The Vergecast - Netflix wants linear TV to die, Thread border routers are Matter-ready, and Tesla sold most of its Bitcoin

Episode Date: July 22, 2022

The Verge's Nilay Patel, David Pierce, and Alex Cranz run discuss Tesla earnings, Netflix's next move, and an upgrade to smart home standard Thread. Further reading: Tesla’s run of record quarterly deliveries comes to an end thanks to China’s COVID shutdowns Elon Musk now says Tesla could start Cybertruck deliveries in mid-2023 Tesla sold 75 percent of its Bitcoin BMW starts selling heated seat subscriptions for $18 a month  The First-Ever Blazer EV: Electric SUV | Chevrolet  BMW Wants to Charge for Heated Seats. These Grey Market Hackers Will Fix That. 75 Percent of Car Buyers Don't Want Features Locked Behind Subscriptions Netflix’s CEO is ready for TV to die Netflix subscriber count in the US and Canada dropped by 1.3 million over the last three months  Netflix's ad-supported tier won't have everything at launch Netflix is partnering with Microsoft for its new ad-supported tier Netflix's latest anti-password sharing test lets users 'buy' additional homes  Amazon is giving Prime Video its biggest redesign in years Eve’s new motion sensor is the first with Thread Amazon says Matter will make Alexa smarter If you have one of these Thread border routers, your smart home will be Matter-ready  Samsung’s August 10th Unpacked will definitely feature at least one foldable Samsung confirms August 10th Unpacked event date with ‘cryptic’ puzzle  Google Pixel 6A review: midrange parts, Tensor smarts  Google’s prototype augmented reality glasses are going outside Elon Musk’s Twitter takeover trial set to start in October Apple will settle butterfly keyboard lawsuit for $50 million Internal documents show Facebook and Google discussing platform strategies The new Google Wallet is now available to all users Learn more about your ad choices. Visit podcastchoices.com/adchoices

Today on the Vergecast, the crew tries to figure out just how much Dogecoin Tesla owns. Then we'll get into all the streaming news from this week, and of course a lightning round on gadgets that's coming up right after this. Support for the show comes from Retool. Too many companies run critical operations on duct taped spreadsheets, Slack workflows, and whatever else they could cobble together. Not because they want to, but because building internal tools means weeks of waiting on someone else's backlog.

That's where Retool comes in. Build custom internal tools just by describing what you need. Prompt something like, build me a revenue dashboard on our Salesforce data. And Retool actually builds it on your company's data in your cloud with enterprise security built in. Go to Retool.com slash Verchcast. 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 sure. 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. Welcome to the Richcast, the flagship podcast of The Future of Television. You are now in the Quantum. I don't know what that means.

I don't know what the future of television is. Quantum television. It's quantum dots. That's where my brain went. But that's just a display technology. The future of television is navigating tiles. on multiple apps with no universal search. And what you want is for TV to be so confusing that you just give up and read a book.

And then you read a book. And then you're hanging out of friends. The industry is really trying to make it better for you. Like make your social life better. They're cutting your screen time. I'm your friend, Eli. David Pierce is here. Hi, I'm your friend who will stand there and hold the rabbit ears for you so that you get the broadcast television.

I'll do that for you. Anytime. Alex Kranz is here. I'm your friend who will say ATSC 3.0 is coming. Don't worry, guys. it. It's going to save broadcast television. Okay, is one of the, maybe the only other person who cares about broadcast standards? Listening to or making this show right now. I'm like watching like Liam in the background just like cringe with fear. Liam, you need like a meter that's like boring and not boring and you can just tell us which way we're going in real time. So I have an antenna connected my TV now. Yeah. Because YouTube TV compresses everything so badly. So I was like, I'm going to get an antenna for football season. Yeah. I set it up. I'm in the woods. So I had to monkey around and like pick up the CBS and Fox stations to pick up games. And my local CBS station, which is 1080I, CBS looks better than Fox. Fox still broadcast at 720P. CBS is at 1080I. The local CBS station is like, no, actually our main feed, we're going to do 720P and then we'll have three subchannels of infomercials. Yes. Because that's where the money is. Yes. I don't believe that ATSC 3.0 is going to roll out and do 4K HDR broadcasting.

broadcasters around America are going to be like, we should use all of our bandwidth or be like, we're going to do 45 more infomercial channels. Like, I don't even think they're capable of shooting in 4K at this point. I think most shows are still shooting in 720. There's football boca that they're really excited about. Well, so those are just like Sony A7s on the sideline. And then that came out ever, like, do you remember like Barstall Sports? It's like, I love this new 8K camera.

And I wanted to be like, I don't want to engage you, but I have some notes about your whole situation. Don't get excited. It's just a mirror. Like some guy just had a mirrorless camera. Anyway, but I will tell you this. So Neil Mohan, friend of the Rochcast, had a product at YouTube. I was watching the NBA finals. I sent him a note. I was like, dude, you are YouTube TV is sponsoring the NBA finals. Why don't you just give them the cameras? Like, it's your Google. You got him lying around. Let's just ask D. Peter to pick some up and like send him over. And he wrote back, he's like, we have offered. Like, it's a hard problem with many stakeholders. And we have certainly been like, will just do it.

But he's like, it's a hard problem with many stakeholders. Like, it's not as simple. And that was the end of our conversation. Don't worry. ATSC 3.0 will fix this. That's what's going to get him on board. You know, it bundles Bluetooth 5, which will fix everything. See?

It's magic. Wait, I just want to say before we move on, that, like, a lot of people are like, oh, does Neil, I believe the things that he says, like, is he really this serious about everything? And the fact that you have YouTube TV but went out and bought rabbit ears so that you could get 1080I football is like. Like, that's living your truth, man. I respect that.

I don't like video compression. Do you want to do a full hour on why red compresses more poorly than any other color? Because I can do it. Liam's mirror just exploded. Please don't do that. Liam's like over it. He's like, aboard, aboard. All right, there's actual news.

It's earnings season. Shout out to Jake Castanakis, who for many years has had to tell our entire team, it's earning season, and then like program earning season. We haven't gotten the big ones yet, but Tesla Netflix reported earnings. The Tesla story is really just a story about competition in the EV market at this point. Their deliveries are down. They've been on this run of record deliveries because they've been ramping up their factories and there's unlimited demand for Tesla Model 3s and Model Y's, as far as I can tell.

But there's COVID shutdowns in China. There's the supply chain. Elon has said the supply chain thing is basically a nightmare. So their deliveries are down. they've delivered 254,695, the past quarter, that's down from 310,000 the quarter before. And that is happening as Ford is ramping up the Mach E and the F-150 Lightning and some weird new thing that they're going to make mid-sized SUV. It's also happening. GM is like ramping up Chevy EVs.

There's just like a lot of competition in this market right now. Yeah. And it seems like it's a rough time for it again, like especially for Tesla, which is like building out gigafactories. and really ramping up its own capacity. But then you have these other companies that have been very good at making cars for a very long time that are now in the EV space. And it's always just been like, can the car makers go electric before Tesla figures out how to make a lot of cars? And like this is that moment where it's going to happen. It doesn't help that the CEO is also like, I want to spend $44 billion.

Wait, no, I don't want to spend $44 billion. There's that. It doesn't help there's a little distraction going on with that company. Yeah, I mean, but it's like a, you know, it's a big company. It's a big company. I always wonder, like, they're not all waking up every day. I mean, like, is Elon paying attention to us? Should we go to work today?

Like, you know, they continue to, like, make cars. I think the distraction is more like, is the product roadmap on track? Is the head of autonomous driving going to piece at what she recently did? Like, are the executive stable? Can the company weather these storms? Is Elon going to buy a whole bunch of Bitcoin for some reason? And then this quarter, they sold it all because they just needed cash to deal with all their challenges. Like, they sold 75%. Tesla sold 75% of the Bitcoin it holds.

And that's like, Elon is like, this isn't a verdict on Bitcoin. I'm concerned about the overall liquidity of the company given COVID shutdowns in China. We need the cash. And then he said, we have not sold any of our Dogecoin. That was the best part. He's like, don't worry, guys. Yeah, I'm deeply suspicious of that argument. A, Bitcoin is way down.

I think they ended up saying they took like a hundred, slightly over $100 million bath on selling their Bitcoin. Yeah. So they had bought, last year they bought at $1.5 billion of Bitcoin. Yeah, I think they're going to end up. They sold a chunk of it and then sold majority of what they had left. But I think the number was like $106 million or something that are going to end up losing on their Bitcoin investment. But then Tesla has like $18 billion free cash, which is a lot of money and would not lead you to believe that they are so desperate for another, I think it was $936 million that you would have to say. all of your Bitcoin right this minute.

