The Talk Show

295: ‘Signing Up to Take Some Vitamins’, With Peter Kafka


00:00:00   Peter Kafka, it's good to have you on my show.

00:00:03   I did your show, God, that was years ago now

00:00:05   at this point, isn't it?

00:00:06   - It was years ago and then we had a crossover

00:00:09   and so I think this is our third podcast conversation.

00:00:12   Thanks for having me, Jon.

00:00:13   - It's a pleasure.

00:00:14   Before we get in to all of the streaming,

00:00:20   Michigan-ness, we can just recap yesterday.

00:00:24   We're recording on Wednesday.

00:00:26   Yesterday Apple had their remote virtual,

00:00:29   however you want to describe it, Time Flies event.

00:00:32   I have presumed that you watched.

00:00:35   - I have watched because I'm not in the business

00:00:40   of paying a lot of attention to their watches and iPads,

00:00:43   but when it came time to talk about content bundles,

00:00:46   I perked up a little bit.

00:00:47   - The funny part about that is it's an hour event,

00:00:51   nice and tight.

00:00:52   They only announced really three things,

00:00:55   new watches, new iPads, and a streaming bundle.

00:00:59   The streaming bundle, I actually double checked.

00:01:02   My notes were under two minutes

00:01:04   and then I watched the video again.

00:01:06   It was literally under two minutes.

00:01:08   - Yeah, it's not, I mean, it's Apple

00:01:12   and dutifully people come out saying

00:01:15   this is a game changer, et cetera,

00:01:17   'cause you have to, I think still reflexively

00:01:19   when Apple has an event, you have to justify

00:01:21   the time spent paying attention to it.

00:01:23   And it's much less now, right?

00:01:25   You don't have to fly anywhere.

00:01:26   It's just an hour long webinar, so it's easier to go,

00:01:28   yeah, they got some new stuff.

00:01:31   But yeah, I thought Apple was not overselling

00:01:33   the importance of this bundle.

00:01:35   - No, but well, we'll get into it then.

00:01:38   But what do you, are you an Apple Watch wearer?

00:01:42   - I am, but I am not, I'm kind of reluctant about it.

00:01:48   I was just taking it off my wrist to tell you

00:01:50   what model it was, 'cause I pay that little attention.

00:01:52   It's a Series 3.

00:01:54   And I won't say I was shocked when they came out

00:01:56   with a new line, including like the lower end one

00:01:58   that started at what, was it 300 bucks?

00:02:00   - 279, but it's like-- - What was the S?

00:02:02   The S, for the SE?

00:02:03   That's the cheap model?

00:02:05   - Well, it's the cheap new model, right?

00:02:09   It's brand new product, and it's sort of best thought of

00:02:12   as last year's Series 5, but without like the ECG.

00:02:17   I always wanna say EKG, but ECG sensor.

00:02:21   - It's bananas, it's to me.

00:02:25   I mean, I know they sell well.

00:02:26   And people will ask me about my watch periodically.

00:02:28   I say, hey, Apple Watch, how do you like it?

00:02:30   And should I get the wireless version?

00:02:31   And I'll say, it's an odometer, and I wear it.

00:02:35   And when I don't wear it, I feel bad that I didn't wear it,

00:02:38   but that's the entire utility.

00:02:40   So the idea of like selling a super premium version of it

00:02:43   is bananas to me, but I'm sure Apple knows.

00:02:46   Well, no, I don't know that Apple knows what they're doing,

00:02:48   but presumably there is a market for that.

00:02:50   - I think that people, I think your take is very typical,

00:02:53   and you're obviously juiced in more to this

00:02:55   than the average person out there.

00:02:58   For most people, getting a $300 digital watch

00:03:03   is a pretty expensive digital watch.

00:03:05   And that is what it is, right?

00:03:07   It is, I mean, we can get into nerd out,

00:03:11   and you're running apps, and you're doing all this stuff,

00:03:13   but it's a digital watch.

00:03:16   And 300 bucks is more than most people spend on a watch.

00:03:18   And if they do get one, they're gonna wear it forever,

00:03:22   by some definition of forever,

00:03:24   which is less than a watch, a super watch,

00:03:29   mechanical watch nerd's definition of forever,

00:03:31   which is like decades,

00:03:33   but way, way more than like a tech person would think,

00:03:36   hey, that's not the latest version.

00:03:39   - Yeah, the last time I spent a lot of time thinking about

00:03:43   is when they introduced wireless,

00:03:45   because I thought that was pretty interesting,

00:03:47   and we finally got the sort of Dick Tracy land,

00:03:49   and what if this thing would allow me

00:03:51   to not take my phone with me on verit, too,

00:03:55   when I went out, and I borrowed a watch from Apple

00:03:58   using that premise, and Apple, to their credit,

00:04:01   pretty much said, the thing you wanna do is not gonna work.

00:04:04   You cannot use this as a phone substitute.

00:04:09   And they're right, but when you tell people that,

00:04:12   they get ash in the face.

00:04:14   They're like, well, what's the point of that?

00:04:16   I'm like, I don't know.

00:04:17   - Yeah, I wonder, too.

00:04:19   And I do have it, I have the,

00:04:22   I bought a new one for myself last year,

00:04:24   'cause I hadn't had one in a couple years,

00:04:25   and I did get the cellular option,

00:04:28   and I just justify it all as, well,

00:04:31   I write Daring Fireball, I should have the cellular thing.

00:04:33   - Yeah, exactly. - And I can,

00:04:36   I pass off my whole, not singular, Verizon bill,

00:04:40   as a tax, it's a business expense

00:04:42   that I charge $10 a month to put my watch on.

00:04:46   I almost never, ever use the cellular thing on my phone,

00:04:50   or on my watch.

00:04:51   But I will say this, and I'm not saying it's worth it,

00:04:55   'cause I think Verizon charges me 10 bucks a month for it.

00:04:58   It's at least-- - That sounds right, yeah.

00:05:00   - I will say this, there was one time,

00:05:03   and I don't remember, I'm not trying to obfuscate

00:05:06   a personal detail, I forget what it was,

00:05:08   but at some point, a couple months ago,

00:05:11   but I know it was during the quarantine,

00:05:14   'cause I've sort of got quarantine time locked in my head,

00:05:17   there was a minor iOS update, just 13.1 points, whatever,

00:05:22   and I'm like, okay, I'll update my phone.

00:05:26   And it was like noon, and I got,

00:05:30   while my phone was updating, I got a call

00:05:32   I had been waiting for, I forget what it was,

00:05:34   but it was a fairly important call

00:05:36   from somebody who I was waiting to call me,

00:05:38   and so I was really, and my, it went off on my wrist,

00:05:43   and I was like, whoa, what's going on?

00:05:44   And I look, and my phone has got that Apple logo

00:05:47   that it takes five, you don't even know

00:05:49   how long it's gonna take till your phone's updated.

00:05:51   I'm like, oh, I can answer on my wrist,

00:05:53   and I took the entire important phone call on my watch

00:05:57   while my phone was incapacitated,

00:06:02   and I was like, I don't know if this is worth $120 a year,

00:06:05   but almost.

00:06:06   - It works remarkably well as a speakerphone,

00:06:09   I will say that, it's way better

00:06:11   than you would expect that to work.

00:06:12   What I wanted was something that allowed me

00:06:14   to go to my kid's soccer game,

00:06:16   and if I needed to see an email or see a text

00:06:19   or reply to one, that I could do that

00:06:20   and not bring my phone, and then thus,

00:06:22   I wouldn't be looking at my phone,

00:06:24   or I'd be more in tune to my kids,

00:06:26   and even as you say this out loud,

00:06:27   you're saying, wait, you're gonna spend several hundred

00:06:29   dollars plus $10 a month so you could

00:06:34   not look at your phone, why don't you just not look

00:06:36   at your phone, and of course, if you're listening

00:06:38   to this podcast, you know that's very hard,

00:06:39   and it sounds pathetic to say that,

00:06:41   but it doesn't allow you to do that.

00:06:43   Mail won't work, text will kind of work

00:06:45   if it's iMessage, but not, you know,

00:06:47   it doesn't, like the Apple people said,

00:06:49   it doesn't do what you want it to do in that case.

00:06:52   - No, it definitely does not.

00:06:53   The other thing is, and this is the interesting thing

00:07:00   that they announced yesterday, was this sort of

00:07:03   cellular watches for your young children

00:07:08   and for your elderly, confused parents.

00:07:12   And I don't know, it's like I've got one kid

00:07:18   and now he's in 11th grade, so I'm out of that,

00:07:23   and you know, he's got a phone.

00:07:26   If you don't wanna buy a phone for your kid,

00:07:31   which I get, and I totally, you know,

00:07:33   I'm not telling anybody how to parent their kids

00:07:34   and what age should a kid get their own cell phone

00:07:37   is a huge question, it's like the parental question,

00:07:40   one of the big parental questions of our generation.

00:07:43   But if you're on the fence about it,

00:07:47   whether it's expense-wise or whatever else,

00:07:50   are you gonna buy your kid a $350 or $400 watch?

00:07:53   - Yeah, that baffled me as well.

00:07:56   I thought the exact same thing,

00:07:57   which is, my kids have a tracking device,

00:07:59   it's the phone I bought for them.

00:08:01   Or the phone, and buying that phone's a big deal,

00:08:05   and I bought a used phone from Amazon, Amazon renewed,

00:08:08   now I got battery problems and all that.

00:08:09   But yeah, it's the tracking device is the phone.

00:08:13   We don't need a second tracking device.

00:08:14   - And it's like if you're the kid who's like 11 or 12,

00:08:18   and your parents are willing to get you a $400 thing

00:08:22   to add to the family's cell phone plan,

00:08:25   don't you want the iPhone SE?

00:08:27   Like, I want the phone, I want the thing I can play with

00:08:30   and take pictures with.

00:08:31   - I kind of assume that everyone in that market

00:08:33   has the phone too.

00:08:35   That's what I imagine in Apple.

00:08:37   - Yeah, but they really sold that feature as like your kid.

00:08:41   They didn't, and it's weird, 'cause it's like Apple can't

00:08:44   say if you don't wanna get your kid a phone,

00:08:46   because they're Apple, they want everybody to have a phone.

00:08:50   So you had to, it was a weird sort of, not doublespeak,

00:08:55   what's the opposite of doublespeak,

00:08:56   where you don't mention something?

00:08:58   Like a conspicuous--

00:08:59   - You walk all the way up to it.

00:09:02   - The version of that that I really noticed was the

00:09:05   blood oxygen reader, which I never would have thought

00:09:09   prior to March of this year, but when you talk about

00:09:12   blood oxygen levels, and I'm like, oh, that's a COVID

00:09:15   detector, but of course they can't say that,

00:09:18   'cause it's not.

