0:00

Welcome

0:03

to the Vergecast, the flagship podcast

0:05

of the Laserdisc Resurgence. I'm

0:07

your friend David Pierce, and I am at a Redbox

0:10

kiosk near my house outside of a CVS.

0:14

I confess, I have never done this before. I've

0:16

been watching DVDs since, like, I had

0:18

one of those DVD-VCR combo

0:21

things, and back then the only DVD

0:23

we had was Clueless, so I watched it like 65,000

0:25

times.

0:25

Back then my family

0:27

was a pretty early Netflix house,

0:30

so we had those red envelopes coming and going all

0:32

the time. And then somewhere along the way, I

0:35

gave away my DVD collection and just went all

0:37

in on streaming. There was a piracy

0:39

phase in there too, but we don't have to talk about that.

0:42

But now, here

0:43

I am at the Redbox, because this kind of feels

0:45

like the last bastion of

0:47

the old DVD era. Like, I'm

0:50

looking at this and I can get DVDs of Asteroid

0:52

City and the Super Mario Bros. And

0:54

Shazam, which I definitely won't do. And

0:57

Cocaine Bear, which I might do. And

1:00

this

1:00

just feels like an era that's ending.

1:03

DVD.com, which is the name of Netflix's

1:05

old DVD delivery service, is shutting

1:07

down for good this week. Oh, and quick

1:09

PSA on that front, actually. If you're still a

1:11

DVD subscriber, put all your favorite movies

1:13

at the top of the queue right now, because

1:16

you get to keep

1:16

everything you have when the service goes down. So

1:18

do that as fast as you can. But with that gone,

1:21

and streaming still really ascendant

1:23

even though it's kind of a mess right now, I just wonder

1:25

what's going to happen. Is physical media just

1:27

dead? Is it going to have a huge comeback like

1:30

Vinyl did, where everybody's suddenly buying albums

1:32

again? I really don't know, but I'm very

1:34

curious about it. So in the first part

1:37

of the show today, I am actually going to talk to the person

1:39

responsible for this kiosk I'm standing in front

1:41

of. That's Bill Ruhana, the CEO

1:43

of Chicken Soup for the Soul Entertainment, which

1:46

now owns

1:46

Redbox as of a year ago. He has,

1:49

it turns out, some

1:49

surprisingly strong thoughts on the subject. After

1:52

that, we're going to switch gears a bit and talk about metrics,

1:54

the numbers we see everywhere online,

1:57

especially around video views, and

1:59

what it means that everyone reports those numbers

2:02

and none of it really seems to have anything to do

2:04

with anything. All that is coming in just

2:06

a sec, but first I gotta pick a movie

2:08

here, right? We've got a bunch of Spider-Mans,

2:11

John Wick 3, Plane,

2:14

which I don't think I knew was a movie until right

2:16

this second. Oh, they have Dungeons and Dragons.

2:19

Okay, Dungeons and Dragons, Honor Among Thieves,

2:21

rent DVD, $2.25, or I can buy it for $3.99. I'm buying a DVD. Let's do

2:23

this. All

2:27

right, taking this home. Here we go. This

2:30

is the Verge cast. See you in a sec.

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3:07

Welcome back. All right, I got a movie, I

3:09

made it home, and then I realized I don't

3:12

own a DVD player anymore, which was a problem

3:14

for a second, but then I realized that's why

3:16

game consoles exist. Someday I will

3:19

own one of those little small disc-less

3:21

ones, but for now I have an old Xbox

3:23

One and a PS4, both of which have disc

3:25

drives, so I am wired up and

3:28

ready for movie time. But for now, let's

3:30

talk about the future of those discs.

3:32

Redbox is probably the biggest brand

3:35

left in physical movies. DVD.com

3:38

obviously dying this week. Blockbuster

3:40

is long gone. I don't think anybody goes to Best

3:42

Buy or Walmart to buy movies anymore,

3:45

right? And Redbox just

3:47

kind of seems like the last game in town. And

3:49

Redbox actually got a new owner last year.

3:52

It's called Chicken Soup for the Soul Entertainment,

3:54

which also owns the streaming service Crackle

3:56

and Popcorn Flix, plus it has

3:59

film production

3:59

and-

3:59

distribution companies. The company paid $375 million

4:02

for Redbox last year, which a lot of

4:06

people thought was totally bonkers

4:09

at the time, and still do, frankly. But

4:11

Bill Ruhana, the CEO of Chicken Soup for

4:13

the Soul Entertainment, is convinced that

4:15

physical media is not dead, or

4:17

at least is not dead yet and won't be

4:19

dead anytime soon. So I called him

4:21

up to talk about why he thinks this is

4:24

a good business, and why he's betting

4:26

on discs even when his own company is

4:28

in the streaming business, and maybe

4:30

most of all, why he tried to buy DVD.com from

4:33

Netflix before it shut down. One

4:35

thing you should know before we get into the interview, Bill

4:37

uses the terms AVOD and SVOD

4:39

a bunch, and AVOD means ad-supported

4:42

video on demand, and SVOD means subscription

4:45

video on demand. AVOD you pay with

4:47

ads, SVOD you pay with money. Fairly simple. Just

4:49

wanted to clear that up in case you hadn't heard it

4:51

before. Anyway, let's get into

4:53

it. What

4:56

was interesting to you about Redbox in

4:58

the first place?

4:59

Oh, really many things. Let's

5:02

start with the brand and the

5:04

very loyal customer base spread out

5:06

across the country that probably

5:09

hasn't fully migrated to the digital

5:11

world for a variety of reasons, not the least

5:13

of which is some places they don't

5:15

have bandwidth that's enough to be able to

5:17

download movies and watch them without

5:19

a circle of death, you know, to

5:22

make the experience miserable. In some

5:24

cases, they're just late adopters.

5:26

In other cases, they can't afford the internet

5:28

or they can't afford the kind of internet that's required

5:31

to be able to do digital downloads.

5:34

They're movie lovers, they're entertainment

5:36

lovers, so they're highly motivated

5:39

to consume the stuff that we have. I mean,

5:42

I can go on and on and on about this. There were many

5:44

things. But the starting point was the

5:46

brand, the 42 million people in the

5:48

customer loyalty program, the beginning

5:50

of the foray into the digital world,

5:53

the ownership of a very large

5:55

transactional video business, which is very

5:57

hard to start. And then the Kia.

6:00

desks, which in my mind, someday

6:02

I hope to prove this would be generators

6:04

of significant cash flow if handled

6:06

correctly. That could be the cash

6:08

flow machine that allowed us to build our digital

6:11

business out over the next decade.

6:13

The audience is one that

6:15

I'm particularly interested in because we've

6:17

been talking a lot about who physical media

6:19

is for in 2023, right? And

6:22

I think a lot of people look at that audience and

6:24

say that audience is dwindling really

6:26

fast. It's much smaller than it used to

6:28

be. Most of those people are going to one way

6:30

or another find a way to get into the streaming era.

6:33

So we're just going to kind of leave that audience

6:35

behind and trust that they'll eventually catch up. You

6:39

went a different way. Or maybe you think that's

6:41

true, but there's money to be made along

6:43

the way. How do you think about sort of who that

6:45

audience is right now? Well,

6:46

I think it's the people

6:48

I just described, people who are not able

6:51

to have access to bandwidth who can't afford it

6:53

is another category. It's smaller, but

6:55

it's likely to grow of people

6:58

who say, wait a minute, I'm not getting

7:00

the same quality out of a digital

7:03

download that I would have if I had the physical

7:05

disc and I had all that additional capability

7:08

to see things more crisply. I know some

7:10

people who won't watch a Bond movie unless

7:13

it's on a DVD, it has to be blue and it has to

7:15

be the top notch because they want to feel

7:17

every bit of it. This is early for

7:19

this conversation, but at some point,

7:22

this probably takes the turn that eBooks

7:25

took back to physical books that

7:28

downloads and music took back to

7:30

actual albums where people

7:33

started to differentiate a little bit and you had

7:35

this growing cohort of people who

7:37

thought, you know, quality is important too.