So to me, it's like this looks to me like Elon Musk is looking around and being like, I have a lot of investments that are all losing money very quickly. And here's a way to get out of one of them. And it just seemed like this is not a verdict on Bitcoin, but I still have all my doge coin is like a hard, it's a hard thing to say right in a row and have me believe you. But he also called all of the cryptocurrency stuff, quote, a side show to the side show. He also said, and I quote, I might pump, but I don't dump, which is very good. But he did dump.

And then he dumped. He dumped a billion dollars. But he didn't pump at the, he didn't dump at the top. That's true. That's true. Like if you're like, what I do is pump and dump schemes and you're like, but I take a bath every time. Like you are a bad content. That's not how that works.

No, like fundamentally, there's like some things here. One is Tesla. They're very popular. People really like the cars. There's almost unlimited demand. They're going to sell everyone they can make. And no one has, they haven't like made a lot of cars. before the show Alex was saying, like, total in Tesla's history, it's somewhere around

two million total cars. Most sold last year. Last year, right? They've only just sort of ramped up production. Right. With the three and the Y. Like, that's relatively new for Tesla that they have these high volume mainstream cars. The Model S and the Model X were not, like, they were luxury cars.

They competed at high numbers. People are not out there buying Model S plaids every day. It's just like nothing. Like, the X and the Y are the ones, and those are reasons. new cars. So that's where the volume is. So they're growing the volume. But they're up against Ford, which is like putting in different kinds of batteries, just like Tesla does. So they're announced they're doing iron phosphate batteries for their standard range because they have lower energy density, but they're cheaper. They're easy to get. Ford is shipping like one F-150 lightning

a day. It's very hard to buy one. I keep trying. I would love to trade in my truck for one. I keep calling dealers and they're like, yeah, this one's just for show. But if you want it, when we're done letting people test drive it, we'll sell it to you for 20,000 over sticker. And I was like, that seems like a horrible deal. And they're like, do you want to be on the list? It'll cost $500 to be on the list. And I think this is why people hate car dealers.

Yeah. But whatever. Like Ford's making them. They're selling them. They're selling a lot of makis. People really like Machi. And then Chevy just announced it's the Silverado EV is like going to hit. And what was the little ugly one that Chevy has a lot of like little ugly cars?

The Blazer. The new Blazer. And there's a new Equinox. they're coming. GM CEO said in October 2021 and then recently reaffirmed, she says by 2025, GM will sell the most electric vehicles in the United States, which means they're going to beat Tesla. They're like, Tesla sells 14 times more EVs than Chevy. Chevy is like, here's the bolt. And she's like, by 20, you know, in three years, we're going to sell more than Tesla.

So that's a huge ramp, they think they can do it. Don't they have to make cars that look good to do that? Have you seen this new Chevy Blazer? And you just take a break and just like look. It's real something. What am I looking at here? It's the future. That's a future car where someone says, I want future.

And they didn't say anything more than that. And so the designers just went. You know how like Honda and Toyota spent years being like, you know what people want is angry robots to drop their children off at school? And like all their cars looks like. They're pulling back from that now. And Chevy's like, all right, angry robots. That's going to be our thing. And they're going full angry robots.

I love it. But they look wild. So the Blazer has just announced that's going to ship, the Equinox is going to ship. And apparently they've got other ones too, right? They've got the Cadillac lyric and all the other stuff. The Celestique, which is supposed to come very soon, which, who knows? This is the thing, right? Because I feel like people have been throwing this, like, everybody's going to start making more cars and then you're hosed.

And he's being like, Elon Musk for, like, years now. And he keeps basically just, like, sitting back in his chairs being like, call me when they actually ship something. And, like, he's been right basically every time so far. So now I've kind of gotten to the point where it's like, Ford seems to be, like, genuinely on track to doing something big and real. But even for it, I'm not sure how much I'm supposed to believe some of these targets. And it's like 2026 is like an eternity from now in, as far as I'm concerned with any of this stuff.

And like the Celesteak, like, dear God, I feel like I was like four years old when people started talking about the Celesteak. Like, I don't know. Like, Nilai, you spend more time talking to these people than we do. Like, at what point do we believe any of these timelines? Like, isn't all of this just vaporware and Tesla still kind of the only company ship a lot of electric cars. It's shipping a lot of electric cars.

It is impossible to buy a Tesla right now. True. If you're like, I would like to buy a Model 3. They're like, good luck. Would you like to buy used Model 3 for $10,000 over its MSRP when it was new? And you're like, no, that seems bad. And then you end up looking on Facebook Marketplace for $10,000, $2,06 PMW convertibles, which is like what I've been doing with my time.

It's very entertaining. You're like, that's two MacBooks. I can do that. But you should not buy $180. thousand mile, 2006 BMW convertible. Don't do that. But you should buy the 14-inch MacBook Pro, as discussed. And you should almost always ask your wife if you should spend $10,000 in 2006 v&W convertible.

But I think fundamentally you're seeing the big companies ramp. They know it's existential. That's the thing that's getting all of these companies. In Europe, they've got to get there. The regulations are such that they have to get there. And now they've made all these promises to their investors that they're going to get there. And so, yeah, I mean, I'm the one who calls all the cars vaporware. But they know that, like, their future is in doing this.

And in particular, I think with Ford, they're slowly splitting that company into two, right? On top of everything else that they announced, they, like, quietly are going to lay off 8,000 people from the gas division of the company so they can invest in the EV division of the company. Is that Ford Blue and Ford Green? No, they didn't call them Ford Blue and Ford Green. I think they, it's Ford Blue and Ford Model E. I like Alex's idea better. Do you think they would change it? But could we call them and see if they'll change it?

So my understanding of this is that both choices were bad. So you couldn't have Model E. So if you call one Model E, then you've got to call the Gas Cars Model T, which is just deeply insulting. And if you call the Gas Cars Model or Ford Blue and you call the other one Ford Green, the pickup truck people won't buy from Ford Green because of the Green new deal. This is like a real problem they had. So they went with Model E and Blue. Can't have those green cars, comic cars.

Have you known, all EVs, they've stopped doing green highlights, have all gone to blue highlights. Like, there's a whole story inside of the connotations of green. Wow. And so all EVs are now doing electric blue instead of green. It's wild. Should we call them, like, Ford Red? Like, start making the association, like, red instead of green because, like, the entire planet would be red. Yeah.

And on fire, if you don't buy this. And then people are like, I love that color. This is definitely what, like, Dodge is going to do. You know, they're going to, like, rebrand themselves as an e-muscle car brand. Yeah. And they keep showing swoopy renders of cars that don't exist. But it's existential for them. Like, they have to move away from gas cars because governments around the world

aren't going to let them keep selling gas cars. They're going to build that infrastructure. And then they have to deal with the fact that, like, a lot of their recurring revenue is, like, parts for gas cars and, like, maintenance contracts of their dealerships. and all this stuff, like, and like electric cars don't need that stuff. So that's how you see, like, BMW doing heated seats for $18 a month or whatever they're going to do. Because they're trying to move, they're trying to turn the car into literally an iPhone where every button you push makes Apple money. And that's their dream.

Like, that's what every car CEO is like, and eventually we'll have other lines of revenue in the car. And I'm like, oh, you mean like charging infrastructure? And they're like, no, we mean like NFTs. And it's just we're on different planets. I cannot wait to jailbreak. an electric car that wants to charge me $18 a month from a heated seats. So Vice actually, Motherboard, whom we love, has a great story about gray market hackers. So BMW has been doing this for a long time now.

Yeah. So you buy BMW, it has all the parts in it, all the software supports, and they're like, you want to use CarPlay, that'll be $30 a year. And then BMW owners, like, this is a great deal for the privilege of driving BMW. Fine. So now they're like rolling it out to other components. And the one that blew up this past week was heated seats. So in countries outside of the United States, they're shipping the cars with a heated seat

hardware, and they're not enabling it unless you pay $18 a month. So what's the lifetime? $415. It's just like ridiculous. So but this is the part of this I don't understand is like the idea that you buy a car and then they overcharge you for all the upgrades is like how cars have worked forever, right? They're like, do you want Bluetooth in your car? That's $65,000 extra dollars.

And then they're like, do you want? a two-inched wipers instead of one, that's $600. And this is just like what happens when you buy a car. And I don't know, part of me thinks this outrage is like way overblown because what we're actually doing is it's like buy now, pay later, where it's like, no, you're just paying the same price in installments. We've changed nothing. It's spirit airlines, right?

Like it's what all the airline companies do now where they're like, yeah, BMW, you're spirit airlines in the situation, to be clear. But it's the same thing where they're just saying, okay, I'm going to nickel and dime you. You want to bring a bag on the plane for when you're going to go. on your trip, shocking, $25, please. It's $3 every time you open your trunk in your BMW. Would I personally like to just have that baked into the price so I don't get irrationally angry when I check in?

Yes. But their calculus is a lot of people would rather be like, oh, I saved $25 by smuggling all my clothes under my shirt. I definitely saw a great TikTok of a travel influencer who's like, here's what you do. You get a huge pillowcase, you shove all your clothes in the pillowcase, and they can't stop you from bringing a pillow. And she was dead serious. I was like that.

