The Vergecast - Facebook lost daily users for the first time ever / Spotify CEO defends Joe Rogan deal

Episode Date: February 4, 2022

The Verge's Nilay Patel, Alex Cranz, Ashley Carman, and Alex Heath discuss Meta's rough week: Facebook reported its first-ever quarterly decline of daily users globally, along with lower-than-expected ad growth that sent its stock plunging roughly 20 percent. The crew also discuss Spotify's response to the Joe Rogan controversy and how it will be handling moderation going forward. Further reading: Facebook lost daily users for the first time ever last quarter Meta’s stock price plunges 25 percent overnight Google parent company Alphabet broke $200 billion in annual revenue for the first time Epic largely lost to Apple, but 35 states are now backing its fight in a higher court Spotify CEO defends Joe Rogan deal in tense company town hall Spotify says it’s a creator company now Here is the Spotify COVID content policy that lets Joe Rogan slide Spotify finally responds to Joe Rogan controversy with a plan to label podcasts that discuss COVID-19 Joe Rogan defends podcast and apologizes to Spotify for backlash The Joe Rogan controversy is what happens when you put podcasts behind a wall  Sony is buying Bungie, the developer of Destiny and original creator of Halo Big video game companies just can’t stop buying studios Wordle has been bought by The New York Times, will ‘initially’ remain free for everyone to play Peloton’s latest gadget is a $90 heart rate monitor for your arm Echelon persuades USPTO that Peloton’s streaming tech is unpatentable Appeals court upholds California’s net neutrality law Google leaks Pixel 6A name in, of all things, a coloring book Tesla has a new feature that will disable your seat controls if you keep messing with them Public accountants are deducting themselves from their jobs  What’s the difference between 5G, 5G Plus, 5G UW, and 5G UC? Learn more about your ad choices. Visit podcastchoices.com/adchoices

This week on the Vergecast, Alex Cranz, Ashley Carman and Alex Heath joined the show. We talk about Facebook, Google, and Apple. Apple's app tracking has had a huge impact on Facebook's earnings and Google's earnings. We get into more Spotify and Joe Rogan. The CEO had comments this week that Ashley leaked. Let me do a little lightning round on other headlines. That's all coming up on the Vergecast now. Support for the show comes from Retool.

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We all need to retool how we build software. What's up, y'all. I'm Skyler Diggins, seven-time WMBA All-Star, Olympic gold medalist, and mom. And I'm Cassidy Hubbard, host and reporter for nearly 20 years covering the biggest names and stories in sports and mom. And this is Am Mom, a community for athletes, game changers, and moms of all kinds. Dropping May 14th. Tap in with us. Hello, and welcome for our chast, the flagship podcast of being a platform and not a publisher. I wasn't going to do it.

And then it just happened. I'm so sorry to everyone. I'm also sorry because Dieter still isn't here. And I'm quite frankly just at a loss. I don't know how to handle it. So in classic Indian mom fashion, I'm dealing with whatever emotions I'm having by having all the people I can together at once. So Ashley Carmen is here.

Hello. Alex Heath is here. Hi. And Alex Cranes is here. Hello. Everyone. I'm just going to feed everybody. And that's how we're dealing with my emotional state.

The Dieter isn't. I think he's back next week. God bless him. He's on vacation. He deserves it. No one can see you cry in the metaverse. It's okay, Nilai. Do you know one of you? A long time ago when we used to go to CS, like in force and the whole video team was there, we would make these videos. Like in the last day, like art project videos, just like a reward for the video team. And so we did one that was Ross Miller, managing editor at the time, spending a whole day at CS.

Like the concept was he lived at CS. I remember this. There's a scene in it where he's. trying in a VR headset. It's like just very funny. But that was just like our little joke, our project video. And then months later, this was when the media could still like play pranks and lie and it wasn't a threat to democracy.

We did an April Foolstroke that we were going to buy a Super Bowl ad like as a stunt. So we put up this post and deleted it that said we had bought a Super Bowl ad. And we had made a Super Bowl ad. So there was like an unlisted YouTube link in this thing. And we left it up just long enough for people to click on it. So this over the top. Super Bowl ad that we had made featured the scene of Brawl's crying in the headset, and everyone thought we were serious.

My God. We did. This is true. We bought airtime on the Super Bowl in Helena, Montana, and we sent a local university student to a Buffalo Wild Wings to watch a Super Bowl ad in Helena, Montana. So it's true. How to do? Did it do really well?

I was like, did people stop? And she's like, they were all pretty confused. All that's pretty prophetic. really, if you think about it. I was right. And it turned out we should have just bought the full bill. We should have run the national campaign. I mean, I talked to RCA owner after the show. Anyway, regardless of all that, it's kind of a gigantic week of news. There's a lot of themes in the news, but we have to start with, I mean, Facebook had earnings yesterday. It was a huge miss. The stock is tanking. It's

taking like the whole stock market down with it. Mark Zuckerberg addressed the company today. he said that he'd scratched his eye, so he might start crying, but it was not because of earnings. It was because he had scratched his eye. This is all true. Alex, walk us through what is happening with Facebook. Yeah, so meta slash Facebook has been saying for a while that these Apple ad tracking changes, which is that prompt you see when you open an iOS app asking if you want to be tracked, that that's going to hurt them quite a bit. We hadn't really seen what that looked like until this quarter, the fourth quarter, and it was bad. And they said it's going to stay bad for a while. They're projecting to lose 10 billion in revenue this year alone just from Apple's changes.

And so it was a combination of that and also the fact that Facebook, Core Blue, lost daily users globally for the first time ever. So for 30 plus quarters, it's been nonstop up and to the right. This time they lost a million users in North America, which, which is their key market where they make the most money. And this all kind of feeds into the narrative that we and others have been reporting on, on, you know, Facebook is obviously losing touch with young people to a lot of competition. And just the theme of, it was a very downbeat earnings call. And, you know, I think meta Facebook earning calls are always pretty interesting.

But this one was like very, it felt like, you know, they were under siege. And Mark Zuckerberg was talking about how competition has never been furious. sir, which plays conveniently into the whole antitrust debate, which we'll get into. But I do think it's real that TikTok is eating their lunch in terms of where people are spending time. And the news feed is lame. So they're trying to figure all that out. So they've got this kind of competitive pressure on the business side and on the product consumer side, all kind of converging at once in a really nasty quarter. And so, yes, they lost over $200 billion in market value in one day, which is a record that they had set themselves in 2018 previously. So they've set both records for most market

cap lost in a day. And I saw some chart about how they drove down the entire NASDAQ or something with them. So yeah, pretty nuts. You really love an overachiever. Like, that's just going out there and doing their best in the worst way possible. Facebook's like a college partier. They're up big, they're down big. You never know what's going to happen. You never know. They party hard.

They work hard. Well, I wanted to ask the one million lost users, were those people this just quit? Well, so those are DAUs, which, you know, daily active users. The global monthly users were up a little bit, but that's a lot easier to cheat. Like, I've heard stories about, like, engineering, you know, departments in Facebook where like they can just kind of scramble some buttons and notifications to like prop up MAU and get them to their growth goals like at the end of every quarter if they need to.

It's a lot harder to fake daily users. And that's kind of their North Star metric in terms of like the health of the platform. And it's what Snap and Twitter and everyone else kind of guides towards. And so the fact that they lost those DAUs and they couldn't eke out a little bit of growth even in like some other part of the world where they're always usually growing was notable. And also the backdrop like I said to that is. like they've been saying in the reporting from the Facebook files and everything has been showing that they're very, very weak with young people and that young people just aren't even

getting on their apps like a whole generation. So that's like a kind of existential threat for them that we kind of saw come to light for sure in the numbers this quarter. So Ashley, for a long time you covered Instagram. Instagram was Facebook's youth play. You and I have spent a lot of time talking on this show, talking to executives about Instagram is coming, becoming a shopping destination. They're going to make it a catalog. It was the cool thing that they had. Yeah.