7:40

And I get a much higher quality picture,

7:42

a much higher quality experience

7:45

if I actually have the physical media, which is so

7:47

much more richly packed with information.

7:50

Oh, and then there's all this other stuff that

7:52

comes with these DVDs that, you

7:54

know, you might want to actually have seen, you know,

7:56

so it's, you know, all the extras that

7:59

you get, that you don't get. in a digital download

8:01

very often. For us, it's really about giving

8:03

you access to first-class,

8:06

top-notch, current content from

8:09

any studio at the lowest possible

8:11

price, the earliest in the ecosystem

8:14

after it's theatrical that you can do it. And

8:17

so there's something that we're meeting

8:19

in need that's a little different than that collectible

8:21

need, that's for sure.

8:23

Right, yeah, and I think that

8:25

piece of the kind of windowing that you're

8:27

into is part of the thing about

8:29

your strategy that I think is so interesting, because it seems to

8:32

me that you have crackle,

8:34

you have chicken soup for the soul, you have red box. Everyone

8:37

else is kind of out in the streaming industry fighting

8:39

about content. Everybody's making shows and

8:42

spending more and more money throwing it into their own platforms.

8:45

It seems to me that what you're building is this

8:47

sort of

8:48

every step of the way distribution

8:50

pipeline. That's correct. Rather than

8:52

saying, we're gonna throw a bunch of money at David Fincher, you're

8:55

trying to get in sort of every step of where

8:58

content

8:58

is. Is that a fair description of

9:01

how you think about this? It is, and I

9:03

mean, look, we thought and have

9:05

always thought that understanding what consumers

9:08

want is most easily achieved

9:10

by watching what they do. And

9:13

if you want to watch what they do,

9:15

you have to be in that first line of

9:17

consumption so that you see what they do. And

9:20

one of the things I loved about and still love about

9:22

red box, so there's 42 million people in the customer

9:24

loyalty program. Give us a group

9:26

of people who we know, we know

9:28

who they are and we know when their

9:30

places and we can learn what they like. And

9:33

eventually artificial intelligence can

9:36

help us, I think, figure out how

9:38

to serve them stuff on the home screens

9:40

of our networks that are tailored

9:42

to them. By the word, I will repeat the

9:44

word eventually because we

9:47

cannot do that today, nor can anyone

9:49

else, no matter what they believe. Yeah,

9:52

everybody's doing a lot of voodoo that I think

9:54

doesn't add up too much in a lot of cases. No,

9:56

not yet.

9:57

So would that

9:59

part of the...

9:59

thinking with Redbox that you can get

10:02

this very early sense of what people like and

10:04

what's successful and that informs

10:06

what ends up on crackle months or

10:08

years later? Yes. So from one perspective,

10:11

that's what it was about. And

10:13

if you think about it,

10:14

the kiosks, transactional

10:17

video, the fast business, the

10:19

Avod business, we have some subscription

10:22

stuff, but it's not really our focus. I don't think

10:24

that's a particularly good business right now. And

10:26

having so many different places that people

10:29

interact with us as they consume,

10:31

it is very valuable. It

10:33

is a great bit of information that other people

10:35

don't have. And actually, other

10:37

than Amazon, there really isn't another company

10:40

with as many connecting points with consumers

10:42

in the media space as us. We are a very

10:45

unique beast. And that's all

10:47

intentional. That was really what I was looking for

10:49

when I was putting these pieces together. We

10:51

haven't taken advantage of that yet, David. We haven't yet

10:54

integrated all this stuff in a way that we know

10:56

how to smartly take advantage of what

10:58

we can do. But we've certainly set the stage

11:01

for that to happen because we

11:03

have the early access all

11:05

across a wide number

11:07

of things.

11:08

So that was the plan. There's a flip

11:11

side to this too, by the way. If you're thinking

11:13

about creating content and

11:15

you want to make sure that as you create

11:17

it, you're doing it in the least

11:19

risky way, having all this information

11:22

about what is consumed in these various ways,

11:24

like what works at the kiosks, what works

11:27

in T-VOD, what works in A-VOD, what

11:29

works on FAST. That informs

11:31

your thinking about how you will

11:33

commit to content creation. And a lot

11:35

of times, because you're the first dollar in a

11:37

lot of these places, you have superior

11:40

economics to people who otherwise

11:42

were creating content and would have to go through your system

11:44

and you get a piece of their revenue. So

11:47

if you believe, as I do, that ultimately content

11:49

and distribution are irrevocably

11:51

and completely tied to each other, it

11:54

is the kind of ecosystem that allows

11:56

you to actually lower your risk and

11:58

create content over time.

11:59

and get the most money back from it.

12:02

And it completely blows

12:05

away the theory that an S-Vide standing

12:07

by itself is a good idea, because it isn't. And

12:09

everybody's now figured that out. We've

12:12

done this, I've been talking about this since 2017,

12:16

that the S-Vide business was a disaster

12:18

waiting to happen. Do you think physical media

12:21

keeps being part of that equation

12:23

over time? I mean, if you play it out a ways,

12:26

more people have broadband, the windowing

12:28

system maybe changes so that there

12:30

are fewer ways to get stuff, but it's still

12:33

kind of, you get the $20 downloads

12:34

instead of the DVD rentals

12:36

and stuff like that. Do you think there's a place for physical

12:38

media in this long-term? I do.

12:42

If only because experience tells us

12:44

that inertia is the most powerful

12:46

force of all. And changing

12:49

people's habits is really hard to do.

12:52

Now,

12:52

COVID broke a lot of things, right?

12:55

It forced people to change their habits. One

12:57

thing it did is it accelerated the digital

13:00

transformation dramatically. But

13:02

if you looked at our business and

13:05

understood the assumption we made about

13:07

what would be successful in the physical

13:10

space, we said we expected

13:12

the red box kiosks with

13:15

a full of the content that it used

13:17

to have prior to COVID would

13:19

do 30% of the business that it did in 2019 before

13:21

COVID. With

13:24

that very low expectation,

13:26

we were highly profitable. Okay, wow.

13:28

Which was why I thought this

13:30

was a good idea. That

13:32

even if two-thirds or more of the people

13:35

had changed their mind about consumption, and that's

13:37

a pretty aggressive assumption that

13:39

two-thirds of the people have changed their habits, that

13:41

would be amazing. Then we would

13:43

still be profitable at 30%. And that

13:46

is further enhanced,

13:48

I'll say, for lack of a better word, by the fact

13:50

that we have a couple of other businesses

13:53

that make the kiosks profitable

13:56

at a lower level than that from

13:58

things other than just rentals. We're putting

14:00

screens on top of them and selling digital

14:03

out of home advertising. We have a

14:05

business that's built around the service

14:08

company that services our red

14:10

box kiosks, does the break

14:12

fix of them and does the merchandising

14:15

of them. We now do that service for other

14:18

big kiosk owners. Every

14:20

time we add one of those customers, we

14:22

bring our costs down to service

14:24

our own kiosks to the point that

14:27

I think by the end of next year, we'll

14:29

be close to zero net cost to actually

14:31

run our own kiosks from a servicing point of view.

14:34

That changes the business entirely. If

14:37

you took a one-dimensional view of this question

14:39

and said, hey, DVDs are going to go

14:42

away over the next 10 years, how are you going to handle

14:44

this? I would say, okay, great. Let's

14:46

start with the fact that I believe it's at least 10 years

14:48

because of the way people's habits are. Let's

14:51

also be smart and think about the ways we can

14:53

make that less relevant to our success. Let's

14:56

use these kiosks in more diversified ways.

14:58

Let's bring down the cost through the service business.

