posted 1 day ago on re/code
A lot is riding on a new London-based COO to help justify the company’s $45 billion valuation. WeWork is shuffling around some of its most senior executives as it tries to build out its international presence, which is a big test for the office-rental company in justifying its recent $45 billion valuation. Eugen Miropolski, who previously oversaw WeWork operations in all of Europe and Asia excluding Japan, has been named the company’s chief operating officer, the company told Recode, and will remain based in London — a move the company says is out of a desire to charge forward in new overseas markets. Its current COO, Jen Berrent, is moving to a co-president role and will remain WeWork’s chief legal officer and a direct report to Adam Neumann, the company’s CEO. The COO position in particular has seen a good amount of turnover at WeWork as the company scales: Berrent had been in the position for a little under two years, succeeding Artie Minson, who was the COO for also about two years before becoming the company’s chief financial officer and sole president. Both Berrent and Minson were based in the US. So, yes, the people advising Neumann are remaining the same. But the move to promote Miropolski, who at one point oversaw Airbnb’s growth in Europe, reflects how WeWork very much needs to prioritize its international footprint — especially since becoming so closely aligned with SoftBank, the Japanese-based conglomerate which has funneled billions of dollars into the company at a much-questioned valuation to try and help it become a global juggernaut. “There is no one more equipped to operationalize our vision for our next phase of growth,” Berrent said of her successor. Miropolski, who is only 31, said that his “primary focus” as COO would be to expand WeWork’s offerings “whether they’re in Jakarta or Johannesburg.” Johannesburg, for instance, is expected to be WeWork’s first office in all of Africa. The New York-based company over the last few years has been trying to drastically scale up its international presence, entering nine new countries in 2018, in addition to the 18 it was already in. WeWork says at the end of the last fiscal year that 58 percent of its total workspace desks were based outside of the United States, while only 41 percent of them were a year before that. WeWork has had overseas offices since 2014 — company executives admit it could arguably have been overextending itself given that the company was hardly dominant in the United States — but international expansion is the WeWork’s best opportunity to keep up the rapid growth rate that investors like SoftBank expect to see. It has become, for instance, the largest private tenant in London. Other markets are more undeveloped: China, which Miropolski oversaw, is in particular a huge test for WeWork as one of its fastest-growing regions. The company now has 74 locations in China in eight cities, and SoftBank has invested hundreds of millions of dollars in WeWork China, a China-specific venture. But the company has hit some snags recently in markets like Hong Kong. All this global expansion ended up costing the company $2.5 billion last year. The grow-now approach means that WeWork sustains massive overall losses — $2 billion last year, or twice what it lost the year before. But company leadership has said that it is emphasizing expanding to new markets over laying out any path to profitability that it might seek to prepare for an IPO.

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posted 1 day ago on re/code
Plus: Say hello to the first billion-dollar sneaker reseller and Pinterest and the video-chat service Zoom prove that maybe the sky isn’t falling for IPOs in 2019. Included in special counsel Robert Mueller’s 448-page report were pages and pages of details about Russia’s attempts to use social media services, like Facebook and Twitter, to sway public opinion before and after the 2016 US presidential election. We’ve been writing about this activity for years, so many of the details were not exactly new. But, in aggregate, they serve as a reminder of the outsized role that Facebook and Twitter unknowingly played in the election. Mueller’s report also echoed an indictment from 2018, which found that President Trump’s campaign team, by retweeting or linking, apparently unknowingly “promoted” social media posts that originated from Russian trolls. [Kate Fazzini / CNBC] [Want to get the Recode Daily in your inbox? Subscribe here.] Say hello to the first billion-dollar sneaker reseller — StockX — which is about to close in on new money that will amount to a bet that appealing to sneakerheads can be a big business. Recode has learned that StockX is finalizing a new round of financing that will value the company at over $1 billion led by DST Global, the venture capital firm founded by Yuri Milner. StockX operates a marketplace that helps avid high-end sneakers buyers find those sellers who hold rare kicks.[Theodore Schleifer and Jason Del Rey / Recode] Facebook wins the Best News Dump Award for a privacy snafu that was shared during the Mueller report’s unveiling Thursday morning. It turns out that millions of Instagram passwords were stored unencrypted on Facebook’s servers, which means that some employees theoretically had access to them. Facebook had originally said that hundreds of millions of Facebook user passwords were stored in this way, but that only “tens of thousands” of them were from Instagram. The reality, as it tends to be with Facebook, is much worse than initially revealed. [Kurt Wagner / Recode] Pinterest and the video-chat service Zoom prove that maybe the sky isn’t falling for IPOs in 2019. On Thursday, Pinterest began its first day of trading at $23.75, up 25 percent from the IPO price, according to CNBC. The company’s stock was initially priced at $19 per share. The company’s valuation is now well above the $12 billion at which it raised its latest round in 2017. And for Zoom, the company priced its debut stock price between $32 and $35 earlier this week, according to CNBC, but on Thursday Zoom’s surged to $65. CNBC’s Jordan Novet notes that Zoom is an exceptional IPO case because it is profitable, and as Recode’s Teddy Schleifer writes, “we’ll see how Zoom does in its first weeks of trading, but up to this point, it’s looking like a unicorn IPO success story.” [Lauren Feiner / CNBC] Those fancy, new folding Samsung phones are breaking, already. According to The Verge’s Dieter Bohn, his $1,980 Galaxy Fold phone broke after one day of use when, he thinks, a piece of debris worked its way under the screen. After reaching out directly to Samsung, Bohn writes that the company says it’s looking into the issue but for now it warns that users shouldn’t remove a protective plastic film that covers the device. This, though, wasn’t what caused his phone to break. Apparently, the Samsung-installed “screen protector” isn’t supposed to be removed by users; other reviewers have had phones break after they removed it. Debris or a piece of plastic or not, the takeaway is to treat this expensive phone with extreme care. Or, you know, maybe save yourself a couple grand.[Dieter Bohn / The Verge] This is cool Trump’s reaction to a special counsel investigation: “I’m fucked.”

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posted 1 day ago on re/code
DST, the venture capital firm founded by Yuri Milner, is expected to lead the deal. The online sneaker resale marketplace StockX is in advanced talks to be valued at $1 billion-plus in a new round of financing, Recode has learned. DST Global, the late-stage venture firm run by Russian-American billionaire Yuri Milner, is expected to lead the deal, according to people familiar with the matter. It will be the latest bet by the firm on an e-commerce startups after backing companies like like DoorDash, Wish and Faire. The exact size of the financing round couldn’t be learned. Another expected participant is GGV Capital, the venture firm famous for investing in both the US and China, according to the people. StockX is planning to make some other major company announcements when it unveils the fundraising round, which is likely to be closed in the next few weeks. StockX, DST and GGV all declined to comment. StockX launched in 2016 and was founded by Dan Gilbert, the billionaire owner of the Cleveland Cavaliers, and CEO Josh Luber, who previously ran Campless, a site that eventually became StockX and displayed data about hard-to-find sneakers. StockX plays matchmaker for sneakerheads looking for rare kicks and resellers looking to flip unworn, in-demand sneakers for a profit. Sellers ship their goods to StockX facilities where employees authenticate that the sneakers are genuine, before shipping them out to a buyer. StockX, which is not profitable, charges a $5 selling fee, plus as much as 12.5% in transaction and payments fees. Luber told The New York Times a year ago that StockX generated about $2 million in gross sales every day. The company has 700 employees. The Detroit-based company gets its name from its stock-market like pricing structure, which lets shoppers either pay the lowest asking price from one of StockX’s sellers, or place an even lower bid and see if it eventually matches up with a seller’s asking price. StockX also makes the pricing history of a given sneaker transparent, which is one reason why it bills itself as a next-generation eBay. While sneakers are StockX’s sweet spot, the site also sells watches, handbags and streetwear through the same model. Like competitors GOAT and Stadium Goods, StockX has benefitted from the rising popularity of acquiring tough-to-buy sneakers, especially among millennial men and teenage boys. And the valuations of the companies in the space show it. The luxury e-commerce website Farfetch paid around $250 million to acquire Stadium Goods, which uses a consignment model, last year. And GOAT, which also owns the boutique sneaker store chain Flight Club, was valued at more than $550 million when Foot Locker invested $100 million in the company earlier this year. Because of its real-time pricing model, StockX is often able to offer slightly cheaper prices, But StockX’s success is predicated on these high-end sneakers remaining fashionable or collectors’ items — and that’s no guarantee. Previously, StockX has been financially backed by Gilbert, as well as Alphabet’s early-stage arm, GV, and also Battery Ventures.

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posted 2 days ago on re/code
This number is much, much bigger than Facebook originally shared. On the same morning Special Counsel Robert Mueller’s report on Russian election interference finally became public, Facebook dropped some troubling news: Millions of Instagram users’ passwords were accidentally stored unencrypted on Facebook’s servers, which means Facebook employees could access them. Facebook first announced late last month that it had stored hundreds of millions of user passwords unencrypted on its servers, a massive security problem. At the time, it said that “tens of thousands” of Instagram passwords were also stored in this way. On Thursday morning, Facebook updated its blog to say that, actually, “millions” of Instagram users, not “tens of thousands,” were impacted: Since this post was published, we discovered additional logs of Instagram passwords being stored in a readable format. We now estimate that this issue impacted millions of Instagram users. We will be notifying these users as we did the others. Our investigation has determined that these stored passwords were not internally abused or improperly accessed. A Facebook spokesperson pointed Recode to the update and reiterated that “there is no evidence of abuse or misuse of these passwords.” But the timing of the update — again, during the release of Mueller’s report — doesn’t convey the message that Facebook cares strongly that users are aware of this issue. Facebook is under investigation by numerous government agencies, including the FTC and the DOJ, for its data collection and privacy practices. It’s unclear if issues like unencrypted password storage could play a role in those investigations, but it’s not a good look regardless for a company that is already struggling mightily with user trust.

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posted 2 days ago on re/code
Hempel joined the site’s editorial team this year after 17 years at magazines like Businessweek, Fortune, and Wired. The core business of Microsoft-owned LinkedIn is helping professionals network and find new jobs — but unlike its social media peers, it’s unabashedly a media company, too. A team of 50 editors, led by editor-in-chief Dan Roth and editor-at-large Jessi Hempel, delivers news to LinkedIn users around the world. “News has the ability to make professionals smarter and, more important, to get them talking to each other across boundaries and borders around who you know and who you don’t, around things that matter to them in their professional lives,” Hempel said on the latest episode of Recode Media with Peter Kafka. “My work hopefully helps the people on LinkedIn get smarter about their work.” Hempel joined the site this year after 17 years in magazine journalism, working for prestigious legacy brands like Businessweek, Fortune, and Wired. The types of stories she’s writing now for LinkedIn, she explained, are similar to what she was doing by the end of her tenure at Wired: “ideas-driven pieces about the nature of how technology companies are changing.” Most of those 50 editors are not writing stories like Hempel is, or working on her podcast, Hello Monday. Instead, they’re summarizing big news stories and surfacing public discussions among people who are affected or interested by that news; for example, Hempel said, LinkedIn provided a unique window into the substantial layoffs at SpaceX earlier this year. “I remember, that was the one that I was like, ‘Oh, this is amazing,’” she said. “You have six or seven conversations that have been tacked to it that include people who have been laid off and the experience there. Analysts talking about it. Journalists writing about it. People who are looking to hire people who have been laid off. “You get the smattering of first-person sources that I, as a journalist in my career, would have to go out and search for actively,” Hempel added. “We’ve just circled them all up for you and said, ‘You’re interested in this? You can go directly and talk to these people about it.’” You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast. Below, we’ve shared a lightly edited full transcript of Peter’s conversation with Jessi. Peter Kafka: This is Recode Media with Peter Kafka, that is me. I’m part of the Vox Media Podcast Network. I have a very special guest here today, my old friend, Jessi Hempel, who I think of as one of my favorite writers. I still think of her that way, but now I have to think of her as senior editor-at-large at LinkedIn. She’s going to explain what that means. Hi, Jessi. Jessi Hempel: Hi, Peter. Thank you for having me. You kind of have to say that, because I’m currently the writer in the room with you. Yeah. Oh. You are one of my favorite writers. It’s a true thing. Thank you for that. I have always admired the work you’ve done. Oh, and now you’re podcasting, too. Oh, yeah, totally. Let’s plug your podcast frequently. So, my podcast is called Hello Monday. Also for LinkedIn. Also for LinkedIn, but you’re not going to find it on LinkedIn. You’re going to find it wherever you listen to your podcasts. Wherever you listen to fine podcasts like this one. Exactly. Should we just get right to it, explain why you’re at LinkedIn? Right. That is a little bit of a mystery to anybody who has followed my career, which would be my mother and you, because I began my life as a magazine writer. And you did it for a long time. A long time. And you were really good at it. Seventeen years, and thank you for saying I was really good at it. Should we go to the résumé? Businessweek, Fortune, Wired. Queen of all media, Jessi Hempel. That’s right. And you did really good stuff, thoughtful stuff. You write about business and technology, and in a lot of ways you were doing sort of the counter to what I spent a lot of time doing. I did a lot of quick, fast stuff, and you would do deep, thoughtful, insightful, long pieces. What everyone says they want to do, you actually did. That’s right. Actually, I think everyone comes out of journalism school saying, “I’m going to write a National Magazine Award-winning piece for the New Yorker.” Yeah. And then, like, one of those people actually does, over the course of their career. And certainly that wasn’t me, but I did have a good, economically fine-enough career as a long-form journalist, and I loved it. Salaried magazine writer living in New York City, that’s a hard thing to accomplish. Somebody paid my health care benefits. Yeah. And I worked at Condé Nast, and when I began in my career, Condé Nast felt to me like the place that you aim for. So I thought, well, when I finally figure out how to get here, if I can figure out how to get here, well then, I’m done. They made a movie about how amazing it was, or at least terrifying, to work at Condé Nast. I don’t think that “amazing” was the right word. No, but the whole, the premise of Devil Wears Prada was that everyone aspired to be at this, they didn’t say Condé Nast, it was, what? Did they call it Vogue? Or whatever it was supposed to be. Whatever it was supposed to be. The point was, it was supposed to be this amazing citadel of media power, which it was, up until, I don’t know, 10 years ago? 20 years ago? Well, of a certain type of influence, it continues to be a dominator. Yeah. But there was this moment for me — and it happened slowly, it wasn’t an all-at-once moment — where I realized, I looked ahead and I said, “Well, I do this thing I love now, but what’s next for me here?” And I looked at all the people around me who had jobs in my company, and none of them were jobs that I could see myself doing in a decade. It felt to me like the most interesting thing in media, apart from craft, which is something that I loved perfecting, as a writer, for my entire career... You are a writer who likes writing. There are some writers who don’t like it. There are. They’re still good at it, but you like it. There are. So, I would say this about myself, I’m a writer who loves writing, and is a fine enough writer. I think that writing is kind of brick laying. Like, you practice it and you practice it and you practice it and you get better at it. And some people have some gift for it. You’re still laying bricks. And you’re still laying bricks. I practiced and practiced and practiced and loved it. But I think that the reason why I was able to make a career out of it was not because I had some crazy talent. I think it is both because I practice so hard and because I think it was a product of my curiosity, the thing that I was curious about, and as a result, my ability to listen. Like, I, you know, I got in the room because people would tell me things, and then because I was in the room, I got to learn to be a writer. Yeah, the getting in the room part is the thing that has always interested me, not for the status of it, but like, I want to know how it works. Right. I want to know how the thing got made. I want to know how the decision to make the thing got made. I want to know what the people said, not when they’re onstage but behind the stage, or offstage. I want to know about that, and that’s still the thing I want to know about the most. And that’s changed a ton over the course of my career, I would say. For me, that was interesting, but then there was also this moment, Peter, where I became obsessed with ... you know, I’d spent my professional life writing about the internet, and how the internet was going to change things, and that change was that it was going to redistribute power and it was going to change the notion of influence. So, instead of influence being something that happened from the top down, it would happen sideways and from the bottom-up. The users, and someone ... The users would have influence. Someone who didn’t work at Condé Nast, but was in their parents’ basement somewhere in the Midwest, or somewhere in a different country, they could have all this influence. And that was the promise, right, Peter? And yet, I still was writing for these magazines who existed because we had collectively decided that, actually, influence was something that came from the top down, it came from the brand. Like Fortune, which was where I spent a good deal of my professional career... Fortune Magazine. Fortune Magazine, and really, I mean, I think Fortune is really where I learned the craft, was a place that existed because people had confidence in the brand, right? Right, both the readers, advertisers, and