Okay. Things are getting desperate. So the argument from the airlines about the nickel and diming is always, but it makes airfare cheaper. And then people, some people pay for the stuff. But like we've democratized air travel because the base prices are cheaper. I don't know how I feel about that argument,

but that is the argument they will make. Yeah. That is not the argument BMW is making. The argument BMW is making is we want to ship features like adaptive cruise control and lane assist, but when we add it as an option package, no one buys it. This is their quote, and I think it was the drive that I broke the story. And so we're just going to start building it into the cars, and then we can like advertise it to the drivers and get people to pay for it because it's a great future that people will want. They say that stuff. Nobody buys it,

but they also have the power to control what they ship. And right now, when you go to a car dealership to buy a car. They're like, I'm sorry, we only have the most luxurious trim in stock. Do you want to buy a car right now? That's it. So, like, they have people over a barrel. I mean, I guess they won't in a couple of years when cars are shipping again. But, like, I just don't buy that. I'm not saying BMW is full of liars, but that's actually VW. Sorry. That's true. They're like, this car does not have emissions, but it could if you want to press some money. Well, so I think this is like just like back out to like a computer thing, right? It's weird to have hardware in your house that is software gated away from you.

Yes. Right. Like in most cases, people think that's icky. And like we accept that you might have software on your computer that's gated away from you. Right. Like that's like every app on your phone, every video game is like, here it is. All the thing is here. And if you pay some money, it gets more functionality.

And that works in software world. It is super weird to be driving around a bunch of like inactive heated seat hardware. Right. I think there's just something there that like psychologically these companies have not figured out that this is acceptable in software and it is not acceptable in hardware. And the car companies are there forever going to be hardware companies. Yes. And so the idea that you can make the cars cheaper to produce by standardizing the build, by standardizing that they all have heated seats and they all have adaptive cruise control instead of doing that. at build time, which is what they want to do.

So if you buy BMW and you don't hit the option, then it just doesn't have the hardware in it, and the car's cheaper. And they're saying, well, actually, we could, like, muddle out to an average and just build all the cars the same. And then the people who want it can hit the button and pay us a recurring subscription

at a high enough margin to cover the muddled out the same build cost. All of this makes sense to, like, accountants and consultants. Like, they, like, popped a champagne bottle when they, like, hit the button in the Excel spreadsheet, rendered the graph. And then they're like,

took it to the real world and everyone's like, but we hate this. Yeah. And I don't think that they've solved that problem at all. Well, and where does it end is my thing? Like, I'm just looking at this and like we talked a lot about the heated seats thing. But BMW will also charge you, let's see, I believe it's 10 euros a month for high beam assistant, which will automatically switch your high beams on and off when there's oncoming traffic. That is like, that's a safety feature of a car. And like now you've gotten to the point where I'm like, we're like two seats away from like,

okay, we'll give you a gas pedal, and for $8 a month, we'll give you a brake pedal. And it's, like, where does this end? You can pay for online entertainment. Cool, into that. You can pay for accurate maps. Like, nope, that is a thing that I should have because that is how you drive cars. Yeah. I think it's when the EU finally says, wait a minute, this is horribly anti-consumer.

And if we can make Apple put USBC in an iPhone. Oh, no, Alex. You're forgetting that BMW is a German company, and German carmakers get away with things in the Dang it. Like, there's still politicians. They're still reasonably corrupt. You can save us. I don't know.

I just think this is nuts. We're going to keep interviewing Carcio as an decoder and I'm going to keep pushing it. But, like, you see where the car industry is going, right? They're like moving EVs or getting rid of all their old revenue lines that had to do with gas and, like, gas cars and how they needed maintenance. And, like, those maintenance contracts are, like, big recurring revenue. Like, the dealer getting you back in there to do an oil change every, you know, three to 10,000 miles, depending on your, desire to risk it. 7,000.

That was like a big source of money for these companies because they sold the dealers the parts and the oil and the da-da-da. And all that's gone. So they got to come up with other stuff. And the pressure to go and compete with Tesla on all these companies is wicked high. We'll see. I mean, like you mentioned windshield wipers. I have to point out that Tesla has the ultimate vaporware car right now in the cyber truck,

which Elon now says it will ship next year. Sure. It's one more year of windshield wiper development. They're going to add a second one and they're going to be like, we figure it out. Still haven't figured it out. I mean, I get why they haven't figured it out. The prototypes we've seen right now are just staggeringly ugly. She's like one gigantic.

I'm hoping for three in a triangle. Miles Somerville on Twitter sent me one rendering of three in a triangle. But if anyone else wants to send me what three in a triangle would look at three windshield wipers in a triangle would look at on the cyber truck. You know, we'll put it in the next first podcast post. I love it. All right. We got to take a break and come back. We're going to talk about Netflix.

There's some threading users, all kinds of stuff going on. We're back. Support for the show comes from Framer. Framer is an enterprise-grade, no-code website builder, used by teams at companies like Perplexity and Muro to move faster. With real-time collaboration and a robust CMS, with everything you need for great SEO, not to mention advanced analytics that include integrated A-B testing, your designers and marketers are empowered to build and maximize your dot-com from day one. So whether you want to launch a new site, test a few lines. landing pages or migrate your full.com. Framer has programs for startups,

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Download Grammarly for free at Grammarly.com. That's Grammarly.com. We're back. There's more, yet more earnings, yet more news. Alex, talk about Netflix. You wrote this week a headline Netflix CEO's ready for TV to die. Shocking. Which is funny because they make TV.

Yeah. So what on earth do you mean? I mean, I was being a little clickbaity. I'm going to be honest here. I want people to click on my stories and reward me. That's just the way I am. But they're really ready for linear TV to die. That means cable.

That means broadcast TV because that is their primary competitor. It's not Disney. It's not Paramount Plus. It's their parent companies. You know, I think Netflix is up at night thinking Paramount Plus? Yeah, all the time. All the time. That's Star Trek show.

Reed Hastings is like, what's our peacock strategy? No, they're not. And so he's been saying this for like eight years now. He's been saying TV is going to die. And generally, he says TV's dead. in 2030. And this time he said TV's dead in five to ten years. And he said it with a lot of confidence.

Like he was kind of leaning forward. If you watch the earnings video, he's kind of leaning forward. And he's like, well, you know, it's just dead in five to ten years. All right. Thank you, Reed. But they're incentivized, obviously, to say that because they've run out of subscribers. And now they're starting to lose subscribers. They lost, what, 200,000 in Q1.

In Q2, they lost 1.3 million. over three months. And part of that was a bunch of people subscribed during COVID and are now doing other things and don't need it anymore. Part of that is just like general churn. People just are like, I'm going to stop subscribing to this until Stranger Things comes back. So you should actually subscribe now, guys, if you're doing that. But also the future of is on Netflix. Disclosure The Verge made a show on Netflix called The Future of. It's great. I'm one of the EPs. I love it. Was that your disclosure? My Netflix disclosure now is very hypey.

It's like, watch my show. But that's like all the more Netflix inside I have is that our show is on the service. And it's very good. That's the second more important part of the disclosure is like we have editorial independence for Netflix at the end. They can't tell us what to do because otherwise they would say don't blog about the fact that we lost a bunch of subscribers this year. And they're running into this situation where they're losing subscribers.

They have kind of like capped there. The amount of people that are going to buy subscriptions just will. nilly is gone. Like, there are people who would retch rather watch TV. My mom does not know how to log into Netflix. Like, she's on my account. If I asked her to log in right now, she would say, I don't know how. But, and then there's a lot of people who just don't use it, or more importantly,

they're using friends and families, Netflix accounts. They're sharing. And so Netflix has also said during their earnings call that they're, you know, they're working further on this ad-supported tier earlier this week. They announced that Microsoft is going to be working on, like, that's going to be their partner and deliver all the ads for them. And this tier is not going to have everything that Netflix airs on it. That's because of rights, right?

Yeah, yeah. They're saying that's because of licensing rights. Like, they have these licensing agreements. Some of the stuff they just can't screen if they're going to be putting ads on it. Do we get to talk about A-Vod and S-Vod now? This is my favorite subject. We're getting there. Oh, man.

And so they're looking for this other money also with these new anti-password sharing tests that they're running in South America right now. where there's like if you're using somebody else's password, it'll pop up and be like, hey, we noticed you're doing this. You should instead pay $5 or whatever a month and get your own home and be independent, which I'm sure my mom is going to do the one time she finally logs into Netflix. She's immediately going to be like, oh yeah, thank you, Netflix for this reminder. It would be great if they somehow targeted that towards the specific, if they could like detect the relationship.