15:02

Let's figure out what the right price

15:04

increases might be over the course of a decade

15:06

to help make up for some of the lost

15:09

customers. We look at it on

15:12

that kind of an automated basis, you start

15:14

to realize, hey, it's relevant

15:16

that physical media is going away, but perhaps

15:19

less relevant than people thought when we bought

15:21

the company, which is why we

15:23

are crazy, but not for the reasons people thought.

15:26

That's fair. If that's the

15:28

timeline you're thinking about, do you think Netflix

15:31

is nuts to shut down its DVD

15:33

program now? If we're on a 10-year time

15:35

horizon, they're really jumping the gun here.

15:38

I think if you're them, it's a wholly different

15:40

analysis. This is such a tiny

15:43

little thing in a gargantuan

15:45

business. That's fair. It's not strategic.

15:48

It's more like a pain. It's

15:51

not like it in any way

15:53

affects your core business. Not at all.

15:56

The better

15:57

question is why keep it?

15:59

The bigger question is why didn't you just sell it to me when

16:02

I tried to buy it because I could have created

16:04

a whole bunch of synergies out of that business.

16:07

So why didn't they sell it to you? I

16:09

don't know. They just didn't even return our

16:12

phone calls asking about it. Really? We

16:14

told them we wanted it but they just... I

16:16

think they just wanted gone.

16:19

It's a distraction for them. Sure. What

16:21

would you have done

16:22

with it? Well, I don't know that I would have bought it but

16:24

if they returned my calls, what I would have looked at

16:27

was can I create operational

16:29

synergies and keep the costs lower and

16:32

drive additional revenue into this portion

16:34

of our business. There's a whole other question

16:36

lurking here which is who else is in

16:38

the retail and media business? Can

16:41

you think of any companies like Amazon

16:43

for example that might be in the retail and media

16:45

business and it found ways to make those

16:47

two businesses work incredibly well together?

16:50

People tend to have sort of a very single-minded

16:52

view of almost everything. If

16:55

you kind of challenge that single-minded

16:58

view, they go off the rails so

17:00

they kind of lose it. But there are examples

17:03

of the retail business and the media business

17:05

is working very well together. There

17:07

are examples of them not working at all. Walmart

17:09

and Voodoo was not a good example

17:11

of it. No insult to Walmart.

17:15

They're not a media company. They're a retailer.

17:17

That's what they are. Amazon, God knows what

17:19

they are. They're just awesome at everything

17:21

they do which scares everybody to death but

17:24

they're really good at what they do. So look,

17:26

I don't think there's anything inherently

17:29

contradictory about being in the two businesses if

17:31

you know how to be in them. There are

17:33

a couple of other companies I've learned of that are similar.

17:35

There's a company called Go Digital which

17:37

is a company I like very much in

17:40

both sides both in retail and media.

17:43

They make it work. So I think it can work. That's

17:45

all.

17:46

Yeah, I think part of the reason I'm curious about kind

17:48

of the hypothetical of what you would have done is it seems

17:50

like, you know, it goes back to what you said about Redbox at

17:52

the very beginning, right? It's a really good brand. People

17:55

know it. There are a lot of people in the program

17:57

and it seems to me that if you take

17:59

the idea of this is a very

18:01

accessible brand that gets new stuff.

18:04

There are a lot of ways you can go with that. You could

18:06

just do Red Box by mail, and

18:08

I don't know if the economics work for a lot of the reasons you're

18:10

describing, but that's a thing you could do. Or

18:13

you could start selling movies

18:16

to people through Red Box. There

18:18

are so many sort of splinters off

18:20

of this thing that is Red Box,

18:23

this good brand that people know and are used to interacting

18:25

with, especially if you're

18:28

betting that physical media as a thing that's gonna be around

18:30

for a long time. That's an increasingly not

18:32

competitive space. And it feels like if you

18:34

wanted to sort of branch out from Red

18:37

Box into we just wanna own

18:39

all of the ways that you get, acquire,

18:42

and watch physical media, you

18:44

could have pretty big ambitions there without

18:47

a lot in your way, right? Yeah, I agree.

18:49

Well, that was part of the reason to look at

18:52

the Netflix DVD business, too. I

18:54

mean, if we had gotten the opportunity,

18:57

if we'd gotten

18:58

the opportunity to have a conversation about it, we

19:00

would have then analyzed whether it made

19:02

sense. We never got to that point. I

19:04

just thought there were a lot of inherent possibilities

19:07

in that, you know?

19:08

Yeah, what do you think about DVDs and

19:10

Blu-rays in particular? Like, I

19:12

grant you, this is getting pretty far in the weeds of physical

19:15

media here, but I think I was thinking a

19:17

lot about the vinyl thing today

19:19

in prepping for this, because it's telling to me that

19:21

we didn't go back to CDs, and we didn't

19:23

go back to cassettes. We went to vinyl,

19:26

because that is the object. It

19:28

feels better. If you're gonna buy the physical

19:30

thing, that is the best version of it. It sounds the best,

19:32

it looks the coolest, it has the most kind

19:35

of cultural history, like that's the one.

19:37

And I wonder if we're gonna get some of that same

19:40

stuff for movies and

19:42

TV shows, are we gonna get a

19:44

new format? Are we gonna go back to like,

19:46

is VHS gonna come back? What's

19:48

your sense of Blu-ray and DVDs kind

19:50

of staying power over this next decade? I think

19:52

it's Blu-ray DVD. That gives you the

19:55

what you need, you know? We're not getting laser discs

19:57

back. This is all a way of winding up to

19:59

say, can you please.

19:59

laser discs back. That's what I think. You don't think

20:02

so. Partly because

20:04

you've got an embedded base of equipment

20:07

that's quite extensive where the DVD

20:09

can be used and the Blu-ray can be used. And

20:11

of course there were a lot of turntables even though they

20:14

weren't really running that much. People had

20:16

them and they were dying to turn them back

20:18

on, to get them back and get the quality

20:20

of and I guess the feeling

20:22

of that. Do

20:25

you think there are ways we can

20:27

make physical and digital

20:30

interact better over time? I remember

20:33

years ago talking to people who said, you know, if

20:35

you buy a DVD you should also

20:37

get the digital download so that you can watch

20:39

it on the devices that don't have DVD

20:42

players. And especially now, I mean people watch a lot of stuff

20:44

on devices that don't or can't

20:46

connect

20:47

to DVD players. It's true. Are there

20:49

ways to kind of put those pieces together?

20:52

Yes, there are. But I don't

20:54

know if that's a game changer

20:57

but I think it's, you know, an

20:59

incrementally better world.

21:02

If you can put those two things together I think

21:04

it's good. But the things

21:07

that drive our business and now look,

21:09

you're asking me a generic question. So, you

21:11

know, what do you think about this as a general

21:14

principle? I always think about it, what does it mean to my business?

21:16

I can't help that. That's what I do. And,

21:19

you know, so when I think about it from our business's

21:21

point of view, what drives our business is the fact that

21:24

we're the least expensive way to

21:26

get first run movies. That's what drives

21:28

our business. And get them right very

21:30

early and get them from every studio. If

21:32

you look at only any of the streamers,

21:35

not a single one of them

21:38

can deliver you first run movies

21:40

early from every studio.

21:42

They can deliver theirs. Sometimes

21:44

they can deliver one other guy's but

21:46

nobody can deliver everybody's except we

21:49

can or you can get it through transactional

21:51

video but that is so much more expensive

21:54

that for a large chunk of people it's

21:56

prohibitively expensive. So I

21:58

guess the question.

21:59

And then would be, if that's the thing, right,

22:02

if you pull it all the way down and say that the thing that we have

22:04

is cheap ways to watch first-run movies,

22:06

what do you press on customer

22:09

experience-wise to make that better? Is

22:11

the answer more kiosks so that it's quicker

22:13

to get to? Is the answer find ways to make

22:16

it even cheaper? Is it find ways to convince

22:18

Netflix to put its stuff on DVDs so people

22:20

can get it? What's the next

22:22

turn, if there is one, in

22:25

how to do that even better?