then the people you’re writing about, right? CEOs of Apple or Microsoft or whomever, don’t give interviews, generally, to someone working in their parents’ basement, but they would give them to someone working at Fortune. That’s exactly right. And they might care about the individual writer they’re talking to, but they also care that it’s Fortune Magazine. I think that’s right. I think, though, that we have been dealing with the tremblings of the examination of, “Well, what if that’s not true?” ever since I began in this craft, right? Blogging came along, and suddenly, “oh no, how crazy, somebody could be in their basement, in their pajamas, writing, and they could have the same size microphone as Fortune.” And of course, we know that’s not really true, because Fortune also had the brand, and so it gave it credibility. And there were, like, oh, Bill Gates is giving an interview to Gizmodo, back when Gizmodo was kind of a scrappy blog. There were bits of that coming up. There were bits of that coming up, and then there was also this idea that the audience, whoever the audience was, right? When I was writing for Fortune, it was twofold. The audience was, in part, the people we were writing about. I cared a lot about them. I had a lot of dialog with them. I knew who they were — not Bill Gates, but Bill Gates’s PR person, for example, and I had a very deep relationship. Or in some cases the actual people. I mean, I got to know and report about, like, Mark Zuckerberg very early. But the audience-audience, the millions of people for whom Fortune arrived in the mail, who read it, I knew very little about. Maybe I got a letter from the editor. Maybe, when I went home over Christmas, my dad’s friend talked about something I’d read, but that was kind of the extent of it. And they might also say, “How’s it going at Forbes?” because they confuse the two. All the time. Yeah. And Forbes was you, and Fortune was me, but kind of it was all the same. Yeah. And frankly, I just remember my mother saying to me — I worked for Businessweek for a long time — and she said to me, “You know, Jessi, I look through every page of Newsweek and I never see you. Why aren’t you getting in the magazine?” And then I went to Fortune, and it was the same thing. “Mom, I got bad news for you, it’s never going to work.” Yeah, she was like, “Jessi, I look through Forbes, every page, you’re never there.” Yeah, so, totally true. But I think that, you know, so when I got to Condé Nast and I got to Wired — and I was a writer at Wired, maybe a year and a half into my tenure there — Condé Nast bought a Medium property called Backchannel and I went over to help run Backchannel with Steven Levy. It was you and Steve Levy, yeah. Yeah, and Steve Levy is, like, the most wonderful guy. He’s a mensch of a guy. He’s creative. He’d really designed this tech publication on the premise that long-form journalism could exist on Medium. And he’s one of the lions of tech writing and had done amazing books, insanely great, is still one of the great Apple books, had done, and would do these big, heavy, you know, I am going to bring you inside Google, or pick your giant thing. He’s, that is his next book, right? Is currently doing that. No, not Google. It’s Facebook. It’s Facebook, right? He’s deep inside Facebook. It’s been going on for years now. Yeah. Yeah. Going on long enough, with complete access, that when it finally comes out I’m look forward to reading it. That’s a plug for Steven’s book. Yeah. But, so, there Steven and I were, running this long-form magazine on Medium’s software inside of Condé Nast. That lasted maybe a year, and you know, right after Condé Nast bought that property, Medium came out and said oh, actually, we’re not interested in advertising. “We’re pivoting,” it’s one of the many pivots. Yeah, one of the many pivots, but like really bad timing for Condé Nast, which had just bought this property to learn about how advertising might work on it. Yeah. So, that’s unfortunate, but really great timing for me, because I got a whole year and a half of creating long-form journalism on a software that really valued the audience and gave the audience basically a two-way dialog with the writer. And that was addictive, Peter. And what that software did well, I mean, Medium had and has a lot of challenges, but it has some of the most elegant social software in the biz, and it does a really great job of setting up the reader and the writer to be in conversation with each other in meaningful ways. That’s funny. I have never once considered the dialog aspect of Medium. Seriously? Never. I mean, I know they do a thing with claps, and we all make jokes about getting a lot of claps, but to me that seemed like a tack-on thing that you put on to sort of facilitate distribution, and latch on to some of the things that had made Facebook and Twitter work. It never once occurred to me to comment on a Medium ... I did want to ask you about the LinkedIn stuff, and then commenting, but you know, I think of LinkedIn as a place you go to put stuff, instead of a blog, and a lot of times it’s terrible stuff, and sometimes it’s good, and sometimes Jeff Bezos uses it to talk about his personal life. It has never once, I’ve never once thought of it as a conversational element. Well, that probably says a lot about the hats you wear when you go to LinkedIn, Peter. I mean, you’re a media guy, you live in a coast. Wait, I’m sorry, at Medium. You’re talking about LinkedIn. No, I was talking about Medium. Oh, you’re talking about Medium. You were talking Medium. I think you said LinkedIn and I ... Yeah, yeah, yeah. ... thought we were jumping to that. You don’t want to jump there. No, I do. I do want to ask you about LinkedIn and comments, but yeah, no, I was talking about Medium. No, so I think that that was true for me before I was affiliated with Backchannel, and the great wonder of Backchannel was that I became obsessed with the idea of conversation as content, meaningful conversation as content, and that worked on Medium in a small tech community. Remember, it was a tech publication, because Medium was full of tech geeks who knew a lot about tech stuff. And so, I mean, in the same way that I think The Information is really great at conversation as content, because they have the right audience, and they’ve brought them together around the right questions. And there’s a wall around it, right? Right. You just wander in and bam, you’ve got to pay Jessica Lessin some money. Right. So, at Backchannel, I went there because I wanted to write, and I was able to write, and I could still do the 3,000- to 5,000-word features that took a long time and required a lot of resources, but I quickly became obsessed with figuring out actually how to corral those conversations, and try to evolve those conversations into content that actually mattered. And look, that’s a high bar. Like, there’s a lot of like mediocre user-generated content, that’s not what I’m talking about. I’m talking about the actual conversations with readers that elevated the content. Then Condé Nast didn’t continue to support Backchannel, which is no mystery, and so the Backchannel team went back to Wired, which was a great home for us. Round trip back to Wired. Yep, round trip back to Wired, and that was under Nick Thompson, and Nick Thompson is like an incredible intellect and a wonderful editor. Who we’ve had on this podcast. And was a lot of fun to make good work with. His ideas made my ideas better. Yeah. But I missed this thing. I was suddenly writing on Wired, and again, I didn’t know who my audience was, and because I’d had a whole year and a half of knowing who my audience was, I missed it a lot. And I realized that I was actually very curious about distribution and how distribution works and who owns distribution and what influence looks like in a world where, instead of a brand talking down to readers, a brand needs to figure out how to engage readers in a conversation. So, that is a long answer. I know. I was trying to say something positive. It may not have sounded positive. You gave it a full answer to my question, which I appreciate, but I have questions. Yeah. Because I’m very interested in career changing, not myself, but I’m just interested in how it works. Any reason, Peter? No. And I did want to mention that Dan Roth has been on this show before, and Dan had also done really well as a writer, had been at Wired, and then went on to create this sort of content business at LinkedIn. So, I assume there’s a connection there. Well, I love that you say that. He was at Wired, and then he came back to Fortune, and he came back to Fortune to run Fortune.com, and I was so excited to work with him. We got to know each other. We were friendly. And then in, I think 2011, he came into my office, he shut the door, and he said, “Jessi, I’ve been thinking that maybe I’m going to go to LinkedIn. Do you think that’s a crazy idea?” And he’d obviously asked everybody else there before me, and everybody else had told him it was a crazy idea. And I told him, “Absolutely, you should go do that. Yes, you should definitely go to LinkedIn.” And in the back of my head, I also was like, “Yeah, I wouldn’t do it myself,” but you know. “Not for me, but good for you.” He had three little kids, like, that seems like a great opportunity for him. He should go do that. And we’ve been in pretty regular touch ever since, as that has evolved. Yeah. I can’t remember if we talked about, I mean, because he was, he had a minder here from LinkedIn when he was on, and he was a little tight. But I, so, I can’t remember if we talked about this. We probably did. I’m sure we did. But I clearly remember seeing him like a year after he’d taken the job, and he was sitting in the office at the Empire State Building, and he was not happy, and he was not happy for the obvious reasons you would think someone who’d grown up and built a really good career in editorial, would be unhappy when they went to a tech company, which is, it was a tech company. Look, the culture of media companies ... And it’s worked out, but I’m assuming that some of that was in your head when you went over as well. Well, not really, because he went over in 2011, and I went over in 2019, and those were, I mean, that is like a couple of generations of iterations of what it means to be a journalist inside a tech company. Right. And the tech company has figured out why it wants to have a journalist there/if it wants to have a journalist there. Sometimes, they hire journalists and go, “Whoa! Whoa! This is not what we wanted, at all.” “We want a journalist. Just be quieter. Be quiet over there.” “Just go pick the articles, but stop. Just don’t cause trouble.” Yeah. I mean, it’s a funny flirtation, right? Like when Dan came to LinkedIn, Dan was the journalist. He was tasked with building a team. When I came to LinkedIn, Dan had built a team of more than 50 people working around the world on several different news products. It was a totally different situation. I think the only thing that is similar is that Dan had a really clear mandate and I have a really clear mandate and I think having a clear mandate helps you be effective at the thing that you’re doing. What is the mandate? Just for context, everyone here knows what LinkedIn is, and I think everyone listening here knows that LinkedIn is a giant company that’s owned by a much bigger company, Microsoft, so what does Microsoft/LinkedIn/Dan Roth want you to do? That just stressed me out so much, the way that you layered that out. It’s a lot of weight on top of your head. But no, my job is to come to LinkedIn and continue to write about and create media about big ideas in the same way that I was doing it at Wired. So, most of those products are actually going to be fairly similar. At Wired, probably the most well-read things that I wrote in the last year and a half were ideas-driven pieces about the nature of how technology companies are changing. Their personalities are changing and what that means for the people who work at them. That’s a very logical story for me to tell at LinkedIn, too. On the business/practical/cynical side of it, they are a company that makes money from advertising, in part, but just engagement in general. They want people to spend time on LinkedIn and they want you to generate stuff that will bring people to LinkedIn and help them stay in LinkedIn because they’re interested in it. I think what you’re asking — and stop me if I’m wrong on this — but I think what you’re asking to some degree is why does LinkedIn care about paying people to create original content for the platform? Yeah. You can go even further back, why do they care about ... If it’s just a job posting or why do they care about anything? That it isn’t just about selling job postings. Clearly, they want people to hang out on the site because they get more engagement there. And then, too, why pay Jessi Hempel instead of getting the readers to do it for free, which is also something they do? Right. I’m going to talk to those questions in the order that you asked them. So, LinkedIn is so not just a job-posting site. There are tons of just job posting sites and sites that do that very well. But that is its core business. Well, LinkedIn has several businesses, but they all stem back to that. I mean, all those businesses are connected to connecting people with opportunity. Google has a lot of things, but Google at its core is a search engine. It’s a search business. So, LinkedIn is working on building up anything that connects people to opportunity. And to do that better, what it needs is for the people who are coming to the service to spend more time getting things they need from the service. Now, both of those things are important. Spend more time on the service, yes, but specifically, spend more time getting things they need from the service. LinkedIn has always believed, and I think it is because, going back to the CEO, Jeff Weiner, I mean, I first met him in 2008 when he still at Yahoo, before he’d even come to LinkedIn. He’s always really understood content and understood news in particular and believed in it. I think that LinkedIn believed that news has the ability to make professionals smarter and, more important, to get them talking to each other across boundaries and borders around who you know and who you don’t, around things that matter to them in their professional lives. So that was the mandate. That is part of what I’m doing there too, Peter. I mean, my work hopefully helps the people on LinkedIn get smarter about their work. I don’t think that I probably need to tell you, as somebody who works in media, that user-generated content is great, but it is not as great as carefully crafted content by somebody who has studied the field for, in my case, 17 years. I believe that, but there’s lots of evidence to the contrary, right? There’s Facebook. What do you mean? Which is bigger than any other media business and almost all that content is created by people for free. Sure, and we have a lot of members creating a lot of content for free. I mean, I think that the thing that you have to keep coming back to is, we want content that makes professionals smarter at their jobs, that is useful to them, right? The perfect combination of that, we believe, is user-generated content and editorial content. By the way, our editors, I think this is maybe the important piece here: Our editors are not, for the most part, doing what I’m doing. There are a handful of people who do what I am doing, which is really content creation. Making new stuff. Right? Yeah. But, a lot of what editors are doing is contributing to something that we have called the Daily Rundown. The Daily Rundown happens in seven different languages in 11 different markets. And that is, it arrives every day for LinkedIn members, and it is a summary of the day’s news and each piece of news has a collection of conversation that’s happening on the site. I, being a news junkie living in New York City and having a million outlets for my news, never looked at this before I got to LinkedIn. So it’d be really easy to write it off, but the truth is that most LinkedIn members ... Don’t have that. Who are coming to the service every day, they don’t have that. They’re not interested in that and this has become the way that they get their news. The truth is also, it’s hugely interesting. So, you take one like layoffs at SpaceX. I remember, that was the one that I was like, “Oh, this is amazing.” You have this summary of the news, layoffs at SpaceX, and then you have six or seven conversations that have been tacked to it that include people who have been laid off and the experience there. Analysts talking about it. Journalists writing about it. People who are looking to hire people who have been laid off. You get the smattering of first-person sources that I, as a journalist in my career, would have to go out and search for actively. We’ve just circled them all up for you and said, “You’re interested in this? You can go directly and talk to these people about it.” Are you writing about different kinds of things than you would have at Wired or Medium, and/or are you changing the way you approach the story given that you have a different audience, or maybe just an audience that you can talk to? So, both. It’s not an or, it’s an and. Am I writing different stories? Yeah, to some degree. I think when I went from Businessweek to Fortune, my approach to stories changed slightly, based on the slight difference in readers between Businessweek and Fortune. Fortune’s a more writerly magazine as far as style. Fortune’s like a lot of style and a lot of C-level execs reading it. Then when I, obviously, when I went from Fortune to Wired, I went from writing for primarily a business audience to writing for ... Consumer enthusiasts. Consumer enthusiasts. And now, going from Wired to LinkedIn, I’m writing for an audience of professionals who may or may not work in tech, but are really interested in feeling connected to Silicon Valley. So, are you actively thinking about that as you’re writing, as you’re editing, as you’re picking a story topic? Yeah. More so than I would have otherwise, because I’m also getting the feedback from my audience. It’s funny, my audience, like I think about this one guy, Adam Marks. I’ve never met him. I’m guessing he’s listening to this podcast because I connected with him on Backchannel and he has basically followed me on all the social platforms. Now he’s on LinkedIn and he converses with me about what I’m writing. I love that personally, because I can respond to his interests and I think it makes my writing more vibrant. And now at LinkedIn, I just have maybe 20 times the number of readers giving me that feedback than I would have in earlier iterations of my career. This is the last version of this nerdy audience question, but so if ... when you’re writing for Wired or Fortune or Businessweek, business still exists ... people who work there spend a lot of time thinking about how to distribute that stuff widely, but there’s a core audience that is reading them in print or they’re coming to the website and they know what Businessweek is and they have an expectation and they may know you there and they want to follow you and that stuff and they’re there for a reason. I assume at LinkedIn that you’ve got a lot of readers who their commonality is they have jobs or would like jobs or they’re in business in some way. Right. But it’s a feed. It is. It’s coming to them. I’m assuming that you have to think about, how do I reach a reader who wasn’t expecting to read me? Or how do I engage with a reader who wasn’t expecting to read my story? I love that you asked that because actually, that is one of the reasons that I think the editorial team is so important at LinkedIn. Kind of what you’re asking is a little bit about an iteration of the filter bubble. Like, I’ve got my followers. How do I branch out of my followers and the people who think like me and have conversations with other kind of people? And know what I’m talking about. And know what I’m talking about. Although I think that we can safely assume at this point that a general audience of professionals, for the most part, can understand most of what I would write about technology. I mean, it’s not that specified and I’m also not doing day-to-day deal coverage or anything like I might have once read on Recode, for example. But, our Daily Rundown does that really effectively, because when it’s gathering conversations from around the network, those are not conversations from people that you know. In effect, my favorite ones are actually the ones that happen in other countries. Like, I’m pretty obsessed with our Japanese Daily Rundown right now because I’m learning a lot about how news consumption works in different countries. I’m assuming you’re reading in translation? Yes. I