And, you know, recently live video shopping. Like shopping still seems like potentially the place they go. Like Pinterest, you shop it, basically. I just don't think of, like, cool young kids in live video shopping. Well, you never know if the algorithm's good enough. Everyone dresses like an Instagram influencer now. It's like TikTok. It's like TikTok, too.

It's all kind of the same. But, like, you go on Instagram to buy from, like, she in or whatever. I do want to say, like, using myself as an example. I used to occasionally check Facebook daily just to be like, okay, let's just see. I literally go weeks now. And Instagram, it'll be a thing where at 9 p.m. I'm like, oh, shit, I haven't checked Instagram today. Yeah. It just feels like that's more and more. Maybe I'm just getting older and I don't care as much, but it does feel kind of just like less relevant. It's become a shopping mall. I mean, that's the thing. Like the moment, so there's this like pattern that always plays out with Facebook

products where they start off as like your close friends or your college or your high school or whatever and they become shopping malls because like there is just a constant race for revenue. And so yeah, I mean, that's kind of the, that's the worry is that Instagram is becoming less cool. It's definitely more cool than Facebook blue, but definitely not what it used to be. And you know, like I think like so this guy named Nikita Bierre who sold the last social media app, Facebook's actually acquired since all the antitrust scrutiny that he squeaked this. went in in like 2018, 2017. It's called, what was called TBH. He left recently. So he sold his company to Facebook and he, he kind of like analyzed earnings and I totally agree. He was like

Facebook's hands are tied because they've got TikTok eating their lunch. They can't acquire because of antitrust. They can't build internally because founders don't want to be there. This is a guy who was a founder and went there and left. Apple killed their ability to target ads and the metaverse is 10 years out and they're losing billions a year on it. So they've got all this pressure of like trying to spend their way out of irrelevance, I guess, you could say. So we should talk about the metaverse thing. And then I want to spend some time on the apple side because it's fascinating. You said lost $10 billion. That's the headline I've seen everywhere. Like, I don't know if lost is the right word. Right. It wasn't like, where to go?

Like, they know they're going to lose the money. Like, they are pouring money into this. Yeah. At just an absurd rate, they are poaching everyone. There was a business. insider story yesterday about howlends three being kind of like a mess and that team not knowing and like everyone leaving and going to Facebook because Facebook will just like hand you a bag. Like if you work in tech and you have ever seen a VR headset, like Facebook will just like give you the bag. Like it's nuts. That to me is like lost doesn't seem like the right phrase.

Like they know what they're investing in. They know why they're investing in it. They know exactly how much they're losing in terms of money. But that bet is a right. 10 years off. Yeah, I mean, at least. I mean, it's kind of just the fact that it's so uncertain, I think, is a problem for investors because they're not breaking out like sales numbers for the Oculus Quest, for example. And the revenue they're making from it is nowhere near close to offsetting the losses. I think it was like $2 billion or something last year on like a $10 plus billion loss. But you're right. It's not fair to say that it's all just lost. I mean, they've got $15,000 plus people working in this division. They're just paying everyone top of market in the industry to try to like up all the talent because they can't buy things. They can't even buy Supernatural, as we've talked about on here.

That's under antitrust of review. And so that's the thing that's happening. But like, it's just wild to put that stat in context that, like, they spent more last quarter on this than the entire ARVR startup industry raised last year. Like in one quarter, they're spending more than the entire startup ecosystem on ARVR. So it's just, it's like they are the ARVR industry in terms of something. spend. And it's like, is that going to work out? TBD? Yeah. Oh, actually, one thing I want to say, this has been going around today. So the antitrust bills that are in Congress, they have market

cap baselines. So you have to have a $600 billion market cap to get hit by the proposed rules. And Facebook is crashing so fast that it might go under the under $600 billion in terms of market cap and then not be affected by the antitrust rules that are proposed. I think it's on a two-year average, but yes, I mean, chestnut checkers. If we can just torch our market cap enough, we won't be regulated. So it's interesting. We talk about Andrews a lot. Like, are these regulators going to get right?

How they will affect the markets? Where are the downstream effects? Right next to that is Apple, which just was like, fuck you. Right? And turned off the ability for cookies to track across sites and apps. It's had a huge impact across every social media. platform. I think it's crazy to me that Facebook wasn't able to find a way through it. They've been talking about it for a long time. Obviously, Q4 is when a lot of shopping happens. And then right

next that, Google had huge earnings. They broke $200 billion in revenue. They said their e-commerce search ads are up. And Facebook just called out Google. They're like, well, Google has a sweetheart deal with Apple. Yeah. I mean, that's just like shocking to me. It was very shocking. So yeah, the CFO of meta and the earnings call. basically insinuated that Apple and Google are colluding to screw them, to screw meta. And I'm not sure I buy that. I think that's a little bit of like look over there. And we're like mad about Apple.

But it is interesting, yeah, that it's like there was some analyst report today that was like this week, it turns out if you're in bed with Apple, you're doing really well. And if you're not, you know, you're screwed essentially. Which like speaks to platform power and maybe like the fact that platforms should be regulated more harshly than these other kinds of business. which is something I agree with. But yeah, I don't know what I make of that. I mean, the argument is that, you know, Google pays Apple billions of year, billions a year for default search placement in Safari, right? And that Apple's ad tracking thing doesn't hurt browsers. It specifically carves out browsers. So if, you know,

you're able to track people as they move around the web, that's okay. Safari does have cookie blocking in it. We should note that. Yeah. Google is all first party. So basically, Apple defined tracking is like, tracking is when I'm sharing data between companies. And if I do that, the user needs to give me permission. The problem is Google is like the internet, right? And so it's like, yeah, okay, like we own Chrome. We own YouTube.

We own search. Like, we don't need to share your data. Marketers definitely use third party data for Google ads, but Google's fine. And if anything, this is also about like, I don't want to get too nerdy here, but this is about measurement and what Apple. is effectively done is delay how Facebook can report the, um, how ads are, how odds are going on their platform. So it used to be like real time, like you used to be able to adjust your budget and see things in real time. Now it's very delayed. Google doesn't have that problem because they're not hurt by this prompts the way that Facebook is. And so what's happening is like marketers are going, I can get way

better performance and like optimization and see things in Google because of this ad tracking change, not really hurting them. So the argument is basically, just like there's something going on here as long as this agreement with them on the search placement default exists. Apple's not incentivized to be consistent in its philosophy of tracking. That's the argument. So I don't know if I buy that. Like I love it. I am I am here for the argument. But how are you going to write? So Google owns Chrome and they get in a lot of trouble for tracking in Chrome. And they recently threw out, God, I missed theater. They recently threw out flock, which is there.

their cookie replacement idea. They've got a new idea for that. Who knows if anyone will sign up for it. But, like, if you are a small business, Facebook loves to talk about, your flower shop. By the way, every CEO on Decoder when they talk about small businesses, they always go to a flower shop.