22:26

I think that the thing that drives the

22:29

business is always content

22:31

and getting the most content as quickly as possible

22:33

is the key. And here's where the window word,

22:35

which you've used a few times already and I've ignored,

22:40

becomes an important word. Because

22:43

getting an organized window

22:45

strategy from the studios so

22:48

that consumers know what to expect

22:51

would be a very good thing for everybody. You want

22:53

to make this experience better? Make

22:55

it clear to people when they can expect to

22:57

see these things. I mean, right now, the

22:59

media business has destroyed itself between

23:02

taking television and breaking it into 5,000 pieces

23:06

and making it impossible for people to figure

23:08

out where to watch things and

23:10

going through layer after layer of search to

23:12

try and find stuff. Between that

23:15

and the fact that the windowing strategy

23:17

of the various studios are completely

23:20

– they look ad hoc to me. They don't look

23:22

like strategies. They look like just, hey,

23:24

let's see what happens. That is not

23:27

good for the consumer. We have not

23:29

made life better for consumers in either

23:31

of those ways. And good,

23:33

solid, understandable windows, which are – you

23:36

don't have to be slavishly adherent to them,

23:38

but which generally are followed, is

23:40

a huge service to the consumer in terms

23:43

of understanding when to expect to see something.

23:45

It's mind boggling to me that this is not returned

23:48

faster. So the best thing I think we could do for consumers

23:51

is come up with a windowing strategy that actually

23:53

everybody abides by so that they know

23:55

when to look for things.

23:56

Otherwise they're just kind of like wandering around going,

23:58

I don't know, when does this

24:00

Why is Barbie out this week and Oppenheimer out

24:02

this week? Weren't they in the theaters at the same time? Why

24:04

are they six weeks apart? I don't know,

24:07

Universal and Waters. Okay,

24:09

great. Do you as a consumer care

24:11

which studio made the movie you

24:13

want to see? I don't think so. What you care about

24:15

is when is it available and do you know how to find

24:18

it? No, I agree. And I actually love that example

24:20

because I think the Barbenheimer thing was such

24:22

a phenomenon that there are going to be a lot

24:24

of people who want to get both of those movies

24:26

and watch them in the same day. And that is going to be

24:28

so stupidly difficult for so long.

24:31

It is. It's really ridiculous. So

24:33

silly. Well, we've got Barbie coming

24:35

to the kiosks within the next few weeks, which we're

24:38

excited about. There you go. But

24:40

Oppenheimer's not coming to the kiosks until November, or maybe

24:42

even later. I don't even know at this point. You know, it

24:45

doesn't make a ton of sense. It's not

24:48

smart. But this is part of

24:50

the COVID recovery of the

24:52

media business, trying to come back

24:54

to a new approach. With

24:56

COVID having driven so much digital

24:59

take up, it changed everybody's

25:02

focus in the media

25:04

business to digital, digital, digital.

25:07

And now as we start to realize, well, wait

25:09

a minute, it's really not that smart to only have one

25:11

way to monetize your movie when you could

25:14

have seven or six or whatever it is. One

25:17

doesn't cannibalize the other. In fact, a lot of people like

25:20

to watch it in all those different forms. And

25:22

adjusting to that and changing who's

25:24

in charge in these studios

25:27

is really, really taking the time.

25:30

Because when you really get right down to it, this is just

25:32

a fight between different parts of

25:34

the same company as to when

25:36

they're going to do things. How long are they going to put it in the

25:38

theaters? Where's it going to go next? Is it T-VOD?

25:41

Is it, you know, you've got a different guy who runs T-VOD than a guy

25:43

who runs the DVD business. Right.

25:47

And they hate each other. Yeah. Right. All

25:51

trying to figure out whose turn is it. You

25:53

know, every studio is going to go through this in

25:55

their own way. And then there's just Redbox

25:58

kind of kicking it increasingly. on

26:00

its own. I mean, does it feel like this

26:02

is a competitive space

26:04

at the moment? Like, what do you look like? Oh,

26:07

we're all let's left. Do you think that's going to change anytime

26:10

soon? If we get kind of a push

26:12

back towards some stuff you're talking about, are you going to get new competition?

26:15

No, I don't think so because the physical

26:17

presence that you have to create to be in

26:19

our business is so vast. And

26:21

we have 30,000 kiosks spread out across

26:24

the entire United States. You've got

26:26

leases with people, you've got to

26:28

be able to service these things. We're

26:30

not going to have any real competition. What

26:32

is interesting is the growth of kiosks in general

26:34

in the country is amazing to me. I

26:36

mean, there's kiosks popping up all over

26:39

the place. That's good for our service business

26:41

because that's lots of customers for us there. And I

26:43

think that's going to be one of our great businesses. All

26:46

right, thank you. This is really great and really fun.

26:48

I really appreciate you taking the time. It is my

26:50

pleasure. Nice talking to you.

26:53

We got to take a break and then we're going

26:55

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27:39

Welcome back.

27:40

We talk a lot on this show about numbers,

27:43

what it means to go viral and how creators

27:46

use numbers and metrics to understand

27:48

their business. And just what it

27:50

means to be a person when everything

27:53

you do and post and see has

27:55

a million numbers attached to it. And

27:57

all of these numbers seem so... It's

28:00

not meaningless than at least really hard to make

28:02

sense of. Like, can you compare

28:04

a YouTube view to a TikTok view

28:06

to an Instagram view? Is doing that

28:09

even useful? And how

28:11

do you make sense of any of it when everyone knows

28:13

at this point that so much of it can just be

28:16

gamed in one way or another? Well, our

28:18

friend John Herman over at New York Magazine recently

28:21

wrote a column that basically made the

28:23

case that all of these numbers are nonsense. It

28:25

really resonated with me and it kind of made me wonder what

28:28

we do now. So I asked

28:30

him to come on the show and talk about what it means

28:32

that the internet is just swimming with numbers,

28:35

most of which have nothing to do with anything.

28:37

I also grabbed Alex Kranz because we can't

28:39

talk streaming numbers without Alex Kranz. Let's

28:42

get into it.

28:43

John Herman, welcome to the Vergecast. Thanks for having

28:45

me. Alex is here too. Hi, Alex. What's

28:47

up, David?

28:48

John, can you just like sort of run down the thesis

28:50

of your piece for somebody who hasn't read it? Like, why

28:52

did you write about why Twitter views

28:55

don't make any sense?

28:56

I mean, I'll take any chance to write about

28:58

weird metrics. I feel like this is

29:01

like a trick that I use like

29:03

a few times a year for a decade now where

29:05

it's like, hey, there's a number out there that doesn't really make

29:08

any sense. If you explain that number to people,

29:10

everyone else will be like, oh, wait, that's what that

29:12

means? The thing is that

29:15

way of like measuring

29:17

everything in ways that are kind of

29:20

off and manipulative and misleading

29:22

and serve all these different purposes

29:25

is becoming more and more a part of just

29:27

like the fabric of daily life online.

29:30

Like everything that people

29:32

use in any social network in a

29:34

lot of non-social contexts, just in their software,

29:36

is sort of counting what they're doing and returning

29:39

it to them with higher and higher

29:41

numbers that are meant to sort of suggest

29:43

that you... Or they're sort of meant to inform

29:46

your behavior or make you feel good or make

29:48

you feel bad like you need to do something else. You're

29:50

just surrounded by these numbers all the time. And it's just this background

29:52

part of your online life. But as

29:54

a lot of stories start these days, there was a ridiculous

29:58

tweet and... Was it the Tucker Carlson? Carlson

30:00

thing? Yeah. So Donald

30:02

Trump and Tucker Carlson kind of counter-programmed

30:04

the Republican primary debate with

30:07

an interview on Tucker Carlson's

30:10

show, which if you haven't been

30:12

following this is now, I guess you would

30:14

say hosted on X. Like

30:16

exclusively. Yeah. He's just

30:18

blogging and posting it straight

30:20

to X. And the interview happens,

30:24

the debate happens. The debate gets like 12, 13, 14 million

30:27

views, according to Nielsen,

30:30

which is its own can of worms. Fox

30:32

comes out and says like, yeah, I don't know, 15 million

30:34

people watch this. If you count the streaming and stuff like that,

30:36

no one really cares. Donald Trump comes out and

30:39

says, Hey, actually we got

30:41

like 230 million views on

30:44

my interview, which is

30:47

nearly as many people as live in the entire, the entire

30:49

United States. That number kept going up and up and up.

