This Week in Tech 612
Leo Laporte: It's time for TWiT, This Week in Tech. Wow, we have a great panel! This may be one of the best TWiTs in a long time, I'm glad you're here. Greg Ferro joins us from packetpushers.net, Ashley Esqueda from Cnet, and Devindra Hardawar from Engadget. Man, we got Down! We talked about N stage capitalism, the safety net for data, Uber, flying cars, blimps, and submarines. It's all coming up next, on TWiT. It's all coming up next, on TWiT.
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Leo: This is TWiT, This Week in Tech, episode 612, recorded Sunday, April 30, 2017.
Sky Pirates of Silicon Valley
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It's time for TWiT, This Week in Tech, the show where we talk about the week's tech news. And we're going to have fun today, because some of my favorite people are on. Devindra Hardawar is here. Senior editor at Engadget.
Devindra Hardawar: Hello.
Leo: Hi, Devindra! How's tricks?
Devindra: It's going well. This is my pile of books and other gadgets.
Leo: is your office chair the same as in Silicon Valley?
Devindra: I don't think so. This is the Ikea one. This is the 200 dollar office chair, the one they really recommend is 800 bucks. I'm not going to spend that.
Leo: Ashley Esqueda knows; she laughed in a knowing way. Hi, Ashley. Good to see you!
Ashley Esqueda: Hi. Good to see you. Good to see everybody.
Leo: I'm thinking of that chair. What's-his-name has inherited it. It used to be the other guy's. I don't know.
Ashley: It's like the iron thrown.
Leo: It should be Tub losky's chair. Look at this one. This is a $5000 chair. You can get dental work while you're playing...
Ashley: I did not enjoy the sensation of having a chair lean backwards and recline while a monitor was over my face. I know how I feel when I accidentally drop my phone on my face when I'm lying down and tired. The idea of crashing down and slamming me in the face is not great. I don't love it. Also, I don't want to work laying down. I want to take a nap when I'm laying down.
Leo: So Richard Hendricks got Jack Barker's chair. It's... apparently it's real. It's a real chair from Scandanavian design. It's not that expensive. It's only $499. It's called the wow desk chair. Look at that! Devindra, I think you should run out and get it.
Devindra: I should.
Leo: Wouldn't you look good in that?
Ashley: It's got a nice color scheme there. It's beautiful, it's interesting to look at. I like it.
Leo: Also with us, Greg Ferro, from the Packet Pushers network. Greg was giving us a lesson in how Internet infastructure works in the 21st century before the show. I'm sorry you didn't hear it. He's @Etherealmind on Twitter. Great to have you back.
Greg Ferro: Thanks so much, Leo. Sorry I couldn't get there today. I want to point out that I have a fancy chair, but I bought it second hand.
Leo: Awww. What kind do you have?
Greg: It's a Herman Miller. Aaron.
Leo: That's so 1999.
Greg: But I bought it second hand. Back in the days when Ebay was workable.
Leo: If you were in the San Francisco bay area, you could have all of this for pennies on the dollar.
Ashley: Any startup that goes out of business, just show up.
Greg: Let me assure you, if I was in the Silicon Valley area, I couldn't afford to live there.
Leo: There's benefits and...
Ashley: Your house would in fact be that chair.
Greg: There would be a meter on either side. That would be all I could afford. I've looked into it several times, but I can't afford to live there. It's way too expensive.
Leo: But we love it here. Don't we?
Ashley: I'm definitely not in San Francisco. I'm in LA.
Leo: All the real TV people are. And Devindra is in New York, and today Greg is joining us from the UK. Where in England?
Greg: Chiltnam. In the center near GCHQ.
Leo: Good to have him. Thank you, Skype. This was the week of earnings. Amazon and Microsoft and Google via its alphabet. All three of them did well in the cloud. This was the quarter that the cloud showed its strength. At Amazon you can't really judge from it. Jeff Bezos has a big nob or lever in his office that has profit on one side and debit on the other. He decides how much he wants to make in any given quarter. Total net income up to 724 million. Million, with an M. Nothing. A lot of it from Cloud. Microsoft Azure Cloud business grew 93% year over year. That made a big difference in Microsoft's bottom line. Google, which makes most of its money in advertising, made a huge amount, still did pretty well with the Cloud platform. They said in their analyst's call. The fastest growing business was the Google cloud platform. Although, really, Google, you want to hear numbers. Google's ad revenue has doubled since 2012. In 2016, it had 32.8% of the total ad revenue, but that totaled a massive profit for Google. And big growth. Almost 20% growth of this year. So. Big business.
Ashley: They have to make that money so that Larry Page can make a lot of flying jet-skis.
Leo: You have to wonder how much Larry and Sergei are involved day-to-day right now.
Ashley: Sergei is like I have to make lots of money because I have an airship.
Leo: He's building a blimp!
Ashley: We got to make that money.
Greg: Why is it that rich middle aged men fly their own planes? How many times do you wake up in the morning and read the news and 55 year old so in so was flying his plane from here to there and crashed it!
Leo: It's flying or its yachts. If you're a yachtsman, there's a couple things you do. We worked for Paul Allen when we worked at Tech TV. He built a submarine in his yacht. So there's apparently companies that make submarines for rich people. I don't mean like submersibles.
Ashley: How else are they going to play Battleship, Leo?
Greg: Yachts are for billionaires. Millionaires play with planes. If you go down onto the French Riviera, or onto the Greek islands, you can see all the yachts pulled up. Some of them have not just submarines, but too little boats as well, so if they come into the harbor and they want to go to the other side of the harbor, they get in the boat and walk to the other side of the harbor. They don't get a taxi.
Ashley: Where is my flying pod jet-ski?
Leo: The funniest thing is we were told that Paul Allen built his submarine with a boat in the belly because he didn't like to jump in the water when he scuba dived. He liked to emerge into the water. So. Make it so.
Ashley: Look. If I was a Silicon Valley billionaire in the vein of Bill Gates or Jeff Bezos, the rocket stuff, I get. let's go to space. But also, I'd be putting money into having robot servants. That's the thing I want. That's the sign of true wealth is to have robots that look just like you. You make a bunch of robot clones around your house. Hi Ashley, nice to see you today.
Leo: Here's an article. It's a little dated. It's from a couple years back. The world's most expensive luxury submarines. The best one here at the bottom is called the Phoenix. It's only 80 million dollars. Ten bedrooms, a gymnasium wine cellar Jacuzzi, operates at 1000 feet. 213 feet long. 5,000...
Ashley: Is the company still in business? They just have to sell one.
Leo: How about the Seattle? It's... how many people...This one is Paul Allen's. He built it to look like the Beatle's yellow submarine. It can stay underwater for a week. It's only 40 feet. He also owns a 200 million dollar yacht called Octopus, which has two helicopters, seven boats, a crew of 60, and costs $384,000 a week to keep running. I love it that he built his submarine as a yellow submarine. Paul likes Rock and Roll
Ashley: if you're going to do it, that's what you would do, right?
Leo: It would be hard not to sing the we all live in a yellow submarine when you get in there.
Ashley: I bet the crew sings that every time he gets in.
Leo: He doesn't have to pay them to sing it, because he has a recording studio down there as well, with a full time engineer, because any time he goes down there he wants to be able to play.
Ashley: Great acoustic shielding in a submarine.
Leo: more to the point. This article came out this week. They rent the old NASA blimp dirigible hangers. Which were created during WWII to house dirigibles until the Hindenberg put the kabash on the whole thing. But of course, that was pre-world war ii. It was made out of Hydrogen which is explosive. But you put helium in these, it makes you talk funny, but it doesn't explode. Apparently...
Greg: The Germans used hydrogen because it was the only gas... The Americans always use helium because they have a natural occurring source.
Leo: I'm sorry. Some nice Bloomberg lady is talking. This is the hanger, this is not Sergei's blimp. This is 1984. When blimps were big. That hangar though still stands. He could build it in there. He rented the hangars, why not?
Ashley: I'm a big fan of that. If it's not coming out of the pockets... it's obviously coming out of our pockets in some way, but if I give up a little privacy so that Sergei can fly around in a blimp, I guess that's all right.
Leo: It's pretty clear he hasn't taken it out for a spin, because we would know.
Ashley: Oh my god, Leo. What if it's an invisible blimp? High tech! A true air ship like Bowser in super Mario bros. They're all inside, it's made of wood. There's cannons and stuff. The sky pirates of Silicon Valley.
Greg: So Google Glass has become those steampunk goggles.
Ashley: I got to go guys, write this movie right now.
Leo: That might solve the whole dorky glasses thing. make them look steampunk. It's dorky in a good way. I would wear steampunk goggles.
Greg: At least you can sell Steampunk. You definitely can't sell Google glass.
Leo: I love this story. I'm going to jump all over it today. You guys are playful so we can have some fun. The dark overlord has apparently hacked the production company that had Orange is the New Black and a bunch of shows from ABC, Fox, and National Geographic, and IFC, and they tried to blackmail Netflix. They said we have the next season of Orange is the New Black, which comes out in June. If you don't pay us, we'll put it on the torrents. Netflix laughed at them.
Ashley: Netflix is like we make house of cards, dumb dumb. We know how blackmail works.
Leo: Orange is the New Black is, according to Netflix, the most popular Netflix original. I didn't know that.
Ashley: They're cagey about giving out numbers for their individual shows. That is a key piece of information.
Leo: According to Variety: the studio is at ADR. Additional Dialog recording. They got hacked in the fall. The hacker doesn't have the whole season. Just the first ten episodes. So, Netflix is going that's great. You still have to subscribe to Netflix to find out what happens.
Devindra: These hackers have really great taste. I feel like Orange is the New Black doesn't get as much talk as House of Cards.
Ashley: This is a good hype man. I bet you this is an inside job. What a great marketing campaign.
Greg: Now you're telling me Dark Overlord is a Netflix employee trying to beat up...
Leo: First of all... what kind of hacker names himself the dark overlord? This is a 14 year old. By the way.
Ashley: Just a kid of somebody who works at that ADR house, right? That's what we're all guessing?
Leo: His Twitter handle has a three in it for the word "hack3r." You know he's really... the deadline passed. He posted it. Then he did a press release. He called it a Press release. He's so adorable. Let's go to the hack3r... apparently there's many dark overlords on Twitter.
Ashley: I'm surprised he didn't need the Dark Overlord 46.
Leo: This is terrible. I'm trying to find the Dark Overlord Press release, because it's the funniest thing I've ever read. Let me see. If I can find it somewhere
Ashley: Is it the one where he says it didn't have to be this way?
Leo: It didn't have to be this way. Would you be Dark Overlord for us, Ashley.
Ashley: It didn't have to be this way, Netflix. You're going to lose a lot of money on all of this, than what our modest offer was. We're quite ashamed to breathe the same air as you.
Leo: Wait a minute, what? We're quite ashamed to breathe the same air as you?
Ashley: We figured a pragmatic business, such as yourself, would see and understand the benefits of cooperating with a merciful entity like ourselves.
Leo: Merciful. We are the merciful dark overlords.
Ashley: I love the others where he says to the others, there's still time to save yourselves. Our offers are still on the table. For now.
Greg: You know that if I ever do something like this, I am going to be the dark overlord so that attribution becomes a disaster. If you're going to do this, you do not want people tracking you down. You do not want... this is really good way to obfuscate people tracking you down. Hitting Netflix is going to be like Bad News Bears. They can come after you. There's some smart people at Netflix. You know what I mean?
Leo: But I'm the dark overlord. Don't mess with me. I'm going to get my braces off in six months, and then you'll be sorry.
Ashley: But please, don't arrest me before prom.
Devindra: Didn't we see this person online? The person with the raven on social media.
Ashley: I think you're right!
Greg: Do I need to get my hoodie?
Leo: Even Mr. Robot didn't call himself the Dark Overlord. Come on, kid. Come on.
Ashley: Get a good handle! If I could give you some advice, Dark Overlord, do not attack HBO. If you take HBO, they will hire Liam Nissan to find you. It will be very serious.
Leo: I found the dark Overlord, who is apparently a Vincent Van Gough fan. Ashley, you do that voice very well. You will get to play the dark overlord when we make the movie.
Ashley: The Pirates of Silicon Valley! The dark overlord can be the villain in that movie. It'll be great.
Leo: Awesome. Let's take a break. We're going to have fun today. We are having fun today. Ashley is... I'm trying to work on your name. Esqueda.
Ashley: That's it.
Leo: Ashley Esqueda from C Net is here. Great to have you. You're still from C Net. We don't have anything in your lower third, but we'll fix that.
Ashley: Just find me on Twitter.
Leo: Find me on Twitter she says.
Ashley: It's the easiest, best way.
Leo: That's easy because it's @AshleyEsqueda. Couldn't you get @Thedarkoverlord Esqueda?
Ashley: I tried the Dark Overlord with a 3, but it was already taken.
Leo: Follow her on Twitter everyone. Also Devindra Hardawar from Engadget. We're going to get him that chair. I'm sending you that chair.
Devindra: I love the chair. I love the colors.
Leo: Greg Ferro from thepacketpushersnetwork. Great to have all three of you. You know what?
Ashley: He is registered for a true dark overlord on Twitter.
Leo: You're next, Laporte. I'm going to release this entire year's episodes of TWiT in advance. Which would be great. Then I'd just go home. Our show to you today brought to you by Sheets of all things! The best bedding in the world. We're learning having a good night's sleep is a huge part of health. Sleeping well. It's one thing to have a great bed. A lot of you have Casper mattresses, but you also have to put great sheets on those beds. Boll and Branch is the place to go. You will fall asleep faster, you will sleep deeper, you will wake up ready to tackle your day. I sleep on Boll and Branch sheets and I love them. 100% organic cotton. They start soft. Sometimes you buy sheets, I bought a pair of sheets and I regret it. I washed them 8 or 9 times before I could sleep on them, because they had a lot of starch on them. You feel like you're living on a cloud. By the way, Boll and Branch sells online only, so you don't pay the department store markups. Which is like 100%. You're getting half price for twice the quality. Boll and Branch is slept on by three former US presidents, countless celebrities. The reviews rave. I'm raving about it. I want you to feel good about your sheets, inside and out. They're ethically made. Every aspect of the company is geared towards making the world a better place and making you sleep better. Try them for 30 nights and see for yourself. If you're not impressed, just return them for a full refund. By the way, for gifts, if you've got a wedding or a baby shower or a housewarming gift, the box they come in is beautiful. Heavy cardboard with satin ribbons. You don't have to wrap it. When I got my sheets for the first time, I thought, did somebody send me a gift? No. It's just my Boll and Branch sheets. You'll love it. Order them from home. Free shipping, free returns. And about half the cost. go to Boll and Branch today. Bollandbranch.com. $15 off your first set of sheets. Plus free shipping, if you use the promo code TWiT. Try them! Gift them. Bollandbranch.com, promo code TWiT. Best sheets you've ever slept on. You'll be hooked.
Ashley: Feel so relaxed after talking about sheets.