mean, I don’t know, maybe you speak Japanese. I’m obsessed with the way that it happens, not the actual content. I mean, in fact, you would be surprised at the degree to which news stories are news stories globally. They don’t change all the time from market to market, but just the interaction with and the reason for the conversations and the way that they’re playing out in different markets is really interesting to me. So, we’ve spent a lot of time talking about how you got to this job and now we’re going to take a minute on the mechanics of it. I want to talk to you about what you’re actually making. Which is a podcast. Like everyone else, you have a podcast. I think podcasting is like blogging when I first began, right? Yeah, exactly. You know, there was a moment when everybody could blog and then we quickly realized that just meant that everyone could self-publish. No one is reading my blog. No one cares what I have to say. I’m going to stop doing it. And then a handful of people figured out how to do it as a job and some people turned those into businesses. That’s kind of where we are now. Right. Well, I’ve got this podcast, it’s called Hello Monday. It launched the beginning of March. We have six episodes out. It is a podcast about the nature of work and how that work is changing us as we do it. It is so much fun. It is really, truly an experiment for LinkedIn, but LinkedIn, because it is a tech company and has the resources to do so, can invest in trying to make the experiment work and has done so. It seems like a slam dunk for you guys, right? Whether or not, this particular iteration works, the idea of giving your audience something they can put in their ears on their way to work or wherever they’re going, that somehow has a practical utility or at least it’s just interesting. You nailed it. I think that we want to reach professionals wherever they are to help them get smarter about what they’re doing during their day. There are lots of times when professionals are not in front of a screen. They’re at the treadmill, at the gym. They’re walking to work. They’re commuting, and this is a great ... Ignoring their kids. Never. Never. Well, a lot. I mean, as somebody who has a new baby, I can tell you that I think that may be impossible to ignore. I like to think of a future in which I can ignore him for just a little bit. It turns out there is down time with the kids. I haven’t discovered it yet. Yeah, you’ll get to it. Okay. I’m not going to give you any more parenting advice other than telling you to ignore your kids, which does not seem like a good idea. I want to talk about some of the stuff you are creating at LinkedIn. The piece that really struck me was last fall. I’ll read the headline for you and you can riff on it. You wanted Silicon Valley to “outgrow it’s Sheryl Sandbergs.” Yeah. Why? I love that you referenced that piece and it was a time last fall when Sheryl Sandberg was under a ton of fire by the press for her management at Facebook over the course of the last couple of years. After not being really taken to task. After not being taken to ... The criticism over the previous two years was centered, I think correctly, at Mark Zuckerberg because he’s the CEO. There was this window, I started watching as an outsider, because keep in mind, I didn’t really cover Facebook too much. I wrote about it. I opined about it as it were, but our coverage at Wired, when I came back to Wired from Backchannel, really belonged to a team of people we had, who are really gifted and all over it. That freed me up to just watch. But yeah, there was a period of time during which no one would talk about Sheryl Sandberg and that led to a New York Times piece in the fall and then everybody had something to say about Sheryl Sandberg. I didn’t want to comment one way or the other on her management or mismanagement. I wanted to point out something that I just noticed because I’ve covered tech in the Valley for two decades, which is, from the beginning of the Web 2.0 era, there was this moment when suddenly these youngsters with laptops could, like they had never been able to before, start these mostly social services and VCs wanted into those companies so badly. I mean, if you got into Facebook, you were good. If you got shut out of Facebook, you were in trouble. If you invest in Twitter, Facebook, any of these things early enough, even the ones that didn’t end up being ultimately successful, like Tumblr, if you were early, you made your career. You made your career. Right. What that meant was that sometimes VCs would make these really terrible deals. Terrible for the company, terrible for the ecosystem, where they would basically give all the voting power to the kid founder, and I do mean kid founder. I mean, these people were in their late teens and their early 20s. I remember the peak of it was when ... Do you remember when Yahoo bought the company that was run by the 17-year-old? Yep. And, you know, if the company grew to a middling size, I mean, there were problems with it, but then if it got acquired, those problems were usually smoothed out. But for a company like a Facebook, what that meant was that you had a young person who didn’t have management experience who got to hold all the cards, and eventually, you needed to help that person run the business, but you didn’t have the leverage of being able to fire them. It was their company. And by the way, you can flip this narrative and say that this is a terrible thing for the environment and bad deals, but you could say these are people who created a cool thing, and then they got to keep control of their company, and that’s actually how it should be. But we’ll still get into the same point, which is ... I want to let you take the next part here. Either way, whether you think it’s a good deal or a bad deal, you end up at the same point, which is ... Well, you need somebody to be the No. 2. You need a Sheryl. Yeah. Right? And let’s not even use the word “a Sheryl,” like, you need somebody to be a No. 2, and that person has this crazy job, Peter, because that person needs to ... Run the business. ... not ever want to be the No. 1, because they’re always going to be the No. 2. They need to do all the aspects of the job that the founder doesn’t want to do, and then they also need to be able to gently manipulate the founder into doing the things that the founder doesn’t want to do. And so, it’s kind of a hard job. And by the way, those jobs mostly fall to women at tech companies in Silicon Valley. Yeah, the one prominent male version of this is Eric Schmidt at Google. Yeah... Right? Yeah. He was the original “adult supervision.” Right, but then you look at, I don’t know, SpaceX, Airbnb, Slack ... Yeah, oh, and also I guess Dick Costolo at Twitter, but Twitter’s its own weird counterexample. Yeah, I feel like Twitter is a little bit of an outsider in this narrative. You’re making a gendered argument, saying this is often a woman is being brought in to help the young, brilliant coder/technical founder, whoever it is, actually run the thing. Right. Or actually clean up his mess, right? Or pick up his socks, or get him to eat his breakfast ... You can sort of see how all this, the metaphor goes. Or whatever it’s going to take to help the company succeed. Right. And your power in doing that is a soft power, because you don’t have a lot of other types of powers, and you have to be able to exert that soft power well, and that is who Sheryl was. I mean, that’s the story that I wrote. Do you think the ... So if we want to outgrow our Sheryl Sandbergs, or not ... we want to get over this idea, is the idea to fund companies that have fully baked leaders running them? That seems like a ... Well, who knows? It’s 2019, maybe that’s not a nonstarter. Or is it to expect them to grow into that role, or create a different kind of role for the next version of a Sheryl Sandberg, where it’s ... By the way, Sheryl Sandberg has done very well for herself. She has. Right? She’s a billionaire. She has. She has. I mean, Peter, what do you think about supervoting shares? Are supervoting shares necessary? Why has the Valley collectively decided that that is a good thing to give a young founder? I don’t mind them, because I figure everyone’s going in eyes wide open. Most of these companies, by the way, don’t succeed. We pay attention to most of the ones that do. When it becomes time for them to go public, the investors all know full well that is it ... I can’t remember which one I wrote about, that, you know, such-and-such founder has 20-to-one supervoting shares, etc. If you bought Snapchat a couple years ago, you knew this was Evan Spiegel and Bobby Murphy’s company and you’re along for the ride, for better or worse. I don’t think it’s the shares that are the issue. I think it’s, do the people who are running the company want to figure out how to run the company, and what kind of outside help do they want or not? Well, and once a company has become large enough that it is the size and scale of many of the tech companies that I’ve written about in the industry, is it appropriate that we can’t fire those people if they’re ... And I would say no, it is not appropriate that we can’t fire those people if those people aren’t running the company in a way that makes the company, at least in part, a steward to democracy. Well, that’s, they’re two different things, right? So, you fire them because, traditionally, because they’re not running the business properly, because they’re not returning profits for the shareholders. And you have stories like Steve Jobs getting forced out of Apple, right? Right, sure. A lot of this is a reaction to that narrative, because the shortsighted Wall Street something something ... and they could get forced out for any reason. And again, that’s capitalism, and everyone signs on, and that’s fine. And so, if you choose to put money, whether as a public or private investor, into one of these companies where the founder has control, that’s up to you. By the way, this also applies in media companies, New York Times, Viacom, used to be the Washington Post, the Wall Street Journal used to be all run by families. So, they might technically be public companies, but they were essentially private companies. The democracy part is a whole other issue, and I don’t think the market is going to fix democracy, right? That’s the question about regulation, and who, if anyone, can regulate these companies, which we could spend a whole podcast series about. That will be episode two. Yeah. But I do want to ask you about that. But yeah, so I don’t think, if Mark Zuckerberg could have been fired, who knows how many times he would have been fired, but it doesn’t solve the Facebook problem, the Facebook democracy problem. Totally, and that’s not a problem that I’m equipped to know how to solve. That makes two of us. Yeah. There was one other super-provocative piece you had there: We need to talk about Wikipedia. They needed a follow-up, too, and it’s not what I thought you were go with. Really? Explain ... What was what you thought I was going to go with? I don’t know. I thought you were going to say that it’s got all sorts of problems in terms of the actual content, and that’s a problem, then, if you’re a kid cribbing for your third-grade science project, or I don’t know. I don’t know what I was thinking. Right, so the issue that I raised with Wikipedia is somewhat of an evergreen issue. This is not a new thing, but it is of new importance, given the rise of artificial intelligence, and that is that Wikipedia often, because it is a large, free, available dataset, becomes the training data for a lot of the tools powered by artificial intelligence that we use, right? So, I remember ... So you have bots crawling Wikipedia and ingesting it and then using it to make themselves smarter bots. Right, and we don’t even always, especially the people who are creating this stuff, don’t even always pay enough attention to where that information is coming from. I remember visiting one large company, and being inside its AI research and development lab, and they showed me this bot that basically did a child’s school report for her, and you could put in “spotted owls” and it would deliver you all the information in the world on spotted owls. So, my question was, okay, but where does that information come from? And it didn’t compute, and the engineer was like, yeah, but you just put in spotted owls, and then you just get all the information. And then, the third time I asked the question, the engineer was like, well, for now it’s Wikipedia, but, I mean, it’s going to be like all information. And I was like, oh, great, so now it’s okay to use Wikipedia for your science projects. And so, the challenge is, if Wikipedia is going to be used that way, and it is already being used that way, then it needs to be an accurate representation of knowledge in our world, and of course it’s not, because Wikipedia is a volunteer-run project, and those volunteers are mostly well-intentioned white guys from a handful of first-world countries. Yeah, and has all kinds of different biases, and ... Right, and the whole idea of bias is a different thing in the age of artificial intelligence. I mean, you know, the problem you’re ... and I’d never thought about it for Wikipedia, which is why it’s a great piece. I was aware that this was an issue in, like, they’re looking at images, when the bots are crawling images, and what set of images are you looking at? What describes a human being? What color is that person? And that has all sorts of obvious, well, potentially obvious problems. Right. Can cause obvious problems down the road. Right. And this goes down to even self-driving cars. How does the car know what to identify? It doesn’t think that is a person because it hasn’t been trained to identify that shape or size or skin color as a person. Right. Could be calamitous. Right, and it’s like it really is kind of scary to go down that road. You quickly become just so overwhelmed. It’s one of those amorphous problems, like global warming, where you’re like, oh, my God, this problem is so large, it probably doesn’t matter if I recycle my yogurt container, because how could that possibly help? Like, it doesn’t really matter if I figure out how to make an entry into Wikipedia because how can I, as one person, could possibly help? So, you write a story like that, and then I’ll spoil it, which is that you did a follow-up based, I guess, on feedback, right? Mm-hmm. From your LinkedIn readers? Mm-hmm. That’s super gratifying, I’m assuming, because “I wrote something, and not only people read it, but there was so much commentary, and so much thought-provoking discussion that I made a second thing based on that.” Yeah. I mean, look, that was an experiment, and I remember actually, so, yeah, so a bunch of people wrote in, and I turned their commentary into a second piece, and I put that out, and then that got more conversation going. Yeah, that was super gratifying. You know, when I think about that piece, I actually think about a very long, 700-word long message that I got from an AI engineer working at Facebook, who just read this on LinkedIn, and just felt like he had so much to say about it that he needed to get in touch with me and share it. And like, that level of participation in my work, I think that ... Great. I think he reads Wired too, and I think that he would have read this on Wired, too, but he would have had no way to interact with me. So, like, my ... the thing that I went and learned how to do at LinkedIn is then take, when something like that happens, figure out how to give it to you, the audience, in a meaningful way, and I don’t know that I’ve figured that out yet. Like, that follow-up piece, it was okay. Yeah. Yeah. Sometimes I’ll just, I mean, well, in the old days at least, I would just, if someone wrote me a really interesting note, I’d say, “Can I publish this?” And they’d say yes and I’d write a paragraph on top of it, and, you know, cynically, it was a cheap and easy way for me to make content. But I’m like, look, I’d rather ... often I’m retailing someone else’s thoughts and ideas anyway. That’s so true. So, let’s just present it straightforward. They’ll do a better job, and also it’s easier for me to post. You’ve been covering Silicon Valley insightfully for a long time. What is the one do-over you want? Whether it’s a story or a theme or an idea, something you missed. Oh, I love that question. Trying to come up with the job interview answer to that question where, like, the problem ... “I work too hard.” ... the problem is that I just care too much, Peter. Yeah. I can go if you want to think about it for a second. I mean, I can answer my version of it. Yeah, give me your version. And this is the one that many of us are grappling with, I’m still really grappling with, which is you were talking about how there was this period where we were all excited about sort of the disruptive nature of the internet, and specifically, I would think about this in media, and how existing media companies were going to be blown up, or changed in radical ways. And I still am really interested in that, but that’s kind of the only lens I was using to think about Twitter and Facebook, and I really wasn’t thinking about what it meant for the people who were using Facebook. I was thinking more of sort of, well, what is Facebook going to do to NBC or Disney or the New York Times, and how will the New York Times distribute their stuff? And, you know, that’s been my focus for a long time and it’s worked out well, but I think I did miss a big story, and I think a lot of us did. And by the way, you can see Mark Zuckerberg in real time going, “What are you talking about? Facebook’s not involved in the elections,” after the election, and I think he meant it. It was, he didn’t have his head around that idea. Yeah, I, of course, echo what you have to say on that. I was, for a long time, in the beginning of the web 2.0 era, I was as obsessed with what the future might look like as the people that I was writing about, and optimistic beyond measure about the inventions they were introducing. Right, it’s inherently a positive thing. ... and their capability to connect us to each other, and I didn’t ever consider the necessity of friction in connection, and how friction serves us. And now I spend all of my time thinking about how to introduce the kind of friction that will serve us. You’ve got a piece, I think relatively recently, that seems like your attempt to sort of counter the counter, which is WeWork, I’m optimistic about WeWork, because it’s easy, and I think correct, to be very skeptical about WeWork, because they’re an office-leasing company that is now an education company. Right. And there’s a lot of really obvious governance problems there as well. But you’re making the case for this actually could be a really cool company. Yeah, well, this is a thought experiment. I don’t want anybody listening to this to think that I am betting the farm on WeWork, but WeWork is one of the ... But you’re planting a flag and saying, “I think this could be a really significant company.” WeWork is a company with a lot of money, and a company that has been rolling up other companies for a while, and it just strikes me that if we’re ... we’re thinking too narrowly about WeWork. We’re thinking about WeWork as shared office space, and maybe shared a few other things, when in fact we could just think of it as a massive conglomerate that’s going to roll up so many things that eventually some number of those things are going to throw off a lot of money, and that will keep the beast afloat. Yeah. Right? And that is a very practical way of thinking about WeWork that paints a future in which WeWork makes money, and, like, why not think about it that way? But more than that, it’s not about WeWork, it’s about ... What two decades in this business has taught me is that we don’t actually know anything about the companies that we cover, very often, right? Right. We think about them narrowly. We write about their prospects for success or failure narrowly, according to how we think about them. Too often, we follow groupthink. Let me speak in the first person: Too often in my career, I have kind of paid attention to what everybody else was saying on Twitter and used it to inform my own thinking, when in truth, the thing that I have learned is that very often, the things I thought would be the biggest failures have succeeded, and vice versa. Can we leave on that note? Because that’s great. Sure. That’s optimism, that’s good. The thing everyone thinks might be wrong, the thing that you think on your own might be right, take a little risk in your brain and maybe your career. Optimism is a choice. Why would you choose anything else? That’s where we’re leaving this interview. Thank you, Jessi. Thank you, Peter.