30:51

Eventually it's like 300 million people. And,

30:54

you know, he's pretty loose

30:56

with numbers. You sort of, you want to revise

30:58

down a lot of Trump numbers. We're kind of

31:00

used to that. But in this case, he was just actually

31:02

citing a metric attached

31:05

to the tweet under Tucker

31:07

Carlson's video. And it really

31:10

did say that the time I wrote the article, it

31:13

was like 265 million views for

31:15

what was like, you know, Donald Trump has given a

31:17

lot of interviews and he's given interviews

31:19

to Tucker Carlson. This was like, I'm

31:22

sure very interesting to quite a few people

31:24

in a variety of different ways. It is not

31:27

something that everyone in the world or more

31:30

than every voter in the United States. It's just like

31:32

completely implausible. Everyone knows that it's ridiculous,

31:35

but it's not just, you know, kind of

31:37

like a notoriously misleading

31:40

public figure doing this. It is the

31:42

platform saying that's what happened. Views,

31:44

a word that we're supposed to interpret, like

31:47

in some sort of way, 265 million,

31:50

a big number that, you know, exists

31:53

in the world. So I don't know. That

31:55

doesn't make any sense. That's the kind of thing that you would expect to

31:57

hear from like Tabula or outbrain talking

31:59

about how chum box videos are performing.

32:02

And instead, it is like being

32:05

cited by the former president directly on

32:07

still very influential social media platforms. So

32:10

just kind of want to walk back from there. Like that

32:12

can't be real. Of course, it's not Twitter

32:14

internally tracks video views. And

32:17

if you use the Twitter for Mac client,

32:20

you can still see those views, which Elon

32:22

Musk had removed. The real number

32:24

of views on that was like 12 million

32:26

or 15 million, about the same as the

32:28

Republican debate Nielsen ratings, which

32:31

again, a big number. However, that

32:33

number is tracked after I believe, two

32:36

seconds of video playtime

32:38

anywhere on the screen, which if

32:40

you ask someone what it means to watch something,

32:43

no one's gonna on their unless

32:45

they work in advertising or something, no

32:47

one's gonna be like, Oh, yeah, well, if you look at it for two

32:49

seconds, and then scroll past it, you watched it, like that's

32:51

the opposite of watching it. However, that

32:54

is the Twitter video metric. Somehow,

32:56

Twitter is now measuring something

32:59

that is like, that is like 50

33:02

times less rigorous than that. And

33:04

telling everybody that that's how many people are seeing something.

33:07

And, you know, it's funny, it's silly.

33:09

It's a specific example. It is also how the

33:11

entire internet works right

33:13

now. There are just these bullshit numbers

33:16

absolutely everywhere. They're all bullshit

33:18

in slightly different ways. They're all

33:20

kind of like, you know, fundamentally bullshit

33:22

in the same way. But they're all these like different stacks

33:25

of invented measurements. They're frequently

33:27

compared to each other. They're frequently

33:29

touted for marketing. They're used to just sort

33:32

of like contextualize conversations about

33:34

something. I mean,

33:35

is that true? Are they mainly used to sell

33:37

ads? Or like convince people

33:39

to buy ads, right? Like, like saying,

33:42

Oh, yeah, we got 300 million views, don't don't

33:44

look into the numbers, but we got 300 million, you're gonna

33:46

get 300 million impressions if

33:48

you advertise

33:49

on this Tucker Carlson

33:51

show.

33:52

That's absolutely the logic of the like

33:54

gradual number inflation. But I

33:56

think what's weird about it now is that that

33:59

sort of on its face absurd,

34:01

but everyone just goes along with it.

34:04

Number inflation is bleeding out

34:06

of just, you know, the sales teams

34:08

at websites and social platforms. It's

34:10

now just like something that everyone talks about. And

34:13

fandoms talk about metrics all the time. They

34:15

try to manipulate metrics, even if the metrics are sort

34:18

of fake to like get their people, you

34:20

know, seen or in some cases paid more. You've

34:22

got Elon Musk kind of making the case for

34:24

his entire existence of his entire platform

34:26

and the relevance of his entire platform going

34:29

on to like double down on this after

34:31

a bunch of people pointed out that yeah, this, for

34:34

example, Trump tweet is kind of ridiculous.

34:37

The other day he was suggesting that 3

34:39

billion people a month see

34:42

long tweets. Like

34:46

just the Twitter blue long form content

34:48

is viewed by 3 billion people,

34:51

which I'm sure in some extremely

34:54

narrow way is true. Like that content

34:56

somehow produced in a combination

34:59

of people scrolling, kind

35:01

of like loading or, you

35:03

know, internal API calls calling

35:06

upon these posts.

35:07

I'm sure that number of impressions

35:09

to borrow the ad world term

35:12

here was somehow kind of generated and

35:14

logged, but that just has no relationship

35:16

to the reality of how many people

35:19

are engaging with something or seeing something or

35:21

like taking something in. Well,

35:23

I think there are like two sides of

35:25

this to me. One is this sort of nonsense advertiser

35:28

metrics we've always had, right? And every

35:30

company has their own special metrics

35:32

that don't make any sense to anyone

35:34

and essentially mean nothing. You know, Elon Musk

35:36

has been doing this loudly with Twitter. Like he talks a lot about like

35:39

regretted user minutes, which like

35:41

what on earth does that mean? But that has nothing

35:43

to do with sort of my life.

35:46

It's just like a thing they say to seem big

35:48

and everybody has numbers that they want to make big

35:50

or small and that's all fine

35:53

and good. But I think your point about the word views

35:56

to me is, is like what makes this specific thing

35:58

so interesting because one of the

35:59

few comparable

36:00

things across all of these

36:02

platforms that we have all the way down

36:05

to like

36:05

linear television on your TV in your living

36:08

room is we call them all views. And

36:11

the content is different the way that they're delivered

36:13

is different the way that they're measured is different, but we call

36:15

them all views. And so we compare this like

36:17

it's this apples to apples thing.

36:20

And they just honestly have

36:22

nothing to do with each other. Like what

36:24

Netflix thinks is a view is

36:27

so diametrically different

36:29

than what YouTube thinks is a view and what tech tech thinks

36:32

is a view and what Twitter thinks is a view that we're

36:34

not talking about remotely the same

36:36

thing, but because we use the same word, we

36:38

like obsessively pit these things

36:40

against each other all the time. And

36:43

it's kind of weird because nowadays,

36:45

you know, 30 years ago, these

36:47

metrics were actually difficult to measure,

36:50

right? Like you had to sit you had to have a little

36:52

box on your TV in your house. That was

36:54

it. Maybe the cookies could sometimes get it. But

36:56

nowadays, everybody is logging into these services are logging

36:58

into YouTube, they're logging into Twitter, they're logging into

37:01

Netflix is very, very easy to get

37:03

actual super valuable, super

37:06

like need to get into the nitty gritty

37:08

on these metrics. And they're still going for the

37:10

broadest,

37:10

most useless metrics

37:13

they can announce. That's sort

37:15

of like the central funny thing about

37:18

this to me, which is that, yeah,

37:20

I guess we're talking on a 30 year time scale

37:22

now. But if you think about, you know, linear TV

37:25

or print publications, you had

37:28

some data about how many people were

37:30

seeing your things you had like, you

37:33

know, your circulation number or your subscription numbers,

37:35

then you estimate your circulation numbers, you have the number

37:37

of people in a certain market, you have

37:39

all this, but you don't have this direct

37:41

access to like how people are interacting with your stuff.