Leo: I like your banner on your Twitter, Ashley. Do you have many pairs of these or just one?
Ashley: Funny story. I've been accused of having fake hipster glasses.
Leo: Like you don't need the?
Ashley: You can see the reflection here. I do have a prescription in there. I don't need them to see close up. So I could take them off now and be fine, but I need them to see far away. I have three pairs of these glasses. I bought the last two pairs that LA eyeworks ever had, they discontinued them last year. They called me and said do you want them? This is my signature pair of glasses. I have other pairs. You can see them back here. I have one pair that is no joke in a storage safety deposit box at my bank. They're not insured. I also have a pair-- this is the thing that gets people. She's not wearing any lenses when you see some pictures of me and things. I have a stunt pair that doesn't have lenses in it for photo shoots because of the glare.
Greg: I'm getting such an education here. As someone who spent all these years being a nerd...
Leo: no one has ever said to Greg, those are prop glasses.
Ashley: I can't see when I take them off when I'm driving. I would not know how to get home.
Leo: Apparently this is enough of an issue for Ashley that she has to put this in her Twitter bio. My glasses are prescription. People rag you for that.
Ashley: They do! It's a crazy thing. I do need them and I love them deeply. I think people also can't believe I would choose these glasses for myself, because a lot of people are afraid of a bright, bold pair of glasses. But after trying these on for the first time, I felt like I put on Superman's cape. I had always worn black glasses before, and then I tried these on and I loved them so much. Someone told me at that store that I got them from, she said your glasses should always match your insides. I thought that was cool. I live by that now when I buy glasses. Do they match my fun personality? They should match your personality, not your clothes every day.
Leo: I'm guessing Ashley is going to be the first on her block to own the new Echo look.
Ashley: You're right I am!
Leo: Which is not an April Fool's Joke, but the real deal. You can see, I have already requested an invitation as well. This is the newest Amazon Echo.
Ashley: Did you preorder that jacket?
Leo: Yeah, I'm going to get that jacket. That is going to look great on me. We're watching the video, and they show one guy. They don't think this is a guy thing. The idea is it's an Amazon Echo, but it has a built in camera with LED light, and it can shoot stills or video and send that information back to Amazon for what? What is it going to do to help me?
Ashley: They have a feature called Style check. So you can send two pictures of two different outfits to Amazon, and they have deep machine learning, algorithm, and some actual fashion oriented human beings behind the style check that will compare/contrast your apps, and give you back this one is 65%. This is the look you should go with.
Leo: If they had a human or stylist back there...
Ashley: That's the point. At some point, they do have human stylists. They're offsetting the costs of that human by using machine learning to learn what you like to wear and what your styles are. Then when you log into Amazon, Amazon is going to recommend to you all the great clothes that it sells. So that you can buy it and it knows your style and what you like to wear.
Leo: It has a standard tripod socket, Greg I know you have it mounted on a hydraulic lift on your wall. Greg isn't the market for this, but you could have this on an arm.
Greg: If I was going to get one of those, I'd be like why are you wearing brown all the time?
Ashley: My biggest concern is that it's going to look at me one day and I'll log into Amazon. Almost like sub-tweeting me. It's going to start recommending workout clothes and smoothies and a juicer. It'll be like hey.
Leo: You were smart enough to buy this. Maybe you'll by a $400 juicer. $200 for this, which is as much as the Echo used to cost. The echo started this way too with invitation only. It does everything the Echo does. The dystopian fantasies began, people started freaking out about privacy. Devindra, would you admit an Echo look into your house?
Devindra: Not sure. I have a couple Echo dots, actually. But what I love about the Echo is it has good speakers.
Leo: This doesn't have good speakers at all. I think it's more like a dot.
Devindra: The Echo is a big cylinder, so that's a lot of space.
Leo: this thing is tiny.
Devindra: Maybe my wife would be into this, but she's also freaked out by machines, because getting into every aspect of our lives... I don't think we'll be buying this at all.
Leo: This is not for the duct tape over the camera set. This is...
Ashley: I actually think Amazon might have a hard time with this, if only because I think this product is perfect for Gen Z.
Leo: Who is gen Z?
Ashley: Beyond millennials. The set that is 12 to 20 right now. It needs to be cheaper. If it were $99... it's too expensive for the set that it should be for. Generation of kids that are plugged in and sharing pictures of everything they do every second of every day. Maybe they don't do that as much, I don't use social media to share every bit of minutia. This seems like beauty bloggers, style bloggers. Fashion is a huge industry. Last year, one study pegged it as a 2.4 billion dollar Industry. So it's not small potatoes.
Leo: Sorry. Lindsay is doing a haul. Gotta turn that off. This is going to be so awesome. This is totally the audience for this, right?
Ashley: It's totally the audience for this. Here's my look book for spring. These people are going to put together a look book, they'll set up a whole set. To me...
Greg: I disagree with that. That crew is not going to use the crappy camera in a 200 buck piece of rubbish that Amazon is going to float to everybody. What Amazon needs is a bunch of data to feed the machine learning algorithms that it needs to do. So it's got a bunch of humans behind there, fashion consultants, whatever you like. But it's never going to take pictures at a sufficient quality that YouTube beauty vlogger...
Leo: But the wannabees.
Ashley: The ones who go I love Michelle Fan and JJ Gorgeous, and I want to put together my Look Book. That's a way for them to do it and share it with their friends and do short videos. They don't have Instagram husbands to take their photos for them. And that's exactly what this is for.
Leo: Wait a minute. What's an Instagram husband?
Ashley: Have you ever seen that? It's a parody. There's a great parody video on this, where Instagram husbands are these guys who are really into Instagram and helping you get the perfect shot and he's the photographer.
Leo: I might be an Instagram husband.
Ashley: It's a great parody video. Every time I see it, I think it's so well done.
Devindra: this camera is meant to replace some of those. I think that would be useful, and that data would be good for Amazon too.
Greg: This is where Google has such an advantage over its competitors, just to nerd out on this a little bit. YouTube is full of this fashion data. Google can go in with its machine learning and its pseudo artificial learning and mining the data... if it decides fashion is its thing, it can take the data and do it. Amazon has to build the data set. So how do you get pictures of fashion? This is going to build a beautiful data set for machine learning, because you're going to get real people in fixed forms, in the home and trying on different outfits and colors and things, and you're going to be able to build the most comprehensive data set for feeding into the algorithms.
Ashley: Same resolution, same size. It's so easy to process.
Leo: I have a dot in every room. It's my closet echo. I need an echo in every room, including my walk in closet. That's exactly where it's going to be. I'm not...
Ashley: I put it right next to my front door. Maybe I could take a picture as a pseudo security camera. If somebody walked in, I could take a picture of them.
Leo: That's interesting, because there could be other slices on this. That's exactly right.
Ashley: Any Amazon Echo with a camera could be used for a variety of different skills. They did say we're going to expand skills on this. Sorry to anybody who has an Echo at home. This is a really interesting move by Amazon. It feels like... on C Net we had a scoop this week that was maybe Amazon is working on a touch screen version.
Leo: there's some evidence that there may be a market for that, because Microsoft, when they announced that they were putting Cortana in the device, said it would be a touchscreen.
Ashley: Why would you want a touch screen when you're using it with your voice.
Greg: When you control something with your voice... when you work with Siri on your phone or your Echo, the feedback loop is poor. You don't have a sense of when something goes wrong. There's no way of saying to Echo or Google that this isn't right. When you have a touch screen, you can close the feedback loop and say was this accurate, yes/no. Also because it was a screen, it can be reformatted and adapted as time goes by. Not stuck with doing something...
Devindra: When you use the Echo, there are cards that pop up that give you more information than just the voice feedback. I'm not super excited about that. I haven't seen too many cameras targeted inside bedrooms where your clothes would be. This seems like a crazy hacking opportunity, and a really gross one too. We'll see.
Ashley: I set up, I signed up for an invitation. I don't think I would set this up in a place where I was getting dressed. It would more be a place because you might share your picture. I would put it in a place where I would be able to walk up to it, like a full length mirror in my office, or whatever. I walk up to it and do my picture and walk away.
Leo: For people in her business, it would be hugely valuable. When we used to do tech TV and we had a stylus, they take a picture of everything you wore and put it in a notebook with the date and everything. That is valuable information. I think there's a lot of people that would be very interested in this.
Ashley: I think even young men...
Leo: A lot of guys care about this stuff.
Ashley: We're seeing more and more men get into beauty blogging and fashion. It's certainly an expanding industry for men.
Leo: People say this is a non-starter, I think the exact opposite.
Ashley: I think it will start slowly. I think right away, it won't be in stock. The original Echo, it took months before people were able to just buy them? I think it'll be similar to that. I think Amazon is smart making this an invitation only thing. So if they undersell it, they don't have to admit that to anybody. That's a good strategy sales wise.
Leo: I think this is huge potential.
Ashley: Some people really want a speaker. They want that... I have a tap. I love carrying that into the yard with me. That's great.
Leo: I hook my dot up to speakers.
Ashley: Soon it will be able to control Sonos, which I am super excited about. But I definitely am of the mindset that Amazon is on the right track making different kinds of echos for different users, and this is one example of many different types coming in the future.
Leo: What they neglected to mention, there will be a Look app to go along with this that will allow you to look at your daily wardrobe looks. Rate them, rank them, share them. It's interesting.
Ashley: they have a fashion show that they do live every day on Amazon. It's popular as far as I'm aware. Frankie grande is one of the hosts. These big fashion influencers that host it. I think this could be a popular thing, and if people are not sure about Style Look, you can use it in your phone. So it's in the Amazon app already. You can use this as a feature.
Leo: This is so hard, because you have to hold your phone out.
Greg: That is how Snapchat works today. So it's taking what snapchat does and monetizing it.
Leo: You're an Instagram dad.
Ashley: Snapdad. Outfit compare, that's style look. If you're not sure you want to use it.
Leo: Macy's and Nordstrom and Pennys are under huge... this is the final nail on the coffin.
Ashley: It's tough for them. I'm in my early 30's. Why would i want to go to a department store when I know how to measure my body?
Leo: I don't need to go to the department store. You don't shop anymore? You buy online?
Ashley: Generally, I don't. Unless it's an emergency.
Leo: You don't want to try it on in the store. My wife does this; she'll order ten things. Try them on, and it's easy to send back the ones you don't want. Often it will be all ten. No big deal.
Ashley: I got mad the other week at 6PM which is owned by Amazon. They make you pay for your own return shipping. Zappos doesn't do that.
Devindra: Retail is a good point. Going to retail, saying to somebody there, do you guys have anything you would recommend or somebody you would ask, that is the feedback loop they're trying to close online. That could be interesting.
Ashley: I don't want to ask somebody in a department store does this look good on me? I don't trust them. But if a computer is learning about my fashion and saying this looks better on you than this, than maybe I trust a computer more. I want to be a robot when I grow up, so there you go.
Greg: I was reading some research this week about how long retail will last. What they are finding out, is you only need to lose 25% of your current business, and your whole company goes out of business. As soon as you lose 25% of your business, you might as well close up shop and walk away. Amazon only has to beat its competitors, it doesn't have to blow them out of the water. It just has to keep lowering the ceiling to the point where the ceiling meets the floor.
Ashley: They already are.
Leo: You saw the layout in the New York Times last week, zombie malls, because the big Department stores go away, and there is nothing left. Amazon warehouse is robots.
Greg: There's something like 33 feet of mall space for every American citizen.
Leo: Too much. There's a couple interesting trends here. One is Echo entering verticals. If you're Amazon, this is the most lucrative vertical. It ties into individuals creating their own content. This is something I'm intrigued by. It's the trend we've been moving in the direction of. It's getting easier with Snapchat, Instagram. Everybody is becoming a content creator. Now you've got a camera ready to take your picture. I can see it in other verticals. I wonder if Amazon is going to start slicing off these vertical markets, starting with the most lucrative.
Ashley: I think it would be interesting for the hobby market, to have something like the Look but with a touch screen. You're crafting. Woodworking. You literally can watch your how to video for whatever you're doing.
Leo: as you point out, Greg, it's a virtuous circle. You're also getting all this machine learning on the content you're providing them. That enhances their value. Amazon is in some ways a better position than Google.
Greg: More importantly, Amazon has a profit mode. Its convinced its investors that it can grow over a seven year cycle. You look at somebody like... Macy's and Nordstrom's. Those people have to deliver 20% of their profits back to their investors. whereas Amazon says I can take those profits and put it back into...
Leo: Smartest thing Jeff Bezos did, because at some point investors stopped giving him money. Saying you're not going to turn a profit. So he had to borrow money. He's proven right now. Everybody goes that guy is a genius.
Greg: If people want to learn more about this, have a search on YouTube for Scott Gallaway. How Amazon is dismantling retail.
Leo: The chatroom said that as well. He's a professor of marketing at NYU.
Scott: One of the more invidious, or tricks that is going to happen is variable pricing. When you go onto the Amazon Echo he does a demo of this live on stage, he says give me the price of some batteries. He said when I did this yesterday, it gave me a price that was a dollar extra. So one of the interesting things, is once Amazon has you captive, you have this interesting situation where Amazon can give you prices that vary over time. It's amazing, what they do. There was a Washington post article talking about the same thing, about the death of fixed pricing, how Amazon is leading that, and how much of a change that is going to make to society.
Leo: Their algorithms about how algorithmically driven the pricing is on Amazon. I have a friend who sells to Amazon. The stuff you buy on Amazon is often not fulfilled by Amazon, they're just a storefront for merchants. He sells an air purifier that he made in China. His brand, right on it. Sells it on Amazon. He noted that all of a sudden his sales tanked, he investigated and found out Amazon was selling his product itself! And then, he changed, he dropped his price below Amazon's price. Then Amazon's price didn't go down, it went up. He had some theories about this. Algorithmically they were deciding whether they should compete with him or offer the product at a higher price and get fewer purchases... it's all happening over periods of minutes.
Greg: This article was talking about at Christmas time, the price of pumpkin spice triples. As soon as Christmas is over, the price goes through the floor. This idea of going to the supermarket to buy a can of pumpkin spice 365 days of the year might be going away. What Scott Gallaway is pointing out, is it may well be once Amazon knows you're a white middle class successful male with a six figure income, your price might be ten dollars, but a lower socio economic group, maybe the price of the product is six dollars. The second one is about the death of brands. Today we have proctor and Gamble. These massively successful brands around toilet paper, and laundry detergent, and trusted by millions. But if you go onto Google voice or Siri and say buy me some washing liquid, which one is it going to ship you? Why doesn't it just ship you the Amazon no name brand where Amazon takes out 80% profit margin for minimal effort. The brands are dead.
Leo: I'm going to have to watch this video. this is quite fascinating. he gave it at an Amazon L2 clinic where the baby wipes... it's an agnostic... I do not want Amazon basic batteries.
Greg: There's Alexa buy batteries, and Alexa says here's the price of Amazon basic batteries, do you want me to order them for you, and he says no. Alexa says I have nothing else to give you. You can only have whatever Alexa will offer you.