It's a weird. We should just do a clip show about flower shops. So you're the flower shop, right? And you're like, I want to target people to make them buy more flowers. Before you could go on Facebook and, like, set your region and find people who had birthdays coming up

or who in their net, network, we're about to experience an event, and you could like turn the knobs on how much you were spending and immediately see how many conversions you were getting into people buying flowers in your online store. Right? Like this is your, and now you can't do that as much harder. Well, you can just take that money and give it to Google, right? And like Google can tell you, like people are searching for flowers in your area, put ads in front of their face. There is nothing Apple can do to block that, to make that stop. Maybe you can be mad that Google has they pay the money to be the default on Apple devices. They're getting sued over this, right? The reason we know this is because of antitrust lawsuits. But you can't be like Apple's treating us unfairly when one thing is a social network and the other thing is a search engine. And search engines tend to give you perfect data about things people want because they type in the thing they want. Yeah, no, totally. But I guess the argument to play devil's advocate is that Apple's being super high-minded about this and saying it's about privacy, kind of,

at a at a macro level and that tracking is bad at a macro level, when in reality they've defined a very specific, like subset of tracking that specifically hurts apps. And like Google definitely has a ton of information. It builds profiles based on our searches. It has, you know, ways of connecting the dots. It has huge parts of the internet under its eye. And so like Google knows more about us than anyone, you know,

maybe the meta, but not anymore because of tracking changes. So, like, yeah, I mean, I do see that argument a little bit that, like, these two are in cahoots because, I mean, some of the estimates are like 10 plus billion a year. Google's paying Apple, which is like a meaningful. I mean, it's Apple makes a lot of money, but it's a, in terms of margin, that's like free, right? That's like free profit. And it would be very meaningful if Apple lost that money.

And it would be felt in the earnings reports. And so I kind of do see that. I just like, I don't think Apple has been super ideologically, like, consistent with its definition of tracking. So I would like to, I wonder if that will extend to browsers ever. You know, obviously they've been consistent with Safari and trying to block cookies and trackers and stuff. What do you mean by browsers? Like, Safari is the browser on the iPhone. Right.

And every other browser is just a skin of Safari. Right. I guess even Chrome is, Chrome on the iPhone is still technically a skin, right? Yeah. But, I mean, yeah, I don't know. I mean, so you're not a buyer of this argument, Eli, it sounds like. Do I buy the big companies, do shady background deals? Yes, I buy it.

Do I think that Facebook is protesting a bit too much because the money moved from social networks to search? Yeah, I get it. If I had money to spend, which I do not have any money to spend on ads. But if I was to put out another Super Bowl ad for The Verge and I was like, where will I know there's a conversion? Well, Google will tell me if Facebook cannot. And I think that's meaningful to a lot of people. I will say Google is a monopoly in ads. Like they're also being sued by like 36 states or whatever right now.

Because at every part of the ad stack, they were on the number one or number two provider, like service provider. And there's obviously collusion up and down that chain. I mean, isn't it, it kind of writes itself, right? Like Sundar going to Tim and being like, look, we like paying you all this money, but we'd like a little kickback. Like, and Tim's like, I got you. I got you.

Like, I mean, that's how that happened. That's how it goes, right? That's business. Amy Klobuchar is like in the bushes with one of those like shotgun mics. No, I'm just fully like tin hat on this. Like it absolutely feels like collusion from the outside. Just I'm not as in it as you guys are. And just but watching it and watching how Facebook who's always been treated kind of like as the gauche little brother of these other companies get absolutely brutalized by their agreements that they weren't, that Facebook wasn't included in.

It's like, yeah, I can see how they were like, no-uh. You have to go sit in a corner and take your like $200 billion or whatever it was loss. Well, we're going to go rake in cash because we do it the proper way. We do it like the appropriate, acceptable, socially acceptable way of stealing, of like mining everybody's identity for profit. Because they're all, like, all three of them are doing it to some extent. That's the point. Yeah.

Google has a more acceptable. version. And so these companies, it really does feel like Facebook is, you know, definitely under the, like, everybody cares much more about Facebook regulatory rise, right? Because besides being the big ad people, they're also the big putting Trump in charge, misinformation, all of that stuff. They're kind of like the bad kid. And everybody's like, if you're a politician in America and you said you're mad at Facebook, like that's a winning argument no matter what party you're in. Yeah. And I think a lot like, for me, it's almost like, okay, well, they're getting regulated the hell out of them. Like, that's, nobody's going to avoid that. We have to separate ourselves as much as possible, even though we're

doing kind of the same thing. We have to, like, push ourselves further away from them by saying, no, no, no, they do it through an app. They're, they're much more holistic in how they, they mine our data. We're like, we're cool. Don't, don't bug us and how we mine your data. We're fine over here. Like, go, go, if you're, go regulate the hell out of them. I, I guess I agree, with that and I guess my like yeah the point here I think is that if you think mining people's data to like build profiles of them and target them super specifically is de facto bad Google is no worse than meta. I just think that's a fair thing to say right yeah and honestly like a big part of meta's business was we'll advertise apps and free to play games inside of the thing and they'll convert

like that's a big business line for them is app installs like where did ticot come from They bought Facebook ads. That's how they acquired their user base. And like now there's a huge competitor. Like Apple turned that business off for Facebook and they're trying to redirect all those dollars to their own app store ads. Does that seem correct? Or like maybe it's competitive, but there is just like a unilateral Apple controls a platform and they've decided what's acceptable. And it's unclear like, well, Google's tracking you too.

If you're signed into all of the Google apps on your phone and you're, are signing a Google and Safari, they can target you just as well as Facebook. Yeah, I mean, the biggest issue with the Google Apple deal, I mean, it's just slimy in every respect. I think it just gives me EBGBs. Also, the fact that they will not publicly acknowledge it. We're only getting this piecemeal through discovery and litigation, right? Like, this is, like, if one company is paying the other billions of dollars a year, but the two refuse to talk about it, that's usually a good sign that something weird is going on with that arrangement. it. But the fact that like it monopolizes search because who is going to compete with Google

on the iPhone. If you can't get on the iPhone. For search, if you can't be a default, right? And I think in some countries now, they're starting to make Apple give people default choices like Russia or something like that. I don't know if it extends to search, but there's some regulations starting to creep into the defaults there. And meta has wanted default messaging status forever on the iPhone and the ability to get that on first open. But like, I do think. that the Google Apple thing has just really entrenched Google in like its most lucrative user base, which is iOS users for everyone usually. And yeah, if you're Nevo or your search startup, you have no way of competing. So even beyond like how it affects meta, it just is this

shady backroom deal between two of the largest companies in the world that they both refuse to talk about it. It's just, it's very strange. I will say that every time anyone has tried a browser ballot or a search ballot or a defaults ballot, the thing that was the default before always wins. Well, no one cares. That's the thing. You can't get people to care about this stuff as much as you can, like Facebook elected Trump. That's just a great sound bite. It's not true, but it's like, it just works. Oh, no, I don't mean the ballot in terms of like political. I mean, when you open, install windows for the first time, and it's like, do you want Explorer or Netscape? Like, everyone still picks Explorer. In Europe, there is, when you install an Android phone for the

first time in Europe, due to antitrust regulations now, you get a, search ballot, you got to pick your search engine, everyone picks Google. Like, it's, it's interesting how once you're in trends, you just stay there. And like, even if you give people on startup, the ability to pick a different default, like, they're not going to pick Bing. Nothing in the world can make you pick Bing. It's Duck, Duck, Go. Actually, if you're a Bing user, can you just, you know, like, I really want to talk to you. Like, if you're a Bing by choice kind of person, like, let me know. So in the middle of this, like, other social platforms reported earnings, Snap had earnings today? Are they coming through it?

Yeah. They're kind of under remarked upon. Snap was crazy because there was this blast radius of the meta earnings that like hit everyone. Like all these stocks were down in social media like double digit percentage points. And then Snap posted and like, hey, we're actually doing great. We just had our first like quarterly profit as a company ever. And they're up like 60%. Like they swung from like 30 down to like 60% over and after hours in one day. Just the stock market is a giant meme now. is like basically my new theory. But, yeah, Snap is really diverged from, like, the growth narratives of meta.