00:09:19   - Yeah, and--

00:09:19   - And you have all kinds of liability problems,

00:09:21   but I thought, I mean, I don't think there's anyone

00:09:23   who saw that presentation and wasn't thinking about,

00:09:26   will this tell me if I'm getting, if I'm sick

00:09:28   or getting sick?

00:09:29   And they conspicuously did not say that out loud.

00:09:32   - Yeah, and it's, the other factor is that it's partially

00:09:35   coincidental, because clearly these sort of sensors

00:09:38   are years in the making, both in terms of just that

00:09:42   the components technically take years, and then with these

00:09:45   watch things, they take even longer, I think,

00:09:48   than most of Apple's technology, 'cause they have to get

00:09:50   FDA approval, and then the FDA equivalents around the world,

00:09:54   you know, it's a regulatory nightmare.

00:09:57   - Right, it's not like one of these drop shipping people

00:10:00   who came out with masks, you know, in the middle of March,

00:10:03   and said, this will help you, this will protect you.

00:10:07   They weren't, it wasn't that, but it was still very clear

00:10:09   that this was an application that you could use it for,

00:10:12   but they weren't gonna suggest that out loud.

00:10:13   - Right, and it, there's just, but let's,

00:10:18   exactly what you said, nobody's listening to this

00:10:20   and not thinking that, because other than medical

00:10:24   professionals, I don't know of anybody who hasn't heard

00:10:27   blood oxygen as a term and thought about it

00:10:32   more than in the last six months.

00:10:35   I mean, I don't, I mean, I guess I've heard of it

00:10:37   beforehand, but I mean, 99% of the times it's ever come up

00:10:40   in my awareness is COVID.

00:10:43   - Yep, yep.

00:10:45   - So it was in, you know, they have these off the record

00:10:49   briefings for the media after events, and they're,

00:10:53   you know, they're getting better at 'em, it was, you know,

00:10:55   and it's off the record, so I can't really spill

00:10:57   the details of it, but people did ask, you know,

00:11:01   and it's like they can't say it, it's, you know,

00:11:03   it's more than the typical Apple not wanting to say,

00:11:06   get knocked off message, they just legally can't talk

00:11:10   about it in that context.

00:11:11   - Yes, that's right, yeah.

00:11:13   As by the way, they should, they should be very reticent

00:11:18   to make medical claims, which is, I mean, again,

00:11:22   and I don't follow the watch stuff carefully,

00:11:23   but I do know as a watch user that, you know,

00:11:26   when I'm sitting on the subway and I'm traveling

00:11:29   under the East River and all of a sudden the watch tells me

00:11:31   that I passed my movement goal for the day,

00:11:34   or my standing goal for the day, I get a chuckle,

00:11:37   and I go, ah, you know, it's harmless,

00:11:38   it doesn't really matter to me one way or the other,

00:11:40   but I do think about sort of people who are relying

00:11:44   on these devices for actual medical information,

00:11:46   and because, you know, Apple half-positions this now

00:11:49   as a, they no longer say it's, you know, for work, right,

00:11:51   it's for health and fitness, and the fitness part

00:11:55   I sort of get, and there's people who really,

00:11:57   it really does matter to them how many miles they clock

00:12:00   and how many minutes, but for most people, I think,

00:12:02   are probably more in my group, right, it's casual,

00:12:05   but the medical stuff really unnerved,

00:12:07   would unnerve me if I was Apple and had people relying

00:12:11   on me for medical information.

00:12:13   Yeah, I wouldn't, and I'll defer to actual experts on that,

00:12:18   but I do think about that a lot, 'cause it's clearly

00:12:20   a device that has a limit on its accuracy,

00:12:23   which is fine in most cases.

00:12:24   - And I kind of feel like, you know, he's such a

00:12:28   bizarro second version of Tim Cook,

00:12:32   but that Jeff Williams being in charge of the watch

00:12:35   is sort of unsurprising, like he's clearly a bit

00:12:39   of a cipher personality-wise, but he definitely seems

00:12:44   like the, you know, the old carpenter saying,

00:12:49   measure twice, cut once, Tim Cook and Jeff Williams

00:12:52   seem like measure 100 times, cut once type of people.

00:12:56   - Yeah, they're not freelancing a lot at these things.

00:12:59   - Right, and so on the one hand, they definitely

00:13:00   are clearly incentivized to sell a lot of watches,

00:13:04   but neither of them really feel like, well,

00:13:06   let's cut some corners and make some bold claims

00:13:09   on the medical efficacy of these sensors, you know,

00:13:12   they seem to be doing a pretty good job on that stuff.

00:13:16   - Yeah, yeah, yeah, no, they're not telling you

00:13:17   what's gonna, they're not misleading you.

00:13:20   But on the other hand, they are saying these things

00:13:22   have benefits and these can help you track your health,

00:13:24   and I think there's a, for me, there's an uncomfortable

00:13:27   middle ground there.

00:13:28   - The bigger one to me, and they spent less time on it,

00:13:31   like they showed kids, but the bigger one to me

00:13:34   is the question of getting it for your, quote, older parents.

00:13:39   That seems to me the, and I forget if it was a year ago

00:13:44   or two years ago when they added fall detection,

00:13:47   and they keep showing people on mountain bikes

00:13:50   and making jokes about a guy yesterday getting chased

00:13:53   off a cliff by a bear, and that's real.

00:13:55   And I know in California, the mountain biking thing is real

00:13:58   and the mountains are, you know, real mountains,

00:14:01   not our East Coast mountains.

00:14:03   But they--

00:14:06   - They also have bears.

00:14:06   - Yeah. (laughs)

00:14:09   But they also danced around that when they introduced it too

00:14:12   where they did show like a grandmother type in a kitchen

00:14:17   on a stool, and then there was a little, you know,

00:14:19   she was like watching her grandkid who was running in,

00:14:22   and then they definitely cut away,

00:14:24   and then all of the actual simulations of an adult

00:14:28   falling in the home weren't photographed,

00:14:31   they were pictograms, you know, like the Olympic style

00:14:35   stick figures of somebody.

00:14:37   And I remember talking to people at Apple about it,

00:14:40   like that was pretty, and they were like, yeah,

00:14:42   we were, you know, we really had to be careful

00:14:44   'cause we wanted people to know that it is good for this,

00:14:46   and we actually designed it with like older people in mind

00:14:50   so that when they, you know, that their type of falls

00:14:53   are going to be less violent,

00:14:56   and we really wanna be in tune to it,

00:14:58   but we can't show it, you know, it's, you know,

00:15:01   it's grotesque, you can't just show an old person

00:15:04   falling off a stool in an Apple event, it's, it--

00:15:07   - Well, you're not in an Apple event,

00:15:09   but it has been done before, but here's my question,

00:15:12   I think we're roughly the same age,

00:15:13   is the clapper and iPhone and I can't get up,

00:15:16   is that the same thing?

00:15:18   Okay, yeah, that's what I thought.

00:15:20   - No, I think I've fallen and I can't get up

00:15:23   was the medic alert.

00:15:24   Remember that?

00:15:26   It was a-- - Okay, okay, yes.

00:15:28   You're right, but that did show the older people

00:15:31   on the ground yelling for help,

00:15:33   and it's, I would say it's burned indelibly in our minds,

00:15:36   but of course I just, I'm confused about which brand it was,

00:15:39   but yeah, if you were a certain age

00:15:40   and you watched a certain kind of TV,

00:15:41   you saw a lot of us at.

00:15:42   - Right, and as media junkies, you and I saw all of them.

00:15:45   Right, 'cause what was the other one?

00:15:47   There was another one where the old lady,

00:15:48   there was a burglar outside her window.

00:15:50   Do you remember?

00:15:53   - No, I don't remember that.

00:15:54   I remember the rascal that would take you up the stairs

00:15:57   and then the clapper, and they all seemed to be sort of

00:16:00   aimed at the exact same target market.

00:16:02   - I think it might have been the same product

00:16:04   as the I've fallen and I can't get up, the medic alert,

00:16:06   but it was, in addition to falling,

00:16:09   there was a burglar outside an old lady's window

00:16:13   conveniently on the ground floor,

00:16:15   and he was making faces at her through the window

00:16:19   to show that he was about to come in and, you know, burglars.

00:16:23   - You know, the most alarming passage in time

00:16:25   is when you go from laughing at those ads

00:16:27   that are aimed at old people to gradually getting closer

00:16:30   and closer to the target market.

00:16:31   It's definitely happened to me with pharma stuff.

00:16:33   - Yeah, totally.

00:16:34   - Those pharma ads that run during football or 60 minutes

00:16:37   I never paid any attention to,

00:16:38   and I'm still not really the market for it yet,

00:16:41   but I'm definitely getting closer.

00:16:42   And I keep thinking, all right, you know, one day

00:16:44   I'm gonna pay a lot of attention to that small type.

00:16:47   - Yeah, I think what happens with that, with the sports,

00:16:50   is you run out of, I'm 47, so I've run out of athletes

00:16:55   who are my age, you know, it was, as a Yankees fan,

00:17:00   one of the nice things about being a Yankees fan of my age

00:17:05   is that Derek Jeter and Mariano Rivera had,

00:17:08   in addition to extremely successful careers,

00:17:11   played until they were like 41, 42 years old,

00:17:15   and they were roughly my age, and so I still had guys,

00:17:18   my guys, my age, you know, playing professional sports.

00:17:22   Now I'm 47, nobody's left, you know, Tom Brady is,

00:17:25   I don't know, a remarkable 43

00:17:26   and still playing an NFL quarterback, but--

00:17:29   - And perhaps washed up, yeah.

00:17:31   Yeah, kickers, I think, is our last chance

00:17:34   to find someone, Morton Anderson or someone like,

00:17:36   oh my God, we're so old.

00:17:38   - And every once in a while there'd be a baseball pitcher

00:17:41   who could pitch until his 40s

00:17:42   'cause he was a knuckleball thrower or something like that.

00:17:45   - Phil Nicro, I remember being very old, yeah, yeah.

00:17:48   But yeah, this has been Old Timey Radio

00:17:50   brought to you by Jimmy Jeter.

00:17:51   - Well, but what happens is you go from having the last gasp

00:17:56   of athletes your age to suddenly watching the commercials

00:18:01   between there, and it's clearly a product

00:18:03   for an older gentleman, and you're like, wait a minute,

00:18:06   that actor looks younger than me.

00:18:10   Whatever the medical problem that's ailing him

00:18:14   that you tend to think of as being a generation older

00:18:17   than you, all of a sudden I'm looking at the casting

00:18:19   and I'm like, well, he's a professional actor,

00:18:22   but damn, he looks--

00:18:24   - A handsome fellow, yes.

00:18:26   Yeah, I got an Instagram ad inviting me

00:18:28   to join a COVID vaccine test, I think it was Pfizer,

00:18:32   and it's clearly one of those things where they are A/B

00:18:35   testing different images and targeting different people,

00:18:37   and the gentleman in my Instagram ad was,

00:18:41   I'm guessing at least 10 years older than me,

00:18:43   but it was gnarly to realize that they had pegged me

00:18:46   as someone in that general bracket who might be interested

00:18:50   in getting COVID testing through an Instagram ad,

00:18:52   which is a whole other story.