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posted 3 days ago on re/code
Plus: Susan Wojcicki has one of the toughest jobs in Silicon Valley, and Apple and Google are blocking TikTok in India. Facebook is building a voice assistant to rival similar assistants from Amazon, Apple, and Google. Facebook is also talking to companies in the smart-speaker supply chain, according to a story from CNBC. A personal assistant makes sense for Facebook, especially given its recent push into in-home hardware. Last fall, when the company launched its video-chat device for the home, Portal came equipped with Amazon’s Alexa instead of a native Facebook assistant. When we asked why, a Facebook executive said: “We looked at [our own assistant], and really our vision is that … the assistant is not the platform.” Apparently those feelings have changed.[Salvador Rodriguez / CNBC] [Want to get the Recode Daily in your inbox? Subscribe here.] Susan Wojcicki has one of the toughest jobs in Silicon Valley. As the CEO of YouTube, she is ultimately responsible for what content is allowed, and what content is removed, on a platform where people upload the nastiest types of videos you could ever imagine. And have you ever read the comments? 2019 has already been a tough year, full of controversy for YouTube. “One way I think about some of the decisions is putting myself in the future and thinking: in five or 10 years, what will they say?” Wojcicki told the New York Times in a profile that’s worth your time. “If someone were to look back on the decisions that we’re making, would they feel we were on the right side of history? Would I feel proud?”[Daisuke Wakabayashi / New York Times] U.S. lawmakers will get their first look at the Mueller report on Thursday after Attorney General William Barr holds a press conference at 9:30 am ET. Someone who won’t be surprised about what the report contains? President Trump. The White House has reportedly been briefed on many of the report’s findings ahead of Thursday’s presser. “The talks have aided the president’s legal team as it prepares a rebuttal to the report and strategizes for the coming public war over its findings,” the New York Times wrote. Some aren’t happy that President Trump is getting early access: Rep. Jerry Nadler, who chairs the House Judiciary Committee, tweeted Wednesday that he was “deeply troubled” by the briefings.[Mark Mazzetti, Maggie Haberman, Nicholas Fandos, and Katie Benner / The New York Times] Apple and Google are blocking TikTok, a popular Chinese video app, from their respective app stores in India at the Indian government’s request. India demanded the apps be removed because of “concerns the video-sharing mobile app exposed children to troubling content, including pornography,” according to Bloomberg. TikTok, once called Musical.ly, lets users share short-form video and is incredibly popular with young people. India has been on the forefront when it comes to policing technology platforms. The Indian government proposed rules late last year that would require platforms like Facebook and Google to track what people share on their respective platforms. Critics say the rules would be detrimental to encryption and free speech.[Mark Bergen and Saritha Rai / Bloomberg] More tech IPOs are on the way: Both Pinterest and Zoom are expected to list their stock publicly for the first time on Thursday, and the two companies may actually end up with similar valuations. But it’s Pinterest, which has way more brand recognition than Zoom, a corporate video conferencing service, that will garner most of the attention, writes Recode’s Teddy Schleifer. “The stock market is about perception as well as fundamentals. And our perceptions are driven by companies that we actually know, like Pinterest.” Lyft, another tech unicorn that went public late last month, has already seen its stock drop by more than 26 percent.[Teddy Schleifer / Recode] AirPods are everywhere these days — and they’re making human interaction a little, er, awkward. Workers in the service industry, like coffee shop baristas or hair stylists, are finding it can be uncomfortable to interact with patrons who don’t take their earphones out of their ears. It can be hard to tell, for example, if someone is listening to your conversation or just listening to their music. “The idea that they’re always in your ears has really changed the way I’ve interacted,” a barista told BuzzFeed News. “It’s kind of a reminder of how people view service workers. I think there’s a good percentage of people who don’t see me as a full person.”[Alex Kantrowitz / BuzzFeed] This is Cool Instagram is changing NBA photography.

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posted 3 days ago on re/code
Plus: Susan Wojcicki has one of the toughest jobs in Silicon Valley and Apple and Google are blocking TikTok. Facebook is building a voice assistant to rival similar assistants from Amazon, Apple, and Google. Facebook is also talking to companies in the smart-speaker supply chain, according to a story from CNBC. A personal assistant makes sense for Facebook, especially given its recent push into in-home hardware. Last fall, when the company launched its video-chat device for the home, Portal came equipped with Amazon’s Alexa instead of a native Facebook assistant. When we asked why, a Facebook executive said: “We looked at [our own assistant], and really our vision is that … the assistant is not the platform.” Apparently those feelings have changed.[Salvador Rodriguez / CNBC] [Want to get the Recode Daily in your inbox? Subscribe here.] Susan Wojcicki has one of the toughest jobs in Silicon Valley. As the CEO of YouTube, she is ultimately responsible for what content is allowed, and what content is removed, on a platform where people upload the nastiest types of videos you could ever imagine. And have you ever read the comments? 2019 has already been a tough year, full of controversy for YouTube. “One way I think about some of the decisions is putting myself in the future and thinking: in five or 10 years, what will they say?” Wojcicki told the New York Times in a profile that’s worth your time. “If someone were to look back on the decisions that we’re making, would they feel we were on the right side of history? Would I feel proud?”[Daisuke Wakabayashi / New York Times] U.S. lawmakers will get their first look at the Mueller report on Thursdayafter Attorney General William Barr holds a press conference at 9:30 am ET. Someone who won’t be surprised about what the report contains? President Trump. The White House has reportedly been briefed on many of the report’s findings ahead of Thursday’s presser. “The talks have aided the president’s legal team as it prepares a rebuttal to the report and strategizes for the coming public war over its findings,” The New York Times wrote. Some aren’t happy that President Trump is getting early access: Rep.Jerry Nadler, who chairs the House Judiciary Committee, tweeted Wednesday that he was “deeply troubled” by the briefings.[Mark Mazzetti, Maggie Haberman, Nicholas Fandos and Katie Benner / The New York Times] Apple and Google are blocking TikTok, a popular Chinese video app, from their respective app stores in India at the Indian government’s request. India demanded the apps be removed because of “concerns the video-sharing mobile app exposed children to troubling content, including pornography,” according to Bloomberg. TikTok, once called Musical.ly, lets users share short-form video and is incredibly popular with young people. India has been on the forefront when it comes to policing technology platforms. The Indian government proposed rules late last year that would require platforms like Facebook and Google to track what people share on their respective platforms. Critics say the rules would be detrimental to encryption and free speech.[Mark Bergen and Saritha Rai / Bloomberg] More tech IPOs are on the way: Both Pinterest and Zoom are expected to list their stock publicly for the first time on Thursday, and the two companies may actually end up with similar valuations. But it’s Pinterest, which has way more brand recognition than Zoom, a corporate video conferencing service, that will garner most of the attention, writes Recode’s Teddy Schleifer. “The stock market is about perception as well as fundamentals. And our perceptions are driven by companies that we actually know, like Pinterest.” Lyft, another tech unicorn that went public late last month, has already seen its stock drop by more than 26 percent.[Teddy Schleifer / Recode] AirPods are everywhere these days — and they’re making human interaction a little, er, awkward. Workers in the service industry, like coffee shop baristas or hair stylists, are finding it can be uncomfortable to interact with patrons who don’t take their earphones out of their ears. It can be hard to tell, for example, if someone is listening to your conversation or just listening to their music. “The idea that they’re always in your ears has really changed the way I’ve interacted,” a barista told BuzzFeed News. “It’s kind of a reminder of how people view service workers. I think there’s a good percentage of people who don’t see me as a full person.”[Alex Kantrowitz / Buzzfeed] This is Cool Instagram is changing NBA photography.

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posted 3 days ago on re/code
Microsoft has persistently tried to acquire Zoom, the video chat tool, sources tell Recode. 2019 is supposed to be the year of the monster tech IPO. And it still might be. But, apparently, not without some copious doomsaying. In a year likely to feature some of the most well-known tech startups — Uber, Lyft, Peloton, Slack, Pinterest, and Postmates — finally becoming public companies, the first few months have soured some of the jubilation in Silicon Valley. After a government shutdown flummoxed dealmakers and delayed IPO timelines, the first of those brand-name public offerings — Lyft — has struggled, seeing its shares fall about 35 percent below its opening trade price in its first two weeks as a public company. And on Thursday, we’ll begin to see whether that slippage forebodes a full-on downpour. But here’s the ray of sunshine that busts the narrative of a Silicon Valley valuation bubble: Thursday’s headlines may be driven by Pinterest, the consumer-facing social pinboard company. But what if it is the under-the-radar second fiddle on Thursday — the cloud video communications software startup Zoom — that tells the more accurate story about Silicon Valley’s unicorns? Maybe you haven’t heard of Zoom. Fair enough. There are a lot of video-chat services out there. But it’s expected to be valued within spitting distance of Pinterest when shares are sold to IPO investors late Wednesday. Zoom drew the interest of Microsoft, which made repeated attempts to purchase it over the years, Recode has learned from multiple people briefed on the approaches. The talks never grew serious — with founder Eric Yuan repeatedly telling the newly acquisitive Microsoft team that he wasn’t interested in selling — but one approach happened as late as earlier this year, one source said. That acquisition would have made sense for Microsoft, which has struggled to turn Skype into a success story after buying it in 2011. Neither company returned requests for comment. But there’s good reason to think that wouldn’t have made sense for Yuan and that he was right to spurn Microsoft’s advances. His company is currently slated to be worth about $8 billion — a 8x spike from its last valuation on the private markets in 2017, when it was judged to be a $1 billion company. And since opening its books and releasing its IPO documents with the SEC — revealing a profitable, high-growth, reliable subscription business — industry observers are salivating over its business fundamentals. Zoom will make Yuan worth probably about $2 billion. The company has already had to boost its price range to meet the oversubscribed demand it generated on its road show. We’ll see how Zoom does in its first weeks of trading, but up to this point, it’s looking like a unicorn IPO success story. So, we’re all good? Here’s the rub: Even though Zoom is slated to be worth barely less than Pinterest, which is currently scheduled to be valued at about $9 billion in its IPO, you probably haven’t heard of Zoom unless you’re a white-collar business professional. It’s an enterprise company. Pinterest, on the other hand, has 250 million monthly active users. That explains why companies like Pinterest get a lot more media coverage than companies like Zoom. Even though they’ve now built similarly valued companies, it’s consumer-facing startups whose CEOs land on magazine covers, become so iconic that their names grow into verbs, and, more broadly, define a wave of Silicon Valley innovation. And why that matters is because they also disproportionately drive the narrative of how an IPO market is doing. IPO markets — like a piece of fiction or a well-written speech — have a narrative: Do public market investors these days value growth or profits? What megacompany is the forced analogy du jour? Is the tech IPO market “open” or “closed”? !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}})}(); The stock market is about perception as well as fundamentals. And our perceptions are driven by companies that we actually know, like Pinterest. And that’s why potential disappointments like Pinterest, which is expected to fall short of its latest private-market valuation when it sells IPO shares on Wednesday, cast long shadows. And it’s why so much attention is paid to Lyft’s troubles (which are indeed troubling). The hyped companies become the bellwethers for whether the sky is indeed falling. And if Pinterest’s first weeks of trading fall flat — and Lyft’s don’t recover — then yeah, that spells bad news for the Postmates and Pelotons of the world. To be sure, Lyft is the largest tech IPO yet of the year. Rightly or wrongly, it is the barometer for the tech IPO market right now. Other soon-to-IPO companies are watching it closely to judge whether the waters are safe for wading, or whether it’s better to wait another month or three. That’s especially true, of course, for that other ride-hailing company expected to go public in a few weeks. Uber, which is eyeing a sky-high valuation, now would probably like to see Lyft succeed — for the first time in its history. If only for just a moment, that is.

