The Vergecast - Recode's Kara Swisher, AT&T - Time Warner, and IGTV

Episode Date: June 22, 2018

Instagram announced on Wednesday a standalone app called IGTV, a place for watching long-form vertical video. Casey and Ashely — who went to Instagram’s event that announced the app — talk with Nilay, Dieter, and Paul about their initial feelings about the platform and predict how it will fit into the social mediasphere. Also, Nilay Patel sits down with Kara Swisher to talk about the recent AT&T and Time Warner merger. Kara published a book in 2003 about the AOL and Time Warner merger There Must Be a Pony in Here Somewhere (the merger split off in 2009) so the two discuss the similarities and differences between the two mergers and what they can potentially mean when distribution companies own content. There’s a whole lot more in between that — like Paul’s weekly segment (now up for sale) “Shaavoop” — so listen to it all and you’ll get it all. 01:54 - Instagram announces IGTV, a standalone app for longer videos 19:33 - AT&T launches new WatchTV streaming service at aggressive $15-per-month price 27:26 - Tinder parent company buys anti-Tinder dating app Hinge 35:51 - Kara Swisher talks AT&T - Time Warner merger 1:07:12 - Paul’s weekly segment “Shaavoop” 1:11:51 - What happens if Apple loses its Supreme Court App Store antitrust appeal? 1:19:27 - Apple’s AirPower charging mat rumored to ship in September following ‘technical hurdles’ 1:19:48 - Apple and Oprah are teaming up to make videos Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hello and welcome to the Vergecast, the flagship podcast of the Verge Podcast Network, which is part of the Vox Media Podcast Network, which is part of Vox Media, which at this point is not going to be part of a larger conglomerate as near as I can tell. But we'll probably happen soon, given the current environment. Anyway, I'm Nelai. I'm your friend. We have an all-star crew today. Paul is here.

Hello. Speaking of Vox Media Podcast Network, Casey Newton, host of Converge, is joining us. Hey, everybody. Ashley Carmen, host of Whyge Push That Button, is joining us. Hello. And Dieter's here, host a processor. Hey, how's it going? Which is not a podcast, but a video experience.

Yeah, it's a whole thing. Dieter makes the moving pictures. I dance like a monkey in front of the camera. That's great. Hey, Casey, if we're the flagship, what is Converge? What kind of boat is it? Converge is a... What kind of boat is it?

It's like, you know the kit, the car from Knight Rider? Imagine if that were a boat. That's what Converge is. So a Corvette. It's a lot of technology in there. Very smart and also kind of funny. Is it like the, oh, it's the Lotus from the James Bond movie that converts into a summer. Ashley, what kind of boat is, why did you push up?

Honestly, it came to me immediately. A jet ski. Ooh. Me and Caitlin speeding off into the sunset on a jet ski. She would be like scream crying and I would be driving. I'd be driving. It's the end of the big pimping video with like the boat and like zooming out. Caitlin's

Exactly. That's exactly how it would go. All right. There's a lot to talk about. There's a reason I wanted Casey and Ashley on our show to Casey and Ashley, not Casey and Ashy, which is what I just said. There's a reason I wanted Casey and Ashley on our show.

I would say this is news that's going to feed into almost everything we talk about on the show this week. But Instagram announced IGTV, which is as near as I can tell, a direct competitor to YouTube that feeds off of all of the video stuff that's happening on Instagram lately. Casey, I was watching your Twitter feed yesterday.

It sounds like the event was just a pure disaster. So just walk us through what happened with the announcement and then what the product is. You know, it really was. And first, let me say everything I'm about to say, none of it matters even a little bit. But you have to understand that tech demos are incredibly well-produced. They spend incalculable amounts of money on them.

These things are choreograph. down to the last, you know, like where the napkins are placed. And, man, Instagram went all out on this event. They rented out a concert venue in San Francisco that hasn't even re... It is apparently about to reopen. It's called the Fillmore West. There's a Fillmore East. Anyway, they had created like seven rooms where you could take these funny Instagram

photos against beautiful backdrops. They had a make-your-own-a-e-Berry bowl. They had four different kinds of fancy toast, right? It was like the ultimate. Instagram event, and when it came time for the thing to start, it didn't. And 45 minutes went by, 45 minutes. You know, doors were at 9. What did you do for 45 minutes? Well, honestly, I wrote a story because there had been so much reporting that it happened leading up to the event that I thought, you know, this is a really good time to sort of pour out my thoughts and

feelings about, you know, what this new Instagram video experience is going to be. The last thing I'll say about the sort of failure is they had brought in all these very famous Instagram stars who had collectively tens of millions of followers, and they had told us to anticipate a 30-minute long event, and so I thought we were going to sort of get to hear from all these people who we knew were backstage because they were posting about it to their Instagram. Well, Kevin Sistram, the CEO, comes out on stage. He starts the event, and they wind up just doing the entire thing in 10 minutes. So the entire thing was over in an incredibly short amount of time. Did they tell you why it was so late? I'm told it was technical difficulties. They were

trying to have simultaneous events in New York and Sao Paulo, and something happened where, like, I think it was just basically a Zoom conference call issue. I shouldn't say that it was Zoom because I don't know what software they use. But if you've ever used any work video conferencing software, you know that it's the bane of your existence, and I think Instagram ran hard into that reality. You know, they make a live video product. Maybe their next pivot is just they're going to do work video chat. I mean, that's everyone's final pivot.

Every company eventually is like, what's the biggest problem we can solve that we have? every day and it's video conference. It's a very hard problem. Apple only just now managed to solve it with FaceTime working more than people. Listen, I've been down at Google and I've said, like, what is the deal with work, video chat?

It doesn't seem like it should be that hard. And they just, they shake their heads and they're like, we wish we knew. No one can figure out why it's so hard. The smartest people in the world, it baffles them. Apple didn't just figure out. They literally opened the drawer where they stored the I chat code

and they were like rifling through the file folders. And they're like, I guess we're to hear this one. Like, I found the envelope within it. Rendezvous, what's that? Anyway, we should not talk about video conferencing for an hour. So IGTV, Casey, what is it? So IGTV is two things. One is it's a new section of Instagram, which you'll now see as a glowing orange orb at the top of your feed.

And it's a standalone app. And if you tap in video from people you follow and things that Instagram thinks you'll be interested in will automatically start to play. It's, again, it's vertical video. And now you as a user can upload up to 10 minutes. And if you're a super fancy account with millions of followers, you can upload up to an hour. And Instagram says that eventually they hope to get rid of all time limits, and you can just upload, you know, however long a video you want to. Here's why I think this is a smart move from Instagram. I think historically, social networks have been terrible places to watch video because we just don't go there for video, right?

You think about how you use a social network. Your thumb never stops moving, right? You're always scrolling through the feed. You're tapping around. You're clicking. And social networks like Facebook in particular, although also Twitter, have been building these experiences where they just sort of accept that they expect that you're going to stop scrolling and watch, you know, Game of Thrones or, you know, their cheap rip off of it. where I think Instagram was really smart was they said the only way to get people to watch a video on their phones is you have to make a first class destination for it that you actually seek out. And that's what IGTV is. So yes, you can find it inside the Instagram app. But even there, it's a home for video. You only tap on it if you're ready to sort of lean back and watch. The standalone app functions the exact same way. This is the move that Snapchat should have made with Discover, but never did. And I think that ultimately, if you believe that you have really good video on your platform, you have to make a standalone

destination for it or you're ultimately not that serious about it. I think the app is very well made. It's very clearly a first-gen app. Like notifications are still coming in on Instagram when you get comments on your stuff or whatever. I posted a video and because it's a brand-new video platform, I did what you must do in a brand-new video platform, is take a video somebody else made that's also a copyright infringement. And I put that up.

It was Ruben, our engagement editor, did a very... video of me lip-syncing Slim Shady from the Microsoft video I did a while ago. It's incredible, so I posted that. But what I love about the interface is it's autoplay, which fine, whatever. But while you're watching a video, you can just swipe up and kind of like browse through other recent videos and other channels. And if you get bored, you just tap on the next one and it starts right away and then you can swipe up again. And so this like, it has a sort of a video native feel to sort of browsing around that is much better than

like, I don't know, even like a TV channel interface or a really good guide. You can kind of just like watch something and if you get bored with it, you've already sort of scrolled through to find something else to look at. The animations are super cute too. Yeah. They have like little static TV stuff. So I want your take on it because you're my

link to what the teens love. I also uploaded a video I didn't make just because, you know, I had to try it. Wait, is everyone's reaction in a new video platform to see if content ID exists. It's just like, like I can be illegal here.

But I just feel like eventually this platform is going to be overwhelmed with terrible content. Like the verge posting videos there is going to be fantastic. We should shoot for vertical. I think the future of our Circle Breaker show is on IGTV. I'll be honest with you. Yeah, like that. I could totally see that being awesome.

