things.

So that's all good. On the flip side, it's like, okay, how long should it be until they, should they be required to open up all that extra stuff they built to third parties, right? So on one hand, you want Apple to be able to bring AirPods to market and to bring them to market, years more quickly than they would if they had to be open up generally, right? Or they'd go through a standards process like Bluetooth, which also is probably going to make it worse,

because when you get a standards, you're negotiating, you end up with least common denominator, all these sorts of things. On the flip side, it's like, well, if Apple, given how powerful they are, if they create all this technology, should they have to open up that technology to other competitors? Or do they just get to dominate the iPhone headphones market forever, right? A good example, another example of this is Apple Pay. Like, NFC is actually a standard. Apple incorporates NFC, but no third party can access that NFC capability on the phone, only the wallet can.

And so, like, you can't have a third party payment. If you use a third party app for payment, you got to bring up that QR code and show it instead of just tapping it to the thing like Apple can do. So that's an example where Apple, there's APIs to access that. Apple has made a deliberate strategic choice to not open up those APIs, not because they're incapable or not because they can't build these safeguards or all these sort of standardized interfaces, but because it's economically beneficial to the company to not do that. And so that sort of ties into why just sort of raised in passing this antitrust point, which is these companies make it so much easier to just use all their stuff.

And not only because it's built in, but also because their stuff often will. works better. And that their stuff often works better because they've granted themselves capabilities and privileges. They don't grant to third party apps. And on one hand, like I said, that is also a tradeoff. I tend to defend it because I think there is a payoff for consumers. But the problem is that what something this story illustrates is if you follow the natural path, if you go down the road that Google and Apple are paying for you, you are putting all your eggs in one basket and if that basket breaks, you're utterly and completely screwed. Indeed.

And so to return to Mark's experience, the specifics of this story, and also the broader impact of Google's tactics here, the New York Times, again, says the tech industry's first tool to seriously disrupt the vast online exchange of so-called child pornography was photo DNA, a database of known images of abuse converted into unique digital codes or hashes. It could be used to quickly comb through large numbers of images to detect a match, even if a photo had been altered in small ways. After Microsoft released photo DNA in 2009, Facebook and other tech companies used it to root out users circulating illegal and harmful imagery. A bigger breakthrough came along almost a decade later in 2018,

when Google developed an artificially intelligent tool that could recognize never before seen exploitative images of children. That meant finding not just known images of abused children, but images of unknown victims who could potentially be rescued by the authorities. When Google makes such a discovery, it locks the user's account, searches for other exploitative material, and, as required by federal law, makes a report to the cybertipers, line at the National Center for Missing and Exploited Children. In 2021, the Cyber Tip line reported that it had alerted authorities to, quote, over 4,260 potential new child victims. And just as a general note, this is why the Times story was so effective. Like, it would have been easy to frame Google as evil and dystopian and reckless or whatever,

but there are meaningful benefits here. like 4,260 potential victims referred to authorities. Like that sounds like a good thing. Yeah, just to jump in on that story point and the number you raise, the reason why this story was so good, it stands in contrast to the vast majority of reporting about big tech and the, the CSAM, you know, child sexually, child sexual abuse material. There was a story a few years ago where, so this photo,

this photo DNA is a very effective system. And it makes, I think it's a tradeoff that it gets all the tradeoffs exactly right, which is there is a, you can run basically a mathematical, you can distill any image to a, a set of characters. It's called a hash, right? So it's like 250s characters,

I think, long, it looks totally random. If you get that hash, you can't back that hash out into an image, right? It's sort of a one-way conversion. And so the way this works is you have this list of hashes that is from the database.

Like there's one dedicated entity that's allowed to hold this database. And then you run, you convert all the images in your cloud to hashes also. And then you basically compare, are there any matches? Now, if there's complications here, like how fuzzy. What if you change the color of the photo? What if you crapped it? Things like that. There's lots of considerations here.

but by and large actually i'll come back to that a moment but by and large if you find a match then because there's considerations you do have someone that reviews them now a pretty shitty job to be clear but it's in the loop because you don't want false positives like that that is so there are pieces in the loop to make sure theoretically that would happen to mark doesn't happen okay so we're talking photo idea so they look they compare it now the way the federal law works is if you find this material, you have to report it. Right. But the law does not compel you to look for it.