They're actually growing quite a bit and seem to be navigating the Apple stuff a lot better. Yeah. I want to call out, we've been talking about Antrust a lot. Their epic case is still ongoing, right? They have lost a bunch of the trial court level. Now they're into appeals. A bunch of states, the EFF, Microsoft, the United States of America have now all filed briefs in support of Epic. Actually, the United States brief is like kind of down the middle.

Like, it was very much like, this is a good thing to consider. But Microsoft in particular, stridently in favor of Epic, a broad ruling for Apple could leave little room for a limiting principle to prevent Apple from leveraging its control of iOS to foreclose competition in countless adjacent markets. Microsoft says to the court, Google, the only other mobile operating system provider could be empowered to do the same. The stakes are high for my Microsoft. So in the context of all this, right, Apple just like turned off Facebook's business. Like, you have this lawsuit that's burning along in Microsoft, which is huge and just made a gigantic acquisition. And they're doing great being like, hey, Apple's in control of a lot here.

I think that's pretty fascinating. Did Facebook ever sue Apple for the changes? Like, has that, no. Did that ever happen? They were preparing an antitrust lawsuit and they haven't filed it. I think it's kind of like you're out on the battlefield looking at the other line. It's like who goes first and then how many bodies are you willing to lose based on whoever goes first? You know, like that's seen in Game of Thrones. And so, yeah, it's kind of like a game of chicken. But they're not the only one either. Like a lot of companies, even ones that publicly say they are like agree with the philosophy behind Apple's changes or privately fuming about it.

But yeah, they were looking at that for a while. Facebook filing an antitrust lawsuit against Apple. Oh, it's facing all the government. It's very good. Yes. We got to take a break. The other company that is often mad at Apple for its control of its platform is Spotify. Spotify is in the coalition of app fairness.

They want the default. This is the name of the thing. I get it. I didn't name it. Spotify in a bunch of trouble itself this week. We'll come back. Ashley's going to walk us through that. Support for this show comes from Shopify.

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All right, Ash, the Spotify story is like out of control at this point. Yeah. But they had earnings too. They had a town hall meeting with their employees about Joe Rogan. You heard the speech from Daniel, like, the CEO walks through it. Yeah. So, well, I think the last time y'all did Vergecast was, so last Thursday, recorded. So since then.

Days of Rogan ago. Yeah, I think this is important to contextualize. Since then, we leaked the moderation rules that Spotify's been playing by, which was like the big question. It's like, what are the rules on Spotify because everybody wants them to act on Joe Rogan's misinformation? And they're like, well, we're not because he's within our policy rules or policies. So we leaked the moderation rules on Sunday.

Spotify finally formally, publicly releases these moderation rules. I believe there are four rules related to COVID, one of which is just you can't deny that COVID is real. It's an important rule. That's critical. Another one is that you can't say that vaccines are designed to care. Hill. Another one is that, I guess I have these memorized now. This is my pop quiz. There's only four of that. Yeah, but I mean, I'm still impressed. Like, the amount of brain space

left for Rogan things is rapidly dwindling. Another one is you can't have COVID parties, so you can't encourage, like, COVID contagion parties. I don't remember the last one. But, like, you can see from these rules that it's pretty easy to not break them. Oh, it's not to drink bleach. Yep, it's bleach. I went and looked at it. Duh. You can't tell them. people to drink bleach. Those are the rules. And so we can easily understand now why Joe Rogan has been kept live and why Spotify has hesitated slash has not really moderated his show, even though they say they've taken down some episodes. Rogan obviously does not, I don't think. He believes

COVID is real, seemingly. And he might suggest that people don't get vaccinated, but it's not because he thinks they're designed to kill people. Didn't he get COVID? He's had COVID. I would hope he thinks it's real. And when Aaron Rogers had COVID, he consulted with Joe Rogan. Honestly, at any moment, I can turn this into an Aaron Rogers conversation. So I just, Kranz, if you could keep me in line, that would be much appreciated. You can't do it. You can talk about The Rock, though. Yeah.

We all have to exercise restraint here. He will potentially encourage you to take Ivermectin, but not bleach. Anyway, so that was on Sunday. Daniel X, Spotify CEO, also with that, like, issued a press release blog post, basically being like, we're a creator platform, we're a platform. We're not going to, you know, do. more than this. These are our rules. So then fast forward more to this week. There's just more conversation among musicians, among other podcasters, an in-house podcast, Scienceverse,

says that they're not going to publish episodes unless they are dedicated to debunking misinformation on Spotify's own platform. I feel like that didn't get enough play, right? Yeah. Like imagine if, I don't know, SB Nation was like, we're not going to publish any more sports content unless it's dedicated to debunking everything the Verge publishes. Yes. Right. Yeah. That is like inside of Spotify, its own podcast is like, we're done. All we're going to do is debunk Rogan.

And they're like, I don't know. That one's the one that's just like it washed over everything because there's so much noise. I was like, that is a insane situation. Yeah. It's, it's brave, honestly, of them to do that. And we can get to. Spotify did actually respond. Hot pod insiders got the scoop on this one.

But we can get to it. So yeah. So then Wednesday. Spotify had its earnings call. Broadly, like, everything's looking good from a corporate perspective. Users are up. Subscribers are up. Notably, the whole podcast play is about getting into ad revenue. So ad revenue now counts for 15% of their total revenue, which is a big deal for them because, like, they just launched the Spotify Ad Network for podcasts, like broadly this year. I think last year it was. So also on Wednesday, they took the opportunity to host a town hall internally, with employees, we got the entire audio from that, and within it, there's a lot to parse.

But you can see that a lot of what Daniel Eck, the CEO, talks about is basically how important Joe Rogan is to the business. And you could probably see that reflected in their earnings. He's critical to the entire podcasting ad apparatus. He also makes the argument that they are a platform, not a publisher. Nelai, I know you're going to want to. I'm dying. Yeah.

And then, Nila, I'll let you talk about the hardware part. But they actually talked about why they got into exclusive podcasts and licensing in the first place. And it actually has to do with hardware deals with Apple or not with Apple. They didn't mention Apple. They mentioned Tesla. They mentioned Google and they mentioned Amazon. Yeah. That part to me is fascinating.

He was like, and I wasn't clear if this was podcast in general or Spotify in general, right? But he was like, when we were trying to get deals with Google and Amazon and even Tesla, we didn't have the leverage because our catalog looked just like everyone's catalog. And you can read that as music. basically everybody has the same music catalog. You can read that as podcasts when podcasts were an open RSS ecosystem. Everybody has access to the same podcast. So they had no differentiation. And then they signed the Rogan deal.

And I'm guessing now, you know, people who want to listen to Joe Rogan on Google's smart speakers have to make a deal with Spotify. Amazon, I think, are the same. And then Tesla famously has not had a Spotify app. But I'm guessing a bunch of Tesla owners want to listen to Joe Rogan. And so now Spotify can say, if you want Joe Rogan, you got to put our app on your infotainment. I was just going to say the vent diagram of Tesla owners and Joe Rogan listeners, it's very good. I mean, I have to imagine this helps Elon wanting to get Spotify on a Tesla, too, because Elon loves Joe Rogan.

I mean, that's just, that is fascinating, that whole dynamic of them needing exclusives for these deals. Yeah, and they even say in this town hall as well that the reason they pursued Rogan specifically is because his show was never available on the platform before. And even still, it was the number one most searched podcast. So they were like, we got to get the big dog if we're going to play in this. And they're using it to their advantage as, you know, they should, I guess. After the Rogan deal, just to close this loop, Spotify premium is now available on Tesla. Right. So they were able, once they got the leverage, they were able to go in and say, okay, there's, now, do I think Daniel Eck and Elon had to sit down?