But as soon as you start getting some kid in his bedroom, all these kids in their bedrooms being like, I'm going to talk to the camera for an hour. No one wants to see that. and you're going to have to go through a bunch of crap to get to actually good content. Yeah, so this is like a RIP Vine, but Vine had a forcing function of six seconds, which led to an explosion of creativity. Instagram stories and stories on every other platform have whatever timeline at 15 seconds, and you have to tell a story in that chunk led to an explosion of creativity.

Do you think this sort of like unlimited time zone is at, right? I mean, that was like everyone had issues with when Twitter expanded the tweet limit. It was like, oh, well, we had these creative construction. that really bred this beautiful thing, and now we can do more, and that's bad. I do think giving people more is never good. I think it's 280 on Twitter is an unmitigated good thing. I find Twitter, but I just think that an hour-long video of a teenager in his room, there's going to be a lot of bad, and then eventually maybe you'll find a gem that'll be good.

I think the question is what sort of norms are going to arise on the platform, right? Like on YouTube, we know what a YouTuber video looks like. We don't really know what an IGTV video looks like. The other question is, what is the algorithm going to do? Because if there's a bunch of teenagers for an hour in their bedroom, maybe just their friends will watch it, that'll be fine. But what kind of content is Instagram going to have its algorithm aggressively push when you open the app up? Okay, so you have answers to these questions? In terms of what is the algorithm going to push at you?

I mean, when you were at the event, when you're talking to Instagram, you're writing your story, do they tell you what they want to you? experience to be like? Or are they just kind of like, check it out? Well, you know, it's an open platform. People can make whatever they want for it, and the algorithm will sort of figure it out, right? You know, part of the stuff that I think got cut out of the presentation is what are the famous people going to do with it,

which at least should offer us some early indications. The one thing that they did tell us was there's this Instagram star, who I was not familiar with named Lele Pons. Ashley, I don't know if maybe you're familiar with her. She has 25 million followers. She's a model comedian. and she's going to do a cooking show where she brings on some other influencer

and they try to cook something and then they decide amongst themselves who did the best thing and it's incredibly low rent cable access TV stuff but you're doing it for an enormous audience and some of it's going to be really popular so frankly it's not going to be that different

than what you're seeing on Facebook Watch right like it's the same idea just in very different surfaces it really seems to me I feel like there's going to be a lot of content that's what people currently do as a Facebook live stream, where they just talk to their phone and editorialize about something, but it doesn't actually need to be live,

and that might work better on Instagram. Well, so I actually follow. A lot of YouTube is somebody made a video, and then they edited it, or it went through a program and then got uploaded as an MP4 file. And that is clearly an old, dumb way to do things. I don't know. So I actually follow Lelay Pons on Instagram

because once you like follow one influencer, it becomes very clear that like there's a whole universe that you should like get sucked into. So I followed King Batch and somehow I ended up following like 10 more and there she is. She actually has like a number one billboard single because she is so popular that they put her in a song and everybody download it.

It's like crazy, right? So like it's there, the ascendancy of the major influencers to me is one of the most fascinating things that these platforms can enable. And our friend Marquez Brownlee made a great video yesterday, which everyone should go watch, about his thoughts on IGTV. And his main point was, YouTube is great, but I need to be everywhere. There's not a platform like YouTube that gives me sort of the audience scale,

potentially the revenue scale. Everything else is sort of a feeder into YouTube, but I need another place. And it seems like this is the other place that feels native to YouTubers, because they're already doing tons of stories. And so I think the question is, this is why Instagram had tons of influencers there. They're already capturing so much of their creative attention. They can capture even more.

That means they can capture more audience attention and presumably sell more ads. So I think the question, Deeter, like what's going to be here? I think it's going to look a lot like Instagram stories crossed with YouTube. And you're going to see that same class of people sort of immediately take over in a way that, Snapchat Discover, they went to big legacy media brands and, you know, like, whatever People Magazine is doing on Discover just looks embarrassing. It doesn't feel made. Yeah, how, how insane is it

that Snapchat missed that influencer boat? It was sitting right there. Vine was collapsing. It was sitting right there for them. Well, they were always suspicious of the influencers because they never saw themselves as a place for people to be influenced, right? It was always about bringing you closer to your real friends and not about how many friends you have, it's about how do we sort of let you talk to the people who matter the most in your life, and like King Back

might not have a great role to play there. That's why I thought Discover was always such a weird fit for their app though, right? It's because they have been so suspicious of the influencer crowd. So, I don't know. Casey, did they say they were going to pay influencers to make content? No, and it's sort of strange.

The only way that I can explain that is that this thing is still kind of an experiment, and so they're just going to kind of roll it out. And I think they don't want to promise creators money until they know that it is going to be a hit. I think it'll be enough of a hit that they can pay the audience money. But my guess is you'll hear about that within the next six months. But in the meantime, it is a bit icky that Instagram is like, hey, come make stuff for a platform. And we'll probably pay you eventually, right, from one of the richest companies in the world. One of my favorite stories from this disaster of an event is Ninja, Twitch livestreamer.

Janko Rogers from a variety great reporter interviewed him, and he tweeted, Video Game LiveSter Ninja was busy resetting his Instagram password as I interviewed him about IGTV so that he could get access to start using IGTV. Yeah, I mean, look, there are Twitch stars, there are YouTube stars, there are Instagram stars. If you are any one of those companies, you're trying to figure out how to capture the other, right, to bring them over to your platform. Yeah. What's so fascinating is they got,

they got the attention of people like Ninja and Marquez Brownlee to, like, jump over to Instagram in, like, a pretty big way. Like, they did a really good job, like, getting a bunch of big names to pay attention and, like, try out the platform right away. Right, because we talk about all the time. YouTubers are frustrated, right? And, like, they are happy to look at something new. Well, you know, there's something that I think we should watch is, I mean, look, once we have 25 million followers on any platform, you're going to be fine. But, you know, there is also a downside to the availability of so many platforms and so many platforms like coming after these influencers because it actually seems to not be paying off for them all of that much, right? You're one person. You only have so much time in the week that you can create new content. And now I feel like there's this expectation that if you are an MKBHD, you're, you're one person. You're only have so much time in the week that you can create new content. And now I feel like there's this expectation that if you are an MKBHD, you're

expected to make your weekly YouTube video and your weekly IGTV video and you've got to go stream on Twitch for a little bit. And something about it feels messed up to me. Like, you know, like Ninja is probably the most famous streamer in the world right now. And he's broadcasting himself 12 hours a day. Like, these are not good jobs. We talk about these. Like, these are really great jobs. Like, if I only have enough Instagram followers, like life would be great. And yet I see stuff like this where it's like, okay, great. Now you have to go master a new platform and we're not going to pay you for an indefinite period of time, like some of this stuff is kind of messed up.

Yeah. I mean, the nice thing about Twitch, though, is they have really figured out monetization. Like, you can, if you get like a thousand people watching you on a regular basis, you can make your full-time job. That's fair. Hang on. I'll even start my Twitch channel.

First, you need to know what a video game is, Nelai. Which I do. Manifestly, you know. No lies there. All right, I want to end of this. David Pierce tweeted this yesterday. No, it's just true. I'm sorry. Truth is an absolute defense to liable, Paul. Our friend David Pierce tweeted this yesterday, and I could make arguments for this with absolute certainty and arguments against us with absolute certainty, so I want to hear whatever thinks. Here's

David said. Snapchat wants to be the future of communication, which is a cool idea and a near impossible business. Instagram wants to be the future of TV, which I think this is $6 signs. Casey, do you think that's the right read? Does Instagram want to be the future of TV, yes, with an asterisk, Facebook wants to be the future of TV, and almost all of their moves that they've made around video over the past year have been about going after TV advertising budgets. They see that as this giant pool of money that is going to go away because the younger generation is not watching TV anymore, and all the eyeballs are on Facebook-owned property, so they

might as well go get those ad dollars. So to the extent that TV ad dollars are the future of TV, then yes, that's what Facebook and Instagram want to do. Does Snapchat want to be the future of communication? Sort of. But, you know, it's interesting. They don't really talk about their vision in such grandiose terms, right? They talk about wanting to bring you and your friends closer together, but they don't talk about connecting every person in the world.

They don't talk about, you know, being like the number one global destination for all communication. I see it as more of like a boutique art project studio that comes out with a bunch of, like, weird widgets. And some of them are amazing and show these really cool insights into human behavior. Others of them just kind of like disappear. So to me, that's more of like a Willy Wonka's like chocolate factory than, you know, some grand statement about the future of human interaction. Ashley, what do you think? I mean, I totally agree with Casey because Instagram is also spinning off its own DM app.

Like they want to be everything. It's Facebook just wants everything. Anywhere they can stick an ad, whether that's a chat with your friends, an hour long kid in his bedroom talking, whatever. They're going to do it. You really hate this kid in his bedroom. I just have this idea of a kid who thinks he's funny in his bedroom being like, here's some jokes.

I would like you to send Ashley at one hour long monologue. I'm not here for any stand-up. Wow. So this leads me actually, at the end of the show, I want to ask Casey and Ashley about the amazing consolidation of the dating app market because I think that will be very entertaining. But talking about these companies of future TV leads me into a little bit of policy news. Like I said, IGTV leads me kind of into everything because last week, AT&T Time Warner closed. This week, AT&T put out AT&T watch, which is their streaming TV service.