So this unilateral scanning of what's in the cloud is a choice made by these companies to look for this sort of material. Okay. What happened was a few years ago, Facebook shifted from, if we discover this, we will report it to we're going to proactively scan for these sorts of things. and given the fact that everyone in the world's on Facebook, including terrible people that are trafficking these images, suddenly the number skyrocketed coming from Facebook.

And what happened was you got a whole bunch of stories in the media that saying Facebook is a den of child pornography. And they were basically drawing a causal link that Facebook is, you know, and this was post, this was like post the whole Trump thing, all these sort of things. and yet more example of how evil and vile Facebook is. And that was how reporting has drew. I can't overstate how damaging that entire episode was.

Basically what happened was the media vilified Facebook for being a good actor in this case. Had Facebook never looked for stuff, there would have never been a story. But because they turned on this and because they reported these sorts of things, suddenly they were a bad actor. And think about the incentives this produces broadly. like the incentive is to actually never look for stuff. And the reality is most of this stuff is being trafficked on like these internet forums or on the dark web like these places like that are not like the ones that Facebook are catching, they're catching the morons, right? I was just going to say, the dumbest people on earth sharing this on Facebook or Twitter or whatever.

Yeah. Yeah. And so and so that's an example of the media really getting this totally wrong. and it's still out there. And in Congress did the same thing. It comes to congressional testimony. Oh, Facebook has all this child pornography. It's like Facebook has all this of child pornography that's been reported.

And that's a function of who's reporting and, you know, how often they're doing it. And the other reason why Facebook had a bunch is because all the stuff on Facebook's unencrypted at rest. So what this means is when you send stuff back and forth to Facebook, it's encrypted. So someone can't like tap into your internet connection and steal the connection, right? But when Facebook collects, you know, stuff lands on Facebook servers, it's decrypted, or then it's stored sort of on their servers. And that means Facebook can scan all the sorts of things. This is called, this is different than end-to-end encryption. End-to-end encryption, use WhatsApp as an example, Facebook property.

When you send a message from WhatsApp, it's encrypted on your device. It passes through the WhatsApp servers owned by Facebook. but it's still encrypted. Facebook doesn't have, and Facebook has no means to decrypted. They have no access to it. Now, all this is pertinent in the case of Apple. So one thing that's interesting,

if you look at those numbers of reports, Google has a bunch, Facebook has a bunch, Apple has a very tiny amount. And the reason is because Apple is not scanning your photos that are uploaded. Now, that's a choice on Apple's part because they are unencrypted. And it's interesting that,

people will vilify Facebook for not for infringing on people's privacy. They are they are vilifying Facebook for the number of child pornographic images that are showing up that they're reporting. And Apple almost by definition, given that all your photos are sort of uploaded, probably if they looked could find more. Now again, they're not compelled by law to look. Now, the tradeoff here is very obvious. Apple could say that's a violation of privacy. And one of the things that Apple was going to do, this was sort of a controversy last year,

was Apple was going to start scanning for CSAM, but they weren't going to scan in their cloud. They were going to scan on your device. But they would only scan as you were uploading. So basically they download this list of hashes to your phone. And then as it was uploading, your phone would scan and sort of report, hey, we found a match to this database. Okay.

And then I think the reason Apple did this is because they wanted to also encrypt your stuff in the cloud. Because then once it's encrypted in the cloud, they can't access it either. And that would mean, well, in force, would go to Apple and say, hey, give us access to this person's photos. Apple say, nothing we can do about it. It's encrypted. And that certainly is in line with their sort of privacy stance for sure. but the reason why they would not do that right now is because people would come back say, well, Apple is protecting child pornographers because they're making it impossible.

Not only are they not reporting, but they're actually making it impossible for law enforcement to get any access because photos are completely encrypted sort of end to end. And so Apple's on-device scanning was a solution. Oh, wait, look, we're looking for child porn. We're making sure it's not there. But after that, our customers' content is private. We're not, and no one can get access to us, not even us. This was a huge controversy.

blew up last year. I thought this was a terrible idea. And because to me, there is, even though the scanning on devices in the context of uploading to the cloud, I just felt like, there's so many tradeoffs here. You have to draw a line somewhere. And to me, actually shifting to where your own device is spying on you was sort of a bridge too far for me. And once the toothpaste is out of the tube on that one, then it's,

it's really hard to walk it back, which is another concern. Well, this, and this sort of ties into this because Google's gone further down the road. So we talk about the photo DNA. Exactly. The good thing about the photo DNA approach is false positives are almost never happened. Because it's like it has to be a match. And even then there's a human checking it, right? And so if you get nailed by this, you're almost certainly guilty.