And, you know, Eck had like a giant head of Rogan on a stick that was like, you want to this. Like, um, I feel like we've been doing a lot of reenactments of CEO meetings on this episode of the Vergecast. And I believe that's what was it on a stick? Why don't he's waving the head? Because he's decapitated. What were those big vinyl? What were they called? Like fat cats. Do you know what I'm talking about fat heads? Oh yeah, yeah, yeah. Okay. No, that makes sense. I was like, I went to a much more murderous place and I was like that feels like he's not going to be doing podcasts. Um, he's like, you want to build a robot, Elon? I've got just the brain for you. Um, I don't know. But that is fascinating to me.

You have Spotify trying to do ads, which is, as we've just learned, a business that is very hard if you cannot connect your ad placement to data about what people want. So this is the business they want to grow. This is the business that Apple is crushing Facebook on. Spotify and Apple have the testiest relationship of all, right? Like Spotify has filed complaint after complaint in Europe about Apple's behavior. Apple, they have websites about how Apple is unfair. They are the heart of the coalition of app fairness. it's a good name.

Like, how do you grow that business if everywhere else you look, advertising is becoming a bad business because you cannot connect the data. Like, I don't know where Spotify is getting its tracking data from, apart from here's what you listen to. For podcasts? Yeah. Yeah. I mean, but like the sad part is in the podcast industry,

traditionally all they've had is IP addresses. So, like, geography and, like, what kind of device you're listening on. So even just a little music data. is helpful. Oh my God, that's so sad. Right. So Spotify has, what's a dynamic ad insertion? So when you stream a podcast, they can stop it and put in whatever ad, like they can

target an ad. Oh, streaming ad insertion, yeah. We have dynamic ad insert. I feel like I have to disclose that our podcast is served by megaphone, which is owned by Spotify. Yeah. I don't, I've never even seen the megaphone interface. Andrew, our engineer and producer, I'm sure he's had to look at it a lot.

but like just there's your disclosure disclosure is our brand but that that Spotify buying up the entire tech stack of podcasts so they can make this ad play but right next to it Ashley I think you're saying like the data has been historically so bad that even just knowing that you like Beyonce is like better it's helpful than advertising in Apple podcasts and your age gender what I mean not to get too into the text the ad stuff but I mean what's interesting is like the reason why Rogan is also especially lucrative is because the dude sells a ton of crap. Like if you're an advertiser and you advertise on Rogan like he's huge for you. Like he moves product. And so- He moved to Ivermectin. There you go. So people like really seek him out as an advertiser, which, you know, they need to really get people in the door. And then when you buy ads on Rogan, you have to buy ads on the rest of the Spotify podcast catalog. So they're really using him to just like jump start this operation. I just, I want to go back to the concept that they needed Joe Rogan to get leverage, to get on platforms that aren't Apple, given that isn't their primary competitor in the music space, Apple. Yeah, I mean, it's what Neal I said.

And this is something I actually wrote about this week is, like, RSS, Joe Rogan's been around forever. Like, all of this came about because people want to moderate Joe Rogan now that he's getting paid reportedly $100 million from Spotify. And like prior to this deal, RSS has allowed him to be distributed basically everywhere other than Spotify. And no one ever really like spoke up about him, maybe a little bit. It was considered controversial, but it never kind of reached this fever pitch. And so Spotify kind of brought this issue upon themselves specifically to gain this leverage and close off the ecosystem to gain a competitive leg up on competition. So, but they would say they're just a platform. But I just don't understand why they, they were like, we have to, like, I just don't get why they needed the leverage.

of this one podcaster? Well, it's the entire exclusives. It's all the exclusive, not just Rogan. But like if you like Rogan or you like heavyweight or whatever from Gimlet and it's not available through your Alexa device, you might start being pissed and be like, where is my Rogan? They got the like modern day Howard Stern. I mean, isn't his show like listened to by like more of like than all cable prime time

combined? Like it's, I mean, his reach is massive. It's like pretty safe to assume tens of millions. they say he's the number one podcaster in 93 markets. Yeah, I mean, they got Howard Stern. I mean, they went for the top and they got it. So it's, I mean, I can see why they did it. They wanted the best in terms of reach in terms of, you know, numbers.

Not saying best in terms of content, but. If Harry and Megan had delivered their podcast last year, would we still be in this position we're in right now? You know, it's interesting? Like, you know how there's like shockwaves before an earthquake? Yeah. The tremors before this earthquake were like a bunch of stories that were like, what happened to all those podcast deals that Spotify signed? I mean, my entire author page right now is Spotify stories and not just because of Rogan.

It was they shut down an in-house studio. I've written about like programmatic ads kind of going wrong on their platform. Like, it's been building. So they've got this big business. And we haven't talked about the platform versus publisher thing because I want you to. The headache that it's causing for me. We talked about it last week. We did.

But now we know, like we have this like line from. that honestly it's just exhausted. Like my jaw is clenching, just thinking about it. But I just want to finish the podcast business thing. What's fascinating to me and connecting it to Facebook is, like, their service is built on renting music that everyone else can rent. And they do it, like, artists are mad at Spotify. Artists don't make any money, right?

This is why Neil Young and Jody Mitchell and whoever else can just, like, bail. But they have no differentiation there except for, like, user experience, right? And playlist and potentially your friend list. network effects and whatever, but like, kind of who cares. But this is still the most competitive market in tech that I can think of. Like, when I joke that YouTubers, like the end point of every YouTuber's life cycle is a video about how they're mad at YouTube, like, they're still, like, they're still on YouTube. They can make that video and they can, right, and then they have to make a big decision about what kind of life they want to, and they all stay on YouTube. We get mad at

Facebook and maybe it took, what, four years of sustained negative Facebook stories for them to lose one million daily actives in a quarter and we feel like that's going to take the business. It's like still not a huge effect. No. And it's not that one million is not even really because of the PR. I mean, I'm sure the PR has a role in it, but the products just are getting irrelevant in terms of the way it's

designed for younger people. I mean, that's like the hard truth. That may be an unpopular view of it, but I don't think it was the PR that led to the one million. So it's still like, yeah, right? But Spotify, and you can just go down the list. Like you're mad at Google search. I'm sorry.

like enjoy being that's not going away Spotify's one where I can if you're mad you can go yeah and there's competition right I mean that's the difference in perfect competition yeah and that's the difference between you know Apple and Google and Spotify and meta right the way like platforms versus I mean I was this is like very Ben Thompsony but like his whole thing is platforms versus aggregators you know companies that aggregate attention are much more vulnerable to this

kind of stuff to competitive pressure than platforms, you know, that lock people into their platform. And Spotify's not a platform. It's a publisher. All right. We have to talk about it. I just wanted to make that point. Like, they are trying to build this walled garden podcast ecosystem because it is the thing

that protects them from competition. And it's the thing that gives, and that protection gives them leverage to distribute the app on all these platforms that would otherwise just say, like, you want music and your Tesla? Just pay us the money. And all the music will be here. or you want music on your Amazon Echo, pay us $4 a month, and we'll give you an Amazon music subscription to it. That's what Amazon would prefer.

That's why they have that plan. But Spotify is saying, well, you want, what these people want is Joe Rogan, and they're already paying for us, and they're going to mad at you if you have some pay again. So I just like, from a business perspective, I think it's fascinating. From a moral perspective, the platform versus publisher thing is just such pure corporate both sides nonsense. first of all, just definitionally, Spotify is not a platform. I dare you to try to upload some shit to Spotify right now. This is the lawyer, Neely, I was waiting for it.

You cannot do it. You cannot do it. You have to go through some intermediary. There's one place where you can upload stuff to Spotify. It's Anchor, their user-generated podcast platform that has the programmatic ads problem and mostly has ads for anchor running on it, according to Ashley's reporting.