If you are an AT&T customer, these plans are horribly named, and you sign up for the unlimited space ampersand Moore plan. One of the richest companies in world doesn't know about spelling. $70 a month for a single line. you have 22 gigs of limited data, right? You've got that bucket, and then they throttle you after 22 gigs. But you get this app for free with CNN, HGETV, whatever tiny little selection of time order channels in it. Those are outside of your data cap. AT&T's plan is to turn everyone's phone into a little TV, right?

It's very clearly. They're putting a TV app on your phone. That TV service is outside of your data cap. They're going to do incredibly targeted ads. They're about to buy a big ad tech company called AppNexis. And they want you to watch TV on your AT&T phone all day. And then they're going to figure out where you are. And they're going to be like, you're by a subway.

Try this subway because here's a subway ad inside of your CNN feed. This is explicitly their goal. And I look at Instagram and I look at YouTube. And they also want to turn your phone into little TVs. But you got to pay the data charges because they haven't signed the deal with AT&T. Like, how are these companies going to contend with that? is all of these carriers start to zeroate more and more services, because that attention is finite, and I really think people are going to pick free HBO over IGTV.

Or are they going to keep picking their creators? I honestly don't know how any of these companies are going to contend with that. If Facebook is after TV dollars, the TV service is now there, and they've already got the existing relationships and dollars. People are going to start, like, they'll watch their creators and their fans when they're on Wi-Fi, and then they'll watch HBO. when they're on LTE, LTE. Like, that's surreal.

That's super weird. Wait, that could be a real thing that you do, right? Like, yeah. Wait, informal survey, though. I'm guessing most of us have subscriptions to some sort of entertainment that we could watch on our phone. Like, I can watch Netflix, I could watch HBO.

How much time do you spend on your phone watching, like, a Game of Thrones or Downton Abbey, versus scrolling through Twitter and Instagram and Facebook? I agree with Paul. Like, in a way, the, content that AT&T is adding to watch is the worst, like your phone is the worst place to watch that stuff, right? And your phone is the best place to watch IGTV. And so that's the advantage that I think that Facebook and the platforms have, in addition to the fact that that is

where the creators are who are inspiring so much passion among this younger generation, right? Like there's not a seven-year-old who's going to beg their mom to sign up for watch so they can watch CNN on their way to school. But like a kid who doesn't have access to YouTube when he eight is probably going to be miserable. I mean, that's the idea. To me, the idea that AT&T is going to preload their TV service, probably an Android.

Like, you can't see Apple letting AT&T put their garbage TV service on the iPhone by default. That won't happen. But every Android, like, Samsung's going to be like, yeah, another app? We could do that. Sure. Don't know. You want BigSweed open that for you? We got it. Like, LG is going to be like, yeah, that can be

the whole home screen. Like, they don't shit. The idea they AT&T is going to try to turn all these phones and the little TVs that prioritize the AT&T service and then hyper-advertise that all of their things are free while everything else isn't free and everything else. Also, by the way, this is true, limited to 480P streaming unless you pay $10 a month more. Yep. Yeah. Which is crazy. That is all, those are the things that we described as evils when the net neutrality stuff was happening and now they're extremely real. And it just feels to me like if Facebook's goal, is to capture those TV dollars. They now actually have to compete on the phone with TV companies. And that is new. Like, I don't think that's ever existed before.

The war between TV companies, broadband companies and cell phone companies, up against basically Facebook and Google is very real and about to get super real. They've been complaining for a super long time about, you know, all the stuff that Facebook and Google are doing. and it was this weird undercurrent that made no sense to me in the original net neutrality debate in the past few years. But now it's just crystal clear that those companies are just ready to fight. You remember back in the day when Google was trying to make cable boxes

and get in on the cable box game and they just got iced out by every single cable company because they were afraid of Google? And I was like, why are you afraid of Google? They just do like double-click ads. Chill out. But no, no, like, they're afraid. And like, this fight is going to get really cutthroat. And so when we talk about, you know, net neutrality is over, like, everyone's like,

it'll be fine, don't worry about us. A bunch of people are like, it'll be fine, don't worry about it. But it's not going to be fine. If there is a giant war amongst huge companies over, like, the next great bucket of money that's TV ad dollars, like a knockdown, drag out, no-holds-barred fight for that stuff, you know that the stuff that we've taken for granted when it comes to stuff like net neutrality is going to it's going to just start falling down left and right here's my vision of the future you pay 18t 80 dollars a month because you don't want to watch video 480p

yeah by the way you're still only limited to 1080p it's true uh you pick HBO as your included service you don't watch HBO on your phone except in airports. You watch HBO on your TV. You watch all your TV and movies by paying money and watching it ad-free. Okay. So TV ads and movies don't typically have ads. They have product placement.

Product placement. Yeah. I'm always thinking about the dollars, Paul. All the ad dollars go to... Tony Stark uses a Wall-Walli phone. Now I'm going to use a wallet-phone. Arch-Nemesis, the bedroom monologue. He spends 35 minutes explaining how he was bullied his school or something.

And then he's like, but, you know, great news. I just got a car and I needed auto insurance. Oh, my God. This is a nightmare. And I chose Geico. And Geico was great. This is a choreography novel. I'm just letting you know.

No, but there's so, so much ad money. I don't know if it's moving or if it's expanding, but there is a ton of ad money going to the quote-unquote influencers, especially on Instagram, for product placement. So a thing, we don't need to get in the weeds of this and we should move on. But there's actually a series of articles in the trade publications like Digiday and Ad Week. And they're like, maybe these influencers aren't influencing anything. And like that industry is starting to like wonder if they're actually getting any return on this or if they just like were in a hype wave. And so it's all going to shake out. Okay.

I really do want Casey Nashley to tell me why one company owns that I'm dating it. Disclosure. Instagram is on my Facebook, which also owns Oculus, which my wife works for, the end. And I bet Comcast was involved in something. That's true. Comcast is a investor in Vox Media, which that's great. I will say the CEO of Comcast personally hates me, so don't worry about it. True fact.

Okay. Real quick. I mean, you talk about dating apps and why you just push up a button. all the time. It seems like one company now owns every major dating app. Yeah, so Match Group, yes well, this will be two days now. Match Group now owns Hinge, which I was personally very sad about

because I use Hinge. They bought Hinge, and now they basically own every dating app. They own OKCupid, Tinder. They own a bunch of, they own over 45 dating apps. I didn't even know there were this many in the world, but there are. There are international brands, Match.com, obviously, plenty of fish, I don't know,

like a bunch of apps. And they literally just own every dating habit. It freaks me out. Are there any holdouts? There's Bumble. And Bumble. They just sued Bumble. Match Group just sued Bumble because as some people might know, I believe he was the co-founder of Tinder, went to Bumble because she had like a whole issue there. And now they're suing Bumble for copyright stuff, I think. Yeah. Like the swipe interface or something? I think it's the swipe. So I said, O like, Casey, do you have deep thoughts on this? Oh, I mean, I do. It's a fascinating thing.

and in its own way, it reminds me exactly of what Facebook does, which is they're just sort of hyper alert to any app that comes along that gets a significant number of users that has to do with communication, particularly apps oriented around communication that younger people use, and once they had a threshold, Facebook swoops in and buys them, and then they don't have to worry about anyone ever competing with them. And Match Group has done the exact same thing with dating apps. But that's what's funny.

Is now Facebook is going to compete with Match? Yes. It's the best Smackdown that's going to happen. So I said I could get from IGTD to every single story. And I can. This is Facebook bought Instagram and not being prevented by buying Instagram or WhatsApp is now in retrospect being seen as an antitrust failure because it clearly reduced competition in this market. Do you think anyone at the FTC or DOJ is even flagging the fact that Match Group is literally just reducing competition in this market? Because AT&T and Time Warner went through because there was a vertical merger. Number of competitors in each market stayed the same. Literally, they're just reducing the number of competitors in these markets. There's a 0% chance anyone in the government is thinking about this.

But anyone in the government is on Hinge. Yeah, zero percent chance. I told you I could get there. I think it's super funny. We are talking about these like behemoths combining. And Facebook and Instagram to me is the example. of maybe that should have been scrutinized more closely. But at the time, Instagram was just like some silly photo app, and nobody cared.

And now it's like effectively the future of Facebook. And if Facebook was made to compete with them more directly, it might be a very different situation. But all these little dating apps, to me, the comparison, Casey looks like I'm crazy. No, I think you're totally right. And I think, you know, in a world where Facebook owns most of the social networks, it's also fair to say that innovation has really slowed, right? The only major innovations to come out of social networks in the past three years, I would argue, have come out of Snapchat, right? Or sort of derivatives of things that Snapchat did, which speaks to the reason why you want there to be competition.