Yeah. And like target the copy. be like, it's time to let your mom go. Or like, this relationship obviously ended two years ago and you just haven't talked about this. Like, he's moved on. I'm 97% sure my college girlfriend still uses my Netflix. I can't prove it. But there are things in my recommendations that, no, it doesn't make any sense otherwise.

A likely story, Mr. Pierce. And listen, I'm just saying, they're saying it's a $1.17 per household. Look, it's fine if you think Bridgeton is a banger. It's fine. People like it. When you just suddenly get a lot of, like, kid programming and you're like, oh, someone's using my account. I don't have those. I don't watch cocoa melon.

What's happening here? Sadly, I do. Even though we've made Max an account, we still just use mine. It's great. She's got a profile, and we're still just like, whatever, we're using the main one. She's going to love the gray man. She's going to have a great time. They talked about the gray man a lot.

They're really focused on their content right now. and saying that kind of, what I thought was interesting was they said that their content is enough, right? Like, you and I were talking about that before the show, David. Yeah, I mean, they were basically like, so the AVod versus S-Fod thing is genuinely my favorite subject. In an effort to make as much money from streaming services as possible, the industry basically split into two sides. There's A-Vod, which is advertising-supported video on-demand, and there's S-Vod, which is subscription-supported video-on-demand. And those are two completely separate things to which people sign different rights. So you can have a streaming exclusive for a subscription service and a different streaming

exclusive for an advertising service. And now Netflix has both, which means it's going to have a bunch of deals that exist on Netflix that literally do not apply and are actually prohibited from the ad-supported side of Netflix, which is hilarious. And all of this is backwards and bonkers. But what it means is that there's going to be a bunch of stuff on Netflix that doesn't work on Netflix ad-supported. But Ted Sarandos is basically like, we don't care.

Netflix originals are good. people will pay $5 a month or whatever it ends up costing. They don't care because, I mean, also a lot of their biggest, like their heaviest titters are already gone from the service, right? Like, friends, the office are both now on Peacock, which they're really shaking in their boots over. Marvel's gone. Like they lost all of those, like, Grey's Anatomy was a huge one for them.

All of those CW shows, Riverdale, All-American, those shows do monster traffic for Netflix. And now that CW is breaking apart because of the Warner, the Warner Discovery. deal and CW is owned by Paramount and Warner Brothers. Like, they're losing a lot of these shows. They were going to lose them anyway. So, like, again, they can say, oh, yeah, we're good enough. I don't know if they actually are. Like, I think we just haven't seen enough numbers there.

You don't think the ad tier will just be free? No, they're going to charge for the ad tier. They've made that clear. They haven't said, like, how much they're going to charge, but they're definitely going to charge for the ad tier. I bet it's five bucks. Yeah, it'll be five. I mean, that's what everybody else.

Five bucks is the amount that you just, like, it's the most. you can spend before it feels like money, I think, to a lot of people. Yeah. It's like $4.99 a month. It's like, this is what Apple figured out with Apple Arcade. It's just like, okay. Yeah. And I do think it's true that people mostly go to Netflix to watch Netflix stuff.

Also, this is, I just went to Netflix's Top 10 page, which is top 10.netflix.com and is always fascinating. Have either of you heard of a movie called The Sea Beast? Yes. No. What? It's the number one movie on Netflix. It's for little kids.

I have never in my life until this minute heard of the movie to Cbeast. And it's the number one movie on Netflix. If people could just send us a plot summary of the CBS, you can tweet it at Liam H. James on Twitter or a producer, he'll pass along the best to us. But yeah, yeah, like I think Netflix actually has a lot of problems because they aren't really good at creating those big followings for their shows, apart from stuff like Bridgeton, Stranger Things. Yeah, it has a few of them. It's had a few of them. But every time they talk about like, oh, yeah, we have the biggest movie in the country.

Who do you know talking is talking about the gray man? Right. Who talked about Bright after Bright came out besides Ted Sarandos, who was like, this is the best. I talked about Bright a lot because Bright was ridiculous. Yeah, Bright was trash. That's how people talked about it, right? Like Birdbox, I think, was probably the last one that really kind of like hit the public

consciousness in a way. So Netflix is still struggling there. Well, and this is why Grey Man is so interesting because it's like Netflix has made pretty clear from the beginning that it sees Gray Man as like a Marvel-sized cinematic universe that it's going to get to do lots of stuff with. Directors involved.

Yes, the Russo Brothers. They spent like $200 million on the movie. There's a bunch of books. I've read them all. The first six are great and then they're awful. Does it feel like Marvel? That's my recommendation. No, it's much more like

Jason Borny, I would say. So I'm like, I can see how they'd make a few of these, but I'm not sure I see like a gigantic cinematic universe. And also, I haven't seen it yet, but the reviews are not good. Well, I mean, we've seen them do this again and again where they chase these franchises because they know, like everybody knows, they need franchises. Paramount's entire business is built on Taylor Sheridan and Star Trek. Like, that's their whole business. Peacock is like, we got friends.

Don't you love friends? Come watch friends. Disney Plus has all of pop culture. Netflix doesn't have these big pop culture zyta geist moments apart from stranger things. Squid Game. They've got Squid Game. Right. They definitely have a.

few of them. Their strategy has been, I mean, for the longest time, right? The studios, like, looked at Netflix is, like, their last stop for money. They would go to theaters and they would go to TV and they would syndicate and then Netflix had the rest. Right. So Netflix is, like, strategy from the beginning. It was just, like, quantity. We're just going to buy everything. And then for a minute after they were done with that, their strategy was just quantity of showrunners. So, like, every showrunner in Hollywood just, like, got a Netflix deal. Love this for them. And Netflix was like, no notes, just go nuts, right?

Shonda Rhimes have the time of your life. And now it's like, the strategy has to shift to quality. In a way that I don't think Netflix is unable to do, but if you just look at where they have been, like the middle three episodes of every Netflix show are basically designed for you to look at your phone while you watch them. Right? Like whatever, as long as you're watching Netflix,

you're not doing anything else. And they've said this a lot before, right? Reed Hastings has been like, our true competition is Fortnite. Because if you're playing Fortnite and you're not watching Netflix, Netflix. And sleep. Yeah, and sleep. Yeah. And so now they're like, oh, our competition is like Apple TV Plus. Our competition is at HBO Max. Like all these things that will, I mean, I'm not saying like HBO has the best catalog, but like it's a superior catalog. Yeah. Because it's a lot of stuff that was made for HBO. Right. Throughout the years. Also the show head of the class, which is like one of the weirdest 80 shows. You can possibly watch. We talk about it. It's just like crazy. There's an upcoming book about YouTube. It's very good. When it comes out, we'll have the author on the other show that I'm not. a lot to mention on this show.

Decoder. We have another show. You should have told us. Decoder. But I'm reading it and like the professor from head of the class is like a key character in the story of YouTube. This is like a real thing.

And so now it's just like head of the classes everywhere. You know like when you're shopping for a car, you see that model of car everywhere. I'm like head of the classes everywhere. It's happening, man. It's your moment. But if you're if you're Netflix in that moment, you're like, okay, we've got stranger things and we can hold that

against what's the new Game of Thrones show? The House of the Dragon. House of the Dragon. HBO is good at all of this multi-channel event marketing that HBO has always been known for. We can hold it up against Westworld. We can hold it up against the last season of Ted Lasso, which Apple's going to go all out on

because it's the last season of Ted Lasso. And Netflix just hasn't been in that mode. They've been in the Tiger King is a viral sensation and everyone's watching it and we didn't do anything to make it happen. Right. And I think they just have to shift into like Hollywood mode in a way that I think is very different for them. It's also really hard. Like the part of what that requires is knowing what's going to be a hit before it's a hit. And Netflix is historically very bad at that. I think Netflix is actually really bad about that. And I want to come back to Paramount Plus because I do think Paramount Plus is like a sneaky competitor here, especially with the Taylor Sheridan machine.

Like this is a huge, Yellowstone's a huge franchise. I'm Googling Taylor Sheridan. I don't know who that is. Taylor Sheridan did Sicario. He's like a sad cowboy. Yeah. He was in, he was a writer and also on the show, uh, Sons of Anarchy.

And then he did Sicario. Again, the common thread here is characters who can be described as sad cowboys. Yes. That's true. Like sad cowboy on a motorcycle. Okay. Sad cowboy who's a cop.

Sad cowboying out. He's a sad cowboy on his little horse. This is the Taylor Sheridan cinematic universe. Yeah. I mean, but he's built as the cinematic universe. He actually like, He went out and he built it.

It's a monster. It's one of the most watched. Like Yellowstone is one of the most watched shows on TV right now on any of these platforms. And Paramount is actually made of TV people who maybe we don't watch all their shows in CIS. But they're huge monster successes. Like these are shows that people talk about and people watch. And Paramount's really, really good at it. And also has been doing the ad-supported stuff.