Yes. That's it. That's what they got. That's their user generated content. I'm guessing that's where, when they're like, we took down 20,000 episodes, I'm guessing those are all anchor podcasts. Everything else is ingested through a megaphone or some other distribution service, right? Yeah, through a hosting platform.

But like the key thing in this case with them is that they're paying Rogan. Well, so they're paying Rogan. But like, they also own the ringer and they own Gimlet. And they, like, they have this deal with the Obama's. Like, do you think the people at the ringer are just like, we are owned by a platform and we have complete editorial. No, they work for a company. The company is liable for what they publish.

The people at Gimlet, it's exactly the same deal. If you were to, if Joe Rogan said something horribly defamatory towards someone, that person isn't going to like, ah, well, Spotify is just a platform. No, they're going to sue Spotify too. And I just don't think they see that accountability because they say they're a platform. And it's just nonsense. I mean, I think they see that accountability. I think that's why they say they're a platform, right?

Yeah, I'm sure they understand. understand the argument and where it puts them. Well, can I just read the, can I read the line that makes my jaw clench? Spotify doesn't fit neatly into just one category. It said Daniel Eck. Quote, we are defining an entirely new space of tech and media. We're a very different kind of company. And the rules of the road are being written as we innovate.

That's a lie. The road was paved. Sorry, the road was paved like a decade ago. Netflix has paved the road. There are so many other companies that have paved the road. And Spotify doesn't get to just act like it's new to kind of divert attention from the fact that they paid a man $100 million. And now he says really stupid things that destroyed Nelai's love of the Green Bay Packers. Like, they don't get to, they don't get to make up.

I know that Aaron did not perform all in that game because he was distracted by the noise. I'm just saying it. I should be very excited about the Super Bowl and I'm not. Eck did say this about Rogan and this, you know, I get this. If you do run a platform, you have to say this from time of time. Eck said this about Rogan. There are many things Joe Rogan says that I strongly disagree with and find very offensive. Okay.

Like, I just, I think the idea that you're going to sign this exclusive deal to distribute something on what you consider to be a platform and then not accept the editorial choice you have made to take that thing because you need it to support your business goals is a total cop-out. I completely understand the business goals. You need leverage to get distribution for your app, which would otherwise be undifferentiated from everyone's content catalog. And you've got to build this advertising business around podcasts,

because the, you know, 15% of all the money you make on user fees for music have to go back to the artists. Like, your margins are compressed forever. Yeah, but those are deals that are just written. Nilai, you're coming at this as an editor-in-chief. Daniel Eck is the CEO of a tech company. that like he's not a he doesn't think of himself as a all this discussion about Joe Rogan I've been listened to a lot of it not even just this podcast we in the media are obsessed with this because

we're obsessed with responsibility and the responsibility you have to like put good information out into the world and like the checks that come with that and like these companies don't see themselves as that and even if they experiment with it it's not their door star is like taking responsibility for the things that people on their platform say And, like, they're legally don't need to. So it's like, unless he... We shouldn't call it a platform. We shouldn't, let's not...

Right, we said it's not a platform. It is... But I'm just saying, like, I don't think people care outside of the media industry as much about that. People probably have strong thoughts about what Joe Rogan said

and whether he should be on Spotify or not, but, like, Spotify's responsibility that if Joe Rogan says some crazy shit, you know, I just... They don't see themselves that way, so why should we hold them to the standard that we hold ourselves to as a news publication? I mean, what do you...

I mean, what do you? I mean, what do you think about that? Because they're not a platform. Sure. I buy it. Maybe I'm like a little heated today because we like, if you work at the verge, it appears that I do like a lot of nothing, which is great. That's my whole goal is to like float along.

But like some percentage of my brain space is like legal threats that like come to us, right? And so we have to be buttoned up just to like write the big scoops and investigations so that when those people are mad and try to sue us, we're like buttoned up. And so you're right. There's like just a frame of mind that I'm in. that is like a defensive posture about the First Amendment. And I think that cuts both ways.

That if you want to like enjoy the First Amendment the way that we do in the media, we have this responsible to not just like defame people. Because if we like screw up a bunch of those lawsuits, we will screw up defamation law in America and that will actually be a threat to the First Amendment. And this is like, this is not we're innovating. We're making up the rules of the road. This is when I talk to our lawyers like, don't fuck it up. Like you will fuck up the First Amendment.

So this is like a big deal for us. The comparison I would make, Spotify is trying to run the same game as Netflix. Right? Netflix started out as a wholesale distributor of other people's content. So like NBC or CBS or whoever would like have a bunch of movies and they would just like sell them to Netflix and Netflix and stream them because no one thought streaming is real. And then Netflix quickly realized they had to like have their own content because all of those companies were going to take their movies away and run their. and run their own direct to consumers. So they invest in content.

And now Netflix has two CEOs. They have a tech CEO, Reed Hastings, and they have a media CEO. And that, to me, is like, Ted Sarando's media CEO. That's where Spotify is going to end up here because they are trying to run a massive content business without accepting their, like, who is in charge of the ringer? Is it just Bill Simmons? That's cool. Does he have the same standards as Gimlet?

That's weird. Like, someone has to break those things. ties. And when you go out to make the deals to distribute something else, you become responsible for it. Whether or not you want to be, like, if we ran a piece from a freelancer and someone tried to sue us, my defense could not be, well, we merely licensed this content from a freelancer to put on our platform. Yeah, I guess here's my point is that we're like, Spotify is being responsible because it is taking the responsibility of its decision. Like, it's not saying like, we're going to ignore this situation. It's saying, no, we're going to keep Joe Rogan on the platform.

He didn't say anything illegal. He said some wild stuff. He says a lot of wild stuff. That is taking responsibility. It's not like the responsibility that Joe Rogan haters want them to take. But like or like what we would take as a newsroom and like our, you know, medical facts, you know, standards that we have with publishing content. But that is, it's, it is a version of taking responsibility. Like taking responsibility would just be like not even caring, like completely ignoring it and waiting until a lawsuit shows up if he says something illegal.

So like I, you know, that's that's kind of. how I view it. Yeah, and I think it would be different if they were a YouTube, right? If they were an open access platform and they had to make some rules that made sense. But this, because I think of the scale of the number and the importance, actually, you had this quote, right? It seems like everything in Spotify for employees feels like it has to support Rogan because that's the thing that supports the rest of the business. We're just from a business perspective. Like, that's what your employees think. And then you're saying to them, this is the thing that creates leverage to do our business and we didn't have it, our business would look different. Wow, you've made a huge bet

on one person that doesn't feel like you can control. And if you're Joe Rogan, I've said this on, like, my wife listens to Joe Rogan when her favorite comedians are on. Like, I have listened to the show. He's very charming, but he gets rolled by other charming con men. That's actually the issue here. Like, okay, fine. But if you're him, like, why wouldn't you just bail out of this and accept, like, all of the gambling money that's floating around, realize, like, oh, I could just called Tesla and get the distribution deal that Spotify is using my name to get. Like, I'd seem like Spotify's backs itself into a fairly dangerous corner where they're building the future of their growth on one guy who can leave all the noise has been created.

Can he leave, Ashley? Can he just leave? Yeah, that's what I was going to say. Like, I almost feel like maybe they were hoping this exact situation would play out when the deal expires. Like, that they could be like, we wrote this. I don't know the exact deal terms. I'm going to assume it was like two to three years.

that's typically how their deals, it seems, have been structured. So I would say, like, they were probably hoping, give us the two to three years. Let's just grow this ad business as much as possible. We'll get the advertisers hooked. Rogan might piece out, might not. I don't know. But, like, we can move on. Unfortunately, it didn't happen like that.