Dating apps are actually super innovative, right? The only way that you can grow to a big number of users in a new dating app is to have some new insight into human behavior. Tinder is a great example where there was something really just kind of pleasing about through swiping through a deck of cards, and they were able to build a great business out of that. So, yeah, I am concerned that Match Group is just kind of swooping in and consolidating the space because traditionally dating apps have given us a lot of really interesting new ways to meet people. And they're totally stealing all of the innovative features, like from Bumble where women could message first. That was their big thing.

Now Tinder's going to let people do that. Tinder also is launching Tinder places, which gives you a map of places you've been and you can view people who've also been there who use Tinder. and that's exactly like this app happened that did that first. And now Happen actually today had news saying they're going to have a map as well. And I just felt sad. I was like, Happen, you're not getting acquired. Tinder already ripped you off.

But yeah, they're also just shamelessly taking features too. But yeah, so now Facebook is launching a dating app and it's going to go head to head with Match Group. And it's like, to me, the Battle of the Monoplies. You guys want to just hear some, I have some gossip about the Facebook dating app. Oh, yes. And when I say gossip, I mean, this is information I have not verified with a second person. But former Facebook employee was saying to me, like, you know, so Facebook dating was announced at F8. There is a history of things being announced at F8 that never ship, such as anonymous login.

And this person was saying that it was very notable that Facebook never said, who was working on Facebook dating? They never said what part of the company this is even supposed to be coming out of. And also, there was no time frame for launch. It was just something that they're going to explore. So this person sort of tried to make a bet. I do not bet sources when they come to me with information. But this person tried to bet me that Facebook dating will never launch. Do you think it was just like a marketing thing?

Like someone made it up as basically an ad and if people are into this, then we'll actually find someone to build it? You know, it could have been a trial balloon. I mean, I believe they've had a lot of meetings about it and I believe they've mocked it up. and I'm sure it's been proposed internally there forever. And I think it made for a really kind of cute, fun thing to talk about during an event that Facebook spent most of apologizing. So, you know, it definitely kind of helped to lighten the mood. So, you know, I do think there's kind of something in the works there, but, you know, whether it ever launches is still an open question. I will say I think it's going to launch.

You're in it. I think it's going to watch. You should bet Casey's source. Okay. What about dating TV? All right. Open the app, and there's a guy. I'm going to read.

room telling you how great it is. Literally that was how dating apps used to work. You'd record a VHS tape and send it in and then you'd like go in a room. Exactly. This is the future. It could be. It really could be. Tinder TV.

Oh, my. All right. Here's what's going to happen. We've been talking a lot about merger mania. There is a woman who works this company, and Karriswisher, who is one of the best big company reporters, best tech reporters, best media reporters to ever do it. And this is a fact.

When AOL bought Time Warner, she wrote a book about it called There Must Be a pony in here somewhere. She knows all the characters. I talked to her about half an hour to compare AOL Time Warner to AT&T Time Warner. So listen to just listen to Kara in general in life. But we're going to play that real quick. Well, I'm going to read an ad. We're going to play that. Listen to Kara.

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That is ExpressVPN.com slash verge. Kara Swisher is here. Hey, Kara. Thank you for joining us. Thank you for having me. Congratulations on your baby, by the way. Oh, thank you. She's very cute.

She's a lot better than work, but I'm lost to buy it. Yeah. Are you a good dad? Have you been a good dad? I think so. I hope so. It's your most critical job. It's your most critical job.

It's certainly the thing I enjoy doing the most. So I hope that makes me, I hope that leads me to being a good one. Yeah, I think so. You're not going to enjoy every part of it just so you know, FYI. I'm in the road ahead and I'm here to tell you. Oh, yeah. Well, this is great. This is why you hear it. Because, yeah, right now, Max thinks every idea I have is great. So she hasn't begun yet to disagree with me whatsoever, except not going to say.

But anyway, speaking of the road ahead, Kara, you are what I would describe as a legendary technology and media journalist. Wow, thanks. Don't you have Walt around to praise now? You got to praise me? All right, okay. Yeah, I'm just going down the recode staff. I guess so. No, but it's true.

And you're obviously doing a bunch of great stuff on the media as exists now, and you've got your MSNBC show and obviously the Code Conference. But you've been at it for a long time, and we are covering in great detail the AT&T Time Warner merger. Yeah, it's always some giant company merging with another one. And it struck me that in particular, it is Time Warner that seems to just get batted around these access companies. So AOL was an internet access company. They sold Dial-Up Internet. Steve Case was a CEO.

He bought Time Warner. He had grand pronouncements about the future of the world. Disaster. The deal literally fell apart. I worked for AOL when they unmerged Time Warner, which was a strange moment in sort of my corporate life. Well, the Time Warner people liked it. The Time Warner people were very happy. We have a colleague who worked with us at Engadgett, Thomas Ricker, and he was very unhappy.

Stricker, and he was very unhappy when that deal happened because he had to start telling everyone he worked for AOL. He'd previously just said Time Warner. Anyhow, and now it's AT&T, which is a wireless internet access company, a little bit more stable than AOL, but they're buying Time Warner again. And you wrote a book about the AOL Time Warner merger. It has an amazing title. There must be a pony in here somewhere.

You can go read the book. It's on Amazon. You can buy a Kindle edition. Everyone should go do it if you're interested, that sort of thing. and your book was all about why they did it, why it was a disaster, how it fell apart, and what you could learn from it. And you have this line right at the top of the book,

just before you get into it. And I just want to a quote from it. Sure. This is Kara in her book. There must be a pony here somewhere. I am still a believer that someday the distinction of the old and new media will no longer exist, that this is the end of the beginning of the digital revolution.

It is from the ashes of this bust that the next really important companies in the next era will emerge. So that's like... You're great. I really am. I'm like a profit of some sort. I can't decide. Let me just say, directionally, the AOL time Warner merger was correct.

I will never – I'm very interested in directionally stuff. Like, I think, for example, that Google Glass is directionally correct. I think that, you know, way back when, when there were all kinds of devices that looked like iPhones, they were directionally correct. And so I think the idea of marrying distribution and content was the right one. And it was unfortunate there was so much pushback, especially from Time Warner people on that. Because if they had done it right, it could have been incredibly powerful combining their cable assets with the online ad. Like, we are there today where they were then. It just was the timing was off.

So is that really what fell apart? Because that is the dream, right? You know, Randall Stevenson, the CEO of AT&T, was on stage at code. And he said he wants to build this advertising business to rival Google and Facebook. He wants a direct consumer business for HBO to rival Netflix. Is it the same idea that AOL had, but now it's the right time? It was a similar idea. The idea at the time, you know, it was funny.

Years later when they put AOL over cable over the Time Warner cable system, I think I texted Bob Pittman. I said, oh, now they're doing what you said like seven years later. You know, you were right. And he's like, yeah, thanks. I think they really did have the right concept, which was that. digital distribution and the ability to distribute things in homes in that time via cable especially was a critical differentiator for that company to get the content into people's hands.

I think the problem was the devices didn't exist. There wasn't a mobile. I mean, mobile changed everything, right, to be able to do that. And people just weren't, it still wasn't a commercial thing, even though AOL was the most commercial consumer-focused company at the time. And so I think they had, like I said, it was the right, it was a right. concept, but there was an enormous pushback, especially from the cable groups of people who were so old school. You couldn't even, you know, it was hard to even speak to them because they were so

in an old way of thinking of things. You know, there was a lot of pushback from the movie studios over all, even online advertising. They thought it was stupid at the time. Now, you know, they wanted to be in newspapers. They wanted to advertise in newspapers or get reviews. And now everything that they, I remember them talking about at AOL was, is stuff they're doing today without even thinking. such as clips and online ads and debuting trailers online. That was in the thinking back then. It just was too early, I guess. Was it really just culture clash?

You have this, I pulled another amazing line from the beginning of this book. This is Kara again in the book. It was like watching someone fall down a flight of stairs in slow motion, and every bump and thump made me wince. Yes, so many internet companies later would have that description by me. I was thinking of Uber, Yahoo and others. Yeah, I think it was a huge culture crash. Look, they came in and they essentially bought the company, even though they talked about it as a merger, they bought it.

They took over the culture. They took over the leader. So AOL bought Time Warner. Yeah. They took over the leadership. They were in place. And look, these guys were arrogant, and they were all guys, by the way, mostly, and almost largely. And they were super arrogant. Some of them had some sketchy backgrounds. There were a couple deal-making people that were sketchy. Like, no question. There were some ways they made money that was sketchy, a lot of Ponzi scheme round-tripping that was disturbing, that they, you know, they'd played fast and loose with how they created themselves. And there was also the dot-com bubble, the price of AOL at the time, was so inflated. And now today, when you look at Facebook and others, it doesn't seem that way, right?

It was a little bit ahead of its time in terms of being high-priced. But it was, I think it really sent the people at Time Warner around the bend, thinking they've worked all this time, you know, doing, you know, the basic work of media. And then these guys come in with this fake stock and run things and tell us what to do. And so it was, you know, both were wrong, how they approached it in that AOL. People were wrong to be this arrogant and so luxury, even though they were pretty much correct about what they were saying. And then the Time Warner people, you know, being so stubborn and unwilling to understand that things were changing so drastically, not just in television, but the magazine business of which they had an enormous business. that it was dying even before they realized it.