Like they're being much more thoughtful about it than Netflix, who's kind of like, like coming from, has this real disadvantage because they haven't had to do this before. They don't know how to do this. And Paramount's been doing it for a while now to some success. Yeah, here's the difference, though. And this is why I would bet on Netflix. I mean, I'm still betting on Netflix. It's enormous.

It's got way more subscribers. Well, there's that. There's like just inertia. But there's also like Netflix has like teams of engineers who are good at their jobs. And they can like stream reliably in 4K with Saransan. Paramount Plus is like, this app runs, there's a hamster on a wheel, and we actually, he doesn't power the app, we just let him design the app. It's actually a guinea pig.

The hamsters at HBO Max. I mean, it's just like the Hollywood companies are not good at making the technology, and that's the thing that Netflix still has the massive advantage on. I think Disney Plus is good because they bought Bamtech a long time ago, and they, like, made the app good. HBO Max, they've done a bunch of, like, redesign-y stuff along the way, and they said they switched out. But like it went down today. That was like a thing that happened in the middle of the day, just like disappeared for a while. So we'll see. Like you can have the content if no one can watch it

or the experience of watching it is horrible. I think people will revert to Netflix. And I think that's like a big challenge for these, the Hollywood companies is their user experiences are bad. Yes, 100%. I'm not sure that's true. I think the idea that people will pick the best user experience is a thing that is not true in reality. The hoops people will jump through to watch their dumbass shows is like knows no bounds, right? Like, this is why the streaming world exists because it's like if I have a show you want to watch,

you will do whatever weird shit I make you do in order to watch it. And this is how HBO keeps winning. Like HBO Max is on fire despite being a trash app because people want to watch this stuff on HBO Max. And so I think what Netflix has to do now is figure out, like how to make good things and tell everyone about them. And those are like different skills than Netflix has shown in the past. I mean, I think those other companies do actually have to make good apps though.

Eventually. Yeah. Like I think at some point, I think they are going to run out of steam at some point and people are going to be like, well, I've seen all the content. I don't want to watch this. You're doing boring shit. I want to go back to Netflix. And I think Amazon was kind of a shocking one this week where they're redesigning their whole

app, which has been, just thank God. It was the ugliest app. They made it Netflix. Netflix's algorithm is terrible, but Netflix has like a good user experience. Yeah, I guess. Well, no, I think there's also just like a sheer, I mean, we've seen this in how many interfaces over how many things over time.

They all converge to something really familiar, so they're not trying to make you think too hard, and then you can just like watch the boys, right? Like, that's all they're trying to do. And all these apps launched, and we sat through, shout out to Julia Alexander sat through millions of presentations

about how this app was different and Peacock has a live tab to recreate the feeling of live TV and HBO Max is like cartoon network experience and you like dive in You watch two shows Almost all of it is like this is too much

Like A you haven't thought this all the way through You just need it to be a little bit different And then B People just want to get to the shows And David to your point Like, they just want to hit play, and then you're done with the app. Like, once you get to that point, you don't need the app anymore. And I think you're seeing now with Amazon in particular, like, there's a convergence to,

here's the baseline user experience that everybody wants. And the idea that we're going to keep you in this app forever, like they've let go of because there's so much competition. The team that did the Prime app is led by Drew Bamford, who used to be the head of design HT for years and years. He's a smart designer. and like at the end of the day, they like converge on a thing that's familiar to people.

And I think that's just like the game that you have to play. Yeah, it made me think of when I was talking to Christian from the YouTube TV team for the Vergecast last week. One of the things we got to talking about was that like spreadsheet TV guide, which it turns out everybody in the industry calls it the spreadsheet, which made me really happy. This is just like the old grid. And he was basically like when we launched YouTube TV, we were like we had a million. objectively better ideas about how to program live TV. And we're like, it'll be easier, it'll be easier to navigate. You can just search around.

And the overwhelming response was like, where's the spreadsheet? Well, that was what happened with Hulu as well. Like Hulu was like, no, no, no, we got this. We have a new, amazing experience. And the very first thing everybody said, including myself, was this sucks. Where's my grid? Totally. And it took Hulu way too long to put a grid in.

Well, and now Ben Smith, who was, I think the head of product at Hulu for that redesign is at Amazon and took a much. safer approach for a second go around. Do you know that for years there were just like massive patent disputes with the grade guide? Really? Is there? Yeah, the grid guide was like a patented approach to doing it.

So for like years, Thivo didn't have one back in the day because they, they couldn't get around the patent. And then there was like 5,000 patent lawsuits. And now they're all expired. Who is the patent owner? It was a company called Rovi. It was like the digital TV guide. We patented it.

I mean, this is like 2012, 2013. It was like nuts. And so, like, there's a lot of just, like, PTSD in the industry that, like, they can't do it. So they have to reinvent it. And now they all realize. I can just, like, whatever. I think, like, fundamentally, you look at where all of these companies are, where it prime video is. They've got shows.

Like, they've got the boys. This is the part where I talk about Westworld for an hour. They've got a very expensive Lord of the Ring show coming. Yes. The one thing we have not talked about with Netflix is the Microsoft deal, which we showed out briefly. And I only want to make this one point. They signed up Microsoft to be their ad provider, which means they're going to do the targeting and the placement and all this stuff, the ad tech. Netflix does not want to build that on its own, which is interesting because they build every other part of their tech stack on their own.

But the reason they signed with Microsoft, and it was like, I think it was in the journal of Bloomberg, is the natural partners for such a thing are like Google and Amazon. Netflix runs on AWS. And they're like, no, we can't because they also compete with us. And Microsoft is like, we don't. Also, we have Xbox and you want to do games. And there's just a whole thing happening there where, like, Microsoft won because they don't do everything. Like, they don't have a content studio. And so, like, they're the ad provider.

Like, you don't think of Microsoft really in this ads conversation. But they're about to become a major player in TV ads because they haven't done YouTube originals or made the boys or, like, whatever, all the other things. And, like, I prattle on about these companies all being too big. But that's, like, a really funny outcome of being too big. is it like you tried to make YouTube originals one too many times? There's no guarantee that you won't try again, so you don't get to run our ads business. Like, I think that's nuts.

Yeah, well, and it sparked a bunch of really fun theories on the internet about whether Microsoft is now a good acquirer for Netflix, which I think is ridiculous for like 100 different reasons. But it is an interesting, like that idea that Microsoft is not in Netflix's realm is, I think, like, less true than either side would like it to be. I mean, Microsoft is buying Activision Blizzard, which makes video games, which Netflix will not shut up about how it competes with, and is becoming, like, a real content player in a lot of ways. It doesn't make original shows. That's true.

But, like, the Xbox is becoming as big a generator of IP and time spent as anything else. So it's like, these things are coming together in such a way that I think, like, Netflix and Activision Blizzard might not be that apart for very long. Do you think Microsoft will buy Netflix? No, because I don't know why Netflix would sell to Microsoft. Well, I mean, also, Microsoft had the most disastrous attempt at being like, we're going to be the center of your living room. We're going to make the Xbox a cable box. I still say that was a good idea. This is the worst idea.

They were like, that presentation, when they did the big E3 presentation, and they were like the Xbox one, the center of your living room. And at the end of it, they're like, here's the fucking IR blaster. And it was like, you guys, like, no. Like, I wanted to, like, go to L.A. and be like, I'm stopping this presentation. I'm shutting this down. No one believed me. It's like an old, I hope our old school listeners,

remember how very angry it was with that. Oh, yeah, you got years of verge casting out of IRR blasters. So I, yeah, it'll come back. I mean, I love an IR blaster, though. I'm sorry. Alex, you want to, and everyone thinks they're right, put there. I've got my little.

If you see an IR blaster, The blaster the product has failed. It's, it's been true since, like, the 80s. And that's why the first Nvidia Shield failed. They had an IRR blaster. I didn't fail. We all own one. I know 90% of our listeners.

How are the Shield people going to show up now? The IR people are going to show up, and the shield people, all right, we're taking a break. Wait, can ask one more question before we do? I'm still on Netflix's top 10 page. This is very important to me. Have either of you ever heard of a show called Boo Bitch? Yes. Alex watches every show.

Alex is like, here's what I got. I got a shield. I got a Plex account. I got every show. I wanted to see who was the ghost. It is the ninth most popular show on Netflix right now. It's not worth watching. I just skip to the very end.

I'm closing this tab. Boo bitch. What I want is for Netflix on TV platforms, Chromecast, Apple TV, whatever, to have a 2X speed button. I would watch way more Netflix if I could watch it at 20. I watch all YouTube at like 1.75 on my TV. It's great. If they did it for like the home.

decoration shows where they just skip to the reveal, I would press that button. Oh, that'd be great. Just, I want to see what the sex room looks like. There's a show. There's a show right now on Netflix where, where this little British lady designed sex rooms for people. That's been segment two of the Vergecast. It's been a ride. I hope you're ready to pay $5 a month and watch ads watching a show either about ghosts or sex rooms. That's the future of Netflix. You can learn about a St. Andrews Cross. We're going to come back and talk. about smart home protocols. And that's going to be that.