Leo: I've had this fight with Echo at home. You can ask for a brand name. Buy ever ready batteries and it would do it. I get a lot of Amazon basic products. I don't mind. I'm not complaining. It comes in two days. That's one of the reason we have dots in every room, because when I run out of something, I can get it right there right then. I order everything that way. I don't care if they're Amazon basics.
Greg: The point is, what does that do to brands? How does it disrupt multi-billion dollar companies. Any odd business could be disrupted.
Leo: See this box? It's full of batteries. It's got a dash button. This is an energizer dash button. When this box is low, John where do we keep this? Right there behind the desk.
Ashley: I love the ability to get these buttons and be able to customize them for my computer and an Echo. If I say I want it to buy this thing and you click on it on your profile and you set it up and connect it to a particular button.
Leo: do you think it's in Amazon's interest to get rid of brands? I guess they make more money on basics.
Ashley: They do want brands to do business with them, so I'm sure it's a balance.
Greg: What they want is brands they can dominate. Customers are demanding the brand, so Amazon has to sell it on the terms.
Leo: Wall mart has that clout and Wall Mart absolutely strong arms the brands. I've got to think the brands fight back in some way.
Greg: In those Amazon results that we're talking about, Amazon's ad revenues grew 100% in a quarter. Now they're the fifth largest advertising provider, and the only place they advertise is on their own site. You want to think about that in terms of how much money you can make advertising on Amazon and how that feeds into this loop. They can drive the brands out of business, because the only place brands can achieve that 25%. Keep in mind you can still sell stuff through Walmart and Macy's and whatever those supermarkets are. But you've still got to get that extra 25% to be in business. Amazon is going to have that, and they're going to have to buy the short and curlies. We'll just promote our own brand, where do the brands go?
Leo: This is bad for consumers ultimately, because it eliminates competition.
Greg: No. What it allows is the emergence of new types of brands that are Internet only. Why are you buying Tide soap with a 60 to 80 percent markup. Take food delivery services. What is happening now, there are restaurants that are not restaurants, they just produce food for delivery.
Ashley: There is somebody who does this in an Industrial area in LA. They make amazing food, but they only take orders until a certain time...
Greg: Instead of lamenting the death of the live restaurant or maybe having some food that you get a lift in stores, what you do is change the business model and set up an Industrial building with a commercial kitchen, and create food that is only for sale by couriers. The secret of everything we do about the Internet. Are we going to talk about Ebooks and how they have dropped by 30%? Several articles this week talking about the drop in eBooks. The publishers were beating their chests and saying rise to the paperbacks because ebooks have dropped by 17%. What they're leaving out is that you cannot... as much as the publishers are selling, the independent authors are now selling directly to customers. So the publishers might be selling 17% less ebooks, but I promise you the market is larger. Indie self-published books and regular retail books are in the order of $5000. Small to medium ebooks is $2000, and Amazon publishing is $300000. The big five publisher ebook sales is 250,000. Indie self-published full books is 3 times the size of publisher sales.
Ashley: Even the shopping thing, Leo and Greg. It's a matter of... I tend not to do my shopping at department stores because I have the ability to find individuals who are self-publishing. Making their own clothing lines, starting up their own beauty brands that are smaller, more curated and more designed to me as a customer, as opposed to a large group of people. Amazon basics is fine. But it's like, there are those things, where I want something highly curated. More and more, we're having the ability to do that. There are companies that are making shampoo and conditioner that is made for your type of hair. You like to answer a quiz and mix it and send it to you. This is like, this...
Leo: those are small artisanal businesses. They're aiming at an affluent market, because most...
Ashley: I don't think you can scale on the low end in such ways that compete with Amazon. I think that is the weird evolution of what's going on right now. If you don't play ball with them, you want to scale, they're going to eat your lunch.
Leo: It makes sense that ebooks would die. You don't need a store front for Ebooks. There's no physical products, anybody can deliver a podcast or an ebook without help from an intermediary.
Greg: You need a digital storefront. There are random PDFs all over the Internet. It's centralizing content; that's what we've learned. But the apps are too, right?
Devindra: Yea, we've had, like yea. There are random PDFs all over the internet. It's centralizing content, that's what we've learned with the App Store, too, right? Like that's kind of the—
Leo: Discovery is the issue. Discovery.
Ashley: Right. Because there's so much out there and it's all being distributed in so many different ways.
Greg: But the point is, is that you might well be using Amazon as a delivery mechanism. So, if you're using the Amazon online shopping experience, that is, you're seeing the emergence of startups now that build a product and the only place you can buy it is on Amazon. Now, that is a change in the retail where sure, you're out there marketing and reaching users and driving sales and engagement, but when they want to buy it. So, I bought some vitamins this week. And I went to the company's website to check them out. I checked them all out and when I went to click buy it just went to Amazon's website. That is a perfect example of a change in business model. Way before they would have had to had a warehouse and a distribution mechanism, blah, blah, blah.
Leo: It's a win all around because you feel more comfortable buying it from Amazon anyway.
Greg: Well, arguably, right? I'm not a huge fan of Amazon like other people are.
Leo: Most people say, "Oh, hey this is even better." I do this. If I can buy a product from Amazon or from the vendor, I always will buy it from Amazon. The price is the same, just because I know Amazon. I trust Amazon.
Devindra: Well, it's easier.
Leo: It's easier. They have my credit card.
Ashley: Everything's already there. It's all—it's very convenient.
Leo: So, if you're making a product that you can deliver yourself, a digital product, there's really no reason to go through a middleman except you do have to solve this discovery issue. You have to somehow find an audience and have the audience find you.
Ashley: And that's what influencers are for.
Leo: Yea, how does this look in this new era? Obviously if you're making a good, if you're selling spinner fidgets, fidget spinners, you've got to get somebody who's going to fulfill it. You need somebody like Amazon. Somebody with warehouses. That makes sense. And that's going to all centralize through probably Amazon. But if you're a podcaster or you're an author—I mean, Devindra, you're a writer. As a writer, I would think that this offers all sorts of interesting possibilities. The same thing for musicians but they always come back to me and say the same thing. But how do I rise above? How do I find an audience?
Devindra: Yea. I mean I remember like when blogging first got started, it was all about getting your SEO ranking up and where you stood in Google. And then more niche things started happening. You know, Google News popped up and it was all about the Google News. And then things like Tech Name for tech bloggers.
Leo: Well, what really happened was demand media which was content tailored around search results. Fake news. All the negatives rose to the surface. But If you're somebody who's writing—you know, if you're Ben Thompson writing at Stratechery, you know, the real challenge for you I would imagine is—it's one of the reasons you probably still work for Engadget, right? I mean, you could branch out on your—I don't want to scare your employer, but.
Devindra: Anybody can become an independent contractor or something, try to do everything. But, yea you don't have an audience.
Leo: Yea, but what stops you from that? Audience.
Devindra: I mean for me also, I like Engadget and I like the people I work with. It's a site I love. It's a thing I believe in and want to build. Doing your own thing is so much more tough. It's so much more risky, too.
Leo: It's nice to get a health plan. It's nice to get a paycheck every other week. And a lot of people prefer that.
Devindra: That's all very nice.
Greg: I live in a country where freedom is built in to the healthcare system. So, anyway.
Leo: That's actually a really interesting point. If we had a national health, that would change things dramatically in the US because—
Ashley: Yea, it would encourage people to take more risks.
Leo: You'd see much more entrepreneurialism. You'd see much more individual startups because that would be one whole chunk. That's a big risk factor.
Ashley: College, too. College too is another really good example of that. I mean if you're not a hundred thousand dollars in the hole when you leave college, you have some money to maybe start your own business.
Leo: That's a really good point, too. If you start with a clean slate, you've got health. All you need to do is make rent and food. That means it's a lot easier. The barrier to entry is a lot easier and you could take a chance on yourself.
Greg: That's exactly what my business of course, is exactly that, Leo. So, Packet Pushers is 5 years of sweat equity. It's a nighttime job about building a podcast and publishing shows and posts week in and week out. And then two years ago, I was able to go fulltime and drop my salary by 50% but we're able to make—
Leo: So why does innovation still happen here to the degree that it doesn't happen in the UK? Or Canada? Or every other developed nation because we're one of the last not to offer healthcare.
Greg: The thing is if you've ever been in the ocean and dropped a little turd in there, something floats to the top, right? So, the inference is with enough people, something's going to float to the top, you know, of the—
Leo: Are you saying that—I'm going to try to understand what you just said about the United States.
Ashley: I think also—wait, let me see if I can figure this out. So, basically, like think of it this way. France has close to the population of California.
Ashley: So, if you're looking at the sheer—
Leo: Why aren't they as productive as California?
Ashley: Sheer scale, well our GDP I think in California is like really close to France. So, I think actually it's like kind of the same. So, but—
Leo: Oh, good. Oh, all right.
Ashley: But if you look at just sheer scale, there are a lot of people who try businesses and fail and so, and I do think that because we have a very capitalism friendly country, I think that that is an encouragement. I think that to see these guys like Bezos and—
Leo: You could just say, you could actually just say it's cultural and despite all the economic disincentives, that culture always will win. People will do what they emotionally they want to do regardless of the logical factors.
Greg: California is not the only place where people are successful in the world. You are so far up your own bum.
Greg: There is innovation happening all over the world. It doesn't just happen in California or San Francisco or Silicon Valley. It's everywhere. Like I live in the UK, the 5th largest economy in the world. There is a startup incubator just down the road that's bigger than—
Leo: Money's probably easier to get. Venture capital is probably easier to get in the US than it is in the UK.
Greg: Stupid ideas are funded faster in the US than most places.
Leo: That's right. Look at the Juicero.
Greg: But I could do the same thing in London. There's no shortage of stupid startups being funded.
Devindra: It's very different, though. When I used to cover startups more directly like international startups, it was always very different how each country would approach it, you know, France, the UK versus America. There is that idea, I think some countries are trapped in a sort of traditionalism where even if you're trying to do something cool and new, the people around you are like, "Oh, no, that will never work."
Leo: Well, for several years in a row, I spoke at LeWeb in France. And a lot of the purpose of LeWeb is to kind of foster this kind of free-wheeling capitalism that occurs in the United States and there were definitely cultural and financial barriers to that. A lot of it was an aversion to taking risk. They were very clear about that.
Greg: Yea, there's a whole bunch of reason as to why startups do and don't work. But you certainly can't generalize that and say that innovation only happens in California or that the US is better at innovation than anyone else is.
Ashley: I don't think that at all.
Leo: And I wouldn't say that with you in the room, anyway.
Greg: You said exactly that. You said that innovation happens in America better than anywhere else. And that is complete rubbish.
Leo: Well, wait a minute. We are better than everyone else.
Leo: All right. Let's take a break.
Greg: You know they may be better at technology startups, but you know what? There's a whole spectrum of industries that are startups funding all the time.
Leo: Of course, Greg. Of course.
Greg: So, yes.
Leo: Of course. Of course. And we're sorry about the whole revolution thing. We, you know.
Greg: I want my tea back.
Ashley: You can borrow Paul Allen's submarine.
Ashley: It's at the bottom of the harbor.
Leo: The Boston Harbor. It's all down there.
Greg: Her Majesty would certainly appreciate getting that back. I'm sure.
Leo: Actually, you're Australian. You've got nothing to talk about here. I would say Australia's in many respects, culturally more like the United States in terms of go-getter and energy and—
Devindra: Independence, yea.
Leo: Independence and all of that.
Greg: So, Australia was, when I grew up, was very anglophile. It was really aligned with the British and the English and all that sort of stuff. And as time goes by, Australia has become Americanized so through my 20s to 30s Australia was becoming increasingly Americanized. And then there was a distinct shift into Asia. So, Australia realized that America really didn't want to be—it's a love hate, sort of a—we love you this year, but not so much next year sort of thing. And so, Australia turned much more towards Asia. So, now you have this culture which is very rich because you've got Asian influences, very close ties with the Americans, but a foundation in the European culture, or specifically, the English culture. And, it actually ends up, it's not sufficient to make a generalization that Australia is very Americanized when it's actually much more Asianized currently.
Leo: Interesting. Interesting. Well, if you're going to emulate somebody, that's not a bad person to emulate. I mean—
Greg: Well, you want to be nice to your neighbors because they might not like you.
Leo: Let's take a break. We'll have more with our great panel. Devindra Hardawar from Engadget. Ashley Esqueda from CNET and of course, Greg Ferro from Packet Pushers.
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Leo: Man, there's pressure on me now because we've had so much fun in the last—I picked the right topics. I think I've got a—
Greg: I just wanted to pick up on something from the last one where we talked about how discovery was important.
Leo: Yes. We didn't really address that.
Greg: And then one of the fascinating things that's coming to me is this Apple reducing its affiliate fees from 7% to 2.5%. If what we talked about is valid and true, and I'm not sure—I thought we all agreed to it to some extent.
Leo: Oh, I think so.
Greg: Why would Apple suddenly reduce its affiliate fees and not encourage influencers and people to engage and participate in providing their products?
Leo: So, I talked to a number of tech blogs, maybe Devindra has some input in this too, a number of tech blogs and a significant amount of their revenue comes from links to the App Store and the tech blog. And they used to make 7% of the money made by purchasing that app. Apple on May 1st will lower it by 64% to 2.5%. And now that's not going to affect you and me buying apps. It's not going to affect the company selling the apps. But it may very well affect a number of publications for instance that use these affiliate fees for revenue. Devindra, do you have any thoughts on that?
Devindra: I don't know how that works on our end.
Leo: I don't know if Engadget does it. Engadget probably doesn't have to.
Devindra: I don't think we do. And I wouldn't know because—
Leo: It's a lot of the smaller, Apple sites do that. I think iMore.
Devindra: I think Wire Cutter.
Leo: Yea, Wire Cutter.
Devindra: Those sites rely on affiliate links a lot. This was a weird announcement because it just seems incredibly petty in a way. Like, is Apple trying to cut costs? I don't—like the App Store is one of their big money makers. It would make sense to encourage more growth there. Or maybe they feel like they don't need to. Maybe it's so big now they don't really need to sweeten the pot for these people.
Leo: Frederico Viticci—
Ashley: Maybe it's that they feel like they want to be the people curating because I know they've made a little bit of an effort to curate a little bit better in the App Store, like the featured sections and things like that. Maybe that's all they feel they need.
Leo: Amazon has lowered its affiliate fees, too, right? I mean that used to be a great way to make money. In fact, as an author, I made more money from Amazon, if you bought a book on my website, than I did from the publisher. It was more than my royalties which is a sad commentary on the state of royalties. But I think Amazon has dropped those as well. So, maybe this is just they can? I don't know.
Greg: What about if Apple starts selling ads on its—it has started to sell ads. You can, developers can now pay to have their products promoted on the Apple's App Store. What if Apple gets into ads and it wants that 5% to be able to throw into an ad campaign, to build up an ad network that they can then sell directly to vendors?