The movie business had changed. Every part of their business, the cable business, had changed. Well, you know, it's interesting because I look at it as what, you know, at the time, the connections were slower, you know, we were using desktop computers, CRTs. There was no video streaming to speak of. And Time Warner at that time still owned Time Inc. Time Inc. has since been spun off. A critical part of the company then, critical in terms of revenue and everything else.

And it seemed like what they wanted to do was AOL was going to distribute Time Inc news and magazines on the AOL service. And one day they would get to the video side. And now we're just 20 years hence or whatever. And now the plan seems to be, well, Time Inc is gone. It's its own company. But AT&T is going to distribute Time Warner's video assets over its devices and services. Right. Right.

It's like it's literally the same idea. Same as it ever was. It's wild to me. The difference, as you talk about the culture, is AT&T is not a fast and loose company, right? It's among the most conservative companies in America. It is, from all accounts, extremely well run. They've been going at it for a long time. They've got good leadership.

People seem to like their executives. And it seems like the culture clash will come the other way, right? Instead of a bunch of, you know, arrogant sort of internet cowboys telling the stodgy media company what to do, it's a stodgy. telecom company telling a bunch of Hollywood types what to do. Do you think that's going to go any better or worse? You know, I think they probably do understand how to stay away from things. I mean, you might look. I mean, I know Comcast has an investment in box media and so, but they've been relatively

hands off of a lot of their investments in NBC and everything else. You don't see them wandering or over telling, you know, telling the people of NBC what to do or that I can discernibly see. And in fact, I've been pretty supportive of some, you know, especially as the Trump administration has attacked a lot of people on their on their networks you know I you know they just the first thing that that Randall Stevens had had a deal with obviously was Samantha B but he didn't because he didn't know it at the time but he's going to see stuff like that and I think they fully expect controversies like that there's the talent controversies there's you know a different way of doing

business that Hollywood still has from from a telephone company but in a lot of ways this is critically important because they have to have some sort of defense against internet companies right now, like in terms of who will be also sucking up this content. And so they have to have a growth story beyond mobile. And, you know, it's weird to say that AT&T is the one in trouble, but they kind of are given their competitors going forward. How do you mean? Well, I think that they're fighting off major incursions in consumers' time from companies

like Google and Facebook and Amazon and Apple. And so they have to do a deal like this because I think they're current. business, as strong as it is, is not one that's the high-growth one, and it's not the one that creates differentiation. And I think creating differentiation is critical for any company going forward. So you're saying AT&T has a solid business that isn't going to grow very fast, which is true, right? I mean, the number of mobile subscribers in the United States is not on some exponential curve. So they can, AT&T has this problem where they might be able to churn customers with Verizon all day on night, but that's that business. And to get growth, they have to start competing

with the tech companies. Absolutely. I think that's where we're headed. We're headed into this distributor-owning content kind of world. And you sort of wait for when one of the big, you know, Amazon's already moved into that space really aggressively. Now, in their case, they're doing it in order to sell toilet paper, right? That's their end goal is to sell more toilet paper. And by the way, here have a show kind of thing. You know, Facebook is here, use more of our thing and here's more content.

Like, everyone has a different take on why they're doing it. But I think you're going to see a lot just a lot more of this. face-to-face competition between distributors of content and owners of content, and not competition between those, but them getting into those businesses. You already see it. It's already happened. Yeah, I mean, I think, as you know, I cover net neutrality very closely. I think about it a lot.

And here, you know, Instagram yesterday announced IGTV, their new YouTube competitor. And just the reality is that HBO, if you watch an AT&T phone with an AT&D connection, will be free to watch. and IGTV will cost you some money on your data cap. Right, exactly. Do you think that tech industry is prepared for that reality? Well, I think the big companies are running the Internet. I mean, we have a difference in this only because I think that the big companies have made

their deals. And I think I'm worried more about the small companies, you know, who are going to have to pay higher prices. I think these big companies, I think essentially Facebook, Google, Amazon, own the internet. You know what I mean? They don't, I don't, you know, Netflix made their deal with Comcast. And, you know, the big ones make their deals. I think the smaller ones are definitely at risk of being sort of zeroed out in this data,

the ability to move data over, massive amounts of data over these lines. Yeah, I think about that. I mean, you started Recode, right? It was an independent business and you had free access to distribution. We started The Verge. We had free access to distribution. I wonder even if you could start something like that in this climate without. Well, we have low data needs.

I mean, especially, yeah, in a video. environment, certainly. Like, you know, and when you're thinking about it, you know, I always, we do always worry about this and then something else gets invented. Like, I don't know what it is, but it's something else happens. But it certainly is, you know, it's the giants fighting right now. And, you know, if you're not a giant, you're in, you're, you've got some issues, I think. Even if you're, your thought, like, I always think about Netflix right now. Like, what's going to happen to that company? Like, I think it's getting bought, right? That's just, it seems that to me. But then you're like, oh, everyone's like, oh, they're too expensive. I'm like, are they? Really? Like, like,

companies have pretty big market caps and wouldn't you want to own Netflix or would it be worth that much money? I mean, I don't buy these things, so I'm not the one making these decisions, but you have to think long and hard about all these assets. If something like, you just think about that when I was writing this book, the idea that Time Warner could be bought like it was no big deal. Like that merger was a big deal at the time. Or that Rupert Murdoch would be selling off his assets. Like he's getting out of the media business fast because he knows that he can't compete without the assets that the others have. And so, you know, we'll see.

Right. And so what Kara is referencing, I'm sure, Veritas listeners now is this week, basically, the Fox took a new offer from Disney for, I think, $71 billion to counteract Comcast $65 billion cash offer. And Robert Murdoch has to decide. Seems like he wants to sell it to Disney, but Comcast, I'm sure, will come back. He does. Yeah, because he's comfortable with Disney. Right? But, you know, Comcast has got a lot of money.

Like, it's a lot of, that's, like, ultimately, you know, he wants that money so he can shove it down Fox News's throat, I guess. I don't know what he's doing with his money, but thank goodness he has money to do that. Yeah. Yeah. Rupert Murdoch getting richer is one of my least favorite memes going on right now. So it just, you know, the fact that he's selling is really interesting to me. That's what I'm talking about is that that he's too small. Like Rupert Murdoch is too small.

He's got to move to a bigger thing. In a lot of ways, when I'm thinking about Disney buying News Corp, for example, I'm like, oh, they may not be big enough to take on. Like, right, Disney is not big enough to take on. And so that's why AT&T, getting back to the AT&T thing, is the concept behind the original merger of AOL and Time Warner was this idea to create this entertainment and communications and distribution behemoth. That was the idea behind it. And it was a great idea. And it was the right idea. And here we are today.

Yeah, a very smart... Maybe not great for consumers. I'm sorry, not great for consumers, necessarily. I don't think it's great for consumers, but a very smart media CEO, who we both work for, told me that he thinks the AT&T deal is way smarter than the AOL deal ever was. Yes, yes, yeah, yeah, but its time has come. It looks smart today, right? I just...

It's so easy to put off that, like, burst of the history. I'm like, really? Because the concepts behind it are exactly the same. They're very similar. It's just they were difficult people hitting up against each other and fighting over, you know, status. And at that time, media was so much more arrogant that they could behave like that. Now they're sort of not, which I think is different. Is there a model for a behemoth of a size being successful?

This is something I've been thinking about as well is companies of this size, you know, they're not nimble. They're not fast. No. They tend to trip over themselves all the time and then sort of devolve into constituent parks. And even Time Warner, right? It was a behemoth, and their CEO just started selling off pieces of it everywhere he could because he needed to break it up to create value. Is there a model for a behemoth of the size being successful over time?

Well, you know, I've been thinking about this a lot lately because I think right now, right, there's a big, there's sort of a discussion happening in Silicon Valley that all that matters are these big companies now. Like different people call them Fang, different names. I think Farhad calls them the frightful whatever five. But there are, I think most, what's happening here now is the big companies are running everything. You don't see as many. Like, I was trying to think of hot startups like in the Snapchat, Airbnb school, Uber. There aren't any, are there?

Like, what's the next class? They don't exist because these big companies. Only the CEO cashed out. You insist. I'm trying. I'm just throwing some stuff. There is a bird. You're going to bird.

You're already down in bird land. Like, come on. Like, think about it. There isn't. There isn't. Like we had like one time it was Airbnb, Snapchat, Uber, Pinterest. There's a bunch. And then now you can't come up with, I can't put five on my hands right now of that, of that excitement.

He had box then. You had Dropbox. There was like a dozen at least. Yeah. The unicorns, right? And now they don't exist because the big companies are sort of either sucking up everything or doing it pretty well themselves. Now, whether they can stay nimble, I don't know. But certainly you don't see a lot of innovation coming from the small companies.

anymore. Do you think there's going to be like a government or regulatory pushback on that? I mean, there's a lot of interest in sort of rethinking how antitrust works. Are you? Yeah. I think I have to rethink antitrust completely. Like, that's the problem. I mean, some of these companies are like nation states at this point, I think.