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Get started with Claude today at cloud. com. That's cloud. cloud.AI slash vergecast and check out cloud pro which includes access to all the features mentioned in today's episode clod dot a i slash verge cast all right we're back there's a bunch of gadget stuff to talk about at the end here on our show that's ostensibly gadgets for mid-july this is a it's been a fun techie week it's been a fun techie week i'm just saying i hope everyone had a good ad break you've all recovered you all watched boo bitch all let's start with what i think is tiny news

but huge news. Thread 1.3.0 is out. Yes. The tiniest news in the world. Some of the biggest news in tech. Like, this is the underlying Bluetooth 5 is here story of the week. So thread, as you know, is the underlying wireless protocol that will support and matter the new smart home standard. It will let you control all of your stuff on all your stuff. So matters the new standard. All your gadgets are going to show up in HomeKit. All your gadgets are going to show up in Alexa. All your gadgets are going to show. You don't have to do all this weird cross-combatability stuff. Apple, called it its new architecture. They've all said out loud at events, we're going to support matter. Thread is the wireless standard. The matter runs on. Up until today, we've been tracking this for 500 years.

Yes, 501. Give or take. Like the first gen Ero had like thread radios in it. And they were like, it's going to be huge. It's 2022.

Up until today, there are lots of thread devices you could buy. The most notable, like the nano leaf lights that people like. But the border routers that like sit between your Wi-Fi network and the thread devices were all totally incompatible

with each other. So Nest Hub Max, the second-gen nest-hub, the Apple TV 4K, the HomePod Mini, the newer echoes, the Nanaleaf stuff, Eero stuff,

all had thread radios in them. You could all connect to Wi-Fi and then pass signals onto your thread network, but all of them were totally incompatible, could not talk to each other, could not mesh together. So if you had multiple

of these devices in your house, you had multiple weirdo thread networks, And the devices were not cross-compatible, which is even crazier. So some devices supported whatever. Thread 1.3, it's here. 1.3.0, which is very specific. Backwards compatible with all of them. So now they all just mesh together.

And I just want to take a minute to be like devices from Google and Apple and Amazon all can talk to each other because of this one update to thread. So a HomePod Mini and an Apple TV 4K and a Nest Wi-Fi and Ness Hub and newer echoes. are like, yep, we're just one wireless mesh network in your home to support smart home devices. When they update, do they play We Are the World? They're like, we're sorry that we did this to you for years. We apologize that your house was a weird disaster. You have a Linux box in the garage to fix it. It's a weird song.

They didn't hire any writers. They'll get some backing singers. It'll be fine. If someone could put that to a beat, that'd be great. I don't know that it was, like, melodically perfect, but I think it had bars in it. So this is huge, right? So it means matter is happening. It means that, like, is Jen Toey, read about this for us.

She got a great piece on thread itself. And then she has a piece where she interviewed Mara Kutman's who directs Amazon smart home. And they're like, this is the thing that unlocks Alexa on Smart Home. That will, like, make it smarter. We'll be able to see all your stuff. Be more predictive. Build intelligent automations that we, like, guess for you that are cool.

It's a tiny little standard story, but you rarely see a standard, like, come to life and everybody support it and say this is the way it's going to go, the way that this is slowly beginning to happen. Yeah, and thread is like the thing that enables the thing, right? Like matter is just like the interface that understands all of this across the things. But like you said, none of this works if thread is not sitting underneath of it actually building a single network that makes sense to all of these devices. Yeah, like this feels like one of those things. And it's going to be interesting to see sort of how quickly everything sort of gets on board. But it seems like everybody's committed and this is going to happen pretty fast, which is very exciting. Yeah, the fact that now, like, you can have thread border routers in your house.

And thread border router is such a bad name. It's just like these things can't run Wi-Fi. Wi-Fi is too power-hungry. It requires too many components. They can't run Bluetooth because Bluetooth sucks for all the reason. Bluetooth sucks. Like, Blue-Gs doesn't have the range, right? Like Bluetooth low energy in particular does not have a lot of capability.

So thread sits in the middle where you get kind of like pervasive coverage in our house. Plus everything is meshing together. So you can extend the coverage really fast really easily. Plus it's super low power. So this is the thing that like if you want all the lights switches in your house to go, they don't have to be on Wi-Fi. That's too hard. Or you don't need the Leviton Hub or whatever it is that I have.

You just can buy the devices in the go. And so like Apple knows and Amazon knows. Everybody knows. Like we can't, we can't ask people to like dedicate their entire houses to our weird smart home ideas and the downstream manufacturers, the lights which manufacturers, will just kill them if they have to make five versions of every product. And so it's been a long, a long, long, long, long time coming, but it's here. And there's like already some beginnings, like Eve has a new motion sensor that runs on thread that's going to work with all this stuff.

And I think we're just going to see kind of an explosion of thread devices now that the underlying, now that they can say anybody with a HomePod Mini can run it, anybody with a new Echo can run it, Anybody with a Nest Hub second gen can run it. Anybody with Euro routers can run it. And it's going to speed up adoption really fast. I think I'm guessing that when Apple does the new iPhones and like the next version, because they're, you know, they've talked a lot about the next version of iOS they're redesigned the home app.

I'm guessing there's going to be a wave of accessories that come along for the ride because that's when that's when the matter support will be here. Or like Apple, they'll release the new version of iOS and then six months from now, they'll ship the dot update that has matter in it. But like, that's the moment, I think, this all starts to really happen. Yeah, no, I think that's right. And it feels like, like, as we talk about all of this stuff, part of what's wild about these things is it's like, we're just explaining how it, like, obviously should have worked

the whole time. Where it's just like, oh, you have a thing that connects to a thing and they talk to each other, and then you have another thing, and that also talks to it. And it's like, yeah, no, that's what this is supposed to be. It's like, I always describe it as like that time when we all first got cell phones, when you could only call other people on your carrier. And then everybody was like, well, this is ridiculous and just let you call other people who had phones. And this, this feels like that moment to me where it's like, okay, we've gone from

this is dumb and bad to this is how this always should have been. And on the one hand, it's like, I'm trying to like remain very excited because it is very exciting. But it's also like, yeah, dudes, like, nobody's inventing anything new or interesting here. This is just what it should have been. I mean, they've been trying this. They've been out this for five years. It was supposed to come out earlier this summer. I got delayed by several months. Like, there's a bunch of underlying political tech stuff, like what should the standard be? Is it ready? Should we ship it? But the fact that it is happening on all these devices at once, and they're like mainstream devices, it's a commendable. Like the industry actually did it. And the upside of those five years that it took

is all of these companies have now seen how badly it would go if they tried to like build the whole wall themselves. Like there was a minute where HomeKit was like, we're going to build a whole gigantic accessory ecosystem around HomeKit and Alexa was going to do the same thing. And Google was going to do the same thing. And everybody realized, like, that's ridiculous. The idea that I will exclusively buy Google devices for my home is just not going to happen in the world. And they all now know that for sure. And I feel like it has helped a lot in the last year.

I like that it's going to force Apple and Amazon and Google to maybe have better home management apps. God, I hope so. Right. Like, I hope that happens. Because right now they've been competing with, like, Amazon's just like, we have, we support everything. And Apple's like security. And Google's like, we're here too. And now they have to, like, actually think about it and compete if they want to be in this space.

Yeah, it's going to be like an interface race for the first time ever, which is very exciting. Yeah. Underlying bits of matter are very much home kit. Like Apple just, like, basically gave home kit to this standard. What was the most secure of, like, all of these standards up until that point, right? Yeah, and a lot of their leverage was like, do you want to be on our phone? You're going to do it. You're going to do our thing.

Okay. So, like, there's a lot of that politicking underneath the, hood here. I think you can see more things are going to end up looking like the home app. And Apple is saying it's redesigned the home app in the new version of iOS. It appears they just made the scores like ovals. So we'll see what that means. But yeah, it's a big deal.

Thread 1.3.0. If you've got one of these devices, like the quietly update, you should like go get an antelief and be like, it's so fast. But that's actually the coolest thing about it, like compared to Wi-Fi or Bluetooth, lightning fast control from your phone to the thing. Yeah. Like that's the coolest thing about it. Got it. All right. All their gadget news, Samsung, going to fold some phones at us?

Yeah, Samsung has like halfway announced the date of the new unpacked thing like 45 times and then eventually just announced the thing. They were like, oh, the day that all of you knew it was going to be, it's going to be that day. So it's August 10th. We're going to get at least one foldable phone, presumably a bunch of other wacky stuff because that's what Samsung tends to do. Are we going to get that speaker? Where's the big speaker? Oh, man. What was it? It was like, What was like the Galaxy Tubb? What was the name of the Galaxy Grill? Like it looked like a little Weber grill.