Leo: It may be that. It may also be, and I've seen this. You see this not so much through the apps, but you see it with antivirus companies. A lot of antivirus companies pump up their sales by using these kinds of affiliate fees, and there's kind of resellers. And what you get I think is a lot of sketchy websites and kind of sketchy or suspect marketing techniques. It may be that Apple felt like it was losing control of how apps were marketed.
Ashley: They're certainly some people who game the system, and have these sort of propped up websites. But the thing is, I'm sure there's a lot of those. And I'm sure Apple wants to obviously curb that but they're in the process, like you were saying. I mean there's a lot of sites like Touch Arcade who writes great reviews of iOS and Android games. They will suffer tremendously because of that. That is—it's not all of their revenue, but it certainly is a good chunk of it. And you know, you don't want to lose writers on a site like that. You don't want to lose people who are hard-working just because Apple cut a certain percentage. But, yea, I mean it's a bummer. It's a real bummer. I feel bad for all the sites that are on the up and up and really just need that money to survive, that are you know, I think being punished a little bit because of some of less than pure actors in the space.
Leo: You know, you've got to always remember if you're—what is it? A dickie bird that lives on the back of a hippopotamus in a symbiotic relationship that it picks off the parasites? And you've just got to hope that the hippopotamus doesn't turn around and eat you. Or it's a crocodile or an alligator. They pick the—they actually—you've seen the pictures of them going into the mouth of the alligator and the alligator's sitting there going, "Ah."
Ashley: They clean its teeth. They pick out all the—
Leo: Apple's the alligator and if you live on the crumbs the alligator's giving you—it can always
Devindra: It's the same story with online retailers, too, right? I remember in the late 90s, some of the earliest online stores had affiliate programs. They're like 10% or more sometimes. I used to buy video games from GameCave.com and I had a little website and people were buying through it. And then the company disappeared in a year, probably because I was making a lot of money off affiliate links.
Leo: Here's the Egyptian Plover cleaning the teeth of the little crocodile.
Ashley: And that is better than any circus you could find.
Leo: (Laughing) That is a very brave thing to do.
Ashley: I want to see that on Planet Earth 3.
Devindra: I want that VR experience.
Ashley: Or that VR experience. You stick your head in an alligator maw. Oh, it's a crocodile, my bad.
Leo: You know, what's the difference? It's all—
Ashley: Look, I live on the west coast. I don't see either of them, so I mean.
Leo: Right. I've been watching the BBC—
Greg: I guess that's what happens when you don't have a tongue.
Leo: Right. Somebody's got to clean your teeth.
Greg: Yea, that's right.
Leo: No toothbrushes.
Ashley: They can't reach their teeth because their arms are too short.
Leo: Here's another tiny little company suffering from Apple beating it up. Qualcomm. Apple stopped paying Qualcomm's—
Ashley: Who's going to think of the little guy here, Leo?
Leo: Yea. Apple stopped paying Qualcomm royalties because they say, "Hey, you're asking for too much." Qualcomm had to warn, "Our profits are going to drop significantly because we're not getting that." 8-9% lower revenue than previous forecasts because Apple has not been able to reach an agreement with Qualcomm for more than 5 years. Apple says Qualcomm's refusing to negotiate fair terms. This is you know, like when the cable company and—
Ashley: I love when you hear Apple going, "No, there are no fair terms here." Like, what?
Leo: You're just being unfair, Qualcomm.
Greg: Did you notice that Qualcomm isn't actually negotiating direct with Apple? It's set up the deal in such a way that the people who make the chips that Qualcomm licenses to them and then the chip makers then charge Apple the Qualcomm fees, right? So, Apple could never negotiate directly with Qualcomm. It had to always go via the people who made the chips.
Ashley: It sounds like high school. Like, you tell Nancy that I'm not going to go to prom with her brother.
Leo: (Laughing) Can you do that in the Dark Overlord voice? That's just so hot. That's a good one too.
Ashley: That's a good one too. I like it. You need to get one of those Bane masks. Yea, a little voice changer.
Leo: Why is Bane—Bane has the most—it goes up and down. I don't know. I don't know. Sorry. Forget I mentioned it.
Greg: But I mean the level of indirection, the companies are in Taiwan and China that make the chips, are paying Qualcomm's licensing fees.
Leo: I didn't realize that, yea.
Greg: So, now Apple can't go and beat Qualcomm up directly. And that's a brilliant piece of business maneuvering. I mean, Qualcomm is one of the masters of sharp business techniques and quite honestly couldn't happen to a nicer company. Qualcomm has been beating up on its customers for quite some time and is not well liked. It's done a number of things, like Verizon and AT&T have had a run in with Qualcomm over the CDMA technology a few years back. It's consistently that kind of—
Leo: Right. Nobody's using CDMA anymore, but you need to use those Qualcomm chips because they own CDMA.
Greg: That's right. And there's a whole lot of background dealings that Qualcomm got into to make themselves into this unique leadership position. It wasn't because the technology was better by the way.
Leo: Well, there's an irony here because Apple used, is trying to 2nd source the radio chips in their iPhones. They went to Intel. But the Intel chips are so crappy, they're half the speed of Qualcomm. In fact, it's one of the bones of contention. Qualcomm's mad at Apple because Apple slowed down iPhones with the Qualcomm chip so they wouldn't be faster than the Intel chip.
Ashley: That's not good.
Leo: It's all – everybody's acting poorly here.
Ashley: Everybody loses here, guys.
Leo: Everybody loses.
Ashley: And everybody is losing here.
Leo: We put in a better chip but we're going to slow it down.
Devindra: Both companies are also in the middle of suing each other, so, you know.
Leo: No, no. Yea, yea. Apple says Qualcomm's withheld a billion dollars in license fees, so.
Devindra: And honestly, I'd love to be able to withhold my rend because I think it's unfair. Can't we do this?
Ashley: I'd love to withhold any payment on anything because I feel it's unfair and still get that thing. Like it's just—it's a good point, Devindra.
Leo: Let's see. Jimmy Wales, the guy who created Wikipedia is now creating a new news site or trying to crowdfund a new news site called Wikitribune that will—it's annoying journalists because they are having to work with real people to create these articles. The idea is, and I actually put some money into this, so here's a disclaimer, the journalists will write the stories but then, much as Wikipedia uses independent contributors, people who, you know, grammar checkers, fact checkers, fact finders, whistle blowers will then contribute to the story equally, which I think, ok, Devindra, you're a journalist. What do you think of this? Is this a good plan?
Devindra: It's a—I don't know if it's as revolutionary as Jimmy Wales thinks it is and just the idea of a large scale independent you know, media organization, that's basically the Associated Press, isn't it? The crowd stuff or—
Leo: Or ProPublica, right? ProPublica's a really good example of this, yea. And ProPublica has found its voice. In the Trump era it's become well, a great source for fake news, according to Trump.
Ashley: I just wonder how this is not going to—because the thing is, is facts, like we've seen facts tend to be considered like it's so bizarre. This whole thing has been so bizarre to kind of live through.
Leo: You mean the whole fake news thing?
Ashley: But it's like, yea, you had something that is the truth, like regardless of what side it helps, like sometimes it helps one side over the other. And so, people weaponize that. And so, I would love—I'm very curious to see how this particular project makes an effort to not become weaponized. Because even ProPublica now, like you said, they're finding their voice. But some people are arguing that that is, you know, oh, well, you've become liberal now. And so, it's a really, it's a hard problem. And it's tough to combat and you know, people—even before the internet, people would believe things they heard in a town about somebody else, a rumor or things like that. So, I mean fake news is not all that old. It's just really prevalent now online where it wasn't kind of before. So, I just, yea, I don't know how this is going to be received by people. Is it really going to be a source to be trusted? Is there going to be one side or another that says, "Hey, this is not—this is now becoming weaponized. You're fighting for one side or the other."
Leo: More than that, the work Wiki is now tainted a little bit by Julian Assanage and WikiLeaks. We know there's—people who know what a Wiki is know that there's no relationship but I think the general public will look at WikiTribune and WikiLeaks and conflate the two. And they actually have opposite missions I think you could say.
Devindra: I don't know if this also does anything to help the nature of the problem, right, of fake news because what's happening right now, we're in a weird environment where reality itself is in question much of the time.
Leo: Yes, yes.
Devindra: And that's the bigger problem. Like we're encroaching double speak territory. It sometimes feel like we've are being gas lighted, like some politicians that say something and then the next day will be like, "Oh, I didn't say that."
Leo: I didn't say that.
Ashley: I don't know what you mean.
Leo: Those lights aren't flickering.
Devindra: Yea, so I don't know if this solves anything. What would be really nice would be if media companies focus harder on making sure we don't start normalizing this weird reality we're in right now.
Leo: Interesting article by—
Ashley: Or making it entertainment. Like I think that's another really big problem is that the news has become entertainment and this is a bigger problem than just the last 6 months, a year or whatever. This has been happening for decades at this point and you know, when you read a quote like Jeff Zucker who is in charge of CNN, considering that this is a big drama to him and that he's going to bring in better—
Leo: It's great for business.
Ashley: Yea, exactly.
Leo: It's great for business he says.
Ashley: And if I bring in people that make this almost seem like a dramatic reenactment of the news, people are going to watch it and they'll be compelled to watch it. And the thing is, is just because it's interesting to look at a train wreck doesn't make it any less awful. And that's sort of the key there is that there's going to have to be a moment where some real soul searching is going to have to happen on the part of these, on the part of these news outlets, especially on cable. And I don't know that it will.
Greg: So, in my view, news was always entertainment, right? It's always been, you've bought the newspaper to read it and just because you happen to get viable political, you know, balanced views of politics, societal information. But it was always entertainment. People would sit and read the newspaper as a way of being entertained, right? It's never not been entertainment. It's just the people who did the news got really full of their own self-importance and prop themselves up as being the guardians of democracy and the gateway to truth and the only arbitrators to shine the light, blah, blah, blah.
Devindra: Now that's generalizing a lot though.
Greg: It would be hypocritical to say that you're—
Devindra: Newspapers are—
Greg: News has always been entertainment and it needs to adapt to the new environment because now it has to compete against Netflix, Amazon, Google.
Ashley: Now see, I disagree here. I think to say that news has always been entertainment is not accurate. I think news has always been used to fill people's leisure time. Like when you read the newspaper 50 years ago, you're getting information and maybe there are some things that entertain you, but now the people delivering the news have become the entertainment as opposed to the actual news itself. That's the problem. That's what I'm saying. That's what I mean by the news has become entertainment.
Greg: And this is where—my point is that this is that the news that we get today is not fit for the medium that it's being delivered on. So, when you see news being delivered in a 30-second video on Facebook Live or in Instagram or whatever it is, these people haven't adapted to the modern era to deliver it in such a way that they can tell a story in the new medium. They're still stuck in I can publish a Sunday newspaper and make a living model.
Devindra: I don't know if it's a new medium, though. It's the rise of—we've seen so much social news. A couple of organizations are using Snapchat to make their reporting better. It's not the medium. It's the fact that—I don't know. I'm having, I've been having like an existential crisis, an ongoing one, because every time you turn on the news, we're talking about these ridiculous things that are happening. And nobody's like, "Hey, wait a minute. This is insane."
Leo: You can only say that so many times before—I mean, it's actually quite interesting how, just with repetition, your standards change, your expectations change. I wonder, Greg, if part of the reason you see news as entertainment is the cultural difference. You know, in the United States, the notion of a fourth estate as almost a loyal opposition, to speak truth to power, to afflict the comfortable and comfort the afflicted. That's something we certainly—I don't know. Is it unique to the United States? I don't get the sense that the British press barons have that same attitude.
Greg: Don't get me wrong. I'm not saying that that's not valuable or useful.
Leo: It's immensely valuable. I just wonder if that's something that's in your cultural heritage.
Greg: It's certainly in my cultural—I think it's fairly universal across the world.
Leo: Ok, good.
Greg: But it's also a fallacy to believe that that's inherently valuable in its own right. People used to read the newspapers because that was the only form of entertainment you could get on Saturday morning for $2 bucks.
Leo: Yea, you read it with your breakfast, yea. I understand.
Greg: And it was delivered to your door and it was geographically relevant to you. Hopefully it was.
Leo: But the best journalism, maybe despite that, but the best journalists and the best journalism always had in mind, we're here—like the courts in the United States. We're the fourth branch of government. That's what the fourth estate means. We're here to make sure that those other guys stay on the up and up. And that's not the only function but it's a big function. Freedom of press? You're really in trouble. There's no other way—how would you find out what's going on if you didn't have people trying to dig into it?
Greg: Exactly. But it's no longer only journalists can do that. It's now anybody.
Greg: With freedom of information and availability of information on the internet, anybody can dig into that, whereas in the past, even knowing how to make a freedom of information request, which government department? What office? How do you fill out the form? That was an impossible task for many people.
Leo: I would say that's a broadening of journalism rather than a diminution of the value of journalism. That just means more people are becoming journalists, too.
Greg: It's the same thing as what the internet has done to every other business.
Leo: Yes. Precisely.
Greg: They've cut the middleman out.
Greg: Do we need the journalist to be the middleman anymore? In fact, part of the—
Leo: Well, then you're getting a cacophony of voices with a very, with a huge variety of ethical—
Devindra: And expertise level.
Leo: And expertise and ethics. And that's why you're in this fake news crisis because on the internet, everything looks equal and so, if you don't have—well, this is the journal of record so there's fact checkers, there's some reputational cost. You know, there's some burden on this to try to find the truth whereas this guy on a blog, you know, it could be Alex Jones. We don't know.
Greg: But my blog has to compete with newspapers. So, I have a blog. You know, I post reasonably regularly. But my blog has to compete with newspapers and Snapchat and Facebook Live and—
Leo: No, it's much more difficult than it used to be.
Greg: That's right. It's not that people are inherently not going to—
Leo: If there's a fake news crisis, it's because we no longer can distinguish between truth and fiction. There's nothing, there's no big red button on there that says this is true.
Greg: And extrapolate that out, right? Extrapolate that further. If we have so much false advertising, so many gross lies told to us in advertising, it's very easy to sit there and say in all the forms of media and even the newspapers themselves are full of advertising which is blatantly overstated or exaggerated or flat out untruthful, right? So, you put the news, this thing that you just said about the fourth estate, and you just put it right next to an advertisement which is a blatant lie. Who's losing here?
Leo: Right. Well, all right, let's take it out of the realm of politics. Let's talk about medical information. So, it used to be you would go to your doctor. Your doctor would be the trusted source for medical information. And that clearly had flaws. And it disempowered the patient, etcetera, etcetera. Now, thanks to the internet, we can get a lot more information. There's a huge amount of information out there. And there's absolutely no way to vet it. And if there's a fake news crisis in politics, there's a fake news crisis in diet and health information.
Ashley: Sure, wellness is like a big industry now. Wellness. Let's make it about wellness. What does that mean?
Leo: And I would argue that—
Ashley: Gwyneth Paltrow is selling jade eggs that you ladies are supposed to buy for their pretty parts.