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posted 4 days ago on re/code
Plus: Twitter claims it’s improving when it comes to fighting spam and abuse and Netflix has nearly 150 million subscribers. Silicon Valley can’t agree on which Democratic presidential candidate to get behind. The Federal Election Commission’s first fundraising snapshot came out Monday, and it shows that money from Silicon Valley’s tech leaders is spread across multiple candidacies. Kamala Harris, the senator from California, has garnered donations from former Facebook exec Alex Stamos, Y Combinator’s Sam Altman, and venture capitalist Ron Conway. Meanwhile, Cory Booker, the senator from New Jersey (and Stanford alum) has secured funding from former Google CEO Eric Schmidt and Salesforce CEO Marc Benioff, among others. As Recode’s Teddy Schleifer writes: “There is no clear frontrunner among the donor class.”[Theodore Schleifer / Recode] [Want to get the Recode Daily in your inbox? Subscribe here.] Twitter claims it’s improving when it comes to fighting spam and abuse. CEO Jack Dorsey announced at TED on Tuesday a few new metrics about the company’s abuse-fighting efforts. Among them: Using technology, the company now catches 38 percent of the abusive content it takes action on, which means it doesn’t have to wait for humans to report those tweets to the company. A year ago, Twitter didn’t catch any abusive content proactively. Given the massive size of social media platforms like Twitter, which has hundreds of millions of monthly users, automating these abuse efforts is key to cleaning up the service.[Kurt Wagner / Recode] More internal Facebook documents leaked that show the company used its massive trove of personal user data to hurt certain competitors and help partners. NBC News got its hands on 4,000 internal documents tied to a Facebook lawsuit, papers that were part of the same set of leaked documents made public last fall by British lawmakers. The documents are further proof that Facebook used people’s personal data to strengthen its business relationships. “Facebook gave Amazon extended access to user data because it was spending money on Facebook advertising and partnering with the social network on the launch of its Fire smartphone,” NBC reported Tuesday.[Olivia Solon and Cyrus Farivar / NBC News] Netflix has nearly 150 million subscribers, but investors are concerned that the streaming service’s growth may be slowing down in the US. During the company’s first-quarter earnings call on Tuesday, Netflix projected it will add around 300,000 subscribers next quarter, which is less than the 650,000 analysts had hoped (and much less than the 1.7 million it added in Q1). The stock fell, then rebounded in after-hours trading. Still, Netflix is growing like crazy outside the US, and CEO Reed Hastings shared some viewership details about some of the company’s high-profile titles, something it started doing at the end of last year. A new Ben Affleck movie, Triple Frontier, was watched in more than 52 million households, Hasting said. Netflix’s Fyre Festival documentary, which showed the grim reality of a disastrous music festival, had more than 20 million viewers.[Peter Kafka / Recode] Top Stories from Recode AMC Networks boss Josh Sapan wants the people who make TV to look at the data — but not too much. There’s no algorithm for creativity yet, Sapan says on the latest Recode Media.[Peter Kafka] Netflix makes up nearly 30 percent of global streaming video subscriptions. The streaming video company now has 155 million total subscribers globally.[Rani Molla] Here’s why some Silicon Valley families should remain nervous about the college admissions scandal. Who is next?[Theodore Schleifer] Ford CTO Ken Washington explains why self-driving cars are such a hard tech problem. And why Tesla’s so-called Autopilot features are not really “self-driving.”[Kara Swisher] This is Cool Donating to rebuild Notre Dame.

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posted 4 days ago on re/code
Who is next? It has been a month since the college admissions scandal erupted out of nowhere, implicating 33 parents on criminal charges related to a long-running scheme that prosecutors say was led by William “Rick” Singer to fraudulently land their children at some of America’s top colleges. The story has largely moved on to the confines of courtrooms, with some of the parents indicted choosing to plead guilty and others promising to fight the case tooth and nail. The process will be long, and the storyline may fade. But in the meantime, there is some discernible paranoia (and to be sure, some schadenfreude) in corridors of wealth like Silicon Valley about whether there are more shoes to drop — marquee names who were caught up in Operation Varsity Blues but have so far evaded detection or prosecution. And there’s good reason to think so: While prosecutors only filed charges against less than three dozen parents, Singer testified that he had led 761 families through a “side door” into the universities of their choosing. “Every year there is a group of families, especially where I am right now in the Bay Area, Palo Alto, I just flew in. That they want guarantees, they want this thing done. They don’t want to be messing around with this thing. And so they want in at certain schools,” Singer said on a recorded phone call transcribed in the indictment. “So I did 761 what I would call, ‘side doors.’” There are a lot of mega-rich families in the Bay Area, and some are likely nervous. Now, it’s not clear that all the families Singer mentioned committed prosecutable crimes. The 50 total people charged by the feds were caught on wires or otherwise directly implicated on alleged crimes like conspiracy to commit racketeering or mail fraud. The other 700 families that Singer said he aided might have not been conspirators on any of these charges — or the cases may lack prosecutorial evidence, like a taped conversation. But there’s a healthy amount of guessing among venture capitalists one month later about who will be the next high-profile person outed for retaining Singer’s services. And what we’ve learned, even at this early stage, is that you don’t have to be in prison to find your life transformed by a whiff of scandal. Chris Schaepe, a venture capitalist at Lightspeed Venture Partners, found himself out of a job after he told his partners that his family was the one referred to in an indictment against a coach who allegedly opened a side door for Schaepe’s son. Schaepe isn’t behind bars, but his reputation has obviously been tarnished. John Doerr, the venture capital legend who retained Singer for his daughter’s college prep, says he merely sought test-tutoring and application-help services — nothing illegal. The same goes for Doerr’s partner at Kleiner Perkins, Ted Schlein. Both are still in their jobs, but the two are still now having to battle their connection to a scandal, and there are certainly hecklers in Silicon Valley who don’t buy their defense. The probe has even ensnared the golfer Phil Mickelson and the Hall of Fame (and moonlighting venture capitalist) Joe Montana. Even if prosecutors don’t bring more charges, there remains a decent chance that Singer’s deep pool of clients is forced to defend their past decisions in public. Investigations have been launched by the US Department of Education, by several of the universities where coaches or administrators are accused of misconduct, and by institutions referred to in the charges, like Goldman Sachs. So given the unknown unknowns, it’s not surprising that Silicon Valley’s money set is on edge.

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posted 4 days ago on re/code
And why Tesla’s so-called Autopilot features are not really “self-driving.” Five years ago at the Code Conference, self-driving cars seemed like they were just around the corner: Google unveiled the project that would later become Waymo, and Uber’s then-CEO Travis Kalanick stirred controversy when he talked about the benefits of replacing human drivers. But in 2019, autonomous vehicle prototypes are a rarity in most cities outside of San Francisco, and humans are still vital to companies like Uber and its first-to-IPO rival Lyft. That’s because self-driving is a really, really hard technological problem, Ford CTO Ken Washington said on the latest episode of Recode Decode with Kara Swisher. But very slowly, starting in 2021, you’re going to start seeing cars with no one in the driver’s seat. “You may see some earlier ones in 2020, but we believe in taking the time to work with the cities,” Washington said. “If you just put a bunch of autonomous vehicles in the city without designing it to make life better in that city, you’re gonna have an analogous problem to what happened when Ubers first started showing up. People hated them because they’re camping out on the corners, and it made congestion worse, it created additional pollution.” Ford is currently testing its self-driving cars (still with humans in the front seat as a precaution) in Miami, Washington, Dearborn, Pittsburgh, and multiple places in California. Washington explained that, in order to be ready for regular consumers, these “robo-cars” need to have a pre-existing 3D scan of every street they might drive on. “This is not your navigation map, the kind of map that you would use on your cell phone that you pull out and you do a Google Map or an Apple Map,” he said. “It’s actually shooting light beams out in three dimensions off of the roof of the vehicle ... [and] capturing these points and creating a 3D image of what the world looks like.” “If you don’t have that part of the map, you’re relying on, in real-time, detecting everything that might happen, and that’s just too hard of a problem,” Washington added, before taking a dig at Tesla’s so-called Autopilot features. “That’s why these vehicles that don’t have LIDAR, that don’t have advanced radar, that haven’t captured a 3D map, are not self-driving vehicles. Let me just really emphasize that. They’re consumer vehicles with really good driver-assist technology.” You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast. Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Ken. Kara Swisher: How are you doing? Ken Washington: I’m great. Now Ken, you’re gonna tell us how cool all this stuff is now that we talked about the disaster that’s coming. Let’s talk a little bit about ... I wrote a column last week, which did get a crazy amount of commentary. Thousands and thousands of comments on the New York Times. People were for it, people were really, really for it, and what I did in the column is that I really don’t want to own a car again. I wrote a piece in the Wall Street Journal 25 years ago saying, “You will have mobile phones. You will not have landlines. You will not be wired. It will be all be wireless.” It was a very good prediction, and then I said, “Now, you’re never gonna own a car,” and, “It will be as quaint as owning a horse.” I think that’s the expression I used. I was trying to get a discussion going. I mean, obviously you wanna talk about where this is going, but I do truly believe that we’re on the cusp of this because of self-driving and AI and the stuff that are gonna go into transportation. So let’s talk a little bit about cars first, and then we’ll get into the other things that companies like Ford and others are doing, where AI does benefit a company. So let’s talk about where we are with autonomous vehicles right now and where AI fits in. Well first, I just wanna say, I think you definitely got people’s attention with the article. Yeah. I think the response was a reflection of the fact that people love cars, and some people hate cars, but everyone needs to move around. What autonomous vehicles has done for us is given us the potential and the promise of a new way of moving around, and a new way of creating mobility, and a new way of solving real pain points in cities. What I loved about your article was it really shined a light on the fact that in urban centers where you really need a different model, that now this new model is beginning to emerge. Right. I wasn’t talking about car ownership. I was talking about — and not — I was talking about car ownership, not car driving. I will continue to drive and move in mobile vehicles depending on ... but it was the car ownership and it’s the idea of ownership. Just the way we owned entertainment before, now we really don’t. Just the way we owned records, we owned this. It’s the same concept, that this is one that’s moving in, and especially in urban areas where I think 90 percent of the population’s going to be in a megalopolis over the next 25 years, like 90 percent. So those other 10 percent can have their cars, it’s fine, but it’s just what happens when those population ... So talk about where we are and how AI fits into the idea of where we are with autonomous. Let’s start with autonomous vehicles. We’re right in several stages, right? Three, four, five, we’re in three now, which is? Well, let me just clarify that. Okay. It’s a term that’s often really misused and misunderstood. When you’re talking about autonomous vehicles, particularly in urban cities where you predict 90 percent of people are gonna live. What you really have to think about is an autonomous vehicle that can truly sense the environment completely and can truly take the human out of the loop. So that’s a level-four autonomous vehicle. Even that level-four autonomous vehicle that can operate in this urban environment, it’s gonna have some boundaries around it. It’s gonna have to have the ability to operate in a city that it’s seen before, so it has to have been mapped. There are gonna be weather restrictions on it, at least with today’s technology, and there are gonna speed restrictions, because the sensors aren’t perfect and hopefully no one in this room believes that the AI part of the problem has been completely solved. You can’t even review résumés with AI and not screw it up. Getting the AI right in a vehicle is really hard. It involves a lot of testing and a lot of validation, a lot of data gathering, but most importantly, the AI that we put into our autonomous vehicles is not just machine learning. You don’t just throw a bunch of data and teach a deep neural network how to drive. You build a lot of sophisticated algorithms around that machine learning, and then you also do a lot of complex integration with the vehicle itself. Right. Talk about the challenges. What are the challenges faced right now by getting to that level of, I guess it’s full autonomy. There’s all kinds of different ways people discuss it, but the full autonomy, where you get it, you call something. It comes to you efficiently, and then you take it somewhere. We like to use the term “self-driving” for the full autonomous vehicle that you would use in an urban city. This is without a driver in the front? Without a driver in the front. And the state that we’re in today is that it’s still a development activity. Right. We still use safety drivers who sit in the driver’s seat- In my experience ... I’ve been in a lot of these cars. The original Google ones that were started before Waymo, I guess, were people who are sitting in a car that’s been tricked up. A car that’s not built specifically to be autonomous, which means they took a regular car and stuck stuff all over it, which you all, everybody ... Pretty much everyone does that today. Everyone does that today. Pretty much everyone does that. Then, they had their clown car, which had no ... Which I drove and I tried to run over the head of Waymo, but it didn’t work. It had no steering wheel. It had no pedals. It was like a Disney ride, essentially. You got in, and I just was texting and drinking the whole time. You know? No, I wasn’t. No, but it was ... It felt like I was on a ride at Disney World. Between that, there’s something else going on. Talk about where we are in that. Where we are right now, and the reason you don’t see those kind of cars on the roads today is that I think Google and a lot of other tech companies, many of them out of Silicon Valley, realized just how hard it is to make the car part. Right. Where we are right now is we have a, basically a software company that was a startup. It was founded by one of the ex-Google leads, Bryan Salesky, and co-founded by Pete Rander from Uber. They joined forces and created a company. Ford invested in that company. We invested a billion dollars in that company, and they’ve grown that company to a little north of 300 people. They’re working shoulder to shoulder with engineers from Ford to develop the vehicle part, the software part, and all the really messy stuff that has to happen in between, to connect them together. Then, we’re working with cities, and that’s a really critical part. You can’t just put a vehicle together, and just show up and expect it to actually do something that’s gonna be a good experience. You need to work with cities to understand, “How do vehicles work in this city? What are the behavioral patterns of citizens in this city? What are the pain points of people that wanna move around? What are the congestion patterns like?” Then, you interact with the people in the cities so that you’ll understand what the human needs are. Then, we’re working on taking all of that information and folding it into creating a business that will work with a self-driving car. That’s where we are today, and we’re in the process of testing. We’re testing today in five cities, preparing for deploying a ... What are the cities you’re in? The five cities are Miami, Washington, Dearborn, Pittsburgh, and we just started testing in California. Why did you pick these cities? Miami was our first pick because it’s a fairly large city and it had a fairly diverse population. That was really important to us. We wanted to work with a city that had a really favorable political climate, while also a really favorable ... it really had a need. Right? We started talking with the city. We realized that we actually could have a good relationship with the city, and they had a real need for us to solve a pain point in the city. Which is congestion? It’s congestion, and there are a lot of underserved communities that don’t even own a car and had no way to get to work. It was a multilingual city, so we knew that we had to solve the diversity challenge and meet that challenge to be effective at scale. So it was a really ideal city for us, and also it’s a place that has really good weather. We didn’t want to take on too big of a problem at first because, look, level-four autonomous vehicle, a self-driving car, that’s going to operate without a person behind the steering wheel. You’re gonna put your loved ones in this vehicle, and you’re gonna trust that this vehicle is gonna take them where they want to go, it’s a really hard problem. Yeah, but I’ve driven with my mother, so I’ve already passed that test. I’d take a self-driving vehicle any day of the week, and twice on Sunday. Talk about the AI elements, because people don’t realize it’s both making the car and putting the AI elements ... AI is pulling in so much data, pulling in and understanding it, and then there’s the sensors part of it and the radar. There’s several different pieces of it. The carmaking is a really important part that people, I think, don’t realize. There’s all kinds of different kinds of cars being made now, but I remember being struck by someone at Uber many years ago telling me, “This self-driving thing’s gonna be easy. Carmaking is trivial,” and I was like, “You’re an idiot.” Like, for so many other reasons, but this one is really