It did look like a little tub. It looked like you'd put a potted plant in it. It was the Galaxy Home. That's what it was called. Not the Galaxy Tub. So the Galaxy Tub. I mean, I will say this might actually be an interesting moment because if it's like the thread stuff is happening. And obviously like all the stuff that Samsung is about to ship it has been working on for a very long time.

So it's not like it spins this stuff up in two weeks. But it's like Samsung has kind of has had smart things for a long time. and has kind of not talked about smart things in a long time. And it's like maybe Samsung has a reason to try to get back into this in a big way if it can be part of this ecosystem again. Every like nine months, I'll get an email from somebody who's like, I'm working on smart things. Do you want to meet?

I'm going to tell you about our new thing. And I'm like, what is it? It's a light. It's a sensor you put in your pool that tells you that it's a pool. But this is a secret of smart things. Like they've been added the longest. They're the most compatible. the most things.

Yes. And they're down to like, it's a sensor that detects whether your pool is full of water. Because we've made every other kind of sensor that can exist. And the people who are into smart things are like, you know, I'd moved another platform, but I can't get this one sensor that tells me if the doorknobs are hot. And it's like, yeah. It's like. There's no other way to tell if there's a fire in the house.

Only the doorknop detector. It's real. It's like once you, once you're like at that level, of very specific product lock-in. You're like, I'm smart things for life. Oh, yeah. We'll see. Samsung says they've sold a bunch of folding phones.

People seem to like the Z-folds, threes that exist. I see them in the wild now. No, I seem about the same as I see a Rivian truck. Like, they exist. People are using them who are not tech journalists. Liam had one for like 15 minutes. There was a day where Liam showed up on a call and was like, hey, I bought a fold. and then the next day, Liam did not have it.

It was longer than that. Was it longer than that? It was two weeks. Okay. Yeah. The return period. But Samsung's like hit their Samsung moment, right? Where they're like, they've sold a lot of them.

They know what the people like and don't like. They don't have to make outrageous claims about them. They just have to continue to iterate. Like, apart from the blue bubble situation, like they're the most interesting phones. Oh, I agree. And this is also in the life cycle of, A, most products, but B, especially Samsung, products where they tend to be good. Like, historically, the, like, third and fourth of a thing Samsung makes is where they start

to kind of solve it. I'm still surprised that Apple, Apple, usually, this is right around the time Apple's like, hey, we've invented this, the folding phone. And they haven't done it yet. It's true. Like, they're a little behind. Well, they've got a real iPad problem. Once they figure out stage manager, oh, my God, stage manager on your folding iPhone would

be the death of me. I can't even think about that right now. Yeah, I can't. I can't do it. I got a pile of windows here on my phone. But, I mean, that's a problem, right? You unfold an, like, a Mac-sized iPhone. You've got an iPad Mini.

Yeah, I want that. I mean, I want to hold an iPad Mini up to my head folded. It's the dream. Other news, we reviewed the Pixel 6A, which seems fine. I'm very excited about this phone, actually, because it's like Google's whole thing when they launched this was basically like the tensor chip is going to make all of our phones great no matter what, and we're going to like bet on AI as the thing that can make even our cheap phones with less impressive hardware good.

And by and large, that seems to be the case. It's like, Alison Johnson reviewed, it's a really good review. But it's like there's like little things bad with it. Like she, the fingerprint sensor is slow and the screen is not like wildly impressive. But it has a good camera, uh, despite having not as impressive camera hardware as some of Google's other phones. It has good battery life. And like the, the processor makes a difference.

And it's like, If Google, like the vibe I get from this is basically it's $449, I think, for basically all of the power you'd get out of the more expensive pixels. And that's cool. If you lived in the UK, would you get this or nothing? I'm so excited. I was like thinking about that the entire time. I'd get this because I can't talk about the nothing phone anymore. Because if somebody was like, oh, what company made that?

And I said, nothing. I feel like I would have to then, like punch them in the face and walk away. You're like, I'm sorry. Yeah. I would get the nothing phone. Would you? I just don't, this design language that Google has with this weird camera line. You don't, you don't like the hump?

It's the worst. The hump and bump. It is not a great looking phone. But I think the thing is like, I don't know, I just, I like this idea that Google's big bet is we can fix a lot of things with software and AI. And at least in part that is panning out on twice. But we cannot hire a good designer. Apparently not. They've hired so many designers.

Yeah, they have a lot of designers who are good. And they've settled on this. Yes. I think it's, I mean, it's part of like just Google's entire design language is like, we want simplicity, so things will load quickly, so you will not leave our site. And then they translated it to hardware, and that actually translates badly. Yeah, there's like a level of like Googly goofiness. I want some light. It has extended to this phone. I don't know. I was looking at my pixel 60 other day and my pixel six pro. And I was like, ugh. Aw. You really, you didn't get cuter with age. You know what I'm saying? Yeah. Other Google News, they've got new prototype AR glasses that they're going to start putting out in the world.

Yeah, they announced that they are going to be testing these. You may be seeing them in the world. A lot of times they're going to look like actual glasses, but they're going to have a ton of sensors in them and gather a lot of data. So that privacy nightmare part of augmented reality, they are not addressing. They're just being like, yep, it's coming. This to me was the funniest news of the week, and it's not even close. Because what happened, I absolutely promise. I have no knowledge, but I'm absolutely confident this is what happened.

Is somebody had a meeting, and somebody was like, okay, this thing's cool. Can I, like, take it home for the weekend and test it? And somebody else went, remember the last time we had AR glasses that we let people go out in the world with? And so they had a whole big thing, and they were like, okay, how do we solve this problem? Like, we can't name it anything like glass because glass hole was pretty funny, and everybody still remembers that. We have to tell everyone that you might see a Google employee in the world wearing AR glasses, and it's okay. We will not harm you. And there's definitely rules.

I'm sure there are rules. You can't wear them into a bar. Don't wear them in the shower. There's just like a glass holes mistakes list that just is in this room at Google. Do not wear it in this announcement for Google. It makes me so happy. So here's your What's a Photo question for this episode of our chest. I'm reading this blog post.

I say we're going to start testing these things. Don't freak out. We just need to see how they work. Only by a few dozen Googlers and select trusted testers. Call me. Don't punch them in the face if you see them. These prototypes will include in-lens displays, microphones, and cameras, but they'll have strict limitations on what they can do.

For example, our AR prototypes don't support photography and videography, though image data will be used to enable experiences like translating the menu in front of you are showing you directions to a nearby coffee shop. What is the difference between the image data that shows a computer what's on the menu such that it can translate it for you and photography and videography. It's not a JPEG. Yeah, if you don't save it, is it a photo? Like, that's the question.

I mean, it's saved. The data is being stored. I think if we went and pushed them, it would be like formats. There's a line of cases in copyright about ephemeral copies and whether they're constitute illegal infringing copies. And the courts got it wrong for a long time and made people pay licensing fees. And then that was, whatever. But ephemeral copies are like a real thing.

Right. At some point, like if you're doing that, you are definitely capturing image data. Yeah, you can't translate an image without capturing image data. Right. Like, there's no way. Like, I don't support videography, but I can definitely read this video feed and then spit out what the words say. All they're saying here is it doesn't record. the video for playback later.

That has to be what this is, right? It makes me think of like the thing where Google and Amazon used to say about their voice assistants that they don't record you. And it's like, no, what actually happens is they just record you for every two seconds and then throw it away. So like it's recording all the time. It's just not saving any of it until it hears a word that it likes. This to me feels like exactly the same thing where it's like, no, it's actually recording

always. It's just not doing anything with it until you tell it to, would be my guess. But it sounds less scary their way. I will say that, you know, they're announcing it because, you know, people are going to see it and people are going to freak out. So then, like, when people see it and they freak out, they can, like, find this blog post. Like, that's, right, they're getting ahead of their own controversy. The stack of AR problems is still huge. Yeah.

Right. They, I don't know what display technology they're going to use. No one's invented one that's any good for AR. Yep. I don't know what processors they're going to use to do all of this. I don't know if their battery life will be any good. I don't know if these things are going to be heavy. Like, I think they're saying it so they can get out ahead of whatever.

New Cycle and like both positive and negative right now we're here we are talking about Google AR but they're just not close like no one is close because the core underlying technologies are not close yeah somebody is going to take a picture of somebody in Mountain View with like a gigantic motherboard strapped to the side of their head and Google's going to be able to be like we told you it's going to be an HTC vibe with like just a pixel phone yeah and there's going to be a person trailing behind them holding a desktop PC that would be amazing like one of those like lidar sensors on the back of the mainz. Exactly.

The full suitcase. We'll see. I mean, look, the mixed reality stuff, again, they're saying these are glasses. So both, we know Apple and Facebook are going with basically full VR headsets with high-res cameras in the outside that create mixed realities and show your reality on the screen. Because I can't solve the pass-through display problem. We just don't know what Google's going to say, although it says it will have prototypes that look like normal glasses.