Leo: The FDA and Congress- the FDA doesn't weigh in on most of what people consider wellness information.
Leo: They don't even talk about dietary supplements, let alone jade eggs or magnetic bracelets or vaccines. And so, we're now in a very similar situation with health and wellness where it's just as big a problem. Everything.
Ashley: There's just so much. There's so much of everything and there's a sucker born every minute and there's also a person designed to take advantage of that sucker born every minute.
Leo: Good news for the conmen of the world because it's gotten easier than ever.
Greg: Yes. And wellness basically comes down to unregulated pseudo medical products that you can self-medicate safely enough, right? So, the FDA doesn't regulate vitamin supplements or whatever.
Leo: Right. I mean there is a massive business in homeopathic remedies.
Leo: If any of you use homeopathic remedies, I apologize. But it's garbage science. It's sugar pills. It's literally—
Greg: You can't use the word science in there. It's just garbage.
Leo: It's garbage.
Devindra: It's garbage.
Leo: And takes advantage of people and it drains their pocketbooks with no effect. In fact, the benign effect is there's no effect. At least it's not going to kill you and probably because of the placebo effect, it might even do you some good. But there is nothing regulating it.
Leo: You go to the drugstore, there's more homeopathic stuff on the drugstore shelves than there is FDA approved stuff.
Devindra: I once had a homeopathic primary care physician. I didn't realize he was a homeopathic doctor before I signed up and yea. The dude was completely—
Leo: But he didn't hurt you.
Devindra: Didn't hurt me but never really helped.
Ashley: You're still here.
Ashley: Yea, but didn't really help. Didn't really help. Exactly right.
Leo: So, I feel like—I feel bad for us because—look, as bad as all of those institutions were, the keepers of the flame of truth, you know, we've learned that they're corrupt. At least we had some idea of, you know, they helped us rate the quality of the information we're getting. At this point, anybody growing up today, there's an avalanche of information of all of equal merit. It's very difficult. And unfortunately, a lot of the fixes for fake news people promote are, "Well, we have to learn critical thinking and we should teach people how to follow the links and find the— "No. It doesn't work. What do you do?
Devindra: It's because humans are, like we're inherently flawed in the way our belief structures are built up sometimes. You'll find people on every side of the political spectrum believing weird stuff. A lot of the anti-vaccers are like—
Leo: Well, that's why I want to take it out politics. I want to take it out of politics because that's such a loaded thing. But there are plenty, I mean it's universal.
Devindra: It's universal. We will believe—the problem is humans. We will believe whatever—
Leo: We're going back to the dark ages where you figured out a person was a witch because you weighed them against a duck and the duck floated. So, if they weight the same as a duck, they're a witch. We're back there.
Greg: We're right back to Juicero Juices. You know, the Juicero Juices thing is exactly this cognitive bias issue that we're talking about.
Leo: Now, one of our hosts apparently knows the guy and says he is a sweet, honest, good person and that the Juicero is not, wasn't an attempt to con people. He really wanted to reinvent the food system, etcetera, etcetera, etcetera. So, I'm not going to assume, in fact it's probably the case that this guy's big mistake was he made it—he made a squeezer that was really way over the top too good. And he has to charge $400 busks for it. Look how overdesigned this thing is. And all it's doing is squeezing a pre-juiced bag of stuff. You can do a better job with your hand. But it's not, it's not like he was trying to con people. He had this really great intention.
Ashley: Sometime, you overthink things. It's like if you're looking at a puzzle in 7th Guest in the 90s. It's like you're looking at it for a million hours and you just feel like an idiot when you figure it out because it's the simplest thing in the world. It's the same.
Devindra: But the bigger worry is that all these investors, all these supposed technical, technology experts looked at this thing and weren't like, "This is too expensive. Why is it so expensive? Can we drop these costs down?" Did nobody just grab the pouch and try to squeeze it as well?
Leo: He raised over $100-million dollars.
Ashley: Yea, and nobody thought to be like, "Hey, man. Can I just see that packet for a second?"
Devindra: Yea. Squeeze it hard.
Ashley: I'm trying to test a theory.
Greg: So, I think you need to stop focusing on the machine and focus on the fact that they built an entire supply chain here. So, you have to have a mechanism that produces fresh vegetables and fruits that have been chopped and then put into these bags. And then you have to refrigerate them. And you have to freight them too. So, I suspect that a lot of that hundred million wasn't poured into the machine. There's a backend in here. And each one of these, and this is where—I mean, this is all patently stupid. But let's just go with it for a minute.
Leo: But that's the point is that they saw. They were that fooled them. Oh, you've got to create a supply chain. Instead of them saying, "So, is somebody going to pay $400-dollars for the juicer and then subscribe, for, what is it?" How much a month is it?
Greg: A hundred dollars a month.
Leo: A hundred dollars a month. Is that a business? That's what they should have been thinking. Not, oh, wow. Supply chain, blah, blah, blah, blah. But that's the problem with Silicon Valley.
Greg: For the people who believe that juice is good for you, which is, let's leave that to one side.
Leo: You know, by the way, Alphabet put money into it. The raised $120-million dollars. Alphabet. Kleiner-Perkins put money into this.
Greg: Remember what we said about millionaires like to fly their own planes and billionaires have yachts? That's exactly the sort of person who would believe in this product, right? Because it's a product they want. It's not a product that ordinary people are going to buy. It's not a product that the majority of the population will buy.
Ashley: It's not a scale product. It's not a product for scale.
Devindra: Like the supply chain and everything, I don't see how this fundamentally is going to be different from him than setting up auto-delivery of fresh, of good juice, the good juice brands to your house or to your office. They didn't fundamentally solve anything. So, I'm just sitting here looking at this dumbfounded.
Leo: It's easy for us in hindsight, especially after seeing the videos of somebody hand squeezing the bag. It's easy for us in hindsight to say, "Oh, what were they thinking?"
Devindra: No, there were a lot of people before. Like this is the dumbest thing ever.
Leo: Not Gwyneth Paltrow. She loves it (laughing).
Ashley: Hey, yea, it's going to be on Goop, guys. And if it's Goop you know it's good.
Leo: If it's Goop—is that her business? Goop?
Ashley: Goop, yea. That's her wellness brand from style—
Leo: I think she's a wonderful actor. I love her work. She's not great at names. What are her kids named, Apple?
Ashley: Apple and Moses.
Leo: And the company is Goop.
Ashley: Well, it's very religious, Apple and Moses. But, Goop. Yea, I don't know.
Leo: (Laughing) But you know what? All you have to say—what you say in the elevator pitch is, "We're going to do the Keurig of juice."
Ashley: Yea, and people go, "I'm in."
Leo: I've got to write a check. Who would have—if you come to somebody—look, making coffee is too complicated. We're going to make these pods and we have a thing. It punches a hole in the—of course, the thing that punches the hole in the pods and then puts hot water through it is like $80 bucks.
Devindra: No, it's cheaper.
Leo: That got cheaper. It's a piece of plastic.
Devindra: It's like $50 bucks now. Yea, they're big, plastic water reservoirs. That's all they are. But they started out a little expensive but they got cheaper. And the pods are reasonable.
Leo: I mean it's terrible for the environment.
Greg: I find that it's insane, those things. The Nespresso version of that is now so popular in the UK that the government has forced them to start a recycling program.
Leo: Yea, rightly so, because I mean every cup of coffee—
Greg: They're made out of aluminum and coffee beans. But because you can't put the coffee beans into the compost or I assume most people have a compost service and you want to recycle the cup thing which is pure aluminum but you can't. So, now they're talking about getting them and blah, blah, blah.
Devindra: At least that was solving a problem, right? Doing coffee right, getting fresh beans and everything and like having a fresh grinding and everything, doing all that right is kind of tough. So, having a way to simply that is great.
Leo: We live in a country where we think Dunkin Donuts is good coffee.
Devindra: I know. Leo.
Ashley: I just got really say.
Devindra: I live in New England. Don't do this.
Greg: Don't get me started on the US coffee. It's—that's not coffee. That's excrement in a cup with water.
Leo: (Laughing) Our show today—let me talk about this.
Greg: In the nicest possible way.
Leo: That's Greg Ferro. Write to him at packetpushers.net Ashley Esqueda, Esqueda, Esqueda. Ashley Esqueda. Ashley Esqueda.
Ashley: That's it. You got it.
Leo: It's a D. I didn't know this. I thought it was a T-H. So, it's Ashley Esqueda.
Ashley: Yea, it's Esqueda but then that D-A at the end trips people up. But it just sounds like the word the at the end. So, it's really easy.
Leo: Let's see if I can say it again. Ashley Esqueda. Esqueda. See, the problem is I look at how it's spelled and that's the problem. I shouldn't look at how it's spelled. I should think in my mind. Ashley, E-S-C-K-E-T-H-A, Esqueda. Now it's easy.
Leo: Is that Castilian Spanish?
Ashley: Si, Si. Castillano. It's Basque.
Leo: Oh, it's Basque. Even better. Basque is great. Also with us, Devindra Hardawar. You know, his name is just like it's spelled.
Devindra: Just like it's spelled. People will mistake it all the time and my last name is so close to hardware that I just wish it was pronounced that.
Leo: (Laughing) Well, you do write for Engadget. It would be better. Devindra Hardware.
Ashley: Yea. That should be your—you should have a very special blog that's just called Devindra Hardware.
Leo: Hardawar and Hardware.
Ashley: Yea, I love it. Catchy.
Leo: I'm telling you, we're moving you onto this. You're going to be a new brand. Brand.
Ashley: That's the new Goop. The new Goop.
Leo: And we're going to get you a chair. Oh, man. I look at people like Marques Brownlee who has basically just taken off.
Ashley: Crushing it.
Leo: Crushing it. And it's just all, it's one guy and a camera.
Ashley: The thing is that guys like that are never going to come work for—
Leo: Right. Me.
Ashley: Places like CNET and—
Leo: I tried to hire him for a long time.
Ashley: We can't afford a guy like that because he's just killing it. He's just making a huge amount of money. And the other thing is—
Leo: Why would he want to work for somebody?
Ashley: He's an influencer. He accepts money for appearances and thing like that. And that's something we are not really allowed to do.
Leo: Right. But see, there you go. There's an example of why it's so hard to know who to trust. Now, I'm sure Marques has very high ideals and integrity, so I'm not going to say anything. But there's plenty of other bloggers out there where you don't know where their money's coming from. They do take money from the companies they work for.
Ashley: Right. There's a very big gray area there. But you know, there are people who watch their channels and implicitly trust them without knowing where a lot of their income comes from. And they get a lot of free gear and things like that. And so, it's very much a really interesting time in new media I think.
Greg: It doesn't last long. If you don't have integrity or ethics in this area—
Leo: People learn.
Greg: You will very quickly be found out and people will quickly-- their bull crap-o-meter will go off and go, "This person's obviously getting paid somewhere." That doesn't work. You have to absolutely be authentic and genuine and if you're getting paid, you have to say so. And I know that because guess what my business is? I get paid to appear at events. I get paid to fly to conferences. We do all of our shows as sponsored and the way that we do it is we just tell our audience, "This is sponsored." And you have to be genuine and authentic all the way up. And the minute that you're not is the day that you'll lose everything.
Leo: Yea. It's really a challenge. And it's changed so much, especially now. We do ads. I have to do ads. And so, we have to be very careful about A, letting you know this is an ad and B, when we talk about a product that we advertise, we've become very religious about disclaiming it immediately and saying, "By the way, this is an advertiser." Because we're always trying to make sure that that distinction is very clear.
Ashley: Right. And in the age of new media where all of these people, where all of these influencers and YouTubers and things are coming up in the world, you know, if you're not—
Leo: They don't care.
Ashley: If you're not cross promoting, you're dying. I mean if you're not on 500 different of your fellow YouTubers channels, that's like you're dead in the water. And so, how do you compete with that? It's a really interesting question. Like, that's something I think about a lot.
Greg: That's the mass consumer market where you need to appeal to very large numbers of people. So, somebody like Casey Neistat's 6 million subscribers, he needs to have, to produce a product which appeals to the largest audience because his monetization is very small, whereas my business works on monetization of a very small audience that's worth a very large amount of money, to a very small number of clients. So, I can build a perfectly viable business model. So, you need to be careful about saying, generalizing what you're saying. You're talking about mass consumer markets, but there are vertical markets where you can run very specific businesses that are very excellent places to work like ours, right? Where we only need to attract an audience of thirty of forty thousand people who have a total spending of roughly in the order of $2-3 billion dollars a year.
Leo: Whoa. I'd take those people (laughing).
Greg: And if you can influence them, you've got a viable business model.
Leo: Yea, it's a niche.
Greg: So, there's a gap between you know, 500,000 subscribers. You have a business activities that you need to do. So, if you want to reach that audience yes, you need to cross promote. You need to get exposure because the attrition rate, people signing off from your YouTube channel as opposed to staying with you is very high. So, you need to continually get the churn going.
Ashley: But I don't think Casey Neistat, somebody like a Casey Neistat is not making broad videos for monetization because he is sponsored by Samsung. That's—I mean, you hit a certain point there, monetization is a very small part of your business.
Leo: Marques Brownlee is a good example, but if Marques Brownlee started being sponsored by Samsung, that would kind of kill his credibility.
Ashley: Do you think so? Like, I don't know because I think a lot of his, I think a lot of his viewers might feel like they can trust him with a sponsorship like that. Ok, well if you're making money off of that, at least you're being honest about it.
Leo: Even though he's sponsored, he says, "I know I'm sponsored by them, but I'm going to be honest about it." Yea, yea, maybe.
Ashley: I'm up front about it. Here it is. And I think that that's—and I mean I'm talking about this not as a generalization, Greg. I'm talking about it in the sense as entertainers. Like, these are people who are entertainers who are bringing you information. And it doesn't matter what vertical it's in, but it's very much, yea. You absolutely can even in the music industry. It's the same thing. If you can build super fans who have a lot of spending prowess, then you only need a few of them to sustain you. And you also have to decide what your idea of success is. But I just, I mean in the sense that in tech journalism, just in general, is like the thing that I am familiar with because that's what I work in and that's sort of the push and pull of right now. We're seeing a lot of talent at YouTube or doing their own thing and creating their own brand and really hesitant to join a larger corporation because of limitations.
Greg: Yea, but that medium is not—I don't believe that you can transfer from YouTube to a corporation. A corporation is effectively the death of the independent creator because it starts to apply rules. As soon as somebody owns your salary and they can start to dictate the way that you work and sometimes it's overt and sometimes it's subvert. And—
Ashley: Right. Well, that's what I'm saying. They're very wary about going to corporations because they've built this thing and they don't have to.
Greg: But the thing is, they don't need corporations.
Devindra: They work for YouTube, to be clear.
Leo: Yea, they're working on YouTube's farm. You bet.
Devindra: We were just talking about the affiliate stuff, like ad rates dropped. YouTube kicks you off for whatever reason. Like, it's funny how it's like independent but not quite. You're independent on somebody else's platform, you know.