I mean, Mark Zuckerberg literally refers to Facebook as a country. Yes, it is. It's an insane conception. Well, he ain't lying. He ain't lying. Well, then he should act more like a day. He should do more stuff. Well, you know, whatever.

He's very earnest about his power. Oh, am I really powerful? Oh, okay. I'm like, yeah, you're a little powerful. But, I mean, I think, you know, I don't think there'll be any regular. To speak of, maybe if they do something awful. I just, like, you watch those hearings. Come on.

Like, come on. Like, really? Like, you know, everyone was talking about how well he did. They did terribly. He did not do well. They did terribly. That's all I can imagine has happened there. And there won't be any regulation.

You know that. Yeah, well, especially not right now. But the reason I ask. The reason I ask is if your frame is all the companies need to get bigger, including companies we think of as giants like News Corp or 21st Century Fox, they need to get bigger. So they're merging and we're getting, you know, we're just going to end up with like two or three behemoths. You know, things go in cycles. And I'm curious, what makes them successful? Like what do you think is a good outcome and what is the outcome that you think is the disaster? Well, you know, I think the outcome is that nothing gets innovated. There's nothing like, you know, there's, you know, there's an AT&T. In the old days, AT&T sort of sat on top of everything. And once it was broken up, you saw all the innovation. But you don't know what you don't know, right? You don't know if they weren't there what would be happening in the ecosystem. And so I don't see anything stopping these companies. And I'm not just talking about AT&T, Time Warner or Disney Fox or Comcast, whatever, or Amazon

or Google. I don't see them being broken up. Like that's, you know, to create that kind of openness. And What's really interesting is usually there was usually one company that really did that, like AT&T or Microsoft back in even going back further. If you remember, you probably don't, you know, but it really did sit on top of everything and hindered innovation, I think. You could easily look at that. And the minute they were sort of gilded by the government in terms of the antitrust thing, there were all kinds of companies, right? It just, everything blossomed. And so you don't, now there's five of them. Like, there's not, you can't, can you say, Facebook.

Facebook is a competitor to Google? Really? Like, sort of. It's Amazon a competitor to Facebook? Not really. Like, they're all in their own giant lanes with their semis, and they're just barreling down the highway. That's how I look at it. And you can't point to any of them, and yet all of them together creates this, like, it's like the Game of Thrones. It's all the very different countries. You know, that beginning map part? Like, that's what I see. Like, I don't know who is the center. But there's certainly a lot of very powerful companies and not one. One of them could easily be hindered by regulation yet. Or because they're not directly competitive with each other, even by each other. And that to me is like the particularly strange bit where, you know, Apple looks at Netflix and they're like, we're going to sign a deal with Oprah. But you can't see how that will ever be anything other than a reason for you to like maybe buy another iPhone. Whereas Netflix is just going to keep running its business at Netflix's scale. and Amazon's going to keep selling you toilet paper. And the idea that they're not in this head-up competition

also seems like we're leaving a lot of potential startup investment or innovation on the table because now it's forced to do anything. It's good for content makers, right? It's going to be good because there's so many places to sell now. Like everyone's in the content business. And so you're going to see competition on that scale. It's like who gets the sports rights, who gets the live stuff is really going to be interesting. Like who really runs that because that's still incredibly powerful.

and you can't replicate it in these, you know, live is live. But when you think about, you know, movie making and things like that, there'll be competition of who's up and who's down, who makes the good product and who doesn't. Like that goes up and down just the way TV networks went up and down. And they'll be competing there, but that's just going to be a question of money and assembling talent, right, and seeing what the talent can create at each of those places.

And you'll see that talent move back and forth and among and between them. But you don't see them competing with each other, really, on their core businesses that are making all the money to pay for that content. So we've talked about Time Warner a lot in AT&T and its competition. And you brought up content. And it's funny to me because I really did used to work for AOL. AOL is now part of Verizon. I'm the only person who hasn't worked for AOL. I always joke that Vox Media is founded on revenge.

The whole company had some bad experience at AOL. They're out to prove that we can get it right. There's a lot of revenge going on. You're right. I don't want to get into it. Anyhow, but AOL is part of Verizon, so it's another carrier that bought a content company. Tim Armstrong, CEO of AOL, went out and bought Yahoo. He bought a huge number of digital advertising companies, and he's going to glue ads all over everything.

But they're not in this, I mean, they have Go-90, and, like, you know, they're not getting... Thanks for the money, Tim. Oprah's not going on Go-9. 90, right? It's not going to happen. No, she ain't. No, she ain't. So how do you see the future of AOL? Do they just sort of get subsumed into the muck? You know what? I don't care. Like, I wish I did. Like, this is someone who wrote a lot about Yahoo, right?

Yeah, that's why I'm asking you. The other day, I was literally in New York. I'm like, should I call Tim and have one? Not today. Like, you know what I mean? I love Tim. I mean, he's, he's, he's, Tim Armstrong. It's very funny and entertaining. But I just don't even, like, Verizon's got to jump on in here, like, with the money. They got to start buying up stuff like to sweet. You know, that's probably good news for Vox Media or some. Oh, no. Or BuzzFeed.

Yes, your nightmare or BuzzFeed or, well, who's going to buy vice? I mean, really. Or at this point. Someone eventually. But I like Nancy Dubuque, who's running it now. But it's, you know, you have to wonder what they, what Verizon's got to do now. They've got to sort of, that's just Yahoo and AOL is not going to cut it, right? Like at this point, they got to like, you know, again, directionally.

correct, right? They were first out the gate with this stuff. They mean, they bought the Huffington Post, too. Their idea was the original AOL idea. We're going to buy a bunch of basically... Directionally correct. Print assets at scale. The Huffing Post and AOL's stable of websites and all

of Yahoo's webpages and we're going to glue ads on them and that's the future. But then what, ATNT is looking at AppNexis, like all of these are going to get sucked up, you know? That company was supposed to go public or bought by 90 different people and now it's back in the play. So you know, they're going to assemble all the parts that are necessary, the advertising, the

technology, advertising technology parts, the content parts, and then see if they can get people to buy it. Now, ultimately, which is a good thing for people like you and I, what matters in the content space is great storytelling, great content, great creation of content, and you can't digitize that so easily, even if you can distribute it. If it's good, people do find it. Like, they really do. It's like very easy to find great content.

Think about all the great television. out there now. And so anyone who's just a creative person who creates great content is in a really good situation, which is nice. Just the question is, you know, can they marry the advertising technology and the marketing and stuff like that to create, you know, bigger things? And that's, I think that's the big question. I mean, it seems like the, you were saying directionally correct, they had the right ideas, wrong time, certainly the wrong cast of personalities. Well, if it's the right time and, you know, the technologies here and mobiles here, is this the right? You know these, people better than anybody I know. Is this the right set of personalities to pull this stuff off?

What, the AT&T stuff? Yeah. I thought Randall was smart. I mean, I don't know. I mean, I think you're going to see a lot of clashing. Like, there's Randall and John Stanky, right, at 18T. John Sanky is the, if you don't know, he's the CEO of what is now called Warner Media, which is being pulled, which is Time Warner instead of 18T. You know, I've just met him casually, but he seems pretty, pretty conservative. You're not conservative. Just like a business guy, like business guy. He doesn't, he doesn't, I'd love to see dinner with. him and Richard Plipler. That I would enjoy more than anything. Richard Plipler is the CEO of HBO. I'm just helping the Vergecast audience. Yes, thank you.

Sorry. So, you know, Richard's fantastic if you've ever had dinner with him. Like literally, just waiting in line with him is fun. So that's going to be an interesting thing. The people like that who have had this track, incredible, Richard has had this astonishing track record at HBO, great shows. And I'll go back to my book. Richard was the only person, Richard was the PR guy for HBO, by the way. He really was. That was essentially, he was. The dream is alive for PR people.

I know. He was, and he worked for Jeff Bukas who ran. Jeff Bucas ran HBO at the time of my book. And Richard was his marketing and a PR person. So he moved himself. Like, his record's been really so impressive, and I really enjoyed talking to him all the time. But he was the only person.

Jeff Buccas was a little bit upset by the deal, but Richard was the only one. one in that entire book and the entire time who was really objecting to what had happened and with the merger, largely because the stock of Time Warner suffered and a lot of people who had been there. He's got a real soul, so he was really upset for receptionists and various people who got screwed when that stock tanked, essentially. But he was always suspect.

He just was the only one who was like, this deal is not going to work and here's why. And he was super smart about it. And so now he's the guy that's got to make it work with. essentially another version of AOL. So I think that'll be, I mean, he's got a lot more power now and a lot more savvy, obviously. But at the time, he literally was the, all of those people went along with it, all the time Warner people went except for Richard. So I think it'll be kind of an interesting moment for him. And, you know, AT&T's putting a lot of pressure on HBO, not to change or whatever, but to be the competitor to Netflix, right?