And yeah, like, what to Nilai is saying is like, they've bought the, Gimlet considers itself a journalistic enterprise. And the science verse, the science verse host and editor are like, this actively makes us doing our job harder. You have someone on our platform saying, things that are wildly wrong about the things that we report on. And that is the dicey situation, I think. And, you know, that's where, and to me, it's just the money, I think. It's like, you can't. It's a lot. All this to say, they did, they clearly talk to Joe Rogan. Oh, well, yeah. He's agreed to put labels on his content. He was contrite-ish and said he was

going to do a better job of, like, there's some amount of pressure that Spotify was able to impose them. And they've rolled out, like, now when you go to upload a podcast on Anchor, they give you the rules, which is amazing. They didn't tell anyone the rules before, actually. I think they're just kind of like speed running what it means to be a media company. That's truly what it is. And they're just like pit stopping at what if we were Facebook along the way? And that's just a bad place to be. I wish Daniel would have called his good friend Zuckerberg because he would tell him that labels do not work.

Yes. Especially with Joe Rogan. Who do we think is going to like see a pop up and decide, oh, maybe I'm not going to listen to this about COVID? Like, I just don't see that working. If anything, people distrust labels. I went on MSNBC to talk about this and I was asked if I thought the labels would work. And I was like, no, because the labels are just said, go listen to the CDC. And do you think that Joe Rogan was going to pick the CDC over Rogan?

And I will tell you that this idea was met with complete shock. Of course. What if they got like a Joe Rogan impersonator? to read the stuff at the CDC. That's great. Tash, your prediction is this is going to burn out, right? It kind of is like multiple, like it's either going to burn out. Like this is it.

We've reached the apex and we're done. Or employees are going to organize and speak up and be like, we're uncomfortable with this. Or you're going to have more musicians and podcasters also speak up and exert some pressure. So it's like those are basically I think the three options. I suppose the wild card is Rogan leaves his deal. But I don't see that happening. Yeah. By the way, I want to make clear, I don't think Joe Reagan should be canceled or taken off the air or censored. I think he should probably look at this moment and try to do a much better job with his platform.

This is Alex's point about, I am a media person, and we take this very seriously. You should take that seriously. Like, that's actually the right outcome, right? Is you use your huge platform and you, like, improve the, like, when he's like, I'm often unprepared, like, all of the alarm bells go off. Maybe he's not always unprepared. He's just saying it. But that's the right outcome. right, is to improve the product.

And Spotify, because they paid the money, look like a party that is accountable for the improvement of the product. So that's the right outcome. It's not, you can't disappear Joe Rogan. And they're building the product around him. Like, that's the other interesting thing is like they're building the product around him.

They launched video podcasts, basically, in coordination with him coming to the platform. They are rolling out interactive ads. Rogan, I think, was a show they used as an example. Like, it's just fascinating, kind of like what this employee who I quoted said, which is like everything kind of rolls up to Rogan, it's like, well, if you're looking at product innovation, those two right there is straight up just Rogan stuff. Man. All right. Well, hopefully Apple does some like product innovations to compete because Apple music is just like a dusty wasteland of a product.

What if they combined podcasts and music? I don't know if anybody wants it. You know, I think, Galaxy rain. I would like some more ads in my settings out for it. I think that would work great. Well, I'm an Apple Music listener, and it's fine. I'm sorry. It is aggressively fine. Neil Young's happy because it has lossless. Okay, we've got to take a break, and then we're going to do a quick lightning round.

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It's a great freaking database. Start building at MongoDB.com slash build. All right. We're back. We're going to do a lightning round. I'm just going to say a headline and then randomly call on one of you

for an immediate reaction. This is like class. Yeah. It's like a first year law class. All right. Alex Heath. Sony is buying Bungee, the developer of Destiny

and the original creator of Halo. FOMO? You think that's it? I mean, is it this just like game industry consolidation, like, that is going to keep happening. And everyone's like, oh, we need more studios. It's like similar to what has been happening in an ad tech because of the Apple changes. Like every time there's these kind of seismic moves, everyone's just like chase for scale, chase for scale. That seems like the rationale behind that, right? Yeah. Do you agree with my

prediction that Apple has been blowing it for a long time in games and they will have to make an, like, Halo was originally demoed on the Mac. It's very funny. Oh, yeah. But if they want to sell a $2,000 headset or however much that thing is going to cost, don't they need some, like, major killer app or piece of gaming IP to make the case? They do. And, like, they have the white glove Apple arcade thing, and I'm sure that will factor into the headset. But, yeah, that's the benefit, you know, of being a platform is you can simultaneously command the most profits in mobile gaming while also sucking the most at mobile gaming. Yeah. Maybe they'll figure it out.

you know, they've got some money. They could maybe figure it out if they try. They're not going to buy a studio. They got to do something. Yeah, they're not going to buy a studio. They're not going to because then, yeah, the studio will unionize and Tim could, no. Like, like, it's too, it's too much drama for them to buy a studio. But also they won't have to, especially, like, if this headset comes out and it's, as game changing as everybody seems to anticipate it or one of its, like, followers being,

they're not going to have to, just like they didn't have to buy a studio to dominate on the iPhone. Like, if they get the users, it doesn't matter. They don't need it. That's totally true. And like, Sony is doing this because Microsoft has been quietly consolidating like, heck, and just bought COD, Call of Duty and all this other stuff. So, like, yeah, Sony needs, I mean, this was obviously in the works long before Microsoft bought Activision, Blizzard. And that still might not even happen.

But like, everybody just wants to consolidate right now there because Sony and Microsoft are like, well, we've got to buy everything before Google decides to do Stadia 2 and go on a buying spree or Facebook or not Facebook, Amazon. Oh, watch out for Google. Google's really going to destroy everyone. Yeah, you know, like I think there's just this weird fear there. And they're also seeing everybody else. Like vertical integration works. It's working really, really well for a lot of the, the, in the film. And like, all of streaming has shown.

shown that vertical integration's great. But here's my argument. All that stuff was like, it's happening on your phone. And your phone's great. Yeah. And it's a camera and it's a tech, like, whatever. It's got all this utility that was great in Apple Consult. They're trying to put a computer on your face, man.

Like, they can't just like assume that everyone's going to do it. Right. If it's a pretty enough computer. I love it. Yeah, I mean, but like BeatSaper's already been purchased. What are they, what are they, what killer app are they going to purchase? Oh, there's stuff out there. They did buy a VR content company that was struggling based out here in Southern California.

I'm trying to remember what it was, actually. That shows how relevant it was. They have game people working on AR stuff. I don't know if they're going to do like full IP there or just license or whatever. But I mean, they need something. Yeah, I'm surprised they haven't bought more studios. But the AAA studios aren't even looking in that direction yet. Like they kind of flirt with it.

There's no market. They're like, oh, yeah, we'll put something out on Oculus because meta gave us much money. Yeah, there's no market. But they don't, they don't care. Like, they don't need to buy one until there's actually a market. And then they might. But if they went and like- Apple will make the market and then, yeah, exactly.

All right. Alex Cranz, Wirtle has been bought by the New York Times reported for a number that's in their own press release. The Times is like the low seven figures, which is an incredible weird self-dunk. And will initially remain free to play for everyone. I finally played Wirtle. I now know how it works. I did it. I use Beast as my starting word there.

Oh, that's a good one. And I got really upset because somebody this week did like a study to figure out what is the scientifically best word that you can play wordal with as your starting word. And it just made me furious because that's not the point of wordal. Like you don't want to game wordal. You don't want to get like cheats. There's always that person. There is that person and I hate them. I want to be good at wordal.