37:44

So the people making media

37:46

had this need to like figure out what

37:49

was going on. So you end up with things like Nielsen,

37:51

where people sit in their houses and log

37:53

what they're doing. And then you do some statistical

37:55

work on that and come up with an estimate for how many people

37:57

are watching things and then advertisers use that number.

37:59

And you end up with a flawed but

38:02

transactable standard that people

38:04

work with. Yeah, at least it's more or less

38:07

apples to apples. Everyone at Nielsen

38:09

always agreed it's not perfect, but

38:11

it's at least directly applicable

38:14

from thing to thing. And it's close enough.

38:16

Yeah, but that world had all kinds of problems. But

38:18

the rise of digital media

38:20

brought along with it this promise that, of course,

38:23

everything is going to be tracked down to the second. We're

38:25

going to know so much about what people are doing. Anyone

38:28

who's written online for a long time your

38:31

publication knows how far people

38:33

scroll in every article that you write. And

38:35

if the numbers aren't good, you just ignore

38:37

that. You just pretend that people actually finish

38:40

your articles. But no, it is. The

38:42

amount of information you can collect directly now

38:44

is huge. So people making media have

38:47

incredible amounts of information. There's total audience

38:49

surveillance. Nothing that you do or consume

38:52

digitally is not tracked down to

38:54

this microscopic level. And

38:56

yet, we somehow collectively know

38:59

less about what's going on. Everyone treats

39:01

this information that they have as a trade

39:03

secret, which has the weird effect of making it

39:05

basically useless. If it's like, all

39:07

right, we're all going to agree on tracking standards.

39:09

We're going to do this in a transparent way. If there was some

39:11

totally alternate history where everyone

39:14

is surveilling their audiences very closely,

39:16

which is can of worms too, but

39:18

then sharing and comparing and auditing that

39:20

data in a transparent way, then you end up

39:22

with a very different kind of world where it would

39:24

just change the media landscape a lot. People

39:28

would know more about what people are doing. And that would create

39:30

all kinds of different incentives and demands. And some would

39:33

be worse and some would be better. However, now,

39:35

we've just got nothing. We've got everyone has so

39:37

much data, petabytes of audience

39:39

data that is just closely guarded

39:42

and shared in the most misleading way possible

39:44

in tiny little fragments when Netflix is ready

39:46

to be like, we actually tracked 3

39:50

billion watch minutes for

39:52

Squid Game, which is the most we've ever tracked.

39:55

And we started tracking this last year. And it's just like, what is

39:57

that for? I mean, obviously, it's for marketing.

40:00

And it's a sort of like flex

40:02

in a particular way to say that, yeah, we are not

40:04

just doing bullshit impressions. We're tracking

40:06

time and we wouldn't do that if it wasn't a lot,

40:08

but it still doesn't mean anything. So

40:11

we just sort of like somehow managed to take more and

40:13

do less with it collectively, which is

40:16

kind of a nice common story online

40:18

these days. Why do you think they treat

40:21

it like these trade secrets? Because

40:22

I totally agree. Is it because

40:24

they think that the

40:26

numbers used to be bigger, the media that

40:28

was like much more a smaller

40:31

landscape. And so a show could have 20

40:33

million viewers, that was a really big deal. And now the

40:35

biggest shows have like 10 million. And

40:37

so they don't want to be like, Oh yeah, Wednesday is the biggest show

40:40

on the platform right now. And actually,

40:42

it's got like 5 million

40:43

viewers or something. I think that's a really

40:45

interesting question. And some of it probably

40:47

just comes down to like instincts, like, Oh

40:49

my gosh, we have this thing is proprietary, it's

40:51

ours, there is a real tendency, I feel

40:54

across large corporations, but

40:56

one that I've observed more directly in tech companies

40:58

that I record on, to just sort of treat

41:00

everything like a trade secret, like you might as

41:02

well. And you end up with

41:05

these interesting collective problems when you do that,

41:07

that show up further down the road. But

41:09

also, like you said, with the streamers in

41:11

particular, they've got kind of a different problem

41:14

from, let's say Facebook, which

41:16

is routinely racking up just absurdly high

41:18

numbers whenever they attack a metric

41:20

to something like, Oh, 100 million people watched a

41:23

viral video yesterday and the day

41:25

before and the day before that works for

41:27

them. They can be like, Yeah, that's amazing. Look at these big

41:29

numbers. There there's, it turns out there's 20

41:31

billion people in the world and we found a bunch more of them

41:33

and they all use Facebook. But

41:36

Netflix, like you said, is

41:38

tracking this stuff from a very early stage, very

41:41

data focused company, they use it to inform all their

41:43

decisions. And they're also, I'm sure, seeing

41:46

like, okay, we've licensed

41:48

a beloved old sitcom that you

41:51

know, when in its heyday was getting like 20 million

41:54

prime time viewers every week, according

41:56

to Nielsen, and we just put it on here and like, it's

41:58

doing okay, but it's not doing that. Or our

42:00

new sitcom that we just released that everyone's

42:03

talking about that's getting a lot of great coverage, actually

42:05

not that many people watch it. And that's kind of flipped over

42:07

time. Like there are genuine huge streaming

42:09

hits. It's not just like a media

42:12

illusion that, I mean, everyone watches streaming

42:14

now. That is how people watch TV.

42:17

But the precedent was set a long time ago,

42:19

just like, well, we're not going to write

42:21

out of the gates, like rush into some

42:23

sort of mutual surveillance with

42:25

tons of disclosures, and we're not going to do

42:27

that if we don't have to. We don't have that need

42:29

that people used to have when they

42:32

worked with Nielsen and depended on Nielsen

42:34

for selling advertisements and getting their ratings to

42:37

know how many people are watching our stuff. We know. We

42:39

would love to know how many people watch other

42:41

people's stuff, but you know, they have, they have

42:43

their ways of guessing there. They seem fine with

42:46

not knowing how many people are watching like this HBO

42:48

max

42:49

reality show or whatever, like Netflix is fine with

42:51

that. Well, this is where we come back to my kind of

42:53

like number nihilism. And

42:56

like Kranz, you and I talked about this a bunch, right? The case

42:58

against forcing all of these

43:00

streaming companies in particular to share a lot of

43:03

really understandable apples to apples

43:05

numbers is that one thing it will do is make very

43:07

obvious how many shows don't work. Right.

43:10

And it's great for the people who are making shows

43:12

that are bigger than you think. And it's actually bad for the people making

43:14

shows that are worse than you think and

43:16

not doing well. And it can like that

43:18

stuff can have real effects

43:20

on people's careers. And it is anyway, because like

43:23

Netflix knows the shows that don't work and it cancels those

43:25

shows. So that's obviously bad for people's careers. But

43:27

like if it starts to be out there,

43:29

like people used to be petrified of ratings

43:31

every day, because if the ratings decided

43:34

your career and part

43:36

of me wonders whether what

43:38

we need is better, more understandable

43:41

metrics or if part of what we need is like many,

43:43

many, many fewer metrics. And

43:45

maybe this place we've come to where really nothing means

43:47

anything. If we all can acknowledge that

43:49

nothing means anything, maybe we're actually in a better place.

43:52

Well, I think the metrics don't mean

43:54

anything, even for the companies themselves,

43:56

because I think of like at least two different

43:58

shows in the last year who

44:00

were sent to be successes

44:03

on their networks, showed like, you

44:05

know, we're like one of them was in the top 10 for Netflix

44:07

for the week it premiered, and then they immediately got

44:09

cancelled. They got cancelled pretty quickly. One of

44:11

them was a League of their own, which was like a very successful

44:13

show for Amazon, but very expensive

44:16

show for Amazon and not nearly the hit that it had hoped

44:18

it to be. And they had this

44:20

long slow cancellation death. That other one

44:23

was Warrior None, which was like another show

44:25

did seemingly did very well.