Leo: Hey, let's take a break. More to come. Great panel. We had a great week this week and I wanted to show you this little video that we made, highlighting the week. Watch.
Narrator: Previously on TWiT.
Sam Machkovech: It might look like I was on vacation on my face. But no, that is VR goggles.
Jason Howell: Like maybe a little sunburn but not.
Sam: Nerd burn.
Jason: We'll call it nerd burn.
Megan Morrone: Nerd.
Jason: Loosen the straps I think a little bit.
Leo: We're talking with Cory Doctorow. His newest book, Walk Away.
Cory Doctorow: A lot of it is about what happens when people who have very strong political beliefs start to compromise on them and how compromise can slide you from you know, don't be evil to surveillance capitalism in a bunch of very small steps.
Narrator: Security Now.
Steve Gibson: This is a bad idea. MasterCard unveils next generation biometric card. But a thumbprint is not exact. Yes, it's better than nothing but if we look at the technology that had to be employed, it doesn't mean that this is cryptographically secure.
Narrator: Know How...
Father Robert Ballecer: We're making a Raspberry Pi Alexa.
Bryan Burnett: Tell me about the weather.
Raspberry Pi Alexa: In Santa Rosa there's a flood warning until Friday.
Fr. Robert: We're going to be using the Amazon trigger word a lot. So, when you hear bleeps, it's us saying Alexa not saying ****.
Narrator: This is your brain. This is your brain on TWiT. Any questions?
Leo: I don't know. A priest swearing always cracks me up. I just—(laughing).
Ashley: That's really—actually that's a really good idea. Just bleep it out.
Leo: We did, too. We do but of course a lot of people watch live and those are the people who get the burden, yea.
Devindra: Did you guys see the new voice tech Amazon added in for devs?
Ashley: The whispering, right? The personality.
Devindra: The whispering and the shouting and they can bleep themselves too. So, that's going to be kind of cool.
Leo: Can I play a sample of that anywhere?
Devindra: I don't think it's working yet.
Ashley: It's an API for developers, right? Like they're saying they're opening us an API.
Leo: So, she will whisper and yell?
Ashley: Some personality, yea.
Devindra: Yea, like a password. Your password is (whispering).
Leo: Oh, man.
Ashley: If you're listening, I just want to let you know that I would pay a very high price to have a GLaDOS voice pack from Portal.
Leo: I had on TomTom, you know, TomTom when you do celebrity voices? I had one, GLaDOS. But she lied. When you were—
Ashley: Well, that's what you'd expect.
Leo: When you were supposed to turn right, she'd say, "Turn left here." And then when you'd get there, she'd say, "Oh, I'm sorry. You've arrived. There's no cake." It was awesome.
Ashley: The best.
Devindra: Your destination was a lie.
Leo: Your destination was a lie. I miss her.
Ashley: She's really—oh, man. That's the virtual assist that I want. Like, I would pay any price.
Leo: So, you want GLaDOS. I want Scarlett Johansson.
Ashley: Yea, I'd prefer. That would be really nice. She has a very nice voice. She is soothing to me.
Leo: She's cute. She has a cute voice, right? Just like pleasant and—
Ashley: Pleasant and kind.
Ashley: Really cute. She's a friend. Like, her voice really is very friendly. I get it.
Leo: That's because you're a girl. I thought more than that. I thought—
Ashley: Well, of course. Obviously, I know why you'd like Scarlett Johansson's voice.
Leo: She's cute. She's adorable. You'd just like to get to know her better.
Ashley: Sure. Sure.
Leo: I'll never forget when my father-in-law said that about the Victoria's Secret catalogue. They just seem like girls you'd just like to get to know.
Ashley: They look like nice girls.
Leo: Nice girls.
Ashley: Just like real nice girls.
Leo: They just seem like nice girls.
Ashley: They're nice ladies. They're ladies.
Leo: They're ladies (laughing). Oh, I forgot to mention. We've got a great week coming up. Let's take a look at what's—I'm all thrown now thinking about that. What's ahead this week, Jason Howell? Jason?
Jason: Here's a look at just a few of the stories we'll be watching in the week ahead. On Monday, May 1st, Apple is dropping the commissions it pays for apps and in-app content as part of the iTunes Affiliate Program from 7% down to 2.5%. Other content types will stay at 7% in all markets. On Tuesday, May 2nd, Microsoft is holding an event in New York City where it's expected to focus on education and creativity. Although the rumor mill is still uncertain whether you can expect an updated Surface Tablet, so cross your fingers on that one. On Wednesday, May 3, a judge decides whether to issue an injunction against Uber in Waymo's case that alleges the theft of 14,000 documents used by Uber in developing its LiDAR technology which could temporarily halt Uber's self-driving car pilot program until the suit is decided. And finally, earnings mayhem continues with Apple on Tuesday, May 2nd and Facebook on Wednesday, May 3rd. That's a look at a few of the things we'll be tracking in the coming week. Join Megan Morrone and me on Tech News Today every weekday at 4:00 PM Pacific, 7:00 PM Eastern here on TWiT.tv.
Leo: Thank you, Jason. And our live Mystery Science Theatre 3000 type coverage of the Microsoft event will begin at 6:00 AM Pacific Time, 9:00 AM Eastern Time. Sigh. And it's me and Ed Bott, right, that will be joining me. We'll be consuming mass quantities of coffee. What is that, Wednesday? Or Tuesday? It's Tuesday, isn't it? Tuesday, 6:00 AM Pacific, 9:00 AM Eastern on TWiT.tv. You can join us live.
Leo: Our show today brought to you by—here's another example of Silicon Valley kind of taking it and running with the ball and it's done such a great job. Blue Apron now the number one fresh ingredient and recipe delivery service in the country. Who knew? Turned out, people really like the idea of instead of going to the grocery, you know, planning a meal, going to the grocery store, buying the ingredients, bringing them home and cooking them, just coming home and finding a box, a lovely refrigerated box on the doorstep with everything they need to make an incredible meal for dinner. They have 2 plans, one for couples and one for families of 4. You can do it all yourself. You never have more of the ingredients than you need. So, if you need like a teaspoon of soy sauce, you get a little bottle with a teaspoon of soy sauce which is nice because you there's no waste afterwards. And you may get great leftovers because I have to say they're fairly generous in the portions. These are delicious meals. Cook them in 40 minutes or less. You get the recipe card and it really is a great way of expanding your repertoire. That's what I think of it as. Because when I cook I cook kind of the same 5 or 6 meals all the time. And it's nice to have something new, new ingredients, new style. By the way, ingredients, amazing, fresh, high-quality from 150 local farms, fisheries and ranches across the United States. The meat is always fresh. The fish is always fresh. Never frozen. Their box is refrigerated. It comes just in the nick of time and you just make it and it's incredible. Their freshness guarantee promises every ingredient in your deliver arrives perfectly ready to cook or they're going to make it right. Blue Apron. They deliver to 99% of the continental United States. There's no weekly commitments. It's not a subscription. You just get deliveries when you want them. You can customize your meus every week. Just go online, say, "I want this, this and this." Match your dietary needs. They have vegetarian plans as well. And recipes never get repeated within a year, so you never get bored. Look at that. What was that? Go back to that. I want that. Roasted Pork & Mustard Pan Sauce with asparagus and fingerling potatoes. Oh, my gosh. Once you make that mustard sauce, then you know, oh, that's good. It's easy. I'm going to use that in 15 different ways. It really expands your capabilities and my mouth is watering like crazy. Spinach and fresh mozzarella pizza with olives, bell peppers and ricotta salata. Or sweet and sour salmon with Bok-Choy, carrots and ginger fried rice. Look at these. They just look so—
Ashley: I'm so hungry now.
Leo: I know. It's so mean.
Ashley: I'm so hungry.
Leo: It's so mean. They make me do this.
Ashley: That spinach and egg flatbread thing, that pizza looks—
Leo: Doesn't that look good?
Ashley: I love eating.
Leo: Have you ever tried this Ashley? You really should. You would love it.
Ashley: Yea, we have had Blue Apron for a while. We like it.
Leo: I do too.
Ashley: I think we split between that and another delivery one, yea. No, no, but it's funny you mention like doing Blue Apron, we actually became a little bit more adventurous in putting together our own stuff later.
Ashley: We were just like, "Ok, so we can only get this 3 times a week for dinner. So, how do we help ourselves the rest of the week?"
Leo: Check out this week's menu. Pick the ones you want. Get 3 meals free with your first purchase and free shipping. It's at blueapron.com/twit. We've been using this for, I don't know, almost a year now. And I just love it. Blueapron.com/twit. And yes, it makes me hungry every time I do that ad.
Greg: It looks a lot more organized than me just going to the cupboard looking at what's in there.
Leo: It is. It is. And you know you'll make it because you've got the ingredients.
Ashley: That's one thing I always like. I always like that thing about—like, I don't make a lot of Indian food but I love it. And I don't have—like there are sometimes I can't get specialty ingredients or take a long time to put them together. And to be able to just get them and not have to spend, especially with some of these kinds of more expensive spices. It's like $20 bucks for a bottle that's this big and you need to use a quarter of a teaspoon and then you never use it again. So, I like Blue Apron for that reason. That's like really nice.
Leo: Whoops. I hate auto-play video. Gosh darn it. You know, it's funny. I had it turned off. I had a plug-in and everything that did it and then Google changed how it does it. And they're playing again. Makes me mad.
Ashley: Because somebody, the person who changed it watches TWiT and they knew.
Leo: They just want to drive me mad. They're driving me mad.
Ashley: They're like, "I'll show you, Leo."
Leo: Twitter earnings: 11 cents a share, vs 1 cent expected. Talk about a Trump bump. Revenue was $548-million-dollars, better than expected. Still declining. Monthly active users—you know, it sounds like a lot. 328 million and then—but it's a fraction of, of course, what Instagram. It's almost at a billion. Facebook of course, almost at 2 billion.
Leo: But still, that's 328 million.
Ashley: And a lot of them are bots. You have to consider bots and people who have signed in—or people who have signed in, parked their @ and that's it.
Leo: Well, this is monthly active users, so they have to use it at least once a month.
Ashley: Ok. So, bots, that's like a good percentage of bots, people who have businesses that auto-tweet things like that.
Leo: Twitter days the daily usage accelerated, up 14%. But see, Ashley, you just told me all you need to do is to be on my Twitter account. I mean it's still a very important medium.
Ashley: I mean, that's my main way of people getting a hold of me is on social media. That is it. Twitter is the big one. Oh, hello, dog.
Greg: I think it's ultimately, it gets down to the difference between multicast versus in-cast. So, mechanisms like Facebook Chat and Snapchat and WhatsApp and all Instagram, are all about communicating to your friends or to people that you know and that you met. Maybe less so with Instagram, but Twitter is one of the few, maybe just Instagram is the only other one, where you can send something to people that you've never known. You can broadcast a social media update. I can't help shake the feeling that this is a different business model between the way Facebook runs it chat apps and exploits them for revenue and to the way where if you're broadcasting something into the open which is—and there's just not that much money in that. And maybe Twitter has to accept that the basis of this business model is that there's a fundamental revenue shift between if Facebook can exploit your private data because you're presenting, you're only talking to your friends. They can get many more signals to exploit, advertising signals. Whereas what you see on Twitter is not so easily monetized because what you're presenting there is a different sort of persona.
Leo: So, it's yea, you know what? You make a good case. You know, I'm tempted to blame management, that they just never managed to take something that is so critical to our culture and make money at it. But you might be right. It's the very nature of it. Sure, they're selling ads and they made, they have revenue of half a billion dollars for three months. Cut costs would be the first thing I would say. Why is it costing so much money if you can't make money at half a billion dollars a quarter? But at the same time, they don't have the opportunities. Go ahead, I'm sorry, Devindra.
Devindra: No, we're seeing more licensing too. Like Twitter data is appearing everywhere now and they're making big deals with sports leagues and everything. So, it's like there's a lot of stuff happening, but I guess making money is a bigger thing. Personally, I'd pay a little money for better Twitter apps and more controls.
Leo: You're not alone. A number of people lately have suggested, let's do a paid Twitter.
Ashley: Even a Pro version would be nice, with more tools and more—
Leo: They're experiencing with a paid version of TweetDeck. I think I heard that, right?
Devindra: I hope it's a complete rewrite because, yea, TweetDeck is—
Ashley: Yea. No thank you.
Leo: I use it but it could be so much better I guess.
Devindra: It's good but yea, I use it because I have to and I wish that for such an essential service that their tools were better.
Leo: How much would you pay for a Twitter account? And what would you have to get? I would pay $5 bucks a month just to have it.
Devindra: Yea, I agree. $5-$10 bucks a month I think, depending on what you get with it.
Greg: You can't make a business at $5-$10 bucks a month. It has to be $20-$50.
Leo: Really? Really?
Greg: Well, look around you. Look at all the startups in Silicon Valley. They're all $20 bucks a month plus then the race that they have is to get enough value to justify $20 bucks a month, right?
Ashley: But I know somebody's also doing all of these licensing deals and all of these other things. I mean, as a power user, just to be able to pay a little extra for the same service with just a few extra tools that are key to how I use it and how other people who use Twitter a lot, I don't know. If they're still making money in the ways that they're doing it right now, maybe that's—maybe. But yea, I don't know.
Greg: It costs a lot of money to collect money, right? And at $5 bucks a month, you're making nothing because the cost of the back-end transaction is $3 bucks. So, then you're left with $2 bucks a month and now you've got to build an entire infrastructure back in to collect $2 bucks a month. That doesn't work. So, even if you—
Leo: No, they're screwed because nobody's going to pay $20-bucks a month for Twitter.
Greg: It's definitely got to be $10 - $20 bucks a month because of the way--
Leo: Look, Netflix is around $10 and—
Ashley: I'd pay $10 for Twitter. If I had the right tools, I'd pay $10 bucks.
Leo: TuneIn Internet Radio, I just bought. I didn't want to buy it but it's the only way you can—you know, there's certain limitations but you get books, you get radio stations. That's a hundred bucks a year. A hundred bucks a year seems to be the new normal, right?
Ashley: That's the baseline.
Greg: At $100-bucks a year you can do a transaction where you lose $5 bucks in transaction fees. You need about $10-$15 bucks to run the back end, to have an accounting system, customer database, securing that. And now you've got $80-bucks a year to do something out of your business. So, that's to say you're going to take, you're going to have to take 20% of the revenue. You're probably going to end up at about $30 bucks that you can use to produce something valuable, to justify the $100 bucks for this thing.
Leo: Well, that's the beauty of the Twitter model. They don't have to produce anything. Their users produce the content on Twitter.
Greg: That's my point. You see, the thing is, to make—you have to charge $100 bucks to create something that's worth $30 bucks that you've got to convince people to buy $100 bucks for, right?
Leo: Right, right.
Greg: So, if you're Twitter, how do you—
Leo: I see what you're saying.