I would say 99.999% a very high number of nights. And can I just interject to say that even in. this case with Mark, you know, Casey Newton pointed out after the fact that according to the times, there was also a video on the phone in which the child appeared on a bed with an unclothed woman. And there were two layers of humans. There were humans at Google. And then there was a human reviewer at the National Center for Missing and Exploited Children that reviewed the content and decided it should be referred to authorities. Right. But this is where this is the key point, though. That content, that photo was not from the photo DNA database. Like those were photos Mark took. So they're photo DNA database. The downside is that they're all old photos, right? Yeah. The abuse in that database has happened decades ago years ago. Like however long it's been, it's been folding around sort of on the internet, internet forever. And so that the difference here is that Google doesn't just do hash matching to the photo.

DNA database. They actually use their image recognition that they've developed via machine learning, so call it AI, and they scan all photos, not just for what matches this database, but for what their system interprets as child pornography. And so there, and so, and then it goes to the human. That's what caught Mark. Mark's photo of his kid was not in the photo DNA database. It was a fresh photo. And so you can see, you can see the benefit from this. I was going to say, that's the value is you can catch ongoing abuse and, you know, intervene in a household where kids are currently being abused as opposed to stuff that happened 10 years ago in the, in the photo DNA database. Right. I mean, like, if you're in like a some small college seminar, maybe in the pre-unet

era when you were allowed to get away with this stuff, there was like, there were like debates about like child pornography and the legality of it because it's kind of like an interesting philosophical question if the harm's already been done it's in the past you know like like like you know it's like it's like in the same it's in the same seminar where you debate like is attempted murder a crime right totally and i again i refer all listeners to point number one in this podcast we are categorically against child pornography in every form no we're we're standing we don't need to say something like this on this podcast because if anyone thinks otherwise they need to go somewhere else.

That's fair. So, but, but yeah, to your point, that's why it's so valuable because the, you know, if the harm's happening now and it's sort of an ongoing thing, that's, you want to stop that. Like, who doesn't want to stop

that, right? To your point, right? Like, like, and so there's real value in Google discovering new things. And that's why you, you know, we've gotten very, very, you know, full circle, but you mentioned that 4,260 number, any one of those that can be saved, because this was discovered,

like, you can see the obvious, the obvious sort of upsides to that. The downside is this story, right? Like, well, there's the broader thing that all your stuff can scanned and looked at, which we can get to in a moment. But what happened here was the, if you think about it, the AI was right. Like, the AI is trained to not get kids in baths, right?

That's like the classic sort of example. In this case, it wasn't a kid in a bath. It was a close up of the child's genital area with, I think, like, you know, maybe there, I think one of them they said there was a hand, like, sort of in the image. Like, you can understand why this went sideways. And then even the human reviewing it, it's like, yeah, that, that looks bad, right? I don't, you know, I don't see any rash. I don't see any rash. I don't see whatever. Like, there was.

And so it goes up the chain. And it's one of those things where, you know, I, it's hard to choose a sign on this. It's a classic example. I can argue every side of this. Should this even be happening? Should you be unilaterally looking for new things? Do people know what they're agreeing to and these are called services?

Right. You can understand every step on this and debate and go bath and forth on all the sides. The problem, and so even the fact that his account got deleted and he got reported to law enforcement, it makes me extremely uncomfortable. and the broader implications about surveillance, so I think we're going to get to,

we can talk to, we talk about in a little bit, but I can definitely articulate and understand the argument that those 4,260 kids are worth this sort of tradeoff, right? Yeah. The problem, I think, is all sort of what happened afterwards. And not only that, I would say even that 4,260 number, we don't know how many false positives, are included.

I mean, I can't imagine very many in the 4,260 number, but how many times is someone falsely accused of this? And not just that, but how many of those kids were actually saved, right? Right. I think that's, there's no oversight

or accountability for the way this is being carried out, which is my biggest concern. Yeah, so let's say that for a moment because I just want to make, make, I think there is one bit about the story that's black and white. fortunately Mark was fully exonerated by the police, right?

Which I would certainly hope so, right? And so there's an aspect where it sucks that he got in that situation, but the system worked, right? Like we have a system of justice. It didn't even get to a court. The police are like, oh, yeah, this was, you know, understand how this happened, totally clear, gave him a police report, he's clear.