I'll tell you that. Yeah, I want to be good at word. it, but I don't want to, like, go to gamefax.com and figure out the best way to get my my score this week. But it was always going to be New York Times, right? Like, New York Times was always going to be the one, if somebody bought this, it wasn't going to be Apple, and it wasn't going to be... It should have been Apple.

Apple would have been, like, from time to time, Apple buys smaller companies, and we do not say why. And it's like, dude, it's wordle. Also, world. Yeah. Yeah. No, there's no, I mean, it's also such a low price. That was the reaction I had immediately.

was like, if this was Mark Zuckerberg, he'd put like a 16x multiple on that. Yeah, just for fun. It's like network effects, baby. I mean, come on. Put that shit behind a paywall. I think it's like, I love that they bought it. I mean, it's going to suck when we eventually get the brought to you by New York Times banner on it. And when some other weird ad appears just thus ruining why everybody likes Wordle.

So one of our top stories of the week is all of Wardle is contained in the source. of the page. So you can just download all of Wordle. That explains the price. Yeah. Yeah. So it's just ripped it off. What's interesting about this to me is, uh, it's like an NFT. You stop it right now. It's pronounced Neft by the way. Sorry, they bought a neft and now just copy, paste your way out of it. Our new security reporter, cornfield is like, he is trolling the most troll. Oh, man, one of like, he was initially very apologetic. He's like, I wrote a dumb post. And now he's like, wait, this is who I am. He shouldn't apologize. It's a beautiful blog. He's touched the blogging

power. His Twitter feed is just people DMing him. How mad they are about NAFTA and him being like, I apologize for nothing. It's great. It's good. It's perfect.

This is what the verge is for. I just think in the context of all the Spotify conversation, the New York Times is trying to make, they're trying to acquire more users, and they can't do it with just news. So it's like recipes and word games are their growth markets.

And they bought the athletic. And audio app. And audio, yeah. Oh, right. And they're doing premium audio. That was their. press release was like, we've hit our subscriber goal because we bought two million of them with the athletic.

And next earnings, it's going to be like 15 million subscribers because we are charging for Wardle. Who will pay for Wordle? I don't give it. No one's going to pay for Wordle. That's why it's initially free. They're just going to, they're going to be like, have you tried spelling B? Like, that's what they're going to do.

Ashley, Peloton made a $90 heart rate monitor for your arm. They also lost a patent case. And the USPTO ruled that their stuff isn't patentables and competitors can copy. Yeah. So, Nilai knows. Also, I think, a Peloton rider. I have a Peloton here. Um, the heart rate monitor. Not going to save Peloton. Not the product that's going to revive Peloton. I don't think. Unless they sell a shit ton of heart rate monitors. Um, I definitely took a Peloton ride today. And the instructor is like, I've been here for eight years and I still love it. And I was like, the vibes and this are all off. I love how you said I took a Peloton ride like you went somewhere. Well, it's, it's, it's, it's, it's,

It's been two years, man. I can go upstairs. I can go downstairs. It's an emotional journey. Everyone wants to think, Pelton, by the way, another company that has been feuding with Apple because their one bike has Apple Watch integration and only for parts of it. They couldn't get it on the treadmill. Once you see it, it is everywhere.

They should join the coalition for app fairness. That would save them. Alex Kranz, Google has leaked the Pixel 6A name in a coloring book. Like, I just, they did a full, like, the six, the six, they were like, we're just going to tell you everything. You're not going to see it. And we're going to tell you five months in advance. And this time, they're like, two people will see this. And they're both Google super fans who bought, it was like a speaker that they got in the mail.

Or like, it was a Nest camera, I think. It was a Nest audio smart speaker. Okay. I was almost there. So it was a Ness speaker. They like, the super fans. And of course the super fan would be like, yeah, I'm going to scan this. nailed it. And I just love that. It's so goofy. You have to imagine they were really hoping this

would happen. And when it did, they were like, yes. Also, in Google earnings, they said they've sold more pixel devices than ever before, which is five. So they sold, yeah, like five or six now. Good job, you know. Wasn't this supposed to be like the iPhone moment for the pixel? Yes. They sold more than ever. I don't know one person who has it. All I know is that that back thing, the back bump is an atrocity. This is so ugly. This is why we missed Deeter. Deeter would Deeter be like, well, but they tried.

Come back, Peter. If you're listening, like, I need you, man. I'm going to take up the net neutrality one. The appeals court held up California's net neutrality law. This is to me the most galaxy brain Trump administration lawyering that has ever been lawyed. So the Trump FCC got rid of net neutrality, right? That was the first thing they did. It's gone. And then they try to write a law saying it was so gone that the federal government would no longer regulate broadband and it would have no business doing such a thing ever again. And also state governments can't do it either.

And then all the states were like, but you just said you can't regulate broadband. So why can you regulate us regulating broadband? And this is, it is 2022. And a court is like, yeah, that seems a little silly. So California still has an neutrality law. Complete galaxy brand lawyering. Very good. I love it.

And there's all these memes about naturality and doing anything. it's because these court cases are just from like burning along in the background and that the case is not about net neutrality. It's whether a government agency can devoid itself of authority and then prevent a state from having the same authority that it once had. That's not normal. Like you can't have a dinner conversation about that. Yeah, you wonder why the news isn't covering net neutrality?

You totally lost me there, dear. But you can have a podcast conversation. I can do it for hours. Sir, I have a podcast. All right. Last one, Tesla rose out any feature that disabled your seat controls if you mess with them too much because the motor's overheat. They put up a warning.

I do. It's good. I want a car that tells me what to do. I think that's where we should go as a society. Is this like mainly for small children? Like when you get in your dad's car and just start messing with a seat until they said no, never again? I think it's mainly for the people who drive Tesla and act like small children who do it. Okay.

Who like don't aren't in the driver's seat when autopilot is on. They're just like messing with the seat. Just sit there. The warning will come up. Seat Track motor unavailable due to excessive use. Wait five minutes to adjust the seat again. It's very good. I haven't adjusted the seat in my car since I bought it.

And I was like, am I missing out? I mean, as someone who moves a seat now. Yeah. Like the only time I've ever done it is when my friend gets in my car and jacks my seat all the way back because she apparently has the legs of a gazelle. And then like I need to, I need to be able to get back up so I can reach the pedals. All right. Well, calm down, crans. I'm sorry. I'm sorry. Success of use.

My Mazda's going to yell at me when I get into next. All right. We've gone over, as always. Hopefully next week, Deeter is back to put some order, semblance of normalcy back to this podcast. You were all wonderful. I think we got another week of Spotify stories out of us. That's my prediction.

Okay. We'll see if I'm back again. We'll see. But that's it. I want to call it two stories on a site. Liz Zapato is a great story. about accountants heading in tax season who are all quitting their jobs. And it is just a very funny.

Like, the whole thing is hilarious. I mean, in one way, sad for accountants in another way, very funny because they're all just like dunking on the profession of accounting. Very good. Read that. Alison Johnson has an explainer on all of the 5G icons that are now proliferating everywhere. There's a hearing today where the United States Congress dumped on the industry for the problems it had with planes.

Very good. We're going to write that up. But the icon explainer just very good. Allison did a great job with that. Decoder this week was Career Karma CEO Ruben Harris. He's great. He's just listening to that. So he's a cool founder.

We got more Decoder coming up next week. And hopefully, like I said, Dieter Bone will stop being up. I'm assuming he's just like drinking. He's just like drinking a frosty tropical drink right now. He shouldn't be listening to this. He's just like in his backyard felling trees, right? And like biking. Yeah.

But maybe he has pinia colatas. I hope you're having a peanut collata, Dieter. Anyway, we miss you. Ideally, he's back next week. We'll be back with the Vergecast. That's it. Rock and roll.