And they'll have an in-lens display. So if they have solved the. display problem, that's a big deal. I mean, it could be just, they own North now, right? And like North looked like regular glasses. This could be like other stuff. Well, and remember that video they showed at I.O. of the translate thing?

Like, that basically was like North or just like very advanced Google Glass, where it's just sort of a heads-up display in front of you. It's those things where you don't need a whole lot of vision, augmented vision. You just need a little bit to show you what that thing on your menu means. apparently. They do on North, which is like a smart glasses company, but North just like projected notifications in front of you. Right. There was no augmented reality happening. I'm saying like they could theoretically still be using that display technology and just saying, okay, we can't make the displays bigger. So let's figure out how we make our UI is cohesive and interesting and smaller.

Yeah. Although, Neely, I would quibble with your definition there. I think a lot of people think that projecting stuff on a screen in front of your eyes counts as augmented reality. No way. I think a lot of people do it shows the speedometer. It's not augmented reality. You got to augment the reality, man. You have to look at the world around you and then you have to like label it. And it can't be postage stamp sized.

Right. It's like a little display that shows you other stuff, even if it's like somehow related to your location. Like if I had like New York City subway, like you come off the subway and you like don't know what direction. you're pointed, it would be great to have a pair of glasses that was just like turn around. That's the Google Maps Live View thing. That's what they've been trying to build forever. Yeah. I just don't think that's augmented reality, really. Okay, but if it shows you that on a teeny tiny display up in the right side of your vision versus projecting it on the building in front of you, is one of those AR and one of those is not AR?

Yeah, that's what I'm saying. Otherwise, it's just a little display. But they're functionally the exact same thing. I'm looking at the world, but there are things happening between me and the world. Do you, do you only want the big screen? screens? No, I'm saying the name is augmented reality. So like, you have to augment reality. I have a little computer monitor in my glasses does not accomplish that. If that is the case, then your iPhone is happily augmenting reality all day long. I mean, Apple would say it is. Yeah, we've been talking about iPhone and iPad AR for like five years. That's what they say. They stand over the

table and they're like, you can't see this, but this Minecraft build, incredible. Yeah. This is just what I'm saying somebody is going to try to sell you a tiny little display in the upper right side of your vision, and they're going to call it AR. And I'm saying you should have higher standards. We should have a little, we should have a little dignity. We should just be like, look, if you're going to augment reality, you got to solve the problem. With the hardest problem of all of this is that the display on your glasses, what's projected on your glasses has to remap itself as you move your head around. Yes. Right? So like you put the virtual billboard on the side of the building and then you move your head and so us to look like it's in plain.

That's a lot of processing power. That's a lot of head tracking. That's a lot of re-rendering. And like no one is ready for this yet. We're talking about like Google's going to put notifications on your phone. Like carplay for glasses, right? It's a second screen for your phone. But we're going to have to deal with the augmented reality beach ball effectively.

Like just the little, I'm thinking in trying to reorient myself. Like it's just going to be a little beach ball when you turn your head too fast. The whole world just glitches for a second. Just glitches. And then you're like, no, no, no, no. I got this. I got this. And I hope it's a cute beach ball. We have all been like with our phone in a place like through a tunnel and the GPS screws up and it's like it thinks you're 500 feet to the left or whatever like in your car navigation. Every time I go through the Holland Tunnel,

it's like you are in a train yard. You need to get out, Alex. Like just imagine that, but it's like your experience of reality because your glasses like lost their GPS peek. Like this is the hardest problem in technology and everyone is talking about it. Like they've solved it and they're not even close. Like, not even a little bit close. Like, the rumors from Apple are like $5,000 virtual reality headset with cameras because it will be easier for them to reconstruct all of reality inside an expensive headset than it is to actually augment reality.

Can you imagine how mad you'll be? Like, I get mad at my phone when it, when it screws up. If my glasses get screw up, like, just the fling across the room. Yeah. Done. Well, this is the problem, right? Knapp them. It ends up being so high stakes because it's just trying to do so much.

Like it's the same rage as like, I need to print this and mail it in 10 minutes. That exact same like fury when the printer's like, hold on. I think your ink's out. I'm just saying the whole tech industry, like things are chasing after this. And like maybe they are. And we certainly have scooped a bunch of it and like whatever. But we should have some standards when we say I went to reality. It cannot be a little projector in the side of your glasses being like,

north. Like whatever. People, self. It's great. All right. Should we do some little lightning around stuff here? Yeah. Elon Musk went to court our boy and said, I want my trial to start in February.

And the judge was like, no. It was, everyone saw that coming. So their trials starting in Delaware in October, already a raging battle inside the Verge team of who gets to spend that time in Delaware. The blood fight. It's going to be five days long, too, which means it's like, like the last trial I really spent a lot of time thinking about was like, Elizabeth. with Holmes, which was like months.

This one is just going to be like a five-day bloodbath. It's going to be insane. Look, you don't mess around in the Delaware recorded chancery. No. They don't have time for your nonsense. Apple settled the class action against the butterfly keyboards for $50 million, which means everyone gets like $0.10. What are you going to do with your $0.10?

You know, I'm going to save up for air glasses. If I save $0.10 a day until real AR glasses come out, I will have millions of dollars. Put them towards that first Apple pair. Yeah. You should sign up and get your 10 cents. But kind of amazing that Apple caved finally. And then lastly, just some big stuff. The antitrust bills, the United States antitrust bills,

that we've talked about in the show forever and ever. They're sitting in the United States Senate. They have not come to the floor. And there's a massive amount of lobbying from the tech companies to try not to make them go away. So there's just like the brewing political fight happening. Amy Klobuchar thinks she has the vote. She wants to bring him to the floor. Chuck Schumer doesn't think hasn't brought on the floor yet.

says he wants the votes. He's been like spotted in Seattle visiting Microsoft and Amazon, which is a little shady, but they're bringing a chips bill to the floor to invest in semiconductors. There's a privacy bill that might hit the floor. So there's a lot of tech regulation back and forth. In the middle of this to like push the antitrust bills along, the committees that did all the hearings just released more documents that are like, here's exactly how Amazon games the buy button, like, to the cent to make sure that they always win. Yeah. Here's how Facebook and Google, like, absolutely, like, self-preference their own products

on their platforms. It's pretty wild stuff. It's one of those things that it's like, it just makes you realize how specific the knowledge of all of this stuff is. It's another one of those things where it's like, it's been sort of obvious on a lot of these hearings that this is the kind of thing that's going on. But it's like, it is both extremely deliberate and extremely calculated how they're doing this stuff.

The companies even kind of understand the dynamics of the other companies, that it's just like, these are just like open secrets within these gigantic tech companies that this is how this works. And it's been really interesting to watch the sort of dribble of it come out where they're all figuring out how to compete with each other when they all kind of know exactly what's going on. Yeah. Like there's emails here, Google executives raising concerns that Samsung would compete on search. There's Google executives discussing how Amazon won't let Google assistant compete with Alexa.

and they will just Yankee Google products from the Amazon store if Google competes too hard. Like, they're all in it. So documents are a while to check them out. But like in the background,

this bill is either going to pass soon or get help because, you know, Congress has, there's not a lot going on, so Congress is going to go on vacation again. And there's a ton of tech companies. There's a Bloomberg report on Tim Cook, just like personally lobbying senators.

Like the amount of money, Apple is spending the amount of money, Amazon spending, TikTok is spending out of control lately. the tech companies are lobbying Congress like no one's ever seen before. So we'll see what happens. Like it's a little moment. Obviously McKenna and Russell and Addy and the rest of our policy team are going to be tracking it closely.

But that's it. All right, we're over, as always. I want to plug Josh Jess's piece on AI writing fiction for Kindle authors who like crank out fiction for Kindle books all day. It's like one of the best and funniest pieces we have in a long time. Also one of the coolest layouts the Virch has ever done. Is this how Chuck Tingle keeps? tingling us. You got a cool, Alex.

It's been a little too sexy in the Vergecast today. All right, that's it. You can tweet at us. Alex is Alex. It's Cranes. Please, by all means, tweet her your favorite episodes

or whatever wackity you, Netflix shows she's watching. Boob bitch. It's boobish. I am at Recklist. Liam, as always, is at Liam H. James. We still have no soundboard. So let's keep the pressure up, my friends.

That's it. That's a Vergecast, rock and roll. Thanks for listening to this week's show. And hey, we'd love to hear from you. Shoot us an email at vergecast at the verge.com. And if you'd like to the show, share it with a friend. Vergecast is a production of the Verge and part of the Vox Media Podcast Network. Today's episode was produced by me, Liam James,

and our senior audio director, Andrew Marino. Our executive producer is Eleanor Donovan. That's it. We'll see you next week.