There's another guy that happened to, same thing. And the real problem here is the guy, goes back to Google. He has a police report saying there is no crime here. I did nothing wrong. Can I have my account back? And Google says no. And continues to say no. Told the New York Times, Google stands by its decision. It blows, that blows my mind. It blows my mind. Like, number one, just sort of on a practical level, like, how can you not, are, how can, like, he's innocent. What are you doing here? But number two, the level of arrogance that goes, like, Like this, we're debating.

Do we want this company that's scanning, looking at everyone's private photos using this awesome computing capability where a computer can actually look at an image? It can interpret what it is. It can distinguish between a child in isolation versus a child in the bathtub. Like just incredibly powerful capability. and we're only scratching the surface of what can be done with this.

Like this whole sort of AI sort of discussion. You have this capability and you leverage this capability against billions of people. And you do it because you tell yourself and you tell the world. Again, it's not compelled by law. Google is choosing to do this. You do this because we are saving kids lives. We are saving kids from abuse. And so that is worth the tradeoffs.

And we're deciding that unilaterally, by the way. voted on this. No, no, yeah. Google users agreed to it when they quick through those, those, those, oh yeah, miles long menus that no one ever reads. How do you not think about that and be terrified of that capability and know that look, if we get this wrong, like, we're going to backpedal as fast as you possibly can. We're going to make it right. Hey, Mark, super sorry. Your accounts back. Next 10 years of service on us. We totally screwed you over. In a way, that you didn't ask for in a way that is tremendously problematic in any

sort of free society are bad. And they not only did not say are bad, they're permanently doing his account. Yeah. It's, it's terrifying. Like, to me, that

that's even more terrifying than what happened to Mark. Because I can walk through every decision chain that led to Mark's account being deleted. I can understand why it happened. I can even make an argument that what happened to Mark is worth the sacrifice. I'm not sure I buy that argument, but I can make it. But there is no universe where I can stomach or buy an argument that not giving

him his account back is a good idea. And it changes how I view every previous argument because this is the company that we're giving all this power to with zero oversight, zero accountability. Like at least the policeman responds to someone. Google doesn't respond to anyone. Yeah. And, you know, along those lines, you wrote that you found two things tremendously disconcerting. Number one, that this surveillance capability exists.

And number two, the speed with which we as a society have demanded that that capability be used. There is a third element that I find disconcerting. And when I talk about this story, sort of hitting on bigger questions facing all of tech, I'm coming to this as someone relatively new to this world. But as an outsider, what's disconcerting to me is that people who are frustrated by the way Google behaved here run into a bottleneck that's become common across all sorts of different tech arguments. Because if you say Google shouldn't be performing what's essentially a police function and have this much power to unilaterally decide, what gets done and what accounts get deleted, who gets their account back.

You'll run into people who will say, well, Google is a private company, and this guy did sign the 900-page user agreement, so they have the right to remove any user and any content that's on their server. And the same argument is made. It's actually something that came up in the Eric Sufer interview you did a week ago,

where you guys are talking about ATT, and he said we're dealing with a new legislative reality as privacy legislation is passed all over the world. And that is true in some sense, particularly in Europe. But in this country, it was Apple who wrote what's a fairly extreme policy that has had huge effects on the rights of like thousands of American businesses. And none of it was ever really reviewed by Congress. and if you point that out, you'll hear people say, well, Apple's a private company. It can do what it wants.

It doesn't have to wait for congressional approval. And that's technically true, but it misses the point. Like, nobody is accusing Apple of intentionally usurping the government. No, but it's concerning that they have that power. You're ignoring the elephant in the room, which is the most obvious example is free speech. Totally. Like, this comes up again and again, like, oh, Twitter's a private company, kick off the platform wherever it wants.

Facebook is private company kick off whoever it wants. And that is true. Like, yes, the First Amendment preserves the ability of private companies to do what they want to do as far as speech is concerned. It's absolutely true. It's absurd. And it irritates me to no end when people pretend that's the end of the argument. That's what drives me crazy. Is that supposed to be like the Trump car, the conversation ender?

And it's like, it's intellectually dishonest to. pretend that that's what people are arguing about here. No, I know. I don't. This is actually a perfect articulation, you know, to go. Alexander Hamilton wrote in one of the Federalist papers defending the Constitution. One of the big objections to the Bill of Rights was actually precisely this, which was when you articulate a right, you diminish the reach of that right.