44:27

And then was cancelled the same week it like premiered.

44:30

And so they left all those fans

44:32

who, you know, that was something John, you

44:34

mentioned, fans are like the most

44:37

meticulous. They're better than Nielsen

44:39

when it comes to figuring out ratings. Like,

44:42

they are so good at figuring

44:44

this stuff out. And they were just saying, well, numbers don't mean

44:46

anything because you published all your

44:48

numbers which say this, and we have all the stuff we

44:51

tracked and says this, and you still went

44:53

did it. So what is numbers? And

44:55

it came down to it was expensive and they didn't want to make it

44:57

right? Like, they didn't want to do a third season because

44:59

third season would increase the cost of the entire

45:02

staff and the contract and everything that Hal Reelk's

45:04

does it. And that was the real reason. And it's

45:06

like, okay,

45:07

numbers are to blame. Well,

45:08

this is something where I'm really kind of torn because

45:11

I work in an industry where people watch your numbers

45:13

at work and see how many people read what you do

45:16

and it matters. And you know, it determines all

45:18

kinds of things about your job. And also

45:20

your sense of like what you're doing and why. But

45:23

there isn't a world where streaming

45:25

companies aren't like collecting and using

45:27

this data or rather data

45:29

in general to like figure out what to do. And

45:32

at streaming companies more than at social

45:35

media companies, which have to depend on really

45:37

direct relationships between like viewership

45:40

metrics and advertising and all this stuff, but that's

45:42

all very, very direct. At streaming companies,

45:44

viewership metrics and

45:46

their sort of internal ratings, they serve as like

45:48

a weird proxy, a sensible

45:51

proxy for success in a way if you're making TV.

45:53

But what they actually survive on mostly

45:55

for now, and I guess this is changing,

45:58

is subscription numbers. That's the

46:00

actual metric that matters. And so Netflix is like,

46:02

all right, well, we can't tell that

46:04

precisely.

46:06

This is their version of the old measurement problem. What

46:08

is driving subscriptions? Like we have

46:10

good ideas. We noticed that people stick

46:12

around after they watch this or they sign

46:14

up and then watch that. Like they have some stuff. But

46:17

what the ratings do for them instead is just serve

46:19

as like a way to value things that

46:22

aren't actually assigned to value in a very, very

46:24

direct way. And if they're gonna do that, I

46:26

tend to think that like more visibility

46:30

is better and more transparency about what the numbers

46:32

mean because the people making

46:34

the shows, the people watching their shows, if they

46:36

don't have that information and Netflix does,

46:39

they're at some sort of disadvantage. If you're

46:41

a viewer, that's sort of fuzzy. You're like talking about

46:43

fandom stuff again. If you're creating

46:45

shows, you have less leverage to like

46:48

ask for more money or you have less

46:50

warning about when you're gonna get canceled or you

46:53

are missing part of the story if your show does

46:55

get canceled. And you suspect

46:57

that it was viewed by a lot of people but maybe there's something

46:59

else going on. Like it's just being withheld.

47:02

And in the context of the strikes in Hollywood,

47:05

generally writers and other people who work

47:07

in entertainment, they generally just want

47:09

more information because the information exists and

47:12

it might be kind of bullshit and it might be collected in a way

47:14

that isn't super transparent. But if it's gonna be used

47:17

to make decisions, it's better that people

47:19

who are trying to

47:19

make this stuff

47:20

know it. It's not ideal that they

47:22

have to obsess about it. Like that's a problem

47:25

too. If there's a world where Netflix

47:27

becomes hypermetrics focused in

47:29

a public way and becomes in

47:31

that sense more like YouTube, you have

47:33

a different set of problems. But

47:36

you've also got a system that is somewhat

47:38

more accountable where in

47:41

some small way, people who are doing

47:43

creative work have a little bit more of a sense

47:46

of like where they stand. And that's not

47:48

worth nothing, especially when you're arguing about like

47:50

pay that is determined by basically

47:53

metrics, which again to sort of like back way, way

47:55

up are all fundamentally made up.

47:57

You have to like come up with a standard for

47:59

measuring. things, you have to apply

48:02

it with some level of rigor. Every

48:04

time you see a number that purports a measure of something

48:07

down to the most fundamental measurements, you should wonder

48:09

how it works. Apply that a thousand

48:11

times over when you're looking at something

48:14

attached to a piece of social

48:16

media content. But still, if

48:18

they're used, they matter. And if they matter,

48:20

then I think people, creative people, should probably have

48:23

more access to them.

48:24

All right, John, before we let you go, can

48:26

we talk about your phone situation for a minute here? Because

48:29

the first cast audience needs to know, you

48:31

wrote about the iPhone 15, which I

48:34

thought was very smart. We've discovered in the course

48:36

of doing this that you have an iPhone 12 mini that

48:38

is literally in the middle of exploding as

48:40

we are recording this. Tell

48:42

us about your phone life and why you're getting a new phone

48:45

this year.

48:45

So listen, I've been a guy that blogger for

48:48

coming up on 15 years here. I don't really have an excuse,

48:51

but I love the mini. It's small.

48:53

It was never very good. Like the battery never

48:55

lasted very long. All this stuff has little beautiful

48:58

children. I want to take pictures or not. It's not great.

49:01

But I don't know. I stuck it out. I

49:04

didn't want to give up this little thing.

49:06

It did overheat while we were recording.

49:10

It's on an ice pack right now, we should say. Yeah,

49:13

it's on a little pink ice pack from

49:15

my daughter's lunchbox to kind of make it to

49:18

the end of the episode here. It couldn't

49:20

handle wireless charging and talking on a video

49:22

at the same time. In

49:25

that sense, I am so excited about the

49:27

iPhone 15. For work

49:29

purposes, for the purposes of content

49:31

creation, I've got numerous critiques

49:34

and thoughts and complications

49:36

about this. However, I can't wait to pre-order

49:39

the phone. I don't care how big it is, as long as it doesn't

49:42

become dangerously

49:44

hot while I attempt to do my job,

49:45

I'll be happy. Fair enough.

49:49

All right, John, thank you so much for being on.

49:51

This is really fun. Alex, thank you. We all,

49:54

we're going to need to do this again. The numbers are not going to

49:56

stop being weird, and you're going to keep doing

49:58

stuff we like, so keep coming back on. Anytime,

50:01

really a pleasure to join you. All

50:04

right, we got to take one more break and then we're going to get to

50:06

the Vertica's hotline. We'll be right back.

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50:48

All right, before we get out of here, let's answer a

50:50

question from the hotline. As a reminder, the

50:52

hotline number is 866-VIRG11. We

50:55

want all of your best and weirdest tech questions.

50:58

And if you don't want to call, you can email VirgCast at

51:00

thevirg.com. That works great too, but

51:03

it's always fun hearing the hotline, not going to lie. Anyway,

51:05

this week's question sent me on kind

51:08

of a tailspin. So let's just hear

51:10

it.

51:10

Hey guys, this is Mark

51:12

from Tampa. I got a question for you

51:14

and you guys seem like the right ones to answer it. It's

51:17

a bit of a streaming and a hardware

51:19

question. So a few months

51:22

back during the reveal of the Apple

51:24

Vision Pro, Bob Iger came onto

51:26

the stage and mentioned that he was developing

51:28

a Disney Plus app for that $3,500 monstrosity of

51:33

a system. However, I did notice that,

51:35

you know, I have a couple of kids, we have

51:37

Nintendo Switches, there's over 125

51:40

million of those already sold

51:42

and in hands everywhere. Do

51:44

you guys have any possible reason why

51:46

Disney wouldn't have a Disney Plus app

51:49

already on a platform that big?

51:51

They've already have a Hulu app for it.

51:54

So it just seemed like a slam dunk why they

51:56

wouldn't have it in hands of all the

51:58

kids around. Seems silly. to carry around

52:00

an iPad and a Switch whenever we travel.