They're going to. Right, they have to. They're going to try to get their money back out of this deal. Sure, but what if he goes to them? hey, I need double the money. Netflix is spending money like a drunken sailor over the left here. So I need double the money. And he's already got a lot of money, right?

What if he does that? Are they going to give it to him? I'd give it to him. I'd give Richard Pupp of any amount of money to make something cool. But are they going to give him a hard time? Is he going to want to sit there with like a committee that tells him what he can do? Like that, I mean, Jeff Buegas, he just handed him the money, right, to do it. But now he's going to need really big money.

And so that would be interesting, Richard in a room saying to John Stank, I need twice as much money for HBO to make money. What kind of people are they going to be? They're going to say, yeah, yeah, sure, Game of Thrones guy. Like, sure, you can do it again. Or are they going to go, like, well, give us an idea of what we can, you know, you could see that cultural clash very obviously. But we'll see. Maybe it'll surprise us that the mobile guys will surprise us and be super risky taking.

There was a very good Wall Street Journal piece that described the forthcoming culture clash, It just had one vignette that I thought said it all, which was all but nine AT&T executives, employees, period, if it's 100,000 employees. All but nine, fly coach, whereas almost everybody at Time Warner has concierge service at the airport and flies first class. It's just that. Really? They fly. Yeah, that'll be nice. That'll be.

So we'll see. But I'm very. They all fly coach? They do? They all fly coach. Wow. There's no private planes? like, no, they're flying a coach and I guess they're paying for GoGo Interacts.

Oh. I just had dinner with Richard Plipler and he does not fly coach. Let me just say. Yeah, I've been in his office. I was like, you're French in your office. It was a nice dinner. I enjoy. I always seek him out. You know what I mean? Like he's a lot. All those executives are fun. They're all great. They're Hollywood people. So we'll see. Let's see how that works. All right. Well, Kara, thank you very much for joining us on the Redcast. Tell the people about your podcast when they can listen to you. Oh, my podcast is called Recode Decode, and we interview all kinds of cool people. I just interviewed Craig Newmark, who was a founder of Craigslist, who's just given $20 million to the SUNY Graduate School of Journalism. And we talked a lot about on the need for tech people to really focus on the importance of reporting going forward. And I think he called it the immune system of democracy. That's pretty good. All right.

Well, RICO decode on Apple Podcasts, just the same as our show. Caros love it to have you. We'll have you back again soon. Thank you so much. This episode of Vergecast is brought to you by Dollar Shave Club. If you ever shower or brush your teeth or try to make your hair look good, I've got good news for you. Dollar Shave Club has a lot of stuff to help you out. Dollar Shave Club delivers everything you need to look, feel, and smell your best.

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dot com slash verge. That is dollar shave club. dot com slash verge. Stay vigilant. Paul, before you begin your segment, I'll tell a story about it. Okay. So many times in the Vergecast,

we've introduced your segments. And I've said, advertisers, if you want to just buy the name, I'll sell it to you. Great. We had incoming, and the advertiser

literally messaged our team and said, we don't know if this offer is a joke or not, but we're interested. interested. Okay. And we had to tell them it wasn't a joke. So I'm telling you now, advertisers. If you want to buy Paul's segment, I'm 100% real. Yes. You can name it anything you want. Anything, that anything. Anything. You are allowed to sit in a 15-minute brainstorming session with me where we will determine the name. Yeah. One contingency is that will be on a broken Zoom call. Paul, every week, but it has the same name. It's true. I'm for sale. It's called Shavoop, which I've decided.

It's spelled S-H-U-V-O-O-P, and I think that is the how the right, the sound that a phone makes when its camera exits its body. Shavoop. Apo has. This is great. The Find X. We have one. I played with it. It's great.

Oh, really? Yeah. I haven't played with it. I've just been looking at it and laughing. So obviously the context is there's this Vivo Next phone where a tiny little camera comes up. A little camera bump comes up. A little tab comes out. By that phone, you can change the sound.

Oh, really? So the sound is software-defined. So when the camera comes up, it can either make a mechanical noise. It sounds like a motor-waring. It can make a sci-fi noise. And then there's one that just literally sounds like a fucking parade. And that's amazing. Be real quiet for a second.

Shav-whoop. Okay, now you can put that as that. All right. But Defined X. Appo's like, cute little tab camera. No, we'll have the whole phone come out of the phone. It's amazing. It's so good.

And it also is the rear cameras. Yeah. So the front camera's popping out, but also the rear cameras are popping out. It's incredibly, it's just terrible. No, it's wonderful. It's so wrong about this. It's so non-utilitarian. but it's just, it's beautiful and a technological.

So it's a delight. You're crazy. Also, it doesn't have a fingerprint sensor. It only has face unlock. So every time you pick up the phone and swipe up, it has to look at your feet. It's incredible. Right.

So to unlock the phone, you have to make it shavoop and then look at it. And then it goes out and it unlocks. It's great. So every time you pick it up, it goes, so that's never going to break. But what I love about it is some kind of, companies are like screw the notch. Yeah.

It's great. I love it. The software on this phone is a direct rip-off of the iPhone, like the most shameless rip-off of the iPhone ever made. But it's great. I like it. Well, but you've got to give them credit. The aesthetics of the phone are very Samsung Galaxy-esque. Yeah.

It's a merger. Well, they got the best Shavup in the biz. I do. I love pop-up cameras. I hope. Like, this is the stuff Samsung used to do, just like regularly. They put out whatever crazy hardware they could make. A stylus and a phone.

Yeah, they're like, whatever. We just like, here's some parts. We put them in a box. We shook the box. Now it's a phone. Samsung's like too, they're too good for that now. There's no crazy Samsung is over. You got a look to Apo and Vivo.

What's the third one? They all deny that they're the same company. One plus. One plus. They literally will not cop to the fact that they are one company. We've had reporters try to dig up Chinese business documentation to be like, no, no, no, it's the same company. And they're like, we share an ownership, but none of us ever talk. And then like a one plus phone comes out.

You're like, that's just that phone. Whatever. Well, pop-up cameras are beautiful. Are you in terms? Dan had one. Yeah. And he showed it to me. And I was like, I love it.

I love it. Until it snaps off, but I love it. It's not going to do that thing where you drop it once. And then it's going to start making it. making the sound. And you're like, oh, this is over. Yeah. It's also not waterproof because it opens up.

Yeah. Yeah. I just can't do it. But I love it. I am unabashed fan of Harvard innovation. I want to talk about two or three things before we wrap up. We're going a little over here. But there's a big case.

The Supreme Court just took a case where a bunch of consumers are suing Apple over App Store pricing. I think this is very confusing. There's a lot of bad headlines out there, and it's an antitrust case. Okay, so I just can't help myself. Here's what I'm going to ask you guys. If there's an app that's only in the iOS App Store, do you feel like you as a consumer have enough you would switch?

Because that's really what this case comes down to. Apple is arguing that they are not a monopoly for consumers for iOS apps. What they actually sell is software services and distribution services to developers and that consumers should not be allowed to sue them. What the consumer class action group is saying is because you charge developers a 30% cut of their fee, they're passing that cost onto you. And because they have no other choice, we're paying this increased cost. So this is like a very thorny. The case is not even about the app store.

The case is about who has the right to sue Apple, whether it's users or developers. Right. Right. And no developer wants to sue Apple because they want to have their app in the app store, which I don't know, sounds like they're maybe afraid of a monopoly. ballistic power. Right. So, Adi wrote a great explainer. You should read it on the site.

But the thing that she and I were talking about, which is not a great parallel, but it illustrates the concept of cost passing, is Spotify, if you just go buy it on the web, costs $10 a month. If you buy it through the app store, it costs $13 a month because they are literally passing the 30% Apple fee onto you, the consumer. So the big question here, and I think this, if the Supreme Court takes, it and Apple loses and they send it back down to the court and Apple loses again and doesn't appeal. Most of the paths on this branching logic chain end in Apple winning. But if Apple loses, this is a

thing that breaks the idea of the closed App Store ecosystem. So this is the case to watch to see if consumers even have the right to sue Apple for App Store pricing because they have no other vendor for applications on their phone. But I guess like the flip side of that is does Apple have the right to have a closed platform that it doesn't allow you to install arbitrary apps on it. Right. So that's like a, again, the first question is just, should it be developer suing Apple or consumer suing Apple? The press, Apple's precedent is it should be the developers because we sell nothing to the consumer. We sell distribution services to the developer. Right. And the consumer saying, who gives a shit, you're the only people that we transact with. So that's like the foundational question.

then the question is, is the app store tax justified or is it, does a consumer, should they have a choice because they cannot buy apps for any other vendor? Well, what remedy is this class action lawsuit seeking? Money, millions of dollars. Right. They're saying you've overcharged us by millions over the years for all these apps that we bought. They're not seeking a, you have to stop it remedy. But if the court says this is unconstitutional, you have to pay this money. There you go.