And the idea was, of course you have free speech. if we limit it to government, you're actually constraining what that is. And that's what these people out here are actually doing. They're dramatically diminishing the meaning and the social moray and value of free speech by saying actually it's only ever sort of a government thing. Yeah, no, totally. And I should clarify that like if we're talking about the literal enforcement of the First Amendment, maybe some people are arguing that this violates like the letter of the First Amendment when Facebook decides to label.

Right. That's not an argument. They're wrong. We agree. They're wrong. We agree. They're wrong. But the bottom line in all of these conversations, whether it's social media companies or Apple or Google, is that people are reasonably concerned. Sometimes they can't even really articulate what the precise concern is. But it's really. reasonable to be concerned that these companies have so much power in our daily lives that they've essentially taken on a government function without being subject to any of the constitutional limits we put on the actual government. And that's what this story reminded me of. And again, there's so many different examples in the arguments we're having about tech today. And I think it's something that will ultimately have to be solved legislatively, and I don't have faith in

our government to get its act together for another 10 or 15 years. But like, that's what the, the core problem is. I don't think it will be solved because the reality is, is the sort of people that are in, that are in big tech, particularly, you know, at places like Google, the sort of people that are in media, the sort of people that are in Washington are all sort of the same kind of people who aren't particularly worried about these these sorts of things. I mean, now, that's not necessarily, and it's so easy to point to so many of the ruckus raisers are bad actors. Like, who wants to defend child pornographers, right?

The most sort of extreme example. Who wants to defend racist? Who wants to defend all these sorts of folks that often tend to be adjacent to, maybe because convenience or your enemy is my enemy, to people that are sort of raising these concerns. And nobody wants to defend Facebook. who's getting crushed by ATT and Apple's behavior. And so there's plenty of unsympathetic characters in all of this. Well, this is where the COVID pandemic is, I think, particularly useful and important.

And why it's unfortunate we haven't really had a national reckoning with all the stuff we got wrong. Because it's a reminder that the reason to have a democracy, the reason of democratic values is not because it's in a particularly efficient way to. to get stuff done. It's horribly inefficient. You end up with bad outcomes all the time. Like a dictator can get a lot more done, a lot more quickly. The reason you have it is because it's a check. It's a check on power.

It's a limit. And because this is why it matters for the state in particular because the state can throw you in prison. Like, Mark could end up in prison. And so you want to have some sort of check on that. And that's the benefit that you get from this. like stuff goes better under a dictatorship most of the time, but when it goes wrong, it goes horribly wrong. I would say that's just sort of broadly speaking that you can make that

sort of argument. And I think this is where the COVID points interesting because a lot of stuff went really wrong. And it went wrong by the same sort of people that are like, oh, you know, I don't say bad things. Like I don't have child porn. Like I don't have all these sorts of things. And it's just a reminder that we can all screw up. Like even if we feel like none of this stuff would ever touch me. And there's a reason why there's a value to have pushback. There's a reason why we tolerate dissidents because most of the time they're crinks, right? Most of the time they're wrong. If you're a contrarian, you're basically wrong the vast majority of the time. The reason we tolerate and value it is for that one time that you're right

and the expected value payoff is huge because the potential damage is so massive. And look, these are really important principles, whether it's the First Amendment and Free Speech or the Fourth Amendment protection against unreasonable search and seizure or I'm too far out of law school to think about which amendment is implicated by some of what Apple's done. But I mean, this is broadly how I feel about antitrust as well. Like, the most credible argument is not that everyone is breaking the law, but that we probably need new laws to account for the reality of what these companies are and how powerful they've become because their actions in the private sector have the potential to undermine like some pretty

core principles and values that have lasted 250 years in America. The issue here is these companies are setting themselves up as judge, jury, and executioner. Exactly. And I think the problem is a lot of people are okay with that because they're like these companies and their employees are share my values. We both have advanced degrees. Like we went to good colleges. is like we're we believe broadly the same things that the people in charge of google and facebook

do we can still have a conversation with them and and and and so when i drop that i'm putting myself in that bucket and there needs to be it's like the broader point about google there needs to be some humility here like we might get it wrong and and the concern i have about society broadly is the same concern about google in this story it's a level of arrogance and the ability to appreciate the awesome power we're assuming and to consider the possibility that we might get it wrong. Interesting. Well, to move to part two here on a lighter note, the Game of Thrones franchise is back and we can start with news from earlier this week from Bloomberg. The hotly anticipated debut of the Game of Thrones prequel saw a vast number of users flock to HBO max,

overwhelming the service on Sunday night in the United States. More than 3,000 outages were reported across the global monitoring service down detector at 9 p.m. in New York City, just as House of the Dragon was released. The show is being successfully viewed by millions of subscribers, a representative for Warner Bros. Discovery Inc., the parent of HBO, said in a statement. and then HBO later said that House of the Dragon was viewed by 10 million people and was the most watched premiere in the history of HBO. So I want to talk a little bit about the difference between HBO Max and Netflix. I'll just say at the top, one reason I'm bullish on HBO Max is that they have the worst app experience of any streaming company on Earth,

and yet I still use it more than anything else because the content is that. good. Are there other reasons to be bullish on where HBO is and where they want to go? And did you enjoy House of the Dragon? I guess it's the most important question. I enjoyed it. I thought it was fairly predictable, which is right up my alley. I got like watching TV to be surprised. I wanted to know what I'm getting into. I want my surprise from sports. That does it for me. But I watched it, which I'm never up to date with any TV show ever. I actually rarely watched TV shows in general, so I never know about anything.

But it's like I knew it would be all over social media. Like there was a huge degree of FOMO. Like I'm going to sort of miss out on this. It's a cultural event. I want to be a part of it. And so I watched it at 9 a.m. on a Monday morning since I've been Taiwan. And it was great because, you know,

now they have HBO Max. There's ways you can get it to work abroad. I'm not going to disclose that may or not happen. But, and I enjoyed it. you know, the, I think that's a good point about sort of, you know, this bit about content is really important, like having the best content. At the same time, there's lots of other pieces that go, like, how do you actually leverage that best content?

I mean, there has been a lot of controversy on HBO over the last few months because they're cutting shows, right? They're, they're getting rid of certain things. You know, Catgirl is in the trash bin of history. And so there's also, like, you have to actually build. a business around this. And, you know, it's very interesting to observe what's happening with Netflix, what's happening with HBO, because there was this period for a long period of time where it's just

this greenfield, this huge opportunity. And Netflix comes in and they're released from all the sort of constraints of Win your TV. And when your TV, there's only like, what's the effective number of shows on HBO on TV? It's one. It's whatever the HBO channel is showing at that time. What's the number of effective shows on Netflix? It's however many shows on the network is you can choose any one of them to watch. There's this tremendous payoff consumer benefit that comes from being sort of on demand.

And you can time shift stuff like times now commodity. It's no longer a constraint. It's it's removed as a thing. And Netflix leaned all the way into this. All their content was available at all times anywhere. And that meant when they did original. content, they released it all at once because could you release, you know, House of Dragon or whatever it's called, House of the Dragon. I've been calling it House of Dragons. I've been calling it,

Game of Dragons. So I mean, who knows? Who knows what it should be? But we're going to call it any number of those things. But no, like you, you, it's actually not only if HBO want to release it all on HBO the network, they would need a 10 hour block because they have to, they can only show one thing at a time, but they're not even doing that. They're actually spacing it out by a week, right? So now I have to wait until next week to watch the next episode and the one after that.

And when Netflix was coming up, and it's all Greenfield, and they're fully exploiting the possibility of digital, I can understand why they took that approach. But there's a, you know, there's a certain bit about technology just because you can do something, doesn't necessarily mean you should do something, right?

And from my perspective, like if House of the Dragon, I'm going to trip over that constantly, if House of the Dragon was released all at once, I probably would not watch a single show. Because what's driving me to watch that show is the cultural moment aspect of it. I want, like, it's fun to talk about with people.

It's something that's discussed online. It's on Twitter. And it's funny you say that because I was so upset at how hands. the Game of Thrones final seasons were that I have no interest in like jumping back in with those people like once you remove the source material from George R.R. Martin like they did a shitty job for a couple seasons. They got killed for the last season, but it was kind of rough for a little while there. But on Sunday night, I felt FOMO because everybody's tweeting about it. I'm

getting text messages about it and like I want to check it out. And so like I'll, I'll be there next Sunday night. I decided to wait to watch it with my wife, but I will for sure be part of the pack who's doing this mostly just so you can talk about it. And Netflix is leaving all of that money on the table as far as Buzz is concerned. Right.

And, you know, but there's two components to that. So number one, how much, like, are there Netflix shows that could be much greater if they actually tapped into the cultural zeit guys? I mean, they've had ones that have broken through. So what was the one from South Korea? the squid game which I never watched because I'm not going to

like it was a moment past right if there was a buildup I might have gotten into it there's also an aspect where by some South Korean show I mean you know that like by having it all there like maybe that helps for a relatively unknown show that helps sort of generate a certain sort of buzz that gets people dipping in

there's arguments that can be made that direction but there's also the aspect of look it's not like how it's not just that the show is on Sunday night you have like 47 ringer articles running up to it. You have like five reaction pieces. I listen to a freaking podcast about it.

Wow. I'm like, well, it's got them on my now. And of course, there it is. It's already out there ready to go. And so one that just increases,

increases sort of like the attraction. But you also have to have a good show that's worth talking about. Right. Right. And my question about this is what, what is the chicken and egg here? Like you mentioned a chicken egg earlier. There's like another one here, right?

is it that this sort of release schedule and this approach helps drive interests that make something popular and bigger than it would have been otherwise? Or is it the sort of mindset and approach that is like, look, this is super valuable content. I know you want it now. I'm going to dribble it out. You're going to have to pay full price for multiple months to our service to get it. we're going to fully prioritize our pay TV customers who give us a lot of money alongside the streaming folks and it's going to be worth it

because we have invested the time and energy and expertise to make this great. And, you know, I'm a big believer in sort of alignment, right? You want to have your business model and your distribution and align with your product and your marginal costs, like all these sorts of things. Like if you have sort of a high-end sort of product, you want to have, you just want to have stuff alive, right? That's why for something like arrogators, like advertising is a natural fit.

It's all about capturing user attention at scale, right? And so what makes the product work also makes the business model work. It's sort of a beautiful sort of thing, right? And the best companies are like that. And when you talk about this, you know, this issue, like kind of the critique of Netflix isn't just that, you know, they released all once, but they never, they never had, like, where's the good content? They have a lot of, like, they have a lot of bad content. And it is pretty surprising when you look at how much money they're spending on content that they haven't been able to crack that code.

And you wrote about this along those lines and said, to the extent that content is an art, a data-driven technical mindset may not only not help, but in fact may be an active debt. And, you know, I was reaching the same conclusion as I was running earlier today thinking about this. Like, you know, choosing great content is more art than science. And Netflix takes this programmatic view to basically everything they do. Well, they actually kind of go in the opposite direction too. Like, like Netflix is famous for just giving creator, like shows money and let's say go for it. Like, like, we're actually being hands off. Yeah, and it's like, like, oh, no, actually that's going to make us more attractive relative to an HBO, which is famous for not only are we going to pay you less because you're going to be an HBO, but also we are going to be super involved and we're going to make choices and we're going to upset you and we're to go back and forth. And the other companies actually kind of well known for doing this these days is Apple.

Like with the Apple TV, they're like, apparently they're incredibly meddlesome. And like it's like they want to have, like, I mean, Richard Pupp. I've heard that too. Yeah. And they're trying to get into all the sorts, sorts of pieces. And, but then you turn around,

like, what is actually, what is the one thing that Apple TV Plus is kind of known for? Like, they're delivering, like, their hit rate is super high. And it makes you wonder,

like, you know, you think about writing. You think about, like, like a great song needs a great producer. A great writer needs a great editor. Like,

there's, there is a great product needs a great product manager ideal. Like that, that sort of like is, is limiting the X. right? A lot of people think that Apple's design really went wrong when Johnny Ive was completely in charge because he didn't have someone checking him who was looking at like, wait, you need to consider like users might actually need porks, right? They might need a keyboard that works. Like that might be an important thing, right? And that might be where this sort of went wrong. And, you know, it's interesting because the old television model, what, what, made HBO in particular really, really compelling and was it was a premium product, right? So you had to pay to get it.

And so there was the sort of alignment and incentives that we need to deliver something that's super high quality. It's not going to be quantity. You get quantity from your cable bundle. But there's a reason to pay extra on top of that sort of every month. And then also, once you get that, we can still leverage cable. So you don't have like, you've read the excerpt. people could get the streaming to work.

Turns out if you're releasing one thing at one time to a lot of people, a wire in the ground is not sort of the worst option like going through your cable box, right? That's sort of like it was designed for that. It's sort of ironic. I mean, again, from my perspective, you do get a shift in place benefit from streaming. That is certainly sort of worth it. But I just thought that was sort of ironic that what's happening with HBO is they're kind of leaning back into the event. event programming matters.

And we see that in sports. Like we haven't talked about like the Big Ten, but they just signed this huge sort of thing, this huge network or this huge deal. Why? Because there's lots of people that care about it. But the Big Ten also took care that one would be on broadcast TV, so anyone can get us, including cable cutters. And number two, every week there's going to be a game on Fox at 12,

a game at CBS at 3, and a game at NBC at 7. And it's going to be there every week and every time. it's the NFL model. And we like this idea that we want to create events. We want to create sort of destinations. And you do that by having something super highly differentiated. And what's really interesting about this is Netflix is never going to do that. Like Netflix is all about like we broke the model and achieved all these advantages that are great for consumers.

And that's true. If you just want something to watch Netflix is a whole bunch of stuff sort of all the time. But it does it does make. it does make me wonder all that choosing, all that picking, all that deliberateness does seem very aligned with a culture and a mentality that does result in quality. And it has to because if you have an event, you have to deliver. It has to be something worth showing up for. And maybe it's just structurally the case.

It's not just a talent thing. It's that HBO structurally is just better place to deliver this. And this is why I'm not so worried about them cutting this stuff. I'm not so worried about them cutting stuff. Like I think you can look at- They're cutting middle-tier stuff. Right. And who's going to pay for that?

Yeah. Like, why waste the money? Yeah, well, and on the Netflix point, one thing I have to add as a point of clarity is that when I was running and came to the conclusion that, you know, content is more art than science, I got like another 200 yards down the road and was like, well, yeah, all this shit is the arts. So it makes sense. So my novel thought wasn't really that groundbreaking.

The other reason just broadly why I am, I'm still optimistic about Discovery, HBO Max. I actually love the combo. Like, number one, I don't mind all this cutting in the middle tier. I don't understand what it's getting you. And meanwhile, Discovery are the kings of cheap content. Like, I can veg out to like property brothers for like three. hour straight, right? Right. And to have that built-in base is really valuable. And that's actually the point I wanted to finish on. So Netflix has 60% more subscribers than its biggest competitor, Disney Plus,

and it has 80% higher net adjusted revenue per user. So Netflix, as much as people want to ring their hands, is still doing quite well. But I will say that the things that once made Netflix a no brainer investment for me and almost every person I know like five to seven years ago are no longer there because five to seven years ago you had a couple good like high end prestige shows that Netflix was putting together and you also had all this network TV to serve as background noise and so between those two things it was a really valuable service and it feels like now they have far less of the like real solid seven seasons of the office or any other show like of that ilk and and at the same time they're not making like the high end prestige as effectively as they were six or seven years ago

and all of that may not harm their bottom line now they're still doing fine i mean it has harmed their bottom line this year but i think going forward it's going to be a continuing challenge for them because everything that used to distinguish them, like unfortunately they're not getting basically free shows for the networks the way they were at the beginning. The thing that didn't necessarily distinguish them, right? You could still get a lot of those reruns on cable TV. What made it better on Netflix?

What made it better on Netflix was all this stuff they leaned into. You could access any of them at any time. It was easy. It worked really well. You weren't dependent on like some programmer at TNT choosing what's going to be on at like four o'clock in the afternoon, right? And there's a bit there where, and Matthew Ball made this point an interview with me,

so I'm sort of blatantly stealing it. But in a world where Netflix was not responsible for its content, it was on an equal footing for content, its technological and user-friendly advantages were a huge advantage. It's like you have the same stuff in both places. Ours is just way easier to access. What's happened, what's changed for them is they no longer have the same content. and and content matters more than anything.

You can make people jump through hoops. You can make me sit down at 9 a.m. on a Monday morning to watch a show. I probably don't really care that much about. I forget it's Monday morning as you're watching House of the Dragon out there. There's a lot of gore for a Monday morning. I got to be honest. Dedicated to the discourse, Ben Thompson, live from Taiwan. Well, listen, I can't wait to come back next week.

And when I do come back, when we come back, I'll have some takes on the first two episodes of House of the Dragon. So we can run through it at the top. Well, I think we're actually coming back in two weeks because to take this full circle, you're going to see a Formula Und race. The Dutch Grand Prix. All right. So I'll have a full report on life out in Zandvort. And then I'll also break down the first three episodes of House of the Dragon. I just want one picture of you in a Red Bull jersey.

Oh, God. the jerseys are so expensive that's my that's my alibi i'm not going to buy any any sort of red bull merchandise but i look forward to it ben and uh we'll keep it rolling talk to you later