Greg: Right? Because by the time all the costs of the people and overhead and the administration and the legal and blah, blah, blah, and international currency transactions and all that stuff, right, you're left with usually about one third of the money that comes in through the door. So, what are you going to produce for $30 bucks that people will pay $100 bucks for?
Leo: A year. $30 bucks a year. And people will pay $100 bucks for it.
Greg: That's right. So, now let's say you get ten million people to pay up. So, now you've got $300 million. What are you going to get, what are you going to create for $300 million to justify your $100 bucks a year?
Leo: So, they're screwed.
Devindra: Better engineering. It seems like a big problem with Twitter is just they can't get people to fix their crap. TweetDeck has been a mess on the web forever. Yea, I understand like this might not be the most financially sound—it won't keep them alive but maybe really doing something for these loyal users who, you know, really depend on the service as like the lifeline of information around the world.
Ashley: And also are the backbone of the service, the people who put up all of that information and like memes and the things that break all the time, those are power users. Like, almost always and so to not have tools for them seems like a really good way to get them to finally get fed up with it and say, "Well, I can't manage this anymore. I wash my hands of it."
Leo: What if you made like a really good, took Twitter and made a really good juicer.
Ashley: Yea, like a packet?
Greg: Well I think this might lead us into a conversation around what Ann Romney did, Leo.
Leo: Oh, my God. Ok, so this thing, yes. Very interesting point.
Greg: Because you're the product. When you're the product—at Twitter, you're the product, not the customer. The customer is the people who gives Twitter the money.
Leo: So, last Sunday there was an interesting article about—a profile, Mike Isaac in the New York Times profiled Travis Kalanick, the CEO and founder of Uber. By the way, this was a good week for Uber. There were no negative stories after that one.
Ashley: After that one.
Leo: (Laughing) But in that one we learned some interesting things. One, that the Uber app had been, and I don't think we talked—did we talk about this last Sunday? We've been talking about it all week. The Uber app had been carefully crafted to—you know, in violation of Apple's polices and get unique identifiers for every user of the app. And this was actually Uber trying to eliminate fraud on the part of its drivers. But, Apple says very clearly, you cannot get identifying information and keep it. They were using secret APIs to do that. Apple can do it but not the 3rd part apps. Tim Cook—Uber thought, "Oh, we'll never get caught because we've geofenced our app so that it doesn't do this if it's in Cupertino." What they forgot is that Apple's kind of big company and they might have people outside of Cupertino. Anyway, Apple figured it out. Tim Cook, instead of banning them from the App Store, or even like making, saying things like, "Well, all right, but you've got to tell your users." Tim Cook just said, "Now, Travis, don't do that. You've got to stop that now. Knock it off." And Travis did. Would have been nice had they said something. But that was the only thing we learned in that article and a little bit further down in the article, almost at the bottom of it, we found out that Uber was buying Lyft receipts from a company called Slice. Slice had bought a company called Unroll Me, a company that I recommended and used. Had a great free service. Unroll.Me. What they did is you would sign up. You'd give it your Gmail credentials and then it would go through and it would unsubscribe the newsletters you didn't want and do a digest of the newsletters you did, uncluttering your mailbox. It was a great idea. Turned out, the business model was, now we've got your email and we can sell information that we can extract from your email like for instance, how many Lyft rides you took. And it will anonymize that information. But they did sell that to Uber. Uber was using it for competitive research, trying to figure out how much business Lyft was generating and those were very valuable. A lot of people reading this felt like they've been, you know, robbed and Uber, Unroll Me's CEO and founder wrote a blog post to say how heartbroken he was that you found out.
Ashley: That was not a helpful blog. That was not a helpful blog, I think. And the Unroll Me, the current CEO of Unroll Me is like, please stop talking.
Leo: Ixnay on the—
Ashley: They just don't post. Don't post.
Leo: And we can do better and blah, blah, blah. But it sounds like your point, and I think this is well taken, Greg, is that of course they were doing this. How else would they make this work?
Greg: Well, I think that it's not so much that Uber was doing this. But think about how many other data sources Uber's got. So, now they've got access to, inverted commas, anonymized information and we have so much—
Leo: It's not anonymized obviously.
Greg: It's not and anybody can un-anonymize this data. We've seen that so consistently over the years. So, let's do away with the fallacy that it was anonymized. That's bull, right? What we have is the data that came from Unroll Me. How many other data sources was Uber buying to get, to build a competitive profile, much less its own data? So, the Uber app tracks you when you're in the car but it also tracks you for 30 minutes, 5 minutes after you leave? So, if it's now getting—let's just take the Unroll Me thing. If it's now seeing your receipts for say, going into a restaurant and it knows that it took you there, then it can say, "Well, hang on. Uber's dropped this person at this place. Here's a receipt for this exact time. I can match up this person with their personal data."
Leo: Oh, my God.
Greg: And so, now you have—you can build up a whole profile around somebody. Now, keep in mind that Uber can also go out onto the internet and talk to Verizon and get anonymized data out there, people's traffic on the internet and suck that into that data file.
Devindra: I mean, I'm not surprised Uber is doing this. I guess I'm more surprised—ever since Unroll.Me, these things pop up all the time and they're always like your conspiracy theory friend, why are you giving my data to—
Leo: Why would you put a camera with Amazon in your closet?
Devindra: Exactly. And most people don't pay any attention but fast forward a couple a months and oh my God, they're selling the data. Then people start freaking out and then there's—
Leo: Of course they are.
Devindra: I wish we had the earlier stuff too, but it's—
Greg: We used to say follow the money to find out why something was being wronged, and increasingly I find myself following the data collection. And in Amazon's case, Amazon isn't about the money, it's about the data. And Google's in this business and Facebook is in this business. It wants the data. It wants your photographs so it can mine them for information. It wants your messages. It wants your—it doesn't care about your home address and your mobile phone number anymore. What it wants is the metadata associated with that. It wants to know that your mobile phone was in the back of an Uber and then you went to this restaurant because that categorizes you as this person which I can now target ads. And I hate it.
Leo: All right. So, we're going to wrap with this, but let me ask you one last question. It's kind of taken as written that oh, this is bad. Oh, you shouldn't let this person's information out. But what—tell me concretely and realistically, and a lot of people say, "Well, the insurance company buys that and then denies you insurance." No, I mean concretely and realistically, what is the harm? I don't mind, assuming that I don't mind targeted ads. I don't mind being offered a coupon when I get out of the Uber to go to the restaurant next door. Assuming I don't mind that, what is the actual harm?
Devindra: I think the big problem is doing this and didn't just tell anybody. And I'm sure it's in the terms of service or something maybe.
Leo: It is. It is, yea.
Devindra: I wish, for me the harm is just like yea, these companies keep doing these things and sneaking it in and not being fully transparent about what's happening. The consumer harm is maybe more stuff like Uber though. These lavishly funded companies who can compile all this data and use it to crush their competitors. In a certain sense it is like helping, it's helping to promote unhealthy competition in some markets.
Ashley: I would say unhealthy competition would also be my answer. I agree with you, Devindra. I think you're absolutely right. I think that—I was having this conversation about the Echo Look this week. And I think that the next generation coming up grows, is growing up in a world where they voluntarily share their days, everything in their day with the rest of the internet. And I think that the idea of what pieces of privacy are the most important to them, they will have to figure that out for themselves and I think that we have an evolving, an evolving world of privacy in which we kind of have to decide and I don't know what the answer to that is but you have to decide how much privacy are we willing to give up for machine learning? Because it only gets better with our data. And it's this weird circular thing where it's like chicken or egg. It's like well, it can only be good if you give it your information but then how much information are you really willing to give it? So, then maybe it's a little more limited than it could be and not as convenient.
Leo: So, basically it's late stage capitalism. Capitalism as a blood sport. And this was—
Ashley: The Hunger Games of Capitalism.
Leo: This was kind of inevitable, though. This is kind of the nature of capitalism, right?
Greg: Well, I think the thing about machine learning is it inherently rewards the biggest companies. So, there is no way you can have a small machine learning startup because you need the data to train the models to do something useful so that you then have a service that you can sell or a revenue stream that you can create. I call it exploiting the data, right, which is its correct name. You call it selling it. I call it exploiting. But, so inherently, to do machine learning, you need to have vast amounts of cash to be able to maintain data. So, once you've got data—
Leo: So, the barrier to entry is huge for new companies to come along.
Greg: Yes. And so, you end up with monopolies like Google, Facebook, Alibaba, Netflix which has a vast amount of data about what people are watching. Amazon's building up.
Leo: In the 18th century you could also get monopolies by having, controlling the shipping lanes. I mean it's always been—capitalism leads to monopoly. That's what happens.
Greg: That's what late stage capitalism is ultimately, the monopolization by some sort of robber baron.
Leo: Some sort of.
Greg: And the problem ultimately is that it's not, and I agree with your point about we need machine learning to do things, to be cyborgs. We are all cyborgs now. If you're holding a smartphone, you're a cyborg, right? The machine makes you greater than you are. The fact that it's not embedded in your body is neither here nor there, right? To me, anyway.
Ashley: I disagree with that, but ok, continue.
Leo: Ashley and I want it embedded. I'm sorry. I'm holding out for the medical version.
Greg: But the point is, you're already half a cyborg if you're dependent on your smartphone, right? We're getting there. It's just a matter of time. I think the point here is that there are, there's no control. I can't take this data back. This data is stolen. This data is taken from your digital exhaust. Verizon acquired AOL and Huff Po and all those companies and it's going to buy Yahoo just so it can build bigger databases so it can target better ads to you and still sell that data to other people. It's all an ad tech play. I didn't give permission for a lot of that data and certainly this is where the FCC will back around net neutrality. It's starting to be quite concerning. But, that data is taken and used in ways which I don't control. And if there are unintended consequences or if there are consequences down the line about a decision I made today that effects the rest of my life, I cannot take it back. And that is my problem, is I cannot take back. If I spend 5 years sharing my life online and everybody can see that, that has consequences for the next 50 years of your life or however long.
Leo: So, I just ignore ads and my life is fine. No, I understand what you're saying, but I feel like it doesn't, it is just the way capitalism works and—
Ashley: And also, I feel like the next generation of people, that's an argument that they would answer with—
Leo: So what?
Ashley: So, who cares? Yea, that's it.
Leo: I want my Amazon Look.
Ashley: I don't care. Yea, I want my Amazon to give me the best information and the best. I just want the best and the most convenient thing.
Leo: And I want a merchant that's the most efficient so I can get the lowest prices. I don't care.
Ashley: Right. Right.
Greg: And now you're not getting the lowest prices, you're getting the variable prices. And then you get a variable pricing model depending on—
Ashley: Well, can I just say that I feel like if I make really good money and somebody else can be subsidized, like someone who doesn't make a lot of money could have access. Like a Nintendo Switch. So, let's say I pay a little extra for the Switch and somebody else who can't really afford it pays a little bit less but they get to enjoy it like—
Leo: I did that. I bought my Switch on eBay at $100-dollar premium because I don't want to wait in line.
Ashley: Variable pricing already happens on sites like eBay where it's like if there's supply and demand, people with the funds will pay that premium and people that don't just won't happen until they can afford it.
Leo: It already happens. I could get the Switch (laughing).
Greg: Except that you're assuming that the money, that you're transferring your wealth to somebody who is worthy of it. Tell me how they—
Leo: I don't care if they're worthy. Why do we care if they're worthy?
Ashley: Yea, I don't care if they're worthy.
Greg: Well, what happens if the intermediary is just exploiting both sides?
Ashley: Well, they're always going to exploit both sides.
Greg: So, your case then is false. So, you'd be willing to pay go and work harder for the rest of your life and you know, and earn that, get that pay raise, earn that extra money and then just give it away because some retailer asked you for it.
Ashley: No, I'm doing it because they have an option for—it was your example. You said on the flip side of that, somebody with a lower income could get it at a cheaper price. And if that were the case, I'd be like, all right.
Leo: The problem is, the antidotes to this I worry about. You know, so then what?
Ashley: I mean that's always the question, right, Leo? It's like so then what? So then what? So then what because—yes, in a way it is, it would be a retailer hypothetically taking advantage of a certain group or class of people and then you know, people fight back against that. People get upset about that. People want it to be democratized. All the same price. That's fine. I get that. But it's like that's just the evolution of what's happening right now. And I think that machine learning and the cloud are the biggest—AI is like one of the biggest growing verticles in technology right now because of these things.
Leo: Hang on. Everybody hang on to your thoughts. We have one more ad. I want to get that out of the way and I want to give you a chance for finals to sum this up. Because I think this is really – this is a fundamental conversation. It really is exactly what we do which is we talk about what's going on today and what the impact is going to be in the future and what it's going to mean to you in the future. That's really all we do. It happens to be all about technology because that's where the rubber's hitting the road today. But that's what, I think to me, the most interesting thing and I'd love to hear from all three of you.
Leo: But first, a word from Harry's. I want to talk about—almost all the advertisers on this show are disrupting the status quo. Harry's is a perfectly good example. Two guys, Jeff and Andy, serial entrepreneurs, they were looking for the next thing and they said, "What is an industry we can disrupt?" They were tired of paying $4-dollars a blade for their razor blades. They said, "We can do better. I bet you we can do…" There they are. "We can do a razor blade company that charges less and gives you great quality. And we'll do it by subscription." And they created Harry's. And it's amazing. Harry's sells great blades. They did one thing that was very smart. They took all that venture capital and they bought the factory that makes the blades in Germany, the best blade making factory in Germany. They own it. So, you're buying direct from the factory. So, you get good razors, great blades and they cost half as much as the blades in the drugstore. I love it. I just love this idea. Now, there is a monopoly on razor blade companies because they all patent their handles. So, Harry's had to make a different handle and that means you've got to get the handle before you can use the blades. But they made that really easy, too. Normally you get a shave set which includes the handle, 3 blades, a full-size bottle of the shave cream or the gel, whichever you choose, the travel blade cover. That's $15-dollars. That's the Truman set. They have the Winston set with the metal handle. I really like the Winston. $25-dollars, but you know what? We've got an even better deal. We're going to get you started with Harry's free. You just cover shipping when you sign up. So, what we're going to do, we've got a sample that includes the handle, the very nice Truman handle. It's weighted. It's rubberized grip so it feels good. We're going to get you a couple of the cartridges. These are 5-blade cartridges that include the trimmer and the lubricating strip, everything. And a sample size of the shave gel so you can see how that is, free. Just you pay the shipping. And then you get the subscription so you never will run out. You will always have blades and you won't ever use a blade longer than you should. It's awesome. I want you to go to harrys.com/twit. Harry's, H-A-R-R-Y-S.com/TWiT and this is an awesome deal. We just started to do this where you get the free set, just cover shipping. And then, of course, sign up for the subscription. It's a great deal. Get started with Harry's today and you will be very, very happy. And the nice thing is, you never run out. You always get the blades, you always have blades. You always have shave cream. You're ready. You're ready to go. Harry's.com/TWiT.
Leo: What a great panel today. Greg Ferro from the Packet Pushers network, it's always a pleasure to have you on. You're so smart.
Greg: I don't know that, but anyway.
Leo: No, you are and I love it. He's @etherealmind on Twitter and do listen to all the shows on the Packet Pushers network. They're really, really great. Devindra Hardawar from Engadget. He's the senior editor there. And I'm pleased to say has been a great friend personally and of the network for some years now. It's always great to have you on. Our newest friend is, I've just got a massive crush on, Ashley Esqueda.
Ashley: Weeks of friendship. Weeks of friendship.
Leo: Yea, it took me a month to learn her name but—no, I love all three of you and it's always fun to do a show. Last thoughts on this as we end, as we head off into the sunset of late stage capitalism, what is the antidote to this? It feels so inevitable.
Greg: Yea. So, I think for me there has to be a social safety net. Now, we can, every culture is going to attack a social safety net differently. Let me just sort of say like—
Leo: Basic income?
Greg: Well, so in the UK there is a basic income. There's unemployment benefits. There's nationalized healthcare. Let's not go into that today. That's a whole other discussion.
Leo: I like all of that. I'm not against any of that.
Greg: Yea. And I think what we need is some sort of social safety net for our data. There has to be some agreement around what we own and what we control and what we can save to the big companies and say that as a society, this is the limit that we want to take of it.
Leo: Do you think that's realistic, that that could happen? I don't think that can happen.
Greg: I think it has to.
Leo: I wish it would. I wish it would. I see no incentive for that to happen. What's their incentive?
Devindra: Yea. I mean, it's not just like the companies doing this too, right? The problem is we need people on the governmental level who understand this stuff.
Leo: That's not happening.
Devindra: And that the brightest minds are going into these companies and they're doing stuff like Uber and they're trying to figure out if—
Leo: There is something happening, though. I think a lot of people watched Trump's election and said, "Wait a minute. You don't have to be a career politician. You don't have to have experience in public service. You don't have to have served. You can still become President." And I guarantee you, Mark Zuckerberg and a lot of other technocrats are looking at this and saying—
Ashley: He went to dinner with a family in Ohio. He's running.
Leo: Clearly running and he said, "I can do a better job. What about me?" And I think that Zuckerberg, just like Bill Gates towards the end of his career, became a philanthropist. I think Zuckerberg's having too much fun running Facebook right now. But I think he's definitely opening the door and I think his retirement, and I don't think it's that far off. Maybe when he's in his 40s, is public service. Because he's a technocrat.
Devindra: He's got the whole fund and stuff already. Like, he is following in Bill Gates' footsteps. We were talking about the crazy things billionaires and millionaires do earlier with their money. And I don't think Bill Gates gets enough credit for not being an ambiguous spender and like trying to help the world and educate kids.
Leo: Well, he has so much money he can do both.
Devindra: Exactly. He can.
Leo: He can have a submarine and save the world.
Devindra: He can.
Devindra: You can. And maybe yea, we should.
Ashley: We could have it all.
Leo: But here's the question. What did Mark Zuckerberg then do those—
Ashley: Well, here's what it boils down to. And this is my thoughts on this, is that it boils down to his constituents. Let's say he does run for governor or president. His constituents have to demand that. And I really believe that the next generation of kids, they don't care. They don't—that's not going to be an important thing to them.
Leo: They don't care about politics.
Ashley: Well, they don't care about privacy. I mean to demand that from their representative is like—
Leo: No, they're not going to ask for that.
Ashley: They're not going to ask for that.
Devindra: Because they're being conditioned by Zuckerberg too, and his services.
Devindra: It's all like—yea. Big loop.
Greg: I just want to point out something. Everybody talks about how great it is that Zuckerberg or Gates or some other billionaire is donating a few billion dollars to something or another. That's actually a pittance compared to what governments donate.
Leo: That's a very good point. Private, charitable contributions are a fraction of what the government does.
Greg: Right, so if you take government in 2015 spent $12.1-billion dollars on overseas aid. That is one third of Bill Gates' total wealth, right? And he is not spending that much.
Leo: You're a little out of date. Bill's worth $87-billion now (laughing).
Greg: But the point I'm making is he's not spending $12-billion dollars a year on foreign aid. He's spending a couple of billion and having fun.
Leo: He says he's going to give it all, all but a billion or two.
Greg: And he's going to get some Warren Buffets and he's got a bunch of other people donating it into a fund which will probably hand out a couple of billion dollars a year. Now, that's just in the UK. The US government has a massive overseas aid budget and stuff like that. Don't lionize billionaires because they gave away some petty cash to make themselves feel good.
Leo: I agree. I agree.
Ashley: But they're also not making that income every year. The thing is, yea, Bill Gates is not giving away $12-billion dollars of his fortune a year, but that's also because he's not making $87-billion dollars a year.
Devindra: Yea, this is a weird argument to be having because I think you can both—
Leo: We need both. We need both.
Ashley: Yea, we need both.
Leo: It's clear that private charitable contributions will never make up what we would lose if the government stopped doing this.
Leo: And that by the way, when we say government, government is us. What we do as a society with our tax dollars in aggregate is a lot more valuable then what a handful of super rich do. That's the corkscrew.
Greg: Yes, I'm not claiming that what he's doing is not valued. In fact, he's doing very, very smart, brining very good business ethics to how he spends that money whereas a lot of governments do not wisely give away aid money. I'll absolutely agree with that. But let's not lionize how much he gives away because it's actually a pittance.
Leo: No, I agree. But. But.
Devindra: It's more about how the give it away, too.
Leo: What do we do? What do we do? So, you want this data safety net. Is that going to happen?
Greg: I think what we have to iterate our way forward. We don't even know what that would look like. I mean, we haven't even gotten to the end of machine learning our process to know how we—
Leo: It's not going to happen (laughing). I can tell you.
Devindra: It also starts with smart people, smarter people in government and kind of in power who understand how this stuff works.
Leo: And that is going to happen but it's going to be Mark Zuckerberg.
Ashley: Unless it's built in the way of a New Deal-esque thing where it is literally set up as a government based—but then your data is international.
Leo: I would propose—yes.
Ashley: Your data's global so how do you fix that?
Leo: I propose that if you really care about this, you're going to become a survivalist, a data survivalist. And the rest of us are just going to go along with our lives and we don't know—
Ashley: And get fashion advice.
Devindra: Have you guys seen or read The Circle? It is—it's not a very good book and it's a pretty terrible movie, but the—
Leo: (Laughing) Well, great. Thanks for the recommendation. I can't wait.
Ashley: I'm going to buy it right now.
Devindra: One of the only I think interesting idea in it is the way we're handling our privacy and our data and how we're kind of just opening ourselves up to potential disaster.
Leo: It's Dave Egger's novel which is kind of an amalgam of Google and Facebook. I felt like it was very Facebooky and then there's some Googley stuff in it, too.
Devindra: There is a lot of stuff. Well, the novel itself was kind of a mess but that movie, guys, do not see that movie.
Leo: Do not see it? That bad?
Devindra: It is terrible. It is that bad.
Leo: I take it we'll be reviewing that on Slash Film sometime soon?
Devindra: Yea, we're going to be doing that next week, the week after this one.
Leo: That's Devindra's great film podcast. I sometimes wish I could just stop talking about technology and talk about culture, films, books.
Devindra: If only you had a network, Leo.
Ashley: That's a podcast we can startup, Leo. We can start that one.
Leo: Just stop this technology stuff, this end stage capitalism and instead talk about the fun stuff. Because we should all be singing as the ship goes down (laughing).
Devindra: In the future, we're all just going to be like little SDK silhouettes making fun of pop culture and reviews and everything. That's where were headed.
Leo: Hey, you guys are great. I want to just keep going but we really shouldn't because I know you're probably starving.
Ashley: Yea, after that Blue Apron ad I've got to go eat.
Leo: And it's kind of the middle of the night for Greg. I don't know how late it is, 2:00 in the morning almost?
Greg: 2:00 in the morning, yea.
Leo: Oh my gosh. Thank you for staying up late with us, Greg. It's always a pleasure.
Greg: Most fun you can have sitting down.
Leo: Well, no, I wouldn't agree with that but-
Leo: I love a good Orange is the New Black but—by the way, you can see that now, all the first 10 episodes available on bit torrent. Thanks to the Dark Overlord.
Ashley: Yea, the Dark Overlord's like, "Thanks to our sponsor, Netflix."
Greg: Good work, Overlord.
Ashley: If you're interested in getting the last 3 episodes, subscribe. It's only $9.99 a month.
Leo: Ashley, what are you doing at CNET? Tell us, give us a plug.
Ashley: I just did a piece on the—DR1 has a micro-series and they do micro drone racing inside a TV and movie set. So, they rebuilt some of the sets from Firefly and they did some racing in there. And that was really cool.
Leo: Oh, that sounds like fun.
Ashley: It was awesome. And sort of the idea in this and something I really like, because drone racing is expensive. Especially DLR drone racing is really pricey. And so they kind of want to bring a pro racing series that kids or teenagers or adults who are not really sure that they want to race, they can sort of say, "Hey, this isn't that expensive to get into. We ought to try it. I'll try it out. I'll see if I'm any good at this." And so, I really like that they're doing this. It's really neat. And of course, like the backdrop could not be freaking cooler.
Leo: How fun.
Ashley: I got to go onto the set and it was just such a moment to be able to see a ship from the TV show Firefly. It was really cool.
Leo: One of my all-time favorite TV shows. Wouldn't that be fun? So, they kept the sets around?
Ashley: So, I think they said there was some rebuilding that had to be done but a couple of the set pieces were still there so they kind of put everything together, re-lit it up and made it look cinematic and they got some really great footage out of it. So, it was really fun to be able to kind of go check that out. And they also did, I think they did with Josh Hutcherson and Sarah Wayne Callies, I forget what the name of the show is. Colony. They went to, they did some drone racing through that set, too. So, it's not just debunked television sets. They're also going to shows where they're actually being produced which was pretty neat.
Leo: How fun is that? CNET.com.
Ashley: Yea. I'm also hosting a comic book show. You talked about hosting pop culture stuff, I'm doing a comic book show now on Nerdist Alpha called Alpha Comic Book Club where we—it's like a book club but with comic books. And it's really fun. So, we do it ever y Monday night live.
Leo: Now, come on. Ashley, did you read comic books when you were little?
Ashley: I didn't. I played video games.
Leo: Yea, me too.
Ashley: My NES was my best friend.
Leo: We didn't have video games but I banged rocks together. It was really fun.
Ashley: It was exciting, I'm sure. Did you get the old hoop and stick, Leo?
Leo: Yea. Hoop and stick. I loved my hoop and stick. And the little cup where you try to get the ball into it. Loved that.
Ashley: That's a good one.
Greg: Hours of fun. Hours of fun.
Ashley: But I'm like kind of like the baby comic book reader out of the three of us and there's three hosts. It's Hector Navarro and Damion Poitier which both long time comic book readers. So, they're excited to sort of see my perspective as a fresh reader to a lot of series.
Ashley: Tomorrow we're talking about Sandman which we just read the first 8 issues.
Leo: I have—
Ashley: It's so freaking good.
Leo: I'm a Neil Gaiman, I'm a huge, I mean he's the greatest, but—
Ashley: He's brilliant.
Leo: I bought and bought the leathern bound collection of The Sandman.
Ashley: It's so good.
Leo: It's four volumes, three or four volumes.
Ashley: It's so good. It's so beautiful and the illustrations and the writing and the story. It's just really great. And so, we're talking about it. I'll save all the rest of it for the show tomorrow but it's on Nerdist Alpha so I get to do a little comic book show on the side, too.
Leo: I always feel guilty when—because we have a lot of comic book fans on and I never, I was never a big—I read comic books as a kid but I wasn't like a huge—
Ashley: You weren't a collector.
Leo: I wasn't into it. I actually was like I'd go to the drugstore and I would buy a 20-cent comic book and I'd read it and I'd throw it away. That's it. That was my interest in comic books. Devindra Hardawar, he does Slash Film and many other things, but of course he's senior editor at Engadget. Tell us about Slash Film. Give us a plug
Devindra: Yea. What we're doing now? I don't know. We review a movie every week at Slash Film for the Slash Film Cast podcast. Yea, so looking forward to that. A lot of good stuff coming up too. Can't wait to talk about Guardians of the Galaxy 2 which is very, very good.
Leo: You survived the doldrums. You know, January, February, March are usually pretty bad for film.
Devindra: It was actually a pretty—we had a good run.
Leo: Usually they bury movies in the first quarter but there was some good stuff. Get Out, did you like Get Out? I didn't see that.
Devindra: I loved Get Out and there's a lot of good TV starting up too, right? The Neil Gaiman thing, The American God.
Ashley: The American God.
Devindra: In a couple minutes.
Leo: Is it tonight? Oh, I got to—bye, everybody. Thanks for joining us. Go watch TV.
Devindra: There's just a lot of good stuff to watch and we talk about all of that.
Leo: I've been watching Handmaid's Tale. Wow, is that grim. That is depressing.
Ashley: Very dark.
Devindra: It is rough, yea.
Devindra: Devindra does Slash Film Cast with my old Tomorrow Daily co-host, Jeff Cannata.
Leo: Oh, nice. Jeff's great.
Devindra: Jeff is great.
Leo: I love Jeff.
Ashley: Jeff's a delight.
Leo: Isn't he sweet?
Ashley: Just a good human through and through.
Leo: I generally loathe anybody who worked for G4 but he's ok (laughing).
Ashley: I worked for G4.
Leo: Ok, now that makes two people I can—and Karston, you worked for G4? Oh, crap. I'm surrounded.
Devindra: Sorry, Leo.
Ashley: Yea, everybody worked for G4.
Leo: Devindra, you worked for G4?
Devindra: I wish. I watched a lot.
Leo: You wish? Aw.
Devindra: It's nice to be here, Leo. It's almost like we're on Tech TV, creating all that good stuff.
Leo: Yea, think of that. Think of it that way. Yea, give my regards to Jeff actually. I love Jeff. Thank you everybody for joining us. We do TWiT every Sunday evening around 3:00 PM Pacific, 6:00 PM Eastern, 2200 UTC late at night in the UK. But that's ok. Stay up late with us. You can watch live and join us in the chatroom at IRC.twit.tv. If you can't be here live, thought, don't worry. We always—really, what we're doing here is making a podcast. It's on demand and all you have to do is go to TWiT.tv to get on demand versions of all of our shows, audio and video. We do hi-def video as well. And you can, you know, of course subscribe. Stream it anywhere but subscribe. Do subscribe. In fact, if you've got a favorite pod catcher, Overcast, Pocket Casts, Podcast Republic, Stitcher, Slacker, tune-in. Whatever you use to subscribe, please subscribe because I don't think you want to miss an episode. This is something—you'll be glad. Some Monday you'll be stuck in traffic and you'll go, "Oh. I've got a TWiT to listen to." So, please do that for me, will you? Thanks for being here! We'll see you next time. Another TWiT is in the can. Bye-bye.