52:02

So just curious if you guys have any thoughts on

52:05

it. All right. Have a great day. Take care.

52:07

Okay. I should say upfront here that I am

52:10

totally fascinated by this question and I'm still

52:12

trying to report it out. So hopefully I will have a firm

52:15

pat 100% answer really soon. But

52:17

in the meantime, I've been talking to people and

52:19

like putting yarn on a board with

52:22

people's photos to try and make sense of this situation.

52:25

And here's what I've gotten so far. I think there are three

52:27

separate things going on here and I'll rank

52:30

them kind of in order of importance. The

52:32

first thing is that with the Switch,

52:35

Nintendo wanted to make a game console first

52:37

and foremost. We've had companies in the past,

52:40

Microsoft at the Xbox One probably most famously,

52:43

try to do the game console

52:46

and entertainment system thing really

52:48

well simultaneously. And it just really doesn't

52:50

work. And one of the things that Nintendo

52:53

has done really well over time is just

52:55

make great games. It has had streaming

52:57

services in the past, but the reason people

52:59

buy Nintendo products is for great games. And

53:02

Nintendo knows that better than just about anybody

53:04

else. Just to name one example, here is

53:06

Reggie Fields, M.A., who was formerly the Nintendo

53:08

of America president and COO talking

53:11

in 2018 about how

53:13

he was thinking about streaming services. The question

53:15

was essentially, when are people going to be able

53:17

to watch Netflix on the Switch? And here's

53:19

what he said. For

53:20

those sorts of questions, we have to refer you

53:22

to the folks at Netflix. What we said when we

53:24

launched Nintendo Switch was that we

53:27

wanted to have a gaming first

53:29

platform and that's what we created. And

53:31

that's what enabled us in the first 12 months

53:33

in the United States to be the best selling

53:36

home console in the history of video

53:38

games. Right now we enable Hulu

53:40

on the platform. We've said that other

53:42

services will come in due time. For us,

53:45

we want to make sure that we continue driving

53:47

the install base for Nintendo Switch, to

53:50

have great

53:50

games for the platform. In terms

53:52

of what's next on the streaming side,

53:55

you're going to have to talk to those individual providers

53:58

in terms of where they stand and

53:59

they're working on.

54:01

That's a little bit of a cop-out, but I think it's also

54:03

true that Nintendo knows

54:06

that entertainment doesn't really move the needle.

54:09

People might watch stuff on their consoles,

54:11

but nobody's buying a console as a way to watch

54:13

stuff, if that makes sense. And so I think if

54:16

you're Nintendo and you're a company that does

54:18

basically one thing very well and you want to

54:20

keep doing it, that kind of focus really

54:22

makes sense. The second thing is that I think Disney

54:25

would really like to have Disney Plus on

54:27

the Switch. When it launched Disney Plus

54:29

in 2019, it did a big show

54:31

in front of investors about what was going on, and

54:34

it actually had a slide of all the places that

54:36

it wanted Disney Plus to be, and it included

54:38

a picture of the Switch, like right there

54:41

on the slide, big red Nintendo Switch.

54:44

And as he was showing this slide, here is what

54:46

Michael Paul, who's Disney's president of streaming

54:48

services, said at the time. Right

54:50

now, we are securing distribution

54:53

for Disney Plus across mobile

54:55

devices and connected TV

54:57

devices, including game consoles,

55:00

streaming media players, and

55:02

smart TVs. With these device

55:04

partnerships, not only do

55:06

we optimize our product for consumer

55:09

experience, we ensure that our

55:11

service will be prominently featured and merchandised

55:13

on our partner platforms. Right,

55:16

okay, so

55:16

Disney wanted this. I don't think that

55:19

was smoke. That is Disney

55:21

saying, we want to be on all the platforms.

55:23

I think if it were easy and straightforward,

55:25

Disney Plus would probably be on the Switch. But

55:28

that thing that Michael Paul said about being

55:30

prominently featured and merchandised, that's

55:33

kind of the third thing. We think

55:35

of these streaming platforms and the systems

55:37

that they run on as just sort of app

55:40

stores, right? Build a thing, put it on the platform, everybody

55:42

wins. But that's not actually how it works.

55:44

This business is really messy, and when

55:47

ads get involved and when subscriptions

55:50

get involved, everybody wants a cut, everybody

55:53

wants access to user data, everybody

55:55

wants to be the first one featured in the store

55:57

and get prominent placement, and there are questions about who's

56:00

the search and what happens when you search for streaming,

56:02

every part of this is like relentlessly

56:05

negotiated and there's a ton of money in

56:07

it. It's how TV makers make a lot of their

56:09

money. It's how streaming platforms make a lot

56:11

of their money. This is a big and complicated

56:14

business. And the thing about Nintendo is

56:16

Nintendo just doesn't need to care

56:18

about any of this. If you remember,

56:20

there was that email that Phil Spencer, the

56:22

head of Xbox, sent about wanting to buy

56:24

Nintendo. He basically said that the

56:27

bad news for Microsoft at the time was

56:29

that Nintendo, and I'm quoting here, is

56:31

sitting on a big pile of cash and they

56:33

have a board of directors that until recently has

56:35

not pushed for further increases in market

56:37

growth or stock appreciation. If

56:40

you were, in theory, super

56:42

interested in market growth or stock appreciation,

56:44

one thing you might do is hire a bunch of

56:46

people and get really into the weeds

56:49

of negotiating these deals with streaming services

56:51

such that maybe you become a streaming platform.

56:54

But Nintendo's good. I don't think Nintendo

56:57

needs the hassle. It's very happy making

57:00

these smash hit games, making a console

57:02

every once in a while. It seems to be a good

57:04

business. It seems to be working for Nintendo. And

57:06

my guess is it just doesn't

57:09

need the nonsense that comes with being

57:11

a really successful streaming platform.

57:13

Put all of that together and I think that

57:15

might be it. I think Nintendo just doesn't

57:17

want this that badly. And

57:19

so here we are. Frankly, it might be

57:21

a miracle that we got Hulu and YouTube

57:24

and Crunchyroll rather than a problem

57:26

that we don't have the rest of the services. But

57:28

that said, if there is a smoking

57:31

gun here, I'm going to find it. And if you

57:33

know the answer and you want to tell me why

57:35

Netflix and Disney Plus and Macs and

57:37

all these other services are not on the Nintendo Switch,

57:40

call the hotline 866-VIRGE-11 or

57:42

email us, vergecastoftheverge.com. Tell

57:45

me all your answers. Alright,

57:48

for now, that is it for the Vergecast. Thanks

57:51

to everyone who came on the show and thank you as

57:53

always for listening. There's lots more

57:55

on all of this stuff, especially the shutdown

57:57

of DVD.com. Yonko Rutgers wrote a great piece.

58:00

for us about how that service worked, which

58:02

is very cool. We'll put a bunch of links in the show notes,

58:04

but as always, read theverge.com. It's a cool

58:06

website. The last thing, this is probably

58:08

the last call for this, but if you have questions

58:11

about The Verge or The Vergecast that you want us to

58:13

answer on our meta Vergecast episode,

58:15

get them in now. We're recording that episode really soon.

58:18

We have a ton of fun stuff. It's going to be a really fun episode.

58:20

This show is produced by Andrew Marino and Liam James.

58:23

Brooke Minters is our editorial director of audio.

58:25

The Vergecast is a Verge production and part of the Vox Media

58:28

Podcast Network. Eli, Alex, and

58:30

I will be back on Friday to talk about MetaConnect,

58:32

the Code Conference, and whatever else happens

58:35

this week, because everything just keeps

58:37

happening. We'll see you then.

58:50

The era of automotive advances

58:53

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58:56

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58:58

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59:02

technology, experience awe-inspiring

59:05

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59:08

as standard. The time is now.

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a test drive and order today at Polestar.com.