00:18:54   - Instagram, people ask me, I keep saying this,

00:18:56   people ask me like, hey, you're a Facebook critic,

00:18:58   why do you still have Instagram?

00:19:00   And it's like, partially because I've got friends

00:19:04   on Instagram and I'm hooked, I get it,

00:19:07   that I do like all the other craziness,

00:19:10   but professionally, I'm obsessed

00:19:13   with the accuracy of their ads.

00:19:15   It is--

00:19:17   - Yeah, no, I just went through this with someone who said,

00:19:19   I'm quitting Facebook because of this latest outrage,

00:19:22   and I'm going, meet me over on Instagram,

00:19:25   and I gently pointed out, and she knew,

00:19:27   she knew that they were owned by the same thing.

00:19:29   She said, I know, I just can't tolerate Facebook,

00:19:32   and this is the compromise I'm making in my head,

00:19:34   but I can't give up Instagram.

00:19:36   - The bizarre accuracy of their ads

00:19:38   is like passing a street performer

00:19:41   who's good at sleight of hand magic,

00:19:43   and it's like, sometimes you see the same trick,

00:19:47   it's like, okay, you got me, I like old watches,

00:19:50   so yeah, yeah, here's another vintage,

00:19:52   either vintage-style watch or something, you know, all right.

00:19:56   But then they'll show me an ad for something else,

00:19:58   and I'm like, wait, how did you know?

00:20:00   - The savviest people I know, people who are in tech,

00:20:05   people who write about tech will continue to tell me

00:20:07   that Instagram or Facebook must be listening to them,

00:20:10   and that's how they do the ad targeting,

00:20:11   and then you explain it, that can't be possible,

00:20:14   and they refuse to believe you 'cause it's too eerie.

00:20:18   And the sad reality, right, is a lot of,

00:20:20   we're much less interesting than we think we are,

00:20:23   and there's much bigger pools of people who look like

00:20:25   and act like us than we realize or want to observe.

00:20:27   - Yeah, I'm not a hobbyist sleight of hand magician,

00:20:32   but I am a big devotee of just observing it,

00:20:37   and that's exactly how sleight of hand magic works

00:20:40   at a very macro level.

00:20:42   Everybody's guess, well, they must be blank,

00:20:44   and that's never it, right,

00:20:46   that's never the explanation for the trick.

00:20:48   But if you ever do get the explanation for a trick,

00:20:51   it is always so mundane.

00:20:53   It is like, what, really?

00:20:54   - Yeah. - That's how you do that?

00:20:55   - Yeah. - The--

00:20:57   - Yeah, that's it. - Yeah, you just scoop

00:20:58   the coin into your lap, that's it, you know.

00:21:00   (laughing)

00:21:02   And the, oh no, they must be blank is like the equivalent

00:21:06   of they must be listening to us,

00:21:08   and it's like, nope, that's not it.

00:21:11   - Are you a Ricky J fan? - Oh, the biggest.

00:21:13   - Okay, I figured, I figured, I love it too.

00:21:17   Great, and a great New Yorker profile of him

00:21:19   from years ago, if you don't know that.

00:21:20   - Oh, I have, I've read all of it.

00:21:22   When he died, I went back and watched all of it,

00:21:27   and there's like YouTubes that are like,

00:21:29   I don't even know what's under 480p,

00:21:32   but some of his old VHS stuff is really, really low res,

00:21:37   and even there, it's like amazing.

00:21:40   I love Ricky J.

00:21:42   Also, what a great character. - Put him in, put him in.

00:21:44   So great, so he'll go in your show notes.

00:21:46   - Yeah. - And I feel like

00:21:47   I've contributed, good. - Yeah.

00:21:49   Here, let me take a break and thank our first sponsor

00:21:53   of the show, our, my good friends at Linode, L-I-N-O-D-E.

00:21:56   I used to pronounce them Li-node,

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00:22:03   Could not be happier with them.

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00:23:58   So I've got the new watch that came this morning,

00:24:03   which was kind of an unbelievable story.

00:24:06   So I don't know, you didn't follow real closely.

00:24:09   You know, they've got these new,

00:24:11   they call them solo loop bands.

00:24:14   So they're--

00:24:15   - Yeah, it looked like the loop

00:24:17   that I have on my Series 3.

00:24:19   There's the bass one. - At a glance,

00:24:20   it looks exactly like the Apple Watch straps

00:24:23   that most people have, the rubber ones.

00:24:24   But there's no, there is no clasp.

00:24:27   They just stretch. - Right.

00:24:29   - And they are very--

00:24:30   - And is it one size fits all,

00:24:32   and then you sort of stretch into it?

00:24:33   - Nope, it is, this is the part

00:24:35   that I cannot stop thinking about,

00:24:37   and I don't know what to do.

00:24:38   'Cause again, it seems like I'm the victim

00:24:42   of a sleight of hand magic trick.

00:24:44   They have 12 sizes.

00:24:45   Nine, so there's nine each.

00:24:48   You know how there's like the larger watch

00:24:50   and the smaller watch.

00:24:51   Roughly men's, women's, but I know a lot of men

00:24:54   who have the 40 millimeter one.

00:24:56   For each one, there's nine.

00:24:58   So like sizes one through nine

00:25:00   are for the 40 millimeter smaller watches,

00:25:02   and sizes four through 12 are for the 44 millimeter watches.

00:25:07   And again, my take on this is that it's like buying shoes.

00:25:13   It is meant for an in-person retail experience.

00:25:16   Go into the store, they have a whole bunch.

00:25:18   You find the one you like, fit this is great,

00:25:21   and then you walk out.

00:25:22   You can't do that in the COVID era.

00:25:24   So they have this thing you print out, a PDF.

00:25:26   You print it out, cut it out like you're in kindergarten.

00:25:28   - You wrap it around your wrist?

00:25:30   - Yeah, and it, but, and so I do this last night,

00:25:34   and I didn't publish my post

00:25:35   until after midnight on the East Coast.

00:25:37   And I know that's not where they got it,

00:25:40   because the package arrived at my house this morning

00:25:43   at 8 a.m.

00:25:46   I took mine out, and mine is a size seven,

00:25:50   according to their scale, one to 12,

00:25:53   and closer to an eight than to a six,

00:25:57   but definitely in the seven,

00:25:58   and they're only about a centimeter difference,

00:26:01   maybe even less than a centimeter.

00:26:02   They're pretty fine-grained.

00:26:04   They sent me two straps, a seven and an eight.

00:26:07   How did they do this?

00:26:11   Actually, they sent me four.

00:26:13   They sent me the rubber one and the braided yarn one,

00:26:15   but each of those they sent in the size seven and eight.

00:26:18   And I wrote to Apple PR.

00:26:21   I was like, I'm blown away by this.

00:26:23   How did you know?

00:26:24   And they were like, that's the magic

00:26:26   of the Apple Watch team.

00:26:28   And I'm like, that's not an answer.

00:26:30   Like, they've got, I think it's like a carnival,

00:26:33   you know, like guess your weight or guess your age.

00:26:36   They have somebody.

00:26:37   - How much variance can there be in wrist size?

00:26:40   You can be very skinny or very heavy, I guess,

00:26:43   and then everyone else is kinda in the middle, right?

00:26:45   - Well, it's, but think about like the regular strap

00:26:49   with the one you have with the pins, right?

00:26:52   It's effectively like guessing exactly

00:26:54   which pin size you take, you know,

00:26:57   which hole your pin goes through.

00:26:59   And so they sent me two, you know,

00:27:00   but it's out of all those holes in your straps,

00:27:04   they got me the exact right size.

00:27:07   It's unbelievable.

00:27:08   - Yeah, I bet you most people have the same hole

00:27:11   on their strap too.

00:27:13   - Maybe, I mean--

00:27:14   - Is my guess.

00:27:15   - You have to--

00:27:15   - Is in keeping with the carnival trick.

00:27:17   Like there's actually much less variance than you think.

00:27:19   - Yeah, so what I need to do after we record

00:27:21   is I gotta ping a couple of my friends in the racket,

00:27:24   you know, like I'll ping like Joanna, Stern,

00:27:27   and maybe Nely, who obviously have very different wrists

00:27:31   and see if they got this, but they must, you know,

00:27:34   they, I'm sure they didn't send the same size to everybody,

00:27:37   but you know, did they guess that Nely needed a thicker one?

00:27:40   I don't know, but whoever's doing the carnival wrist size

00:27:43   guessing for the Apple Watch team nailed me spot on.

00:27:47   I love this strap.

00:27:48   It is very, very nice and comfortable.

00:27:50   - Can I ask you something about that?

00:27:53   Because like I said, I do wear the watch,

00:27:55   and I have the, at one point I went out

00:27:57   and got the fancier straps and would take the,

00:27:59   put 'em on and off if I was exercising,

00:28:01   and then I realized I'm just gonna keep the one on.

00:28:03   And that one, I don't wanna gross anybody out,

00:28:06   but it gets a little gamey over time,

00:28:08   and I have to sort of wash it down,

00:28:10   and if I'm exercising with it, and I,

00:28:12   periodically I'm like, oh yeah,

00:28:13   that thing needs a little wipe.

00:28:15   How does that factor into a thing that you,

00:28:20   I guess it's the same thing, right?

00:28:22   It's a strap is a strap, and whether it's got a pin

00:28:25   or a stretchy thing, it shouldn't matter.

00:28:27   I was thinking about that as they talked about the one band,

00:28:30   it's harder to move.

00:28:31   - Yeah, well, it still slides in and out just as easily.

00:28:34   You know, it's like you don't really disconnect it,

00:28:36   but you know, I think anything rubbery like that,

00:28:39   you're gonna wanna wash with soap and water once in a while.

00:28:42   And that's sort of, as a, again,

00:28:44   not to get into a watch nerd discussion,

00:28:46   but it is sort of the problem with leather watch straps

00:28:49   of all kinds, is they don't last, if you wear one,

00:28:53   if you get like a watch with a leather strap,

00:28:55   it's not gonna last for years.

00:28:57   It just falls apart.

00:28:59   - Yeah, but you want it to sort of have that weathered look.

00:29:01   - Yeah, but eventually it's sort of,

00:29:03   it goes from looking like cool and weathered

00:29:06   to looking like disgusting or maybe having a bit of a smell.

00:29:11   And leather doesn't take to a soap and water

00:29:14   as well as other materials.

00:29:16   - I'm grossed out, it's my wrist I'm talking about.

00:29:20   - But anyway, it is a very nice strap.

00:29:21   I feel it'll be very popular.

00:29:23   And I will say their cutout system nailed my size perfectly.