stupid. This is a particularly stupid thing to say. Talk about that. How do you integrate these physical objects, a car, which could be made of anything going forward, and the AI together? What is the challenge of that? Well, there are many layers to that challenge. The first one that I’ll talk about is the challenge of getting the software to integrate into the hardware, because there are many ways you can do that. We’ve learned through experience that the best way to do that is to design the hardware to have an abstraction layer. That is, don’t design the software in the middle of the vehicle hardware. Make it so that the software team can just work on the software, and then the hardware team can define well-defined interfaces so the software can then integrate in with the vehicle. So that’s just one of the first challenges, but the actual design of the vehicle itself is not trivial because the self-driving car is gonna have a different interaction experience with the human that’s gonna use the vehicle. When you ride in a self-driving vehicle, you’re gonna have a different way of approaching the vehicle. You’re gonna have to hail the vehicle. It’s gonna have to know that, “Oh, that’s you that suggested to hail the vehicle,” and, “How do I know that it’s not the person that’s walking behind you and is gonna hop in the car instead?” So there are all kinds of challenges associated with having a way to interact with the person it’s gonna get in and take the ride. There’s design challenges, and one of the things that we’ve been thinking about and actually implementing it with AI is using AI inside of our engineering teams to help us do the design of the vehicle itself so that we can optimize the solution to some of these challenges. Meaning what? Let me give you an example. One of the things that we’ve begun to work with in the AI space is with 3-D printing and designing differently. When you can 3-D print certain parts and certain components on a vehicle, you can design the part to look any way you want, because you can print things that you couldn’t forge or you couldn’t make with some other method. There are AI-enabled engineering tools that will design the part in the same way that nature would. It’s called “generative design.” We’re working with some of the companies that are on the forefront of this technology, to do generative design of some parts that we may end up putting on both autonomous and our non-autonomous vehicles. Right, meaning designing for ... How would that ... It knows what people want? You give it the parameters, and you tell it what engineering constraints it has to meet. It has to be so strong, it has to have this property, has to have this size, and then the AI will actually go in and say, “Well, it needs to have material here, and here, and here.” Which is what engineers used to pick. But it doesn’t need to have a year so it can lightweight the vehicle and it can ensure that it’s gonna have the right properties and the right strength. Then, you can send that to a 3-D printer and it will make the part. Make that particular part? Make that particular part. It could also be used with consumer preferences too, correct? Absolutely, you can use it for customizing parts, because imagine that you’re the owner of an autonomous vehicle fleet and you’re entering into a ride service. What if you wanted to make your autonomous vehicles customized for your service? You could actually design a customized part that would have an emblem with your company name on it, and you could print that part and put it onto the vehicle. It’s a great example of using AI together with a new technology, with 3-D printing, together with the real opportunity to provide a new service to society. A lot of technologies clashing together to create new opportunities. When you think about other part of the AIs, it’s also mapping, it’s also understanding cities and geographies. We’ll be having Code in Arizona, and we wanna take people to this one area, but they don’t have it mapped at all in autonomous vehicles. So they can’t really do anything. There’s also, there’s no sensors in the roads. Some places are putting sensors in roads to be able to do that. There’s all kinds of ways to do that, but they didn’t, they hadn’t had enough AI technology deployed there to understand the place. Talk to people about what you have to do. You’ve got to basically map the whole world again, and then it’s also a world that’s also changing all the time. Yeah, so this is a really important point. It’s really important to know that a self-driving car has to operate in a region that you have fully mapped. This is not your navigation map, the kind of map that you would use on your cell phone that you pull out and you do a Google Map or an Apple Map. This is a map that is developed by driving the space with an autonomous vehicle, that’s got light detection and ranging sensors on it — LIDAR for short. It’s actually shooting light beams out in three dimensions off of the roof of the vehicle if that’s where you’ve got your LIDARs mounted. It’s receiving the light back, and it’s then capturing these points and creating a 3-D image of what the world looks like. Then, the vehicle uses that static image of what the world looks like and it does some fancy footwork to take off the parked cars and things that could move, because it wants to know, what won’t move? When the car is in self-driving in that region, the LIDARs operate again. Then, they make a comparison of what was there statically and, “What do I see now?” If something is there that wasn’t there when you were mapping it, that means it could move. It could be a kid on a bike. It could be another person. It could be a pedestrian. It could another car. It could be a dog. The task of, first of all, knowing that these are things that you need to know about, you need to predict them, you need to know their trajectory. If you don’t have that part of the map, you’re relying on, in real-time, detecting everything that might happen, and that’s just too hard of a problem. That’s why these vehicles that don’t have LIDAR, that don’t have advanced radar, that haven’t captured a 3-D map, are not self-driving vehicles. Let me just really emphasize that. They’re consumer vehicles with really good driver-assist technology. Some West Coast companies that sell really great electric vehicles, I won’t name them, they’re really great drivers as technology vehicles, but they’re not self-driving vehicles. Right? If in fact, if you can prove that, because you can Google and find out that they’ve been tricked. They do all kinds of crazy things because you put things in the environment that they don’t understand, or when the line markings are covered with dirt or gravel or snow, they don’t work. I can go on and on. Yeah, yeah, don’t. Okay. But the point is, you gotta have a prior map. Buy a Ford. I got it. You gotta have advanced ... Okay. No, that’s not the point. No, seriously, that’s not the point. The point is, you gotta be clear about the fact that self-driving involves a lot of complex technology, and you gotta approach the problem with that kind of seriousness. Ford is not the only company doing it that way, but we are doing it that way. Though, let me be fair, y’all wouldn’t have been in this if they hadn’t started it. Let’s be, this is removed for ... No, no. I gotta push back on you. I gotta fix that. I don’t think you would’ve. I don’t recall you saying it, not you. Ford was the only automaker participating in the first DARPA challenge. We just didn’t go in with our name. Explain what DARPA is. The DARPA challenge is a Department of Defense .... DARPA stands for the Defense Agency Research Projects Agency, and they, every year, put out a big, difficult challenge out to the technical community. It’s usually something that they think is too hard to solve. They pour a bunch of money on it and they say, “What teams can come in here and give us a solution to this problem?” Usually, they’re so hard that nobody solves the problem, but you learn a ton. Sometimes, in the case of self-driving cars, it sparks an entire industry. The very first DARPA challenge was, they put out the challenge of building a self-driving car, because nobody knew how to do that at the time. Ford was the only automaker that participated in that first challenge. In fact, we bought the first Velodyne LIDAR and bolted it on the top of an F-250. Of course, we didn’t succeed in the trial, and nobody else did either, but we learned a lot. That launched the Ford autonomous vehicle project. I wanna get back to AI and the bigger question of where AI fits into it. What would you say if you had to estimate, and I know you probably hate this question, when will you see a shift completely from human driving? Because, I think we can all agree, humans are the problem here. Humans driving is the issue. One person told me, very interesting, I thought it was really smart, it really stuck with me, was, “When an autonomous vehicle has an accident or has a problem, all the others learn through AI and other technologies. When a human makes a problem, they make it again,” like I did the other day when I just hit a car. I’ve done that many times. Talk about that. When do you imagine it rolling out? I don’t think it’s gonna be a step function. It’s gonna be a gradual deployment. You mean like horses to cars? Yeah, it’s gonna be kinda like that, and it’s gonna be kinda like when the internet rolled out. Everybody didn’t just suddenly jump on the internet, right? When cell phones came out, you had people walking around with bricks on their shoulder, and every once in a while somebody would show up with one. I think it’s gonna be kinda like that. You’re gonna see, some of the easy cities have programs, like Miami and Washington, in the case of Ford and our competitors, have picked their cities. You’re gonna see self-driving cars roll out in fleet deployments for both people movement and package delivery in those easy, urban environments that are easy to work with. When? You’re gonna start seeing that in 2021. 2021, this is delivering ... You may see some earlier ones in 2020, but we believe in taking the time to work with the cities, to design the business right so that when you show up, you make it better instead of making it worse. I mean look, this is an optimization problem. If you just put a bunch of autonomous vehicles in the city without designing it to make life better in that city, you’re gonna have an analogous problem to what happened when Ubers first started showing up. People hated them because they’re camping out on the corners, and it made congestion worse, it created additional pollution. So we’re gonna go into these cities and work to design the solution so it makes the experience better. We’re gonna take 2020 to finish that process, and then go in 2021. I think that’s gonna be the beginning of this slow deployment. Does that make Ford and your competitors, the others, are you car companies anymore or are you data companies, AI companies? I do understand the car itself is interesting, but these will be fleets of cars, and possibly you will be running the fleets, and not people owning them. That’s right. It won’t be that everyone doesn’t have an autonomous vehicle. They will just be in fleets and you will rent them, or they’ll be something like that. Yeah, I think that’s right. We think of ourselves as a mobility company, which includes being both a carmaker and also a company that has an AI core competency. We have to have an AI core competency, not only because you need AI in order to pull off the self-driving task. But in parallel to slowly and gradually rolling out fully self-driving vehicles to a small set of cities, we’re gonna keep putting more and more AI into the vehicles that people are buying and leasing and renting and using in Lyft and ... Why is that, to stop — to becoming assisted driving? Well, because humans aren’t very good at driving. Most people are worse drivers than they think they are. I’m a real bad driver. I know it. I think a lot of people are. My children know it, they’re here. You’re not alone. We’re all flawed humans when it comes to driving, because this is ... It’s actually not that easy to be a great driver- No, I’m in a constant rage, but go ahead. Go ahead. Sorry. Go ahead. So you have to have AI in the cars? What does that look like? You need to have assistance, and we know that we can provide more and more driver assistance because the technology is getting cheaper, sensors are getting smaller, compute is getting faster, memory is getting more …. So how does that look at ... You talked about sort of in five, 10, 20 years. Right now I’ve got a car that beeps at me going backwards, and I can see the backwards. It beeps at me when I don’t have ... It just beeps at me when I don’t have a belt on. It’s not very assistant. It’s an irritating person, really, is what ... I’m actually glad you said that, and the reason I’m glad you said that is the reason these cars are beeping at you and doing all that stuff is ... We’ve done a terrible job of designing the human experience in the vehicle. And we’ve learned that we’ve got to take a step back and start thinking about that differently. You’re right. You know, if it spoke to me and said, “Kara, you don’t want to die today. Put that on!” You know? That would be nice. And everyone’s going to want a personalized experience, right? Right. So think about when you first bought ... How many of you have an Alexa device or some kind of smart home device? If you have a smart home device, you start to interact with it and it gets to kind of know you, and you can actually train your voice on it, and, well, why shouldn’t your car have that same kind of interaction with you? So we’re thinking about building AI into our vehicles so that it can be personalized, so that it can be a better experience for you, so that when you get in your vehicle it’s your sort of oasis of ... It’s yours, right? And even if you don’t own it, if you get into a vehicle that’s shared, there’s no reason why that shared vehicle can’t know who you are, too, because you’ve got your smartphone with you. It knows you got in. It’s got all the data in the cloud, and so it should be able to say, “Oh, hey, Kara. I see you’re going on a shared ride or you’re on a Lyft or an Uber ride,” and it knows that you don’t like this kind of music and you like this kind of music, and you like the temperature set to 72 or 71. And so AI can totally change how we think about delivering an experience that’s curated for you. Okay, so talk five years out, 10 years out. What could it be? Before we get to fully autonomous, what could be in it? You’re driving a car, it has your temperature. You don’t have to figure out how to ... The hours I’ve spent trying to get the car to talk to the phone to play the music is insane. It does that without a problem, right? Right. Never, never. That is never going to happen. But what does it do? What are the other things it does? Puts your seatbelt on properly, does the seat properly, right? That kind of ... Well, I think we should think more broadly about how the future of smart, AI-enabled vehicle will interact with the rest of the smart world around us. I mean, I love tinkering with technology in my home, so my home has all these smart sensors on it. Well, in five years, your car that’s got AI in it’s going to interact with your home that’s got AI in it. And so when you pull up to your home, the garage door will open, and when you pull in, the garage lights ought to come on and the ... It should unlock the door, but only if you want it to. You could say, “Don’t unlock the door. Unlock the door.” So it should just be seamless and frictionless, because you’ve got this rolling computer that’s got AI in it with all these sensors on it. Oh, and another thing is, why can’t this vehicle serve you in other ways if it’s in your life? Let’s say it could be a sentinel for you. It could turn on the lights and warn you if somebody comes around your home. It could ... If you ... Wasn’t that the plot of Christine? That ended badly for the people, I recall. Well, look. We can take cues from sci-fi in lots of ways, right? Right, okay. So it’s your sentinel. It sits out there, and when someone comes along, like a dog, like what? Well, so this all part of the iteratively improving part of AI. So it uses AI to take sensors from around ... It’s already got sensors, so why not let it do other things? Exactly, exactly. And imagine at a work site, if you’re driving a truck or a commercial vehicle, how it could be an assistant to you. So, look, I think there are lots of opportunities here to stitch AI into a vehicle, but one other thing is, we’re also using AI to help us make the vehicles higher quality. An example is out of our Silicon Valley lab, and, by the way, I don’t know if your audience knows that we have a presence in Silicon Valley, and it’s been a huge benefit to us, because we’ve met over 1,000 startups. And of those 1,000 startups, one that we met is an AI company that actually was using AI to detect flaws for totally another industry, and we began talking to them, and says, “You know what? One of the really hard problems we have is finding flaws in the quality of wrinkles on seats when we make them.” I mean, it sounds really silly, but it turns out it’s a hard problem. Wrinkles on seats? Yes. It’s actually a hard problem, and we actually had ... I hate the wrinkly seat of a car. We literally had people looking at seats going, “Yeah, that one’s wrinkled. Send it back. Nope, that one’s not,” right? Wow. And so now we have that company deploying AI to do quality inspection, improving the quality of our seat inspector in the manufacturing process using image recognition and AI. So, what? It takes pictures of the seats and then it knows a wrinkly seat? Take pictures of the seats and learns, and it iterates, and it gets better and smarter, and make us ... So it rejects this ... Yeah. It just says, “No,” like ... “No. Yes. Yes. No.” Yes. Right. Yeah. It’s a great example of the use of image recognition to improve the manufacturing process. And there are many other examples. The point is that we’re embedding AI as a core competence to enable us to make cars better, but to make the experience of owning a car better, and also driving a car more safely and more smartly, in addition to self-driving. Talk about that part. Talk about that, driving safely, and what could it do? So earlier I was downtown talking with another group about the fact that we still have a large number of fatalities in the US and globally with automobiles on the road, and the majority, the vast majority of those fatalities are driven by human error. The fact that the fatality rate in the US went up in the last few years, and that’s largely driven by both the complexity of traffic on the road and by distracted driving. And so, if you can use AI to detect when a person is distracted — and they’re driving — by having internal image recognition or other bio-cues, you could save lives. And so we’re working on interior ... And what would it do? Shut down the phone or whack it out of your hand or what? Well, hopefully nothing quite that intrusive, bu you could certainly ... I think it’s a brilliant idea, but go ahead. You can borrow it. You can certainly slow their speed down, or you could alert them, or you could vibrate the ... Report them, to the authorities. That’s a little more intrusive than we’re thinking. I know. I’m going to get to the creepy stuff in a minute. But go ahead. So safety, so slowing people down if they’re texting, and ... That’s right. So you can make the experience safer. We’re also working on the next step in driver assistance technology, because it’s going to be a gradual rollout before you have fully autonomous vehicles. Oh, and by the way, fully autonomous vehicles are not going to be the kind of technology you’re going to go out to your dealer or even to a showroom and buy a personally owned autonomous vehicle any time soon. They’re extremely expensive because of the sensor suite and the kind of compute that’s integrated into the vehicle. But the kind of technology we can increasingly put on the vehicle can give you really great driver assist technology experiences, because we can now put the kind of sensors similar to the ones that we put on our self-driving cars, just without a prior map and without LIDAR. Radar is getting really good. Camera technology is getting extremely good. And then the AI software is getting very good. So we can do more than just lane-keeping. You can do lane-centering, lane-following, the kind of thing that’s been available from that West Coast, that battery/electric company, for a while but that’s now rolling out very at scale by ... In human-driven cars. In human-driven cars. When you think about all this stuff, some of it sounds great. Some of it sounds extraordinarily creepy. Yes. Talk about that, and because ... given the previous stuff about where these things go wrong. Some of this sounds great. Some of the stuff they talked about sound great, you know, weather, climate, things like that. What are the worries you have as the CTO? It could do a lot of things that aren’t so good. Yeah, that’s right, and that’s why you have to be very intentional about how you treat data and how you treat both the collection and the diversity of data and the care of that data. Right, like the thing you talked about, the texting. That could go right to the insurance company. That could go right to wherever, the police, things like that. Exactly right. So it starts with building the trust of an owner to feel good enough about how you’re going to care for their data that they’re willing to give you access to it. And our experience is that trust and that willingness will happen when you can offer something in exchange for that, that’s of value, and then when you don’t break that trust. And so trust is really hard to gain and it’s really easy to lose, and so we’re being very intentional about how we’re caring for the data that we have the honor of managing. So that speeds people going, whether they’re speeding or not, where they’re going, what they’re doing in the car. All of that is ... What they might be playing on the ... because, I mean, I was just thinking the other day, the reason I was laughing a second ago is I was driving in San Francisco, of course, and someone was watching one of the movies. And I looked over and it was a porn movie, and I was like, “Whoa. That’s too much.” I was like, “Wow.” A little TMI there. I was like, “Whoa, that’s a porn movie over there,” then I went, “San Francisco. It’s fine.” But it was really interesting, and I thought, “Well, I feel intrusive, and yet I’m appalled by these people,” and at the same ... It went on and on, but it was like, they would know that someone was doing that in the car, what they were at. Your car is your oasis, so why should there be sensors and AI telling you what to do and making decisions for you in these cars? Well, your example is a good example that you can choose what kind of activity you want to do in your own car, because it’s your car. And if you’ve given us access to that data because we’re going to offer you some service, we have the responsibility to not share that with other people or use it for any other purpose other than what we’ve contracted to do with it. Right, well, I ... It might come as a surprise, but some of these companies are actually sharing data that you didn’t intend for them to share. I understand that, and that’s why it’s really important to us that when we say our aspiration is to be the most trusted company, that’s what we mean, that we’re not going to share if we’re not supposed to. Talk about what you think about the ethics around AI. It seems to me that any data that they can suck up they do, in any way they can chop it up and use it. It’s open season. It seems like that. That’s the ethos, is that this is going to be good, and if you just sit quietly you’ll be able to benefit from this. How do you deal with ... You have an office in Silicon Valley. How do you look at the broader tech industry, which is moving into your businesses? Uber is, Google is, Apple sort of is but isn’t anymore? I can’t tell. But they’re all moving in. Amazon probably is lurking somewhere around. Yeah, yeah. Well, they definitely are. They’re lurkers. Yeah. They definitely are. There’s no doubt about that. I can’t speak for how they manage and treat their data, but we’re very careful about how we treat the data that we have access to. Well, yeah, but you have to work with them. We do. So how do you think about that going forward? Because this is not going to be just a solution for Ford. It’s going to be with Google, with Apple, with the Amazon delivery, with ... You’re not going to get in the delivery business is my guess, for example. Yeah, so our self-driving vehicle may be a self-driving technology for a fleet delivery service, so we might be in that business, from that point of view. Yeah. And we’ll have to work with them and agree that if you’re going to work with us, we have to agree how you’re going to treat the data of our customers. Because if it’s a customer that’s in our car, they’re our customer. And we’ll have to have an arrangement so that you color inside the lines. What do you think about these issues around the ethics of AI, then? Who decides what gets done? Because this is being done by your company. It’s being done by Google. Everyone’s making these decisions that are private companies and in the interest of shareholders. Like you said, you want to make a business of it. Right, right. So, I mean, it’s a big question, and I don’t think any one company has the answer to that, which is why we’re working with coalitions of companies. I think the whole mobility industry, the tech companies, the tier-one supply base, automakers, we’ve all got to have much more conversation about that topic. It’s a hard topic, and I’m not going to sit here and try to make up an answer, because I don’t have an answer, because it’s ... Look, we’re charting into uncharted territory. No one’s built a robo-car before, and no one has deployed an autonomous vehicle at scale or any scale in a city where people are riding in it and they have access to data and watching movies in the back of the car. This is new stuff, and so we’ve got to have the conversations about, well, where are the boundaries? What’s fair game and what’s not? And how do I exchange the access to your data for something that you’re going to say is worth it? And I think we’re going to have to go slowly, try some things out, test it out, and see, “hey, how did that feel?” And we’re going to capture, and we have to measure that and then build on that and learn from it. All right. What is the —and then we’re going to do questions from the audience. What is the scariest thing that you’ve seen with the AI that you’ve been, “Oh, wait a minute. That’s not good”? And what’s the totally weirdest, and what’s the coolest? So I think ... Let me start with the coolest, and actually the coolest might be the scariest, too. So we’re doing some research on something called GANs, G-A-N, stands for Generative Artificial Networks. That’s scary, just the name. Yeah, even the name is scary, but this is pretty freaky stuff. So using this technology, you can actually take a neural network, an AI algorithm, and you can throw a bunch of data and teach it what Kara Swisher looks like. And after it learns what Kara Swisher looks like, it could then project your image onto ... pick any random person who’s roughly about the same size as you. And then that person can start talking and can deliver a speech, and it will look and sound just like Kara Swisher. And so it’s got ... Generate it onto this guy, right here? Yeah, absolutely. This guy. He could be talking and ... I know. That was the plot of Captain Marvel, but okay. All right. Using this technology, you could create a digital movie that made it look like you were saying something that you weren’t. Well, yeah. That’s deepfakes, too. Yeah, yeah, yeah, yeah. Now, here’s the practical application, and this is why I think it’s cool. All right. Where’s the cool part? Because it sounds horrible. Here’s the cool part. The cool part is using this technology, you can take scenarios of environments, say, like city streets, and let’s say you want to do a bunch of autonomous vehicle testing in the city of Miami like we really do, and we go and we take a bunch of video of cars running in a bunch of scenarios in the streets of Miami, and we take the video of cars, and we do it in daylight on a nice, sunny, good-weather day, and we test vehicles against those images and those videos. Using this technique, I can now project a rainy day on that same scenario. I can project a snowy day. I can do a foggy day. I can put new people in that environment. I can change the conditions of the road. I think that’s the holodeck from Star Trek. It’s kind of like the holodeck, exactly. It’s super cool technology, and it’s a way to amplify the ability to do simulation testing, which is why we’re doing research in that phase. Because it has to have so many factors in it. You can’t just test in sunny weather. You have to test in all kinds ... but who wants to go out and test in the snow and the rain, right? Yeah, who wants to do that? Right, so ... Because it would be safer. And what’s the weirdest? Wow. So I don’t know if it’s the weirdest, but something that I think is really promising is the AI that we’ve been talking about is taking AI and putting it in the car. But you don’t have to stop there. The AI and the sensors and the intelligence that goes into a self-driving car, well, it can be out in the world, too, right? Why just put LIDAR on the top of the roof of cars? What if you stuck LIDARs in every intersection that you wanted to drive in? And all of a sudden every car could kind of be a self-driving car if you could get the data that the intersections determine into that car. So that’s something that we’re doing some sort of early-phase research on is how might you instrument the world so that self-driving could be democratized? We think that’s pretty cool, and it’s kind of weird because it flips the self-driving problem on its ear. And it says, “Well, you don’t have to just build a bunch of robo-cars. You could build sort of robo cities, too.” And that could make life better even if you’re not in a smart car. Right, which would create that these cars would react to everything, but they’d have things in the cars that would react to it, right? Absolutely. Yeah. Right. Yeah, they’d be able to say, “Oh, I just got this signal. I’m supposed to stop now, or I can turn left, or I have to take this path, not that path.” Oh, and by the way, if you’ve got an array of this kind of sensors in a city and you’ve got vehicles that have been equipped to react to that, now you can begin to think about, how would you create a society where congestion begins to decrease? Because congestion’s not going to get any better if you just put a bunch of robo-cars in a city. You’ve got to figure out how do you make them synchronize better, how do they behave differently, how do they optimize? If I drop this person off, what’s the next person I should pick up, and should I pick up that person eight blocks away because I’m going to get a better fare, or should I let somebody else pick that person up because that’s going to reduce congestion? That’s an optimization problem. Turns out that’s a really hard optimization problem, because you’ve got lots of factors. You got lots of pieces. You got lots of potential paths, and there’s no hope of solving that optimization problem. If you try to put all the potential states in a traditional computer and then crunch the numbers, it just won’t work. There are too many variables. There are too many scenarios. But you know what will work? A quantum computer can solve that problem, seriously. And so we’re talking to the quantum computer companies about factoring that problem in quantum space, so this is the perfect application of quantum computers. So a lot of people say, “Quantum computers, ah, they’re just science projects.” Yes, today they’re science projects, but they’re really good at solving complex optimization problems, and we’re working on trying to factor that into that space so that we can apply a quantum computer to actually solve congestion. It’s a little far out there, but hey, you asked for the weirdest thing. Good. That’s a good weird one. That’s a weird one. I thought you were going to say hovercraft, which is what Larry Page always says. But hovercrafts. Well, I knew that he said that. That’s why I didn’t say it. Yeah. Okay, good. Are you working on hovercrafts? Whatever. We’re studying them, yes. Why? It’s my job to look over the horizon at all the weird, freaky stuff that might happen one day. Your thoughts on a hovercraft? No, they’re really making hovercrafts in Silicon Valley. Look, I mean, they’re ... It’s really not that wacky, right? Because batteries have gotten lighter. The fact that you can fly drones now, it’s just a big drone. And carbon fiber has gotten light enough and strong enough that you can actually make them so that they can fly for several hours, and if you could actually fly one of these things and put three or four people in it and go from San Jose to San Francisco in 15 minutes, the economics actually works out so that it’s cheaper than taking an Uber. Yeah. And also vertical lift and takeoff vehicles. Exactly, and it’s quieter, quiet. I mean, the reason people don’t do helicopters is because they’re noisy, right? They’re noisy and they don’t play nice with air space. So, if you’ve got something that’s quiet and it’s electric and can vertically take off from basically any of these underutilized regional airports and it can fly from San Jose to San Francisco and you could do the economics and make it work, I think people would pay for it. So, that’s why we’re studying it. Anything else weird you’re doing? Sounds weird enough. Well, so, that’s an example of one mode of many potential modes of transportation. We’re looking at a lot of different modes of transportation. We bought a scooter company. Most people don’t know that. Which one do you have? We bought Spin. And we like Spin... It just showed up here. Yeah. We like Spin a lot because they kind of took the same philosophy that we did for taking vehicles into a city. They took their scooters into a city but only after they talked to the city, which we thought was pretty polite. And so, Spin and Ford really have a common culture and we’re working with them to figure out how do they help us solve the last-mile problem? Do you like the scooters? I love the scooters. I love them. I absolutely love them. Anything scooter. They’re cool. They caught me in a video, my boss did, actually, and put it up on the internets. And I wasn’t wearing a helmet. I usually do wear a helmet. Oh, not good. Most people do not wear helmets. Yeah, well, wear a helmet. I like the scooter. We want you to wear a helmet. All right, questions from the audience? There’s lots of them here. Let’s start right here and then we’ll go ... Audience member: Hi, so, you mentioned a specific West Coast company that was in the news recently for some ... He meant Tesla. Ken Washington: Yeah, come on, all right. I was just being funny, it was Tesla. Audience member: So, Teslas have been changing lanes without... Elon’s not going to find it funny today on Twitter, but go ahead. Audience member: So, people realized you could put stickers on the ground, make them change lanes when they shouldn’t, right? That kind of problem isn’t specific to their camera feed stuff, right? You could do that with LIDAR. That’s more of like an AI problem where you can trick the systems by constructed edge cases that cause them to behave outside of spec, right? And this is a problem that you see also in Internet of Things devices where they suddenly have a whole lot of attack spaces that you can attack them from. And they’re really only as secure as the weakest link in the network. So, when you’re designing a car that uses AI and that networks with the home, for example, how do you deal with that? Ken Washington: You deal with that by not having a single line of defense. Tricking the car by putting stickers on the road and doing other things can trick a path-planning algorithm if that path-planning algorithm has been trained on existing images that didn’t have the stickers. And it also can be tricked if you’re using cameras that are looking for cues on the road. It can’t be tricked if you’re looking for cameras that look for cues on the road if you’re looking for a comparison of the world relative to a prior map and if you’re looking for signals from radar and if you’re looking for geolocation information from a GPS and if you’re looking from localizing the vehicle based on bounces off of other objects in 3-D space. That’s exactly the approach we take. We don’t rely on any one or two or three sets of signals. We do multiple lines of defense. It’s never going to be perfect. But it’s going to be a lot better than just saying, “Oh, I’m looking at lines on the road,” or, “I’m just going to rely on either radar or camera.” You got to have at least three and in some cases four approaches. kay. Another question? Miriam Vogel: Hi, Miriam Vogel, executive director of EqualAI, and I’d love to build on the last conversation. It sounds like you’ve given a lot of thought into the variations and the complexities and I’m curious what you’ve done to make sure that your training sets are mindful of drivers and passengers and pedestrians that are not the prototypical coder. Ken Washington: Yes, so a couple things. First, our algorithms for our self-driving system that Argo is building are not all machine learning-based. It’s a mix of machine learning that’s trained by diverse data sets in the real world and in simulation space, and rule-based algorithms that are based on rules of the road, like “this is a stop sign, this is a yield sign, you’re supposed to turn, do a yielded left, yielded right.” And so, it’s a combination of a deterministic and a learning-based machine learning algorithm. As far as the diversity of the data set, it all comes down to having test data from multiple cities. And we’re currently testing, as I said earlier, in five cities. And we started with a neighborhood that was ethnically diverse on purpose, for that reason. And went to Washington secondly, again, ethnically diverse, in Washington. And then, other populations in the other three cities. And we’re going to expand and go from there. And then on top of that, we’re building on ... we’re hoping to leverage the value of using advanced technology like this kind of creepy GAN thing I talked about earlier to further diversify the simulation data that we use to test and validate our data. Okay, right here. Karen Friedman: Hi. Well this was totally fascinating. I’m somewhat of a luddite, so, all this stuff, both I find weird, scary and cool. My name’s Karen Friedman, I’m actually a consumer advocate. I work on pension issues. And I work with a lot of truck drivers in the