Tech Brew Ride Home - Wed. 05/20 – Joe Rogan is Podcasting’s Howard Stern Moment

Starting point is 00:00:00 On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech Meme Right Home for Wednesday, May 20th, 2020. I'm Brian McCullough today. Facebook takes another major run at cracking e-commerce. Why this might be a highly opportune moment to do so. In short, the Corona moment might be the moment e-commerce finally wins. Also, will Apple ship iPhones without any ear pods and why the big Joe Rogan to Spotify news might be podcasting's Howard Stern moment?

Starting point is 00:00:58 Here's what you missed today in the world of tech. Facebook is taking yet another crack at e-commerce with the newly announced Facebook Shops, a free tool that helps businesses easily list products on their Facebook page, Instagram profile, stories, or even inside ads, quoting CNBC. In the future, Facebook Shops will also allow businesses to sell products to customers through the chat features of WhatsApp, Messenger, and Instagram Direct. They'll also be able to tag products during Facebook and Instagram livestreams, so customers can click on the tags and be taken to a product ordering page.

Starting point is 00:01:36 The company has previously let businesses list products on Facebook and Instagram, but Facebook Shops lets them upload their catalogs once to make them accessible across Facebook's various apps. It's one simple and consistent experience across the family of apps, which means it is easier for people, Facebook CEO Mark Zuckerberg said, in a live stream on Facebook. That, of course, means there will be higher conversions and more sales for small businesses, end quote. Facebook shops comes as Facebook ramps up its efforts to support small businesses during the coronavirus pandemic, and Zuckerberg said that he personally was involved with the development of the feature.

Starting point is 00:02:11 Small businesses make up the vast majority of Facebook's more than 8 million advertisers, Zuckerberg said on Tuesday. Even though shops is free, it will encourage small businesses to remain actively engaged with the platform. Since the pandemic began, the company has announced a $100 million program to support small businesses through grants and a way for small businesses to sell gift cards directly to consumers through Facebook, end quote. So you might be saying big deal. Facebook has tried to gin up e-commerce on its platform numerous times over the years, but one way to think about this is in the context of the big platform wars that we always cover on the show. This is a shot across the bow of Amazon, of eBay, of Shopify, or basically this is just another front in the larger tech world war.

Starting point is 00:02:57 as Shashi Khan Kore tweeted, Build a store on Facebook, you depend on Facebook for traffic. Build an independent store, you depend on Google for traffic. Become a seller on Amazon, you depend on Amazon for traffic. And in all of these cases, eventually you buy ads for that traffic, end quote. Again, a multi-front war of which this might be only the most recent hot theater. But it could be an increasingly important one since e-commerce is. is having a moment. And what I mean by that is sort of what we were talking about on that weekend

Starting point is 00:03:37 bonus episode last weekend when a listener asks what I thought was fundamentally going to change because of this coronavirus moment. My answer essentially boiled down to, well, this is it. Commerce, e-commerce, the shift to virtual commerce. The slow inexorable trend of the last decade toward the virtual in-commerce, I think is just undergoing a final decisive phase shift at this very moment in time. There's been a chart that's been making the rounds on Twitter that I've got a link to in the show notes, and it's actually very illuminating. The bottom line is this. It took 10 years for e-commerce's share of retail penetration to go from 5.6% to 16%. And then in just the last eight weeks, it went from that 16% to 27%. Of course, a lot of that e-commerce being done right now

Starting point is 00:04:33 might be temporary and it might ebb back as things return to normal. But as I said on the weekend bonus episode, never underestimate consumer inertia. It takes people a long time to get trained on a new behavior. But once they're converted, they tend to stay converted. And basically what I think we're seeing right now is a forcing mechanism that is accelerating the trend. that we were seeing and converting the bulging part of the bell curve when it comes to commerce. This is how TechCrunch puts it. COVID-19 has made e-commerce a safer choice than visiting a hotspot. Would you rather stand in the Walgreens queue for your pills or subscribe and get them delivered

Starting point is 00:05:12 to your home? The answer is already playing out. Walgreens recently announced a tie-up with postmates to deliver medicines to customers. The last time we had a safety narrative in response to 9-11, it led to the the boom of the surveillance industry. Now that boom is happening in e-commerce. Go online to live a little longer is a very compelling narrative. Nearly 35% of America's spending population is older than 55. Historically, this demographic has been the slowest to adopt e-commerce, but now they will. Some changes are set in motion because there is a forcing function. But once change unfolds,

Starting point is 00:05:50 there is no way to say there will be a preordained endpoint or that it will. will or won't touch some parts of the physical transactions economy. As a customer who's new to online shopping becomes accustomed to, say, Postmates UI over time, each new category added becomes an e-commerce first for that user. Consumer behavior changes are hard, but when they happen, they start a flywheel effect. New behavior will be introduced by one transaction for one category, but will set the flywheel in motion for other categories. As soon as delivery apps understand the cohort of new users and their behaviors. The app adapts to them and introduces them to the powers their iPhone magic ones possess. There will be no looking back. Everything

Starting point is 00:06:32 convenient to order online will be ordered online. Fear and flight to safety are great motivators. Fear of getting a transaction wrong and losing money slowed down payments innovations and safety has never been in the e-commerce equation before. These two powerful motivators are propelling e-commerce forward right now. If there is one j-curve that won't be depressing to watch in the near future, it will be e-commerce revenues, end quote. So basically, think of e-commerce as suddenly the hottest battlefield in the World War of tech platforms. The platforms have always been playing a long game, a land grab game, a game of taking advantage of historical trends, of just simply identifying the tidal waves of history, and then going

Starting point is 00:07:17 and standing in a place where the tsunami will eventually wash over them. e-commerce was in a lot of ways the first battlefield in the great internet transformation of society. But I'm increasingly thinking that 20 years on, the COVID moment might finally be bringing this first battlefield to what was always an inevitable crescendo. Which is also why I've been asking, among all of the things that should be having their moment right now, things like VR, as we've discussed, why haven't we heard more about autonomous delivery, drone delivery, robot delivery, that sort of thing. Not only do people not want to go out, not only are they ordering in more, not only do they not want to interact overly much with people,

Starting point is 00:08:06 but if e-commerce, as we've just said, is accelerating, why not also accelerate the trend of more efficient delivery? So I'm really going to be on the lookout for more stories like this one from the New York Times. It's about Milton Keynes, a small city in the United Kingdom that has been getting grocery delivery during the lockdown via a startup called Starship Technologies and its fleet of delivery robots. Click through for the pictures of these ankle robots, as I like to call them, these knee-high droids from the Death Star, pictures of them actually making deliveries, real deliveries in the real world, on real world roads and sidewalks, quoting from the times. The sudden usefulness of the robots to people staying in their homes is a tantalizing hint of what

Starting point is 00:08:49 the machines could one day accomplish, at least under ideal conditions. Milton Keynes, with a population of 270,000 and a vast network of bicycle paths is perfectly suited to rolling robots. Demand has been so high in recent weeks, some residents have spent days trying to schedule a delivery. Founded in 2014 and backed by more than $80 million, Starship Technologies is based in San Francisco, and it has deployed most of its robots on college campuses in the United States thus far. Equipped with cameras, radar, and other sensors, the robots navigate by matching their surroundings to digital maps built by the company in each new location. The company chose Milton Keynes for a wider deployment, in part because the robots could navigate it with relative ease. Built after World War II, the city was carefully planned, with most streets laid out in a grid and bicycle and pedestrian paths called Redways running beside them.

Starting point is 00:09:39 When the Starship robots first arrived in Milton Keynes, one of the fastest growing cities in Britain, Listpage thought they were cute, but pointless. Quote, the first time I met one, it was stuck on the curb outside my house, she said. Then, in early April, she opened a letter from the National Health Service advising her not to leave her house because her asthma and other conditions made her partially vulnerable to the coronavirus. In the weeks that followed, the robots provided a much-needed connection to the outside world, end quote. Ming-she-Quo is predicting that for the first time ever, with the new upcoming iPhone 12, Apple might be shipping phones without any free earpods inside the box. quoting Apple Insider. In a note to investors, TF Securities Ming Chi Kuo says that he believes that Apple will leave out the $29 lightning earpods when the iPhone 12 ships to consumers. He isn't specific as to why Apple will take the action, but does note that it may dovetail with a promotion for AirPods of some sort. Furthermore, Kuo sees AirPods demand in the short term waning because of larger economic conditions, but this is only temporary as he sees a return to growth in the full year. Previously, he predicted about 85 million sets of AirPods shipping.

Starting point is 00:10:58 He now sees 94 million shipping in the year in total across the entire range of devices. On April 19th, John Prosser stated that Apple had a third-generation AirPods refresh ready to go, contrary to what Quo believes. On April 24th, sources predicted that a new AirPods model would incorporate noise cancellation technology. Impact on the battery life could be offset by Apple using the manufacturing process improvement to save space internally. to fit extra battery capacity, end quote. There's no two ways about this. The biggest story in all of tech today is a podcasting story.

Starting point is 00:11:36 Joe Rogan's podcast will become a Spotify exclusive beginning September 1st. This means that, starting on that date, the only way to listen to new Joe Rogan experience episodes, as well as his, what is it, almost 11 years of back catalog episodes, will be inside the Spotify app. You don't necessarily have to pay up to Spotify to listen. and you can still be a free user of Spotify, but you will need to at least be a Spotify member. This is all part of a multi-year licensing deal, which the Wall Street Journal is reporting, is worth more than $100 million, although I'm hearing that it's most likely north of $200 million,

Starting point is 00:12:15 the larger number making more sense to me because of what I've previously heard about Joe's existing revenue from the podcast already. think about it from Joe's perspective. Doing this move to Spotify, essentially going behind a paywall, is almost guaranteed to limit the reach of his show. And the show is already making more money than God, probably deep into the eight figures per year in terms of advertising revenue. So Spotify would need to pay Joe enough to justify essentially cutting the amount of people who listen to him every day significantly. Lots of people have been making the Howard Stern to say, Serious XM comparison, and I think that's almost exactly apt. Joe has the largest audience in

Starting point is 00:13:00 podcasting, but just as Howard has happily gotten very, very rich over the last 15 years on satellite radio, his audience is nowhere near what it once was. Add to that the fact that it's not like Rogan couldn't demonstrate obvious value to Spotify. Spotify has 286 million active users, while Rogan says his podcast regularly earns 190 million downloads each month. So let's divide that by the number of episodes he does each month, and let's estimate he has 10 to 12 million listeners. If he could bring over even one million of those listeners, make them into new Spotify members, amoritized over time,

Starting point is 00:13:40 that would be worth nine figures to Spotify right there on just a straight accounting basis. But even more so, if Rogan helps cement. Spotify as a podcasting platform. And also one very key part of this deal is the fact that Joe's new content will also be coming down from his YouTube channel. That's not at all insignificant because Joe's YouTube channel has 8.41 million subscribers. And YouTube is launching a direct Spotify competitor soon. And Spotify is launching Joe's new show on its platform with a video component. opponent. See, video is another interesting vector to all this. I point you to Nick Kwa's recent interview

Starting point is 00:14:25 with Bill Simmons of the Ringer, which Spotify bought earlier this year for something like $200 million. Here's a direct quote from that piece. This is Simmons speaking. The Spotify VOD casting thing is going to be really cool and different, and I'm excited for that. I know you wrote about it last week. Some people, for whatever reason, just like watching podcasts. They just do. Spotify has the technology to combine that experience. So whether you want to watch it or you want to listen to it, you're going to get it in the same place. The goal of Spotify is we want you on our app. Come to our app and stay there. This is something they spent, God only knows, at least a year trying to develop the technology for it. That's a good example of why we wanted to go there.

Starting point is 00:15:07 If we were going to work with and for somebody else, we wanted to be in a place where they'd be like, hey, we created this awesome technology. Can you guys be the test case for it? It's like, great, that sounds awesome, end quote. Now, having said all of that, there has been a ton of backlash to this. Joe's announcement of this move on YouTube has 18,000 dislikes. And this was Marco Arment's tweet, quote, F Spotify and F any podcast that's only playable in one app. What Joe Rogan is going to find out, after it's too late,

Starting point is 00:15:41 is that moving an existing open, free show behind a proprietary wall, results in massive audience loss. I hope he at least leaves his public feed up so he can return to it when his Spotify exclusivity fails, end quote. I'm personally not so sure about that, but there are a lot of other people out there that are flat out saying Spotify's podcasting strategy is revealing itself to be kill podcasting. This is from digital trends, quote, wait, what? How can Spotify kill podcasts? You're right, of course, podcasts can't be killed by anyone except their creators, which is exactly why the Joe Rogan acquisition is an ominous sign of what's to come. By making Rogan's show exclusive to Spotify, something that will officially take place later this year, it effectively ceases to be a podcast at all.

Starting point is 00:16:31 And this is from Pod News, an industry newsletter that we all subscribe to in the podcasting biz. They're getting literally pedantic about what the definition of his even is, quote, A podcast is something that is delivered via an RSS feed to multiple podcast apps. Pod News refers to things available exclusively on Spotify, BBC Sounds, or Luminary, as shows. Accordingly, from late 2020, we will no longer refer to the Joe Rogan experience as a podcast, end quote. And finally today, going to squeeze this in here because it's nerdy and in the weeds, but it's nonetheless important. The SD Association has unveiled a new SD8.0 specification, meaning that new SD Express cards will eventually be able to reach speeds of 3,940 megabytes per second with new PCIE 4.0 support, meaning that new

Starting point is 00:17:31 SD cards sometime in the near future will be able to achieve roughly four times the speed of current cards, quoting Gizmodo. In a press release issued on Tuesday, the association announced that transfer speeds for SD Express cards will now top out at just shy of four gigabytes per second. However, that top end figure for new SD Express cards will require a card reader that supports two PCIE four lanes, or else transfer speeds will get cut in half to around to GBPS, or 1920 megabytes per second, when using PCIE3, which is still twice the speed of today's fastest SD cards. Furthermore, the SD Express will be available across a range of card sizes, including SDHC, SDXC, and SDUC.

Starting point is 00:18:21 The way new SD Express cards achieve these speeds is through a new pin layout on the back of the cards which can utilize both single or dual PCI E4 lanes. But perhaps more importantly, like previous versions of the official SD spec, SD8.0 cards will also be backwards compatible with older card readers so you won't get their full listed transfer speeds. The reason why this is important is that with the rise of 4K and AKTVs and phones and cameras that can capture photos and videos and higher resolutions and bit rates than ever before, it's becoming increasingly important to have removable storage that has enough capacity and adequate transfer speeds to properly store all that data.

Starting point is 00:19:03 The same goes for gadgets like the Nintendo Switch, which can bolster its paltry 32 gigabytes of onboard storage by tacking on a separate microSD card. By increasing the transfer speeds of SD cards, the new SD8.0 spec could pave the way for faster loading times on future game consoles that support external SD card storage, end quote. Thanks to Glenn for filling in yesterday. I've been recording sessions for the Collision from Home Conference all week, which normally would have meant me sending you episodes recorded in some hotel room somewhere. Obviously, I'm not doing that, but it is still taken up all of them. my free time this week, thus the weird posting times. Some days I've been posting really, really early, and then some days late and, you know, Glenn filled in yesterday, very ably, I might add. Anyway, I'm recording my final session for the conference tomorrow, so things will be back to

Starting point is 00:20:02 normal, and I will talk to you tomorrow again as well.

Tech Brew Ride Home - Wed. 05/20 – Joe Rogan is Podcasting’s Howard Stern Moment

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