00:29:27   The seven is, the one that I thought from the paper cutout

00:29:30   is exactly the most comfortable.

00:29:32   The eight that Apple sent me as like a second best guess

00:29:36   fits, but is a little loose for my taste.

00:29:40   Like, and it feels like maybe somebody

00:29:42   who likes a looser watch would prefer it,

00:29:46   but it's really nice.

00:29:49   And it's definitely lighter.

00:29:50   I use my kitchen scale.

00:29:52   The regular rubber straps, the sport bands, they call them,

00:29:56   are about 25 grams.

00:29:57   This one's only 13 grams, so it's about half the weight.

00:30:01   Feels like nothing on your wrist.

00:30:02   - Can I ask a meta question here for you?

00:30:04   - Of course.

00:30:05   - They had one hour, two, 2.5 announcements to make.

00:30:10   Do you prefer, and they no longer, right,

00:30:14   they can have their announcements

00:30:15   at whatever schedule they want,

00:30:16   and they don't need to bring press out there.

00:30:19   Do you prefer sort of these discrete chunks of announcements

00:30:22   versus sort of one mega announcement,

00:30:23   and here's six different things,

00:30:25   and we're doing it all in one day?

00:30:26   Does it matter to you as a professional Apple observer?

00:30:30   - I prefer the smaller ones, personally.

00:30:32   I would, and over the years, I struggle.

00:30:37   And part of it is my personal nature.

00:30:43   Part of it is what I talked to you about on your show

00:30:46   is the weird sort of semi-unique nature

00:30:50   of my media empire, which is me,

00:30:54   and it makes it harder for me,

00:30:56   but I'm also, personality-wise,

00:30:58   just not as good at covering a shotgun approach.

00:31:02   Here's 12 things, here's my thoughts.

00:31:04   I do much better with one thing to concentrate on,

00:31:07   even if it's not something that's my favorite thing.

00:31:10   - Yeah, that's what I figured,

00:31:12   and again, since there's no travel,

00:31:13   it's not like you have to complain

00:31:14   about getting on a plane in September and October.

00:31:18   - Yeah, and the other problem, too,

00:31:20   and I find dealing with Apple professionally in the media is,

00:31:26   I feel like, in some ways, they're not that atypical,

00:31:31   but they're always very Apple-y,

00:31:33   and the one thing I always say to people,

00:31:35   in all these years that I've been doing this,

00:31:36   I have never once, in my opinion, been lied to by Apple.

00:31:40   They've never said anything that I've thought was a lie,

00:31:43   and I've never really felt like they screwed me

00:31:46   on their response to something.

00:31:48   If they don't wanna answer a question,

00:31:49   they just don't answer it,

00:31:51   or more typically, they give you

00:31:53   a very Apple-y non-answer,

00:31:56   that they acknowledge is a non-answer.

00:31:58   And I miss, one of the things I miss about being in person

00:32:02   is they'll give you a look that says,

00:32:04   "I know it's a non-answer,"

00:32:05   but in the words coming out of their mouth are a non-answer,

00:32:08   but there's sort of a nod of the head that's like,

00:32:12   that's the best I'm gonna give you.

00:32:14   - Yeah, I think that is more common than not.

00:32:18   The people who are actually gonna lie to you, to your face,

00:32:22   if they're professionals,

00:32:23   they don't tend to last that long in the industry,

00:32:26   and if it's a company, same problem.

00:32:28   You can get away with it once or twice,

00:32:31   but generally, it's not a good way.

00:32:35   And everyone sort of accepts that a non-answer

00:32:37   is a non-answer, and they understand why you're doing it.

00:32:39   - Well, there was a good story, I'm sure you saw it.

00:32:41   There was a good story about a month ago,

00:32:43   I think it was the Columbia Journalism Review

00:32:45   who had a story about dealing with Facebook,

00:32:47   and that Facebook is sort of the exception to the rule

00:32:50   where a lot of people in the media

00:32:52   feel burned by Facebook PR.

00:32:54   - Yeah, there was, you know,

00:32:59   Casey Newton has an anecdote about being deceived

00:33:02   about the plane, and to me,

00:33:03   that seems like more of an outlier.

00:33:05   I pretty much group Facebook in that same group

00:33:08   of they might waste your time

00:33:11   and not tell you things they wanna tell you,

00:33:12   and hold press events, and which is very little to say,

00:33:15   but I think they are less often,

00:33:18   they're less likely to lie to you,

00:33:19   and I think that story has a lot more to do

00:33:21   with sort of the change in the way people perceive Facebook

00:33:25   and the kinds of questions they ask Facebook now,

00:33:29   as opposed to four or six years ago,

00:33:32   and I think that's the difference,

00:33:34   is you're asking much more serious questions

00:33:36   about Facebook that are much more important

00:33:38   than whether a plane is actually in the air,

00:33:40   or this widget does that.

00:33:42   It has more consequence, and I think,

00:33:46   when I read that story,

00:33:47   that I don't think this is terribly dissimilar

00:33:49   from a lot of other companies,

00:33:50   but I think it was also shaded a bit.

00:33:52   - Well, the other factor is that Facebook PR,

00:33:57   for all of Facebook's properties,

00:33:59   it's just not the worst place to work,

00:34:04   but the busiest, because they have the most PR issues

00:34:07   to put out that aren't of their own doing, right?

00:34:10   You can't go through a week without at least two stories

00:34:15   about Facebook popping up that they kind of have to address

00:34:19   in some way as a professional PR team

00:34:22   that aren't based on their announcements.

00:34:25   They're about these constant fires that keep popping up.

00:34:28   - Right, that's what I'm getting at, right?

00:34:30   It's one thing if you're Apple,

00:34:31   and you're generally just getting asked

00:34:33   about the new whatever, right?

00:34:35   And when is it coming out, and what are the stats?

00:34:37   And occasionally, there's something unpleasant

00:34:39   you have to discuss involving China or something,

00:34:42   but usually it's not, right?

00:34:43   And Facebook, now they're asking you about

00:34:45   sort of the existence and essence of Facebook,

00:34:49   and are they responsible for this atrocity?

00:34:51   It's a very different set of questions.

00:34:53   - And I will say this.

00:34:56   The one exception to the Apple PR doesn't say things

00:34:59   that aren't true would be going back to

00:35:02   when Steve Jobs' health was in decline,

00:35:04   and there were some definite issues there

00:35:07   where what they said in hindsight clearly wasn't true.

00:35:12   And again, it's such a unique situation,

00:35:15   and I was nowhere near in the position I am now

00:35:20   when that happened, around 2009, 2010.

00:35:24   But there was an issue.

00:35:28   - I remember a lot of that.

00:35:30   I remember Henry Blodgett saying,

00:35:31   "Steve Jobs looks very sick on stage.

00:35:34   "What's going on?"

00:35:35   And they were indignant about it,

00:35:36   and there were all kinds of variants of that.

00:35:38   And I was gonna say the other exception to that

00:35:39   is just Jobs in general, right?

00:35:42   He was famous for saying,

00:35:42   "We're not gonna do the following and then do that."

00:35:45   And that's--

00:35:47   - It was less Apple than Steve Jobs personally,

00:35:50   deciding, "I'm not going to be forthcoming

00:35:52   "about what's going on."

00:35:53   And it was like right before he took

00:35:55   his first medical leave, and it was like,

00:35:58   I don't know, it seems, or second medical leave,

00:36:00   and it was like everybody knew he had had cancer before,

00:36:02   and it's like, "Is it back?"

00:36:03   And it was like, "No, yeah, I have a dietary issue,"

00:36:06   or something, I forget what it was, but it was like--

00:36:08   - Yep, yep, yep.

00:36:09   He had a cold, it was gaunt, and yeah, yeah.

00:36:12   So I will just say that was a notable exception,

00:36:15   but it was more like the exception that proved the rule

00:36:18   than indicative of dealing with Apple

00:36:21   and anything related to their products.

00:36:23   It was all very, very personal,

00:36:25   and I feel like there was,

00:36:26   who at Apple was gonna stand up and say,

00:36:28   "You can't do this," you know?

00:36:31   - Yeah, I mean, since we're having the meta conversation,

00:36:33   I mean, again, this probably seems obvious,

00:36:35   but it has taken me quite a while to figure it out,

00:36:37   is that everyone in the company

00:36:39   takes the cue from their leader,

00:36:40   and if you're upset about Facebook's PR or Apple's PR,

00:36:44   whoever it is, that is,

00:36:46   they're doing what they think their boss wants them to do,

00:36:50   and their boss usually does want them to do it,

00:36:52   and if there's a disconnect,

00:36:53   that usually gets solved one way or another,

00:36:55   and so if you're upset with a certain way

00:36:57   a company's treating you, it's as a press person,

00:37:00   that's what their CEO wants.

00:37:02   - Yeah, yeah.

00:37:02   That's all I'll say now for the,

00:37:06   getting back to the watch.

00:37:07   (laughing)

00:37:10   I love it.

00:37:11   I do like the strap, I think it's nice,

00:37:13   I think people are gonna wanna try 'em on.

00:37:15   I do think the paper thing is an accurate gauge,

00:37:17   but that's really all I have to say for now.

00:37:19   It's not a super exciting product, so I don't feel,

00:37:22   to me, I'm most interested in those two minutes of the,

00:37:27   this is why I wanted to talk to you this week,

00:37:29   is to me, it's the bundle and the streaming,

00:37:32   and where this stuff is going.

00:37:35   So what are your thoughts on the Apple One bundle

00:37:37   that they announced?

00:37:40   - Uh, I am, I think it is,

00:37:44   my mentions were flooded with people disagreeing with me,

00:37:47   and that's their right,

00:37:48   but I think it is an unimpressive bundle.

00:37:50   I don't think it's meaningful for consumers or for Apple.

00:37:55   My thought on bundles in general is they work

00:37:58   when they are anchored by something that you really want.

00:38:01   So if it's cable TV, you're paying for a bunch of channels

00:38:04   because you want sports or live news or whatever it is,

00:38:07   and Amazon Prime gives you a bunch of stuff,

00:38:09   but you're not subscribing to Amazon Prime

00:38:11   because you want Prime Video,

00:38:13   you're subscribing because you want the free shipping.

00:38:16   And I don't see the live sports

00:38:20   or free shipping part of the Apple bundles.

00:38:24   And so we can start there, but that to me is,

00:38:27   it's not a meaningful thing until they connect it

00:38:30   to the must-have Apple product, which is the device.

00:38:33   And we can talk about why that maybe

00:38:36   isn't the case right now.

00:38:38   - I guess my,

00:38:41   I don't completely disagree,

00:38:44   but I think I feel more like Apple Music

00:38:47   is that linchpin service.

00:38:49   And that is how, that's what I did to guess

00:38:53   what their pricing would be, which was pretty accurate,

00:38:55   as I thought, well, why don't you take

00:38:57   the Apple Music pricing and add $5, and there's your bundle.

00:39:01   And that's pretty much exactly the pricing

00:39:03   for individual and family.

00:39:05   Take the 10 and $15 that Apple Music costs

00:39:08   as individual or a family, and add $5 a month

00:39:13   and include not everything else,

00:39:16   but the arcade and the TV Plus,

00:39:21   and some iCloud storage, which I still really feel

00:39:25   like they're nickel and diming people on.

00:39:27   Like, for the individual thing,

00:39:30   it's like to upgrade the people to the 50 gigabytes

00:39:33   when they're selling these phones

00:39:35   that have 512 gigabytes of storage

00:39:38   and shoot 4K video that easily fills up 50 gigabytes

00:39:43   if you're shooting it a lot.

00:39:45   It's like, wow, I can't believe that.

00:39:48   If these people are gonna give you $20 or $15 a month,

00:39:50   why not just give them more of that storage

00:39:53   for their backups?

00:39:54   But anyway.

00:39:55   - I used to feel the same way about storage in general

00:39:59   on the device, right?

00:40:01   The markup for whatever the base level iPhone,

00:40:03   which early on became an unusable amount of storage, right?

00:40:07   You had to get a higher level.

00:40:09   It was an enormous markup to go to the next level.

00:40:12   Especially when it's almost irresponsible

00:40:13   to sell the phone at sort of the base level,

00:40:15   whatever that used to be.

00:40:16   I remember having a tell-- - It was 16.

00:40:17   - I remember having a tell relative,

00:40:19   it was like, you don't buy that.

00:40:20   Like, you think you're saving money,

00:40:21   but you don't want to have a functioning job.

00:40:23   - Yeah, it was 16 gigabytes that they stuck with

00:40:25   as the base for way too long, because at 16 gigabytes,

00:40:29   it was like half of it was taken up by the operating system.

00:40:32   You know, like once they burst past 16,

00:40:36   even the 32, it's like you mostly get 32.

00:40:40   But with 16, you didn't even get close to 16

00:40:43   of usable storage, because the OS and everything else

00:40:46   had to be in there.

00:40:46   And they had to reserve enough space

00:40:49   so that you could do software updates, you know?

00:40:52   And even if they only reserve like two gigabytes

00:40:54   so that when a software update comes,

00:40:55   there's space to write the update before doing the update,

00:40:58   it's like if you're only giving people 16,

00:41:01   you're taking away one eighth of their storage.

00:41:04   - Yep, and I think you're right.

00:41:05   I think, I mean, music is by far,

00:41:07   music and the data are by far the most widely used

00:41:10   of those offerings, and I think there are probably

00:41:13   tens of millions of people who are using both music

00:41:15   and data, and so right there, you're getting pretty close.

00:41:18   - But the big difference between those two, though,

00:41:21   is music is fun.

00:41:22   People want to listen to music, and people,

00:41:25   why do people listen to music?

00:41:27   Because music makes them happy, right?

00:41:30   It's very, you know, it's the one form of our media

00:41:34   that is just the closest, it's just purely emotional, right?

00:41:39   It makes you happy.

00:41:40   That's why you pay for streaming music.

00:41:43   Why do you pay for iCloud storage?

00:41:45   It is the most cerebral aspect of this offering.

00:41:48   It is medicine, to be honest.

00:41:50   It is, you're signing up to take some vitamins,

00:41:53   and you should be taking them,

00:41:55   and you should have enough storage in your iCloud plan

00:41:58   so that you can back up your devices,

00:42:00   because having those backups in iCloud is really fantastic

00:42:04   and a great way to make sure you don't lose your photos

00:42:06   and stuff like that, but it's medicine, right?

00:42:09   It's no fun at all.

00:42:11   Upgrading from the base storage to more storage,

00:42:16   you don't see anything, you don't get to watch

00:42:18   a funny episode of Ted Lasso, you don't get to listen.

00:42:21   - You don't get to brag to someone

00:42:23   about how big your storage is?

00:42:24   - No, you get, it's medicine.

00:42:27   It's good, but that's why I feel like

00:42:30   they should just offer everybody who gets into

00:42:32   this Apple One bundle the two gigabytes, honestly,

00:42:35   that, or terabytes, so that, and it's like,

00:42:38   well, that's more than anybody needs.

00:42:40   Well, then fine, then they don't have to worry about it,

00:42:42   but isn't that a great, anyway,

00:42:44   that's my argument on that.

00:42:46   - Well, yeah, and frankly, I think that should be

00:42:48   factored into your $1,000 phone.

00:42:50   - Right, right.

00:42:51   - You're paying this much, or you're paying this much

00:42:53   for Apple Care, the storage should come with that.

00:42:55   Like, it should just be a thing you don't have to decide

00:42:58   you need to buy when the thing you wanted to access

00:43:01   is no longer available and you thought it was, right?

00:43:04   That's, it's not just medicine, right, or exercise,

00:43:08   it's finding out you needed, you should have had the storage

00:43:11   but didn't, and now you have a,

00:43:13   there's something bad has happened.

00:43:15   - Yeah, so I--

00:43:17   - Oh, you wish, oh, I would have just gone ahead

00:43:18   and bought it in advance.

00:43:20   - So anyway, I think music might be that linchpin.

00:43:24   It, you know, if you like listening to music,

00:43:27   you need at least one streaming music plan in today's world.

00:43:32   And, you know, if it's gonna be Apple Music,

00:43:34   then why not spend $5 more a month and get the Apple One

00:43:37   and then you get the TV shows and whatever else,

00:43:40   the arcade games?

00:43:41   - Yeah, I just, I, to me, if they said, yeah,

00:43:47   Apple Music now comes with these following three services,

00:43:50   that makes, that's the Amazon model, right?

00:43:52   Here's the thing you're already buying,

00:43:54   now we're throwing more stuff in.

00:43:56   And maybe gradually over time, we up the price

00:43:59   and you're not complaining 'cause we've,

00:44:01   we're making it harder, we're making it stickier, right?

00:44:04   - Right.

00:44:05   - Less churn by adding more stuff, but trying to say,

00:44:08   look, you're already paying for this thing,

00:44:09   why don't you pay a little more and get more stuff?

00:44:12   If it's not stuff you want,

00:44:14   that's where it falls flat for me.

00:44:17   - Yeah, so, and I guess that is sort of, you know,

00:44:22   how important is this?

00:44:25   You know, why even bother with Apple Music?

00:44:28   Why let, you know, why it's,

00:44:31   why not walk away from the music business?

00:44:35   I mean, I guess I think I see why, you know,

00:44:38   Apple cares about it, but what the iTunes

00:44:41   buy a song for 99 cents revolution meant to the company

00:44:45   20 years ago, it really helped rejuvenate the company,

00:44:50   you know, and it's what drove the iPod sales.

00:44:54   And I remember when Apple retail stores

00:44:56   first started opening in malls,

00:44:58   if you perked your ears open, you'd hear kids saying,

00:45:01   hey, let's go to the iPod store, right?

00:45:05   It was really what made the company relevant.

00:45:08   Does Apple need to be in the music business today?

00:45:12   I mean, it's too late, they're obviously

00:45:14   not gonna get out of it, but it's not essential

00:45:17   to what they do or, you know,

00:45:20   all that meaningful to them financially.

00:45:23   - No, it's, I mean, it's in the billions of dollars now,

00:45:27   right, so it starts to become meaningful

00:45:31   and they couldn't take it away without having a problem.

00:45:34   And I think we're sort of explaining

00:45:36   why they need to be in the music business.

00:45:38   If you wanna create a bundle of services,

00:45:39   you need to have something that people want

00:45:41   and that's the thing, it's not games,

00:45:44   it's not Apple news, and it's not Apple TV+ for the moment.

00:45:47   So here's the one thing that tens of millions of people

00:45:50   are willingly paying for.

00:45:51   - And, you know, and I think that's what they were thinking,

00:45:55   you know, that this is something

00:45:56   we don't wanna walk away from, and there's their linchpin.

00:45:59   But then, now this gets into the competitive aspects.

00:46:03   You had a comment yesterday,

00:46:05   right after the event from Spotify.

00:46:07   Here, here's their statement that you tweeted.

00:46:10   Once again, Apple is using its dominant position

00:46:12   and unfair practices to disadvantage competitors

00:46:14   and deprive consumers by favoring its own services.

00:46:17   We call on competition authorities to act urgently

00:46:20   to restrict Apple's anti-competitive behavior,

00:46:23   which if left unchecked will cause irreparable harm

00:46:26   to the developer community

00:46:27   and threaten our collective freedoms

00:46:29   to listen, learn, create, and connect.

00:46:31   It's a little purple.

00:46:34   - A little.

00:46:35   (laughing)

00:46:38   I take solace in a little bit like that being purple.

00:46:42   Like, in normal times, I'd hurt my eyes,

00:46:48   rolling my eyes at that.

00:46:50   In our times, I'm like, oh no, this is fun.

00:46:54   It's fun to get all indignant about something

00:46:57   as trivial as streaming music,

00:47:01   when it's possible that come November,

00:47:04   we're gonna have armed riots in the streets,

00:47:06   and a president who lost an election

00:47:09   and refuses to acknowledge it,

00:47:10   and nobody knows what to do, right?

00:47:13   It's sort of like, yeah, let's argue

00:47:15   about anti-competitive aspects

00:47:17   of whether it's fair or unfair for Apple

00:47:19   to include music in a streaming

00:47:21   when it's the platform provider of the operating system.

00:47:25   - Yeah, I mean, the whole idea that this stuff

00:47:28   is gonna get eventually kicked up to,

00:47:31   some government agency or group of politicians

00:47:34   will rule on this, is impossible to imagine

00:47:37   in the United States.

00:47:38   And by the way, it's not a coincidence

00:47:42   that the Spotify/Apple fight is happening in the EU.

00:47:46   It's not happening in the US.

00:47:48   But yeah, it's impossible to imagine.

00:47:50   I do, I'm not surprised that Spotify said

00:47:54   we're indignant about this.

00:47:56   I think they have, and I'm not an antitrust expert,

00:47:59   nor do I play one on TV,

00:48:01   but I do think they have much less of a ground

00:48:03   to stand on here than the base argument they have,

00:48:07   which is that Apple music tied to the device

00:48:10   is anti-competitive.

00:48:11   If you're just gonna say, all right,

00:48:12   a bunch of stuff tied to other Apple services

00:48:15   is anti-competitive, it's a harder argument to make.

00:48:17   - And I do wonder, I wonder how much it's even worth arguing

00:48:20   about how many people are like,

00:48:22   well, this is my first iPhone,

00:48:24   and I've taken it out of, I've unwrapped the box,

00:48:26   and I'm turning it on, and I'm going through this,

00:48:29   and I have no backup to restore, I'm new to this.

00:48:32   Oh, and there right in my dock is a music app,

00:48:35   and I tap the music app,

00:48:37   and I'm prompted to sign up for Apple Music.

00:48:41   That's basically the gist

00:48:43   of what Spotify's complaining about, right?

00:48:45   And it is.

00:48:48   - It's that plus pricing.

00:48:49   - Right, because they don't have to pay the 30%.

00:48:51   Apple doesn't have to pay itself 30%

00:48:54   for an in-app purchase to sign up.

00:48:57   And I do feel that there's arguments to be made there.

00:49:00   Again, I'm not a legal expert,

00:49:03   but just common sense tells you,

00:49:04   well, that is something to argue about, right?

00:49:07   I mean, common sense says whether that should be allowed

00:49:11   or not, it's at least in this sphere of a debatable,

00:49:15   this is something that's logical to debate.

00:49:20   I think that what Spotify's arguing here with the bundle

00:49:23   to me is sort of getting into the tiny violin,

00:49:28   playing the world's saddest song,

00:49:30   because Apple could do so much more here, really.

00:49:34   The bundle that would really be both lowercase a,

00:49:39   now I'm not saying legally anti-competitive, I don't know,

00:49:42   but certainly lowercase a, anti-competitive

00:49:46   in the common sense term would be if they said,

00:49:48   pay us X dollars a month,

00:49:51   and we'll give you a new iPhone every two years too, right?

00:49:55   So this is the most interesting thing,

00:49:58   and it's a thing that didn't happen, right?

00:50:01   But why did that not happen?

00:50:03   People like you and I have been speculating

00:50:04   about an Apple bundle that would,

00:50:06   basically you'd an all-in Apple subscription service

00:50:09   where you're paying for your phone and AppleCare

00:50:11   and a bunch of other stuff, and it's one monthly fee,

00:50:14   and a lot of people say, give me that, I want that.

00:50:17   And so why didn't they do it?

00:50:18   And a really obvious guess, a semi-informed guess on my part

00:50:24   is maybe they do wanna do it,

00:50:26   but they certainly can't do it in today's political climate

00:50:29   when they're fighting antitrust rights.

00:50:31   And then the question is, okay,

00:50:34   is this something they think they can get to

00:50:36   X number of years down the road?

00:50:38   Is this something they've held off on doing

00:50:40   because they were hoping to be able to do it,

00:50:41   and they've concluded, look,

00:50:43   we just can't do that anytime soon,

00:50:46   so this is what we got.

00:50:47   But to me, it's the obvious thing,

00:50:50   that's to answer, to respond to the thing I was positing

00:50:54   earlier, that's the thing, their version of sports, TV,

00:50:58   and free shipping is the phone,

00:51:00   and so you should bundle it with the phone,

00:51:02   and why aren't they doing that?

00:51:04   And they're certainly not gonna come out and say,

00:51:05   we'd love to do it, but we'll get killed

00:51:07   by the antitrust guys.

00:51:08   And for all I know, they're gonna announce it next fall,

00:51:12   next with the iPhone.

00:51:14   They'll say, ah, now here's the super-duper bundle,

00:51:16   but I don't, I think they would wait, right?

00:51:18   You wouldn't announce the bundle until,

00:51:20   if you were gonna do a super bundle, you'd do it all.

00:51:22   - Yeah, I think so too,

00:51:23   especially since they've already called

00:51:25   the one-tier Premier, and not that they couldn't add

00:51:27   a Super Premier that includes a new iPhone.

00:51:30   - Super Premier Max.

00:51:31   - But that is the, and it is the thing

00:51:37   that I still think has at least,

00:51:40   I don't wanna project more than 10 years in the future,

00:51:42   but I think for the next 10 years,

00:51:45   the idea that people will still want a new phone

00:51:48   every two or three years is pretty, pretty solid bet,

00:51:53   just in terms of camera improvements and stuff, right?

00:51:58   If only camera improvements.

00:52:00   I really think that five years from now,

00:52:04   we'll look back at what our cameras do now on these phones

00:52:07   and be like, oh my god, can you believe that piece of junk?

00:52:09   Whereas now, we're amazed by it.

00:52:10   So I think there's legs on that,

00:52:13   that it would be a huge appeal if they said,

00:52:15   okay, here, just pay us,

00:52:16   I don't know what it would be a month,

00:52:18   and every two years, you get a new iPhone,

00:52:20   and you get all these services.

00:52:23   It's just one, one bet.

00:52:24   - Yeah, and whether you care about any spec at all,

00:52:27   you just say, look, I just don't care.

00:52:28   I know that whatever phone I have is the best phone.

00:52:30   I don't need to worry about it.

00:52:32   I can afford not to worry about it.

00:52:34   This would obviously be towards a wealthier tier

00:52:36   of Apple customers who are wealthy to begin with,

00:52:39   generally speaking.

00:52:40   That's a gross generalization,

00:52:43   but compared to an Android consumer,

00:52:47   that seems like the no-brainer,

00:52:49   and so its absence is super interesting to me.

00:52:52   - And it just happens to be,

00:52:54   in the wake of Microsoft announcing

00:52:57   the same sort of kind of idea

00:53:00   with the new Xbox console hardwares,

00:53:02   the Series S and the Series X,

00:53:06   which I really, it's almost like a speech therapy exercise

00:53:11   to make sure that audibly I say S and X differently,

00:53:16   but with their game streaming service,

00:53:18   and it's, Ben Thompson and I have talked about this

00:53:21   on Dithering, it's really a very appealing deal

00:53:24   because it's not like a credit card thing

00:53:27   where you're paying interest

00:53:30   and you wind up paying more over two years

00:53:32   than you would have if you just bought it outright.

00:53:35   As long as you're interested in the monthly game service,

00:53:40   you do this for two years for a monthly fee,

00:53:43   and including the game service,

00:53:45   you wind up owning an Xbox console at the end

00:53:48   for a very appealing monthly rate,

00:53:50   and you don't really pay a penalty for it

00:53:52   in terms of interest or whatever,

00:53:55   and all of a sudden, this multi-hundred dollar console

00:53:59   and a library of lots of games has this very appealing,

00:54:03   oh, it's 25 bucks a month, that's it.

00:54:05   - Yeah, it's super compelling,

00:54:07   and we're a household where we're considering

00:54:09   making our first sort of big console purchase

00:54:11   in a long time, and we're thinking through this right now,

00:54:14   and they've had that for a while now,

00:54:16   but they're certainly pushing more and more

00:54:18   towards gaming as a service,

00:54:21   where the device is secondary,

00:54:24   and Apple is definitely not in that mode, right?

00:54:27   Apple is still, the device is primary.

00:54:28   - And so we have to go meta for a moment here

00:54:31   and just acknowledge, and you and I, again,

00:54:34   we're of a certain age, where can you imagine

00:54:36   going back 25 years, 20 years, and telling our former selves

00:54:41   that in the year 2020, we're gonna be talking

00:54:44   about Microsoft and Apple and one company

00:54:49   feeling free and liberated antitrust-wise

00:54:54   to offer these content bundles,

00:54:55   and the other one sitting on its hands

00:54:59   missing an obvious opportunity,

00:55:01   and it's Apple that's sort of staring down the barrel

00:55:05   of anti-competition regulators,

00:55:08   and Microsoft that is like,

00:55:10   here, here's this super compelling deal.

00:55:12   - Yeah, and also Microsoft being the company

00:55:16   that could conceivably have spent 20 or $30 billion

00:55:19   to buy the hottest new social media/video service,

00:55:23   and all the rest of its competitors couldn't

00:55:25   because they were too powerful.

00:55:26   - Right, that does sort of go unsaid

00:55:30   in the whole TikTok fiasco, was that Microsoft was...

00:55:35   - There was no other consumer tech company

00:55:40   that could have plausibly tried to get that deal through.

00:55:43   - Right. (laughs)

00:55:45   I know somebody, there was a report somebody had earlier

00:55:47   that Apple at least took a meeting or something,

00:55:50   and it's like, I couldn't imagine that,

00:55:51   because I guess...

00:55:54   - Apple, Apple, Apple, Apple was excited to bat that down.

00:55:58   - It doesn't make any sense.

00:55:59   - That's one of those, like, yeah,

00:56:01   someone called someone from Apple or a banker

00:56:03   said they talked to Apple once or something like that.

00:56:05   Apple, they went from, we don't comment

00:56:07   on rumor and speculation, to hell no.

00:56:10   There's no way we're doing this.

00:56:11   - It was just sort of the old salesman trick of,

00:56:15   hey, you know that rich guy?

00:56:16   He's interested. (laughs)

00:56:18   - Yeah, I got a lot of people coming down

00:56:20   to look at this car, so I can't promise it's here tomorrow.

00:56:24   - Very, very true.

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00:58:47   but that was great.

00:58:48   - You know what?

00:58:49   I love it when it's a, and it just sounds corny

00:58:52   and it's like, you know, but I just love it

00:58:54   when it's a sponsor whose stuff I really love.

00:58:56   And it's like--

00:58:57   - My line is I spend my own money on their product,

00:59:00   which is true.

00:59:01   - Oh, I should mention too, a year ago,

00:59:04   Merlin Mann was on the show and I was telling him

00:59:06   about the Mack Weldon slippers and then they sold out

00:59:11   and they were not a sponsor.

00:59:12   We were just talking about them.

00:59:14   But I love their slippers 'cause they have a little back

00:59:17   so that they stay on.

00:59:17   I don't like a backless slipper.

00:59:19   And lo and behold, a pandemic hits.

00:59:23   I didn't put real shoes on.

00:59:24   I wore out a pair of the slippers.

00:59:27   But they were the, I've probably spent like 10 years

00:59:31   worth of time in slippers in the last six months

00:59:33   with the Mack Weldon slippers.

00:59:34   They're fantastic.

00:59:35   They're the best slippers I've ever owned.

00:59:38   - Cosine.

00:59:39   - So let's talk streaming in the big world, right?

00:59:45   Where Apple is.

00:59:47   I kind of feel like, here's an interesting thought I had

00:59:51   as I was going off to sleep last night

00:59:53   after absorbing all of this.

00:59:56   So Apple comes out with this new Fitness Plus thing,

00:59:59   which is not for me.

01:00:00   - Oh my God, that Twitter fight.

01:00:03   - Oh, what's this?

01:00:04   - I don't know, it was a Twitter fight.

01:00:04   No, no, you were involved in it.

01:00:05   - Oh, yeah, yeah.

01:00:06   - Watching you and Horace and Ben.

01:00:07   - Oh, and the Peloton, yeah, yeah.

01:00:09   - Oh my God, yeah.

01:00:10   - People that, you know what, Peloton is, I've said this,

01:00:15   I've been staying with Ben.

01:00:16   So we have a Peloton.

01:00:18   I don't use it, my wife does.

01:00:20   She won't even let me use it.

01:00:21   She's very serious about it.

01:00:23   I guess she would let me use it if I asked to.

01:00:26   But we are a Peloton family.

01:00:28   Ben has one too.

01:00:30   It is exactly like arguing with people

01:00:34   about Macintosh computers 20, 25 years ago,

01:00:36   where people who've never used one, never seen a Macintosh,

01:00:40   will just tell you blindly that they're overpriced garbage

01:00:44   and you're buying hype and you could buy this other thing

01:00:46   for less and it's better.

01:00:48   And people saying that you should just buy a regular bicycle

01:00:51   and put it on a treadmill or something

01:00:53   and then you get the same thing.

01:00:54   And it's like, you don't get it.

01:00:56   This is like one of the nicest pieces of kit

01:00:59   I've ever seen in my life.

01:01:01   My wife--

01:01:02   - They're very good.

01:01:03   And I was a reluctant buyer

01:01:06   'cause I didn't wanna own one of them.

01:01:07   There was a pandemic.

01:01:08   I'm like, all right, 'cause I'm not going to the gym.

01:01:09   But, and it's very good and all of that.

01:01:11   And yes, there's definitely a cult around it.

01:01:14   I'm not in the cult.

01:01:15   It's a fine product.

01:01:16   I'm happy to buy it,

01:01:17   but I'm not gonna go sing its praises.

01:01:19   The thing that I find confusing from people

01:01:21   who should know better is saying

01:01:22   that the Apple exercise thing is competitive with Peloton,

01:01:26   but that makes no sense.

01:01:27   - It makes no sense at all.

01:01:28   - It's competitive with a million other free

01:01:31   and paid workout apps and videos, not with a device.

01:01:36   - Right, and the device is, it's the starting point.

01:01:40   It's not like you sign up for Peloton classes

01:01:42   and then, oh, maybe you get the bike.

01:01:44   It's like you decide to get the bike

01:01:46   and then you sign up for the classes.

01:01:47   It's a great product.

01:01:48   - Right, you could technically,

01:01:50   I mean, and Peloton has sold some people,

01:01:52   it's subscription service who don't use the bike,

01:01:55   but that's a very small group of people.

01:01:56   It doesn't make any sense.

01:01:57   - Yeah, and it's not central to their success.

01:02:00   That's not their company's story

01:02:02   and it's not why people who are bullish on them are bullish.

01:02:06   Anyway, I think that the fitness thing

01:02:09   is orthogonal to Peloton.

01:02:11   I don't wanna get sidetracked on that,

01:02:12   but the one thought I had going to sleep last night is,

01:02:14   okay, what is the fitness plus thing?

01:02:18   In a sense, if you, they talked about it all

01:02:21   in the context of actual fitness

01:02:24   and you wear your watch and you measure all this stuff,

01:02:27   fitness, fitness, fitness, that's what you sign,

01:02:29   it's certainly why you would sign up for it,

01:02:30   but really all it is is a streaming video platform, right?

01:02:35   It looks like they've signed up about 30 trainers.

01:02:41   I didn't do a headcount in the class photo,

01:02:46   but they have, looks like somewhere around 30 or 40 trainers.

01:02:51   To do these, and some of them have specialties.

01:02:54   Some of these might be in bicycling or somebody,

01:02:56   strength training is obviously very different

01:02:58   than cardio training.

01:03:00   And it seems like, and they talked about,

01:03:04   the diversity's obvious just when you look at it,

01:03:07   but apparently personality-wise and background-wise,

01:03:10   it's very diverse, but it's sorta like a reality show

01:03:12   where there's like, they've got a cast of trainers

01:03:16   and you can get to know them and they have personalities.

01:03:20   It's 10 bucks a month,

01:03:21   and Apple TV+ is five bucks a month.

01:03:26   Which one costs more to produce?

01:03:28   It's clearly TV+, right?

01:03:33   TV+ is, they're spending billions of dollars a year

01:03:36   on original content. - That's right.

01:03:38   - And it costs five dollars.

01:03:40   The scope, I'm not saying that me and you, Peter,

01:03:44   can go out and hire 30 trainers,

01:03:46   but I feel like I could understand the scope

01:03:50   of setting up a direct competitor to Fitness+, right?

01:03:53   Get 30, 35 trainers of a diverse background

01:03:57   and various skills and studio space and a couple of cameras,

01:04:01   and every week we'll have a bunch of these classes.

01:04:03   I understand the scope of that.

01:04:05   I don't understand the scope of making one top-tier TV+

01:04:10   original content series, let alone all of them

01:04:13   and the movies that they're--

01:04:14   - Jennifer Aniston and Reese Witherspoon

01:04:17   got what, two million bucks a piece per episode?

01:04:20   I may have inflated a 2X, but that's a lot, yeah.

01:04:23   The cost, yeah, and now you'd have to bring in someone

01:04:27   who's an actual fitness expert here.

01:04:28   I mean, again, during the pandemic,

01:04:30   our first thought was, oh, we gotta exercise,

01:04:32   let's see what we can get for free on YouTube.

01:04:34   And we didn't try very hard,

01:04:35   but obviously there's a ton of that free stuff,

01:04:37   and there are subscription services,

01:04:38   those that have existed for a long time.

01:04:41   I can see Apple saying, all right, yeah,

01:04:42   people are paying five bucks a month for online yoga,

01:04:45   we can charge a premium for that, fine.

01:04:47   Or by the way, the Peloton standalone service

01:04:50   is however many dollars a month,

01:04:51   we can charge less than that, fine.

01:04:53   - Right, right, yeah, it's like 30 bucks.

01:04:56   - I mean, I don't know.

01:04:58   I don't wanna argue about fitness trends.

01:05:01   It is hard to imagine a lot of people sticking with that

01:05:05   for the same reason that everyone's joke

01:05:07   about the Peloton, right, is that it's gonna collect,

01:05:09   it's gonna be a good towel rack in a year,

01:05:12   because that is the traditional trajectory

01:05:14   for any home exercise machine.

01:05:16   You can get the Nordic Track or whatever it is,

01:05:18   and then it goes unused,

01:05:19   and I would imagine fitness will have the same life cycle.

01:05:24   But I mean, as we were just talking about, right,

01:05:27   there is a bundle of stuff, you can throw that in there.

01:05:29   Is it in the bundle, did I miss that?

01:05:31   - No, it is if you get the Premier level,

01:05:34   which is above family, and it's,

01:05:37   so Premier gets you, the editions are News Plus

01:05:41   and Fitness Plus, and I asked Apple why,

01:05:46   I get why News Plus is in a different tier,

01:05:48   because there's, Apple doesn't own the content.

01:05:51   There's marginal cost to each subscriber

01:05:53   'cause they're paying the participating publications,

01:05:56   and I get why News Plus is, for lack of a better term,

01:05:59   region locked, because the publications

01:06:02   are largely US-centric, and the other countries

01:06:05   where it's available, it's a country-by-country rollout,

01:06:09   and if you live in a Spanish-speaking country,

01:06:13   it doesn't do you any good to sign up

01:06:15   for a News Plus subscription

01:06:16   for a bunch of English-language publications.

01:06:19   Why is Fitness Plus in there?

01:06:22   'Cause Apple owns all the IP, and the answer is,

01:06:27   it's not really, it's not, they were like,

01:06:29   don't read too much about the similarities to News,

01:06:32   but at a basic level right now,

01:06:35   their initial cast of trainers, they all speak English,

01:06:40   and so the countries where Fitness Plus is available

01:06:42   are places where English is the primary language,

01:06:45   and typical Apple, they have nothing to announce

01:06:48   about further plans for other languages.

01:06:50   - But that's a very easy solve.

01:06:51   You can find Spanish-speaking trainers.

01:06:54   - Right, but why, think about it.

01:06:57   When you buy hardware devices from Apple,

01:07:00   or most companies, just about any company,

01:07:03   if one of them is half the price of another,

01:07:06   even a casual observer can figure out why.

01:07:10   Why is the iPhone SE half the price of the iPhone 11 Pro?

01:07:15   Well, it's smaller, and it's older,

01:07:18   and it doesn't have Face ID, and it has the old design,

01:07:20   and the camera's not as fancy, and there you go.

01:07:24   It's not as good a device.

01:07:26   But TV Plus is way more stuff

01:07:30   that is way, way, way more expensive to produce,

01:07:34   and it's only $5 a month,

01:07:35   and Fitness Plus is way easier to produce,

01:07:39   way more limited, and it's $10 a month.

01:07:41   It's like an inverse correlation to spending

01:07:45   for how much it costs Apple to produce the Surface.

01:07:48   - I don't know, maybe you can do the math

01:07:51   where you figure out dollar spent per time used,

01:07:54   but I mean, look, why is music $10 a month,

01:07:57   but Netflix is $13 a month?

01:08:00   There isn't necessarily a math you could do in your head,

01:08:04   or the New York Times $15 a month, but the prices are,

01:08:07   I mean, I can tell you why Apple TV Plus is $5 a month,

01:08:10   or really free, right?

01:08:12   It's 'cause no one would pay for it right now.

01:08:15   And Apple will concede that.

01:08:18   They're like, "We're not, you give us a year minimum

01:08:21   "before we can sort of have a fully competitive product,"

01:08:23   is what they have told me in the past.

01:08:25   And that's fair, right?

01:08:26   You just can't, and presumably, Apple's saying,

01:08:28   "Yeah, this fitness thing, we're gonna come out

01:08:30   "out of the gates, and it'll be competitive

01:08:32   "with any other subscription training service."

01:08:36   - Right, so yeah, your take more or less matches mine,

01:08:40   which is that Fitness Plus is a real product where,

01:08:44   what I mean by that is they're saying $10 a month,

01:08:48   we can turn a profit, it's a profitable business

01:08:51   for us to sign up X million people to pay $10 a month,

01:08:54   or to get it in their upgraded Apple One bundle,

01:08:58   and the cost it costs us to do this.

01:09:01   Whereas TV Plus isn't intended at all

01:09:05   as we plan to make a profit selling this for $5 a month

01:09:10   and giving it away to as many people

01:09:12   as we possibly can excuse ourselves to give it away

01:09:15   for year-long extensions at a time.

01:09:18   It's the strategy reasons behind them getting

01:09:21   into their own original content with TV Plus

01:09:26   have nothing to do with making money selling it

01:09:28   for $5 a month, and I think that's more clear now

01:09:32   and the Fitness Plus thing clarifies that

01:09:34   than it was even when they announced it.

01:09:37   - Yeah, and I guess I just would hammer on the idea

01:09:38   that presumably they're saying,

01:09:40   "This is a finished product, this thing is competitive.

01:09:44   "If you were using a different subscription service,

01:09:46   "you can compare this to that,

01:09:47   "or if you were taking classes at your local gym,

01:09:50   "which you can no longer go to,

01:09:51   "you can compare this to that."

01:09:53   Whereas you cannot compare, or you shouldn't

01:09:55   if you're Apple, you don't want to compare TV Plus

01:09:58   to HBO or HBO Max or Netflix or Disney Plus, right?

01:10:01   There's just way more stuff on those other services.

01:10:04   - Yeah, but also each of those companies

01:10:07   has sort of very different levels of investment in it, right?

01:10:12   Like Netflix, what is Netflix?

01:10:15   It's nothing but the streaming service, right?

01:10:17   - Right, those are different questions

01:10:20   than those from the consumer though, right?

01:10:22   Like you're gonna spend $10 or $5 or no dollars,

01:10:26   and so you don't care why Netflix is priced one way

01:10:29   and Disney is priced another,

01:10:31   you just know what you're getting for your money.

01:10:32   - Right, right.

01:10:35   I can't think of another competitive landscape

01:10:39   that is so disparate though like that, right?

01:10:42   It's like just to pick three, right?

01:10:46   So Netflix, everything, the entire company,

01:10:48   and they have a massive valuation,

01:10:51   and I think rightly so.

01:10:52   They're just a huge cultural touchstone worldwide

01:10:56   and incredible sell-through

01:11:01   in terms of how many people have a Netflix subscription,

01:11:04   but there is nothing else to the company

01:11:06   than the monthly streaming subscription.

01:11:09   Disney sort of in the middle, right?

01:11:11   Disney does lots of things and makes money lots of ways

01:11:14   with theme parks and cruise lines,

01:11:16   and God bless 'em for trying to fill cruise ships

01:11:20   going forward, but motion pictures--

01:11:25   - Right, they are trying to create their own Netflix

01:11:30   in a significant way, and the other would-be competitors

01:11:34   are still trying to, they're not trying to do that yet.

01:11:37   They may say they are, but they're hedging their bets,

01:11:39   and they're not making that same kind of commitment.

01:11:41   - Right, and Disney also is a longtime Disney nerd,

01:11:46   and I always feel, I feel like the long-term trajectory

01:11:50   for Apple in some ways, Disney has always been

01:11:53   an interesting pattern to follow, right?

01:11:56   There's the charismatic founder who died too young,

01:12:01   you know, and what does the company do

01:12:04   after Steve Jobs is gone, after Walt Disney is gone?

01:12:07   But one of the things that,

01:12:10   there's so many similarities between them,

01:12:12   but one of the things was that Disney

01:12:16   embraced TV at a time when movie studios were anti-TV, right?

01:12:21   They were like, the movie studios, you know,

01:12:24   movies were movies, and TV was this garbage

01:12:27   black and white thing that was staticky,

01:12:29   and Walt Disney was like, no, we can be in their homes.

01:12:33   Hell yeah, we're gonna have Mickey Mouse on every day,

01:12:36   right after school, you know, what time does school end?

01:12:38   Three o'clock, 3.30 every day, Mickey Mouse Club.

01:12:42   We'll have kids running home to catch the show every day,

01:12:46   unlike every other movie studio, and you know,

01:12:49   culturally, Disney has always sort of had that idea

01:12:52   of they need to stay relevant

01:12:54   and not just keep doing what they did,

01:12:56   and the way to be relevant in today's world

01:12:58   is to have a streaming service, right?

01:13:01   TV channels aren't it for kids anymore, right?

01:13:04   It's as great as it was.

01:13:06   - Yes, yes, and it's also the model

01:13:08   the consumer wants, right?

01:13:10   - Right.

01:13:11   - Broadly, right, I want on demand,

01:13:13   and there are still a lot of people,

01:13:15   there's 80-some million people

01:13:17   who are getting linear cable TV,

01:13:18   but that is going to continue to shrink,

01:13:20   and they're saying, yeah, we're gonna try to transition

01:13:23   out of our existing business while keeping it going

01:13:27   and move into streaming.

01:13:29   Yeah, it's working.

01:13:31   I mean, it's working so far.

01:13:32   - I'm, you know, and I remember being a kid,

01:13:35   and I don't know how I did it,

01:13:36   'cause it's one of those things that seems like,

01:13:40   my parents are, you know, just put it

01:13:44   as belovedly as I can, a bit tight with the money,

01:13:47   and so I kind of can't believe that we got cable TV

01:13:52   as early as we did, and I can't believe we got HBO.

01:13:55   We had HBO like in the early '80s,

01:13:58   and we eventually got rid of it,

01:14:00   and I was very upset about it,

01:14:02   because it was like, they were like,

01:14:03   nobody watches it except you, and I'm like.

01:14:05   - Yeah, you were watching Porky's,

01:14:08   and there was a Ninja movie, I think, with the big,

01:14:11   the big draws.

01:14:13   - Nobody watches it but you, John,

01:14:14   was not a great way of selling the,

01:14:17   we're downgrading from HBO.

01:14:19   But I just remember the same thing,

01:14:22   where it was like, well, you know,

01:14:24   a majority of households don't have cable TV.

01:14:26   They still get their TV over the air,

01:14:28   and it's like, yeah, that's, you know,

01:14:30   that was, you know, it's hard to believe,

01:14:32   but yeah, that's how the '80s went,

01:14:33   where there were still lots of people who didn't have cable

01:14:36   and had, you know, rabbit ears, you know,

01:14:38   getting their TV reception.

01:14:40   - Yeah, and that turned out to be a giant expansion

01:14:42   of the media business, and in the same way,

01:14:45   like the CDs were a giant expansion of the music business.

01:14:49   What you are seeing now

01:14:50   with all these big streaming companies is,

01:14:53   they are inevitably going to have smaller profit margins

01:14:57   because they do have to throw so much more into programming

01:15:00   because it is so much more competitive,

01:15:02   because they're not gonna have that really,

01:15:04   really fat bundle that they can sort of

01:15:06   force people to take.

01:15:07   And so you are gonna see a lot of sort of the fun of,

01:15:11   and fun and compensation taken out of working

01:15:15   in the media business, which again,

01:15:16   doesn't matter if you're the consumer,

01:15:18   and for the consumer, it's great right now.

01:15:19   You have more choice than ever.

01:15:21   - What do you think of where Time Warner is,

01:15:26   and HBO in particular?

01:15:29   - I find HBO, I have it, you know, and we're in HBO.

01:15:32   We've always been an HBO family,

01:15:34   and I have some shows I like there,

01:15:35   but I think HBO Max is a mess, brand-wise.

01:15:40   - It is a mess, brand-wise, the actual sort of UI,

01:15:46   and I'm not someone who spends a lot of time

01:15:47   thinking about UI, except that I've been watching

01:15:50   a lot of video in the last six months,

01:15:52   or however long the pandemic's gone on for,

01:15:54   and I'm a fan of Netflix, the product,

01:15:58   but I didn't realize how much better they were

01:16:01   at sort of getting you the thing you want

01:16:03   than everybody else.

01:16:04   I've been trying to watch a bunch of Amazon Prime recently.

01:16:06   It's terrible at saying, "This is the show you were watching.

01:16:10   "Would you like to continue watching it?"

01:16:12   All of that stuff, they're terrible at.

01:16:14   I mean, you know, HBO Max, AT&T just brought on Jason Kyler,

01:16:19   who ran Hulu in its glory days.

01:16:21   He's a product guy.

01:16:22   That product will look better eventually.

01:16:25   It will no longer, when you're trying to watch a download

01:16:30   of Perry Mason in your mother-in-law's Philadelphia house,

01:16:35   to name an example that I can think of recently,

01:16:37   and you have downloaded it, it won't require six extra steps

01:16:41   for you to find that thing on your phone.

01:16:43   It will get better.

01:16:44   And similarly, it's a grab bag of stuff, right?

01:16:48   Friends and the Criterion Collection.

01:16:51   I think they'll sort that out over time.

01:16:53   And the bigger question is, does AT&T,

01:16:55   which is still a phone company

01:16:58   and has an enormous amount of debt

01:16:59   that it has to service and has to pay out dividends,

01:17:02   it has all these financial obligations,

01:17:04   do they want to spend competitively

01:17:06   to keep up with Netflix and Disney?

01:17:09   Right.

01:17:10   And we don't know the answer to that yet.

01:17:11   And even Apple, who I think, you know,

01:17:14   I mean, just like the way that Apple scooped up the,

01:17:16   I forget the name of it already,

01:17:17   the Tom Cruise, or not Tom Cruise, Tom Hanks,

01:17:20   World War II. Greyhound, yeah.

01:17:22   Yeah, Greyhound, which was totally a COVID opportunity.

01:17:26   It was supposed to be a big theatrical movie,

01:17:27   but it couldn't.

01:17:28   And it's just one of those things where,

01:17:32   well, why did Apple win the bidding?

01:17:34   One of the reasons is that it's a pittance for Apple, right?

01:17:38   You know, oh, $100 million, whatever, you know.

01:17:44   Sounds good.

01:17:44   Apple is, the most recently described to me is,

01:17:48   this is pre-COVID, but the new dumb money in Hollywood.

01:17:52   That Eddy Cue is the most important guy,

01:17:54   but he's the person you bring your project to first

01:17:57   because he may pay the most,

01:17:59   which isn't really a ringing endorsement.

01:18:01   And again, they'll probably sort that over time.

01:18:04   I mean, Amazon has also done money.

01:18:06   They're burning money on this Lord of the Rings prequel,

01:18:10   which doesn't exist yet.

01:18:12   And it's sort of astonishing that they've been at video

01:18:14   for so long and really have not made a ton of progress.

01:18:18   But again, Amazon can afford to screw around

01:18:21   and not get it right for a long time.

01:18:23   So can Apple.

01:18:25   Netflix is getting it right.

01:18:27   They're still spending $3 billion a year more

01:18:30   than they're bringing in to finance all this stuff.

01:18:33   But Wall Street's okay with it.

01:18:35   And then, but for these other companies

01:18:37   that are in the middle, where it is their core business,

01:18:41   but it's unclear how much they're gonna be able

01:18:43   to throw at that, that's the real question mark.

01:18:45   And it's weird to talk about the company

01:18:47   that used to be called Time Warner being sort of

01:18:50   in the middle of the tier of giant media companies,

01:18:55   but that's kind of where they are right now.

01:18:57   - That's a good way to wrap up.

01:18:58   Thank you, Peter Kafka.

01:19:00   Anything else you wanted to talk about?

01:19:04   - I'm delighted to be on the internet with you, John.

01:19:06   Thank you for having me.

01:19:07   - Let me thank our sponsors, Mack Weldon and Linode.

01:19:10   And everybody can catch Peter's own podcast, Recode Media,

01:19:14   just on your favorite podcast player.

01:19:16   - Oh, I'll plug something I already did.

01:19:19   We did, my colleague and I, Ronnie Mola,

01:19:20   did a seven-part series on Netflix called Land of the Giants,

01:19:23   which you can also get where you hear your favorite podcast.

01:19:26   So if you like hearing about Netflix and streaming,

01:19:28   we've got seven episodes of that for you.

01:19:30   - Excellent.

01:19:31   Thank you, Peter.