Not unconstitutional, illegal. I don't think the founding fathers really thought this one through. George Washington was like, let me run any binary I want. From a practical standpoint, I think Lincoln ran Linux. I feel like Apple gets so much goodwill from like, hey, we're the company that we make money by selling hardware. Yeah. And like it's so frustrating to try to buy a book for Kindle or Audible, like going to like Apple or you go to Amazon site. because you have to buy it through Amazon's website

because you can't even like shop from Amazon's apps for digital products on the phone. And then Amazon's like, hey, sure you want to go, you want to open the Amazon app? I'm like, oh man, I can't remember. Like, it's just needlessly complex. And like I feel like Apple could get a lot of goodwill in that sense of like opening.

Yeah, even opening that. Yeah, just why do they need to charge 30%? Because they don't have enough cash just sitting around. Apple doesn't care about Goodwill. I mean, you know, goodwill is nice. Money's nicer. Also, I think it's incredibly important to Apple to be able to control the experience, right? And I mean, this is like Apple's whole thing is that they have software and hardware that work better together,

and you start allowing other stuff in, and it kind of breaks their model. So, I don't know. I have to say, I've mostly just been listening because I find this discussion, Very interesting. My normal bias is toward, like, the consumer being able to do whatever they want. But I don't want to be too hasty about it because bad things happen when you just let any old person start doing stuff on your hardware. Yeah. No, this is like a real thing that we talk about.

I have the perfect compromise solution. You might even say that this perfect compromise solution is a sweet solution. Peter. Why would you say that? Apple should make progressive web apps, first class citizens and iOS more than they have. now, there should be, they should bless up a open store that doesn't require a cut that can only sell web apps. And then people, they should give them more capabilities while still being sandboxed.

And then if you don't want to go to the app store, you can go to the web app store and install web apps on your phone from there. And you know what? I would put the verge on that web store in a heartbeat. Tim Cook is honestly more likely to completely shut down the iPad division and be like, I was wrong. Everyone buy a Mac. What the fuck are you talking about?

Casey, the reason he said it was a sweet solution is because when the iPhone was first launched, there were no apps. And Steve Jobs famously got on stage and said, we have a sweet solution for you. You can make websites. Which was like one of the most, like, obviously cruel things he's ever said. Counterpoint. Counterpoint, how many electron apps do you have installed on your computer right now that you use on a daily basis? None. Sounds like all of that.

I really like Google's solution. It's not my favorite thing in the world, but it's pretty good compromise. on ChromeOS, you can go to the unstable channel to get new features and stuff, but also you can switch to dev mode. And they terrify you. They let you know, you are so unsafe

now, but you can do whatever the hell you want, but you're so unsafe. Are you sure? Press any key on the keyboard. Press this key for Botnet. Any key on the keyboard will revert it back to a clean, safe state. But they allow you to do it. And I feel like, I mean, a nice result

of this, I don't want to like wield the legal system as a club, but nice result with this. Apple just just gave it. Paul, are you suggesting that the state use its latent power regulates? Okay, you open up settings, right? Scroll all the way to the bottom.

You press into something, you go like five deep into some sort of decision tree, and then there's a jailbreak button. Press jailbreak. Can you imagine if the Supreme Court decision is Ruth Bader Ginsburg, like, mapping out an entire UI for how you jailbreak an iPhone?

Just straight up, she's like, the corner is decided there shall be a button. Have you guys heard of George Hots? I hate you guys so much for making me do this. Yes. But what if you entered the Konami code and that is what jail broke the phone. Just like you could do a WebOS. Apple is no longer constitutionally whimsical enough to do shit like that.

Wait, WebOS? You could Konami code it? Yeah, you typed in the Konami code and that turned on developer mode. We are way over. I'm going to offer two more pieces of Apple News, one real fast, and then two, I'm just brings us all the way back to the top of the show.

One, the air power charging mat rumor to finally start shipping in September following quote unquote technical hurdles which is amazing. Also it runs iOS. Yeah.

It's great. Come on. They don't know. They don't have it on their operating system. They're like iOS. Oh, my God. We'll put it in the charging mat. It's on your watch.

It's in your laptop. How about a car? I mean, you know, that's what they got. That's their thing. It works. All right. And then finally,

I keep saying everything, the entire world is just trying to make your phone a little TV, and to that end, Apple and Oprah are teaming up to make content, which to me is just like, I don't know what Apple is doing with original content. They keep spending money to get it. They keep making deals like this. I don't think they're good at it. Well, and to really bring it full circle, like, where is the home for this content supposed to be? Because my understanding, the last time I quit Apple Music, the video stuff was, you know, the video stuff

was in Apple Music, which is not a good place to go watch video, right? Well, they have a TV app. It's so good. So that's going to be the home? I thought the TV app was for controlling your actual TV. No, that's the remote app. No. The TV app is like, when you have an Apple TV, all the services feed into this interface

that shows you're watching. Except for the ones you actually care about. Except for Netflix. Netflix doesn't feed into it. You know, they promised a data sharing deal with Netflix when they launched it. That was like two years ago, so I haven't done it. They're going to release that when they open source FaceTime. Yeah.

Man, so many old burns from Diener today. Anyway, but yeah, the case of the idea is that you have this TV app and it will feed in everybody else's content and then Apple's video content will be a first class citizen in there. And I don't know. Everyone will watch Oprah. Like people will watch Oprah. Like Oprah is the original influencer. Who? She is.

Write that headline. I mean, it's true. My mom would go anywhere for Oprah. I want that headline. The Vergecast is over because Ashley has a story to write. What part of your day do you open up your phone to watch Oprah? I think at the morning. In the morning?

It's like you're getting ready for the day. The question is, what's the better deal? Oprah or the Obama's on Netflix? Everything. The whole world is just trying to make you watch TV on your phone. I'm telling you. That's the future. Do we know what kind of show Oprah's making?

Like, she's not doing a daily talk show, right? A representative said that together Winfrey and Apple will create original programs that embrace her incomparable ability to connect with audiences around the world. Winfrey's project will be this as part of a lineup of original content from Apple. So if it's embracing her ability. But it sounds like a project. You know what it sounds like to me is like it's Oprah Winfrey network rejects is like what Apple is getting. Oprah already has a network.

You really think she's giving her best stuff to Apple? Oprah's contract with her own network, which by the way is called own, which is great. The Oprah went for a network, but it's her own. 2025. 20, okay. Well, you mean it ends? The contract ends it in 2020? Well, she just extended it.

Oh, she's. I can't stop thinking about what Ashley said, because Oprah did product placement on her show constantly. She gave people cars. Just like influencers do today. Giveaways. Giveaways. Divaways. Advice.

Magazine. Like, she had it all. She built an empire. Yeah. And now she's going to be reduced to streaming on the TV app on an iPhone near you. Okay. Well, congratulations Oprah. We're very proud of you. Oprah's the original influencer. I mean, I need a weekend post.

It's coming. That's it for the Virchcast this week. Casey, you look great, man. What you don't know is that the lights turned off in the studio where Casey is. And I've been gesticulating wildly for the last two minutes, and the lights aren't coming back on. He's just been waving his hands to trip the motion lights. It's incredible. I've just embraced sitting in darkness as a metaphor. 2018 continues a pace.

Thank you, Casey. Tell them about Converge. Listen, Converge is an interview game show that's easy to win, but not impossible to lose. I talk to some of tech's most fascinating personalities, and a new episode comes out every Wednesday. And this coming Wednesday, I talk to Mike Maples, Jr., who was one of the very first investors in Twitter and has just made buckets of money because he's very good at investing. And we have a super fun conversation in which he makes me pitch him Twitter using only things that I would have known in 2005, and it all goes disastrously wrong. I love it.

Ashley, thank you for being here. Button Season 3, it's going to happen. I hope so. Uh-oh. Well, it's funny because the person makes us. It's going to happen. We need the jet ski. Tell the people to binge watch your other two seasons.

What's it about? It's about the choices we make with technology that we might not realize we're making. I'm trying to think we have a streaming episode. Very TV related about password sharing and why people do it. I personally don't password share. Because I suck and I mean. All right. Paul, thank you.

You're welcome. Deeter, tell them about processor, and then I'll get out of here. Processors, the YouTube series, that's about empowering you to better understand how technology works and what it means in your life. All right. How's that? It was great. It was really good. You should watch processor.

You can also follow us on all the platforms. You can watch any number of Verge staffers doing copyright infringement IGTV, apparently. Kara was on the show. You can listen to Rico Decode. You can listen to Recode Media, Peter Kafka. everything's great. We love you all. Rock and roll. Goodbye. Paul. Promocode. Hello, listeners of the Vergecast. This is Peter Kafka. I am the host of Recode Media.

I want to tell you about a free episode of this show that you can go listen to right now. It's the interview Kara Swisher and I did with Daniel Eck, the CEO of Spotify. You know what Spotify is. We talked about why Daniel Eck built Spotify when it made no sense to build Spotify, why he took it public, how he took it public. We had a long and kind of frustrating conversation about his content policy. which ended up, I think, helping him decide that he wanted to change his content policy. It's all in there. You can listen to it right now for free at Recode Media with Peter Kafka. Enjoy.