Midwest who already are having their pensions cut because there’s not enough active workers paying into the pension funds. Can you talk a little bit about the impact on jobs? Because as I’m watching the horizon of these self-driving cars, I’m also watching all these people who will no longer have jobs. Taxicab drivers, now Lyft drivers, Uber drivers, truck drivers throughout the country. I’m sure you guys have thought about this. So, I just want your ... what do you think? Ken Washington: Yeah, well, thanks for the question, Karen. It’s a very important question. And it’s not the first time that an impressive technology has displaced a subset of workers in a particular discipline. The good news ... I don’t know what this particular form is going to take, but the good news is, history teaches us that every time that happens, the quality of the job that they move to and they get retrained to actually repurpose to, improves. And so, I hope that this leads to the creation of new economies like assisting the truck ecosystems to do more work and create more value, just as one example. You may not need as many truck drivers if you deploy autonomous truck solutions at scale. But you may need more workers working in the truck depots. You may need more people supporting the companies who are in the business of deploying these technologies to these companies that are integrating them into the trucks. I just kind of made those up, but I believe that there will be some form of a new economy created around the promise of new business models that come from having autonomous trucks and autonomous vehicles and autonomous package delivery services. But Karen, to be fair, I had this discussion with Marc Andreessen and he’s like, “Oh, farming to manufacturing was better for people because there were more jobs.” The fact of the matter is, there was enormous displacement and problems and social problems and fights and terrible ... There’s going to be a terrible toll on a certain group of people. There’s no question. And anybody who tells you different is ... And in terms of some of the truck staff, they’re not going to just have drivers, they’re going to have robots loading these things. If anyone’s visited any of these, like an Amazon warehouse or anything, they’re going robotic. They have this thing called Kiva that’s amazing. They have all ... they’re going ... everyone’s going robotic and automation in a way that I think is another big trend and this is all governed by AI. It’s really ... it’s fascinating. And in fact, workers probably shouldn’t be putting stuff in boxes. That should be a robot. It’s a repetitive job. As it becomes more efficient... Same thing with ... right now, in San Francisco, we have burger flippers. Burger companies where you make a burger. It’s just burger people that make burgers are cheaper than the robots right now. But eventually, they won’t be. That kind of thing. So, it’s going to have this ... the place about the issues will they come up with new jobs? And who does it? Who does that? And that’s, the problem is we don’t know. Is it Silicon Valley? Is it the government? Right. I think the broader issue is what’s going to happen to the middle-class blue-collar worker over the long term? I don’t have the answer for that. But I think it’s a real issue. Yeah, and years ago I did an interview with Travis Kalanick when he still was CEO of Uber, before he “left.” And he actually was honest about it. And I said, “What’s the problem you face and what is the thing you want to do?” And he actually spoke the truth, which Silicon Valley people tend not to do sometimes. And he goes, “Well you know, Kara, the real problem is the drivers. Once we get rid of them, it’s a great business. But the drivers are the problem.” And he’s an awful human being, but he was correct. He was telling the truth. He was saying, once we remove the drivers in the equation, the business becomes economically fantastic. And I was like ... and I was sitting there, going, “Thank you, thank you, thank you, thank you for saying that truthfully.” And the whole room was like, “Huh.” And all of Silicon Valley was like, “Don’t tell them that!” Like, “Don’t say that kind of thing.” But that’s really the truth, probably. Anyway, next question … Right there? And then, right there. We’ll answer just a few more. Audience member: Hi, thanks so much for this conversation today. I wanted to revisit the issue of congestion. I think it’s a really important issue. Anyone who lives in the city, whether you drive or not, you know it’s an issue. New York just ... They just passed something today. Audience member: Just approved, right, a congestion pricing on Lower Manhattan. It’s only gotten worse with Uber and Lyft and has numerous issues on public ... the public residents, from public transportation taking longer, so, might people take longer to get to work if they use public transportation, to emergency vehicles taking longer to get to places they need to. And that’s not even talking about pollution or climate change effects. So, I wanted to know more about how you think about how autonomous vehicles might address this problem. At least, in the beginning, introduction of more vehicles on the road, whether they’re autonomous or not seems like it could make this worse in the short term. How do you think autonomous vehicles could help address this problem and is there a way that autonomous vehicles could address this problem that would take more vehicles off the road? Ken Washington: So, I think autonomous ... the fact that the vehicles are autonomous in and of themselves will not make the problem better. I think autonomous vehicles deployed smartly into the city in a way that positions the autonomous vehicle after it drops off the person in a way that minimizes the additional movement, in other words, optimizes the routes, so that it’s not a dumb autonomous vehicle in the sense of what ride it chooses to pick up. So, it’s not just the AI for the driving task. There’s got to be AI in the routing task of which vehicles do I send where and how do I reposition them when they’re not busy moving people? That can reduce congestion, because if you didn’t do that with an AI algorithm, you would be doing it one ride at a time by human ... where the human optimizing it based on their sort of social contract. But Uber and Lyft have these maps. They’ve been mapping this kind of stuff for a while, correct? They do. And I think those are examples of how their algorithms are actually helping their drivers optimize their system. But an autonomous vehicle, in a longer-term scenario, could optimize across multiple fleets and not just individual fleets, if you could somehow figure out how to do a contract that way. But you have no hope of making it better if you don’t think about the problem as an optimization problem and a routing problem. And that’s what you’re doing with these scooters now, where they should be and where they should be put back once you’ve charged them. Exactly right. And so, the scooters are a part of this solution as well, because you can offer a person a way that goes somewhere without getting in a car if it’s short enough. So, that’s part of the optimization solution, too. Or you can do what has happened in Austin, where they’ve dropped 400,000 scooters on a very small city and it’s insane. Oh, boy. I love it. So, where’s the next one? Two more. Trooper Sanders: Hi, Trooper Sanders. So, as you’re thinking about deploying fleets, you have to think about maximizing revenue. What are your thoughts or plans on people who can’t necessarily afford to pay for transport and dealing with the equity and access issues? Ken Washington: Yeah, that’s a really important point. And so, we’re creating a living laboratory in downtown Detroit to help us figure out how to solve that problem. For those of you who don’t know, we bought the Michigan Central Station, which had unfortunately become sort of the iconic eyesore for the downfall of Detroit. But at one time, it was the grandest train station in the world. And so we bought that with the promise to revitalize it and bring it back to life and make it, again, the sort of centerpiece of the Detroit mobility ecosystem. And around the train station we bought four other properties and we’re working with the city and we’re in the process now of talking to strategic partners to join us in sorting out that very problem. How do you solve the mobility problem in an inner city, in this case in our own backyard, in our hometown, in a way that gives transportation to the underserved, that revitalizes a community, that figures out how do you tap into the potential of making the streets smart? So, this idea I talked about earlier in terms of putting sensors on the road and making the city smart, well, we’re going to start with experimenting in Corktown. And we might find a way to offer very affordable mobility to the underserved community there that we can then scale up to the world. But this isn’t just altruism. This is part of a way for us to actually have a viable business as well, because if you can democratize mobility, you can make a good business. Henry Ford proved that over a 100 years ago. But there’s nothing wrong with altruism. Also, one of the issues is when you start ... all this stuff is being done, let’s underscore, by private companies, a lot of this new stuff. And it takes away from public transport. A lot of these innovations ... you should see the stuff they’re doing in China, it’s insane, around buses, around small cars, around rickshaws, around ... and it’s all private. And so, once private ... it’s like private prisons, private anything, you’re going to get a lot of problems. And so, it’ll take money away from public transportation things, as you know, which are so hard to ... we can complain all we want about our subways, but they are miracles, the way they work right now. And at the same time, they’re not adequate. And so, that’s one of the problems, is they’re all private companies going to be taking over transportation. And they sure aren’t going to go where the money isn’t. So, that’s one of the problems. Yeah, well, one of the things that we’re going to explore is how can you make these things coexist. And in the case of Detroit, there isn’t a really healthy public transportation system, so we don’t really have that issue. But if you think about taking a solution like the Corktown solution that we’ll be developing over the next several years to a city that does have a healthy subway system, we would want to design the solution so that it amplified that and it could coexist with it and make it better and solve some of the pain points. Because not everybody wants to take the subway but some people would. So, I think that’s in the category of work-to-do, but you’ve got to start somewhere. Yeah. I think you know this, Uber’s trying to get into the subway systems to pay for subways with your Uber app. Which is great, but maybe not so much. You know what I mean? You really start to think about it. Okay, last question. Wherever, whoever has it. Right here. Audience member: How much data sharing is happening between companies? And if there’s an incentive to kind of hoard this data to yourself, does that hold back the industry as a whole in terms of making it safer for consumers? Ken Washington: Yeah. That’s been controversial because Facebook was sharing... Yeah, I mean, look, I’ll just be transparent. There’s basically no data sharing between the companies. Data’s the new oil. We all have our oil wells. Exactly right. That’s just the way it is. And that doesn’t mean it’s going to always be that way. At some point, this is going to get to the point where the technology itself is somewhat commoditized. The exception to the rule here is China. And you guys talked about this earlier on the prior discussion. In that case, the data’s all state-owned. And so they’ve got an unfair advantage just because of the way the government works in China. I think there’s going to be some pretty tough decisions and discussions that we’re going to have to have over the course of the next, say, decade as AI evolves and grows up and begins to be truly adopted and matures. And some of these sectors, like the autonomous vehicle sector and smart home and digital assistance. But right now, there’s no data sharing. I mean, Amazon’s not sharing their data pool with Google, and Ford’s not sharing our data pool with GM. Nobody’s sharing their data, which is why competitive collaborations are so tough. And then in China, the fact of the matter is, the reason they’re innovating so much is because they have the ability. Because they have that. That’s right. The innovation going on there is amazing. I just spent a week in China and I came back and my head was about to explode. I mean they’re just going at light speed, so I think we got to learn how to go at that speed, so it’s a powerful question. Okay. Thank you so much and thank you, everybody. Thank you.

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posted 4 days ago on re/code
The streaming video company now has 155 million total subscribers globally. Netflix has 148 million paying users around the globe, up 26 percent from the same quarter last year and in line with analyst expectations, according to the streaming video company’s latest earnings report. When you add free trials to active subscriptions, the streaming company now has 155 million users globally. But how big is that really? Netflix subscriptions are still just a fraction of the size of the number of global, digital pay-TV subscriptions. There are more than a billion paying digital TV subscribers nationwide, according to market research firm IHS Markit. That counts people who cough up for cable, satellite, and internet protocol television (IPTV). At more than 500 million subscriptions in 2019, all online subscription video services — Netflix, Hulu, Amazon Prime Video — combined represent about half the users of digital pay TV, according to IHS. They’re also growing a lot faster. Netflix makes up nearly 30 percent of all streaming video subscriptions. !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}})}(); Most of Netflix’s growth is coming from abroad, while US growth is slowing as it reacts to growing competition in a crowded media landscape. Total international subscriptions rose 37 percent since Q1 last year, while domestic subscriptions grew only 9 percent. Netflix is still the biggest streaming video contender in an industry that is swiftly gaining on traditional TV, but its growth is becoming more difficult in a country like the United States that is replete with other choices.

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posted 4 days ago on re/code
The streaming company added 9.6 million subscribers last quarter — and it says it isn’t worried about Apple or Disney. Netflix continues to grow at an astonishing pace around the world: The streaming video company added 9.6 million paid subscribers in the first three months of this year and now has nearly 149 million subscribers. That news, delivered via the company’s earnings report this afternoon, doesn’t satisfy Wall Street investors, who pushed the stock down some 3 percent after the numbers were released. The likely culprit is that Netflix’s projections for the next quarter aren’t what analysts expected: Netflix says it looks to add around 300,000 subscribers in the US, while investors were expecting more than 650,000. It is tempting, and not inaccurate, to say investors have a long history of making exaggerated decisions about the value of Netflix’s stock, so that any small surprise can shoot Netflix shares up or down. On the other hand, Netflix’s modest predictions for US growth in the next quarter reflects the fact that it is getting increasingly harder for the company to grow domestically. Those 300,000 subscribers would be a significant drop from the 850,000 subscribers it added in the same period a year ago. And in the company’s most recent quarter, it added 1.74 million subscribers in the US — down from 2.28 million the previous year. On the other other hand, Netflix is still growing very fast outside the US, which has been the case for some time. In its most recent quarter, the company added 7.86 million subscribers, up from nearly 6 million the previous year. That’s not a coincidence: Netflix has been pushing to grow worldwide for several years, and now routinely plays up the fact that shows it makes work all around the world, no matter what country they originally came from and what language they were originally made in. !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}})}(); As he did three months ago, Netflix CEO Reed Hastings is using his quarterly investment letter to share selected audience numbers about some of his original shows. That’s a departure from the past, where Netflix refused to talk about viewership, but it looks as though it’s going to be a standard component for a while. For instance: Hastings says Triple Frontier, his new action movie starring Ben Affleck, was watched by more than 52 million households in the first four weeks it was out, while The Highwaymen, starring Kevin Costner, will likely be viewed by more than 40 million households in its first months. Meanwhile, Netflix’s excellent Fyre festival documentary, which you should definitely spend 90 minutes on, attracted more than 20 million viewers. When Netflix blasted out similar numbers last quarter, it generated grousing from traditional TV and film executives, among others, who argued that the numbers were misleading or, worse, designed to bamboozle ... someone. Short of a Fyre-style fraud, though, it’s hard to see what Netflix has to gain from faking those numbers, which aren’t designed to impress Netflix subscribers (who don’t care) or advertisers (Netflix doesn’t have any of those). The main point of those numbers is to convince the Ben Afflecks of the world that stuff they put on Netflix will be seen by lots of people. That argument will become more important this year as Apple, Disney, AT&T, and other competitors ramp up their own streaming efforts, which means they are competing for viewers’ time and money as well — and the time and effort from the Ben Afflecks of the world. We won’t know how that’s going to pan out for some time, but, unsurprisingly, Hastings says he’s not worried. “[Disney and Apple, who both made streaming announcements recently,] are world-class consumer brands and we’re excited to compete; the clear beneficiaries will be content creators and consumers.”

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posted 4 days ago on re/code
Twitter is using technology to catch more bad tweets. Twitter can be a terrible, hateful place. It’s why the company has promised over and over and over again that it plans to clean up its service and fight user abuse. Part of the problem with that cleanup effort, though, has been that Twitter predominantly relies on its users to find abusive material. It wouldn’t (or couldn’t) find an abusive tweet without someone first flagging it for the company. With more than 300 million monthly users, that’s a near-impossible way to police your service. Good news: Twitter says it’s getting better at finding and removing abusive content without anybody’s help. In a blog post published Tuesday, Twitter says that “38 [percent] of abusive content that’s enforced is surfaced proactively to our teams for review instead of relying on reports from people on Twitter.” The company says this includes tweets that fell into a number of categories, including “abusive behavior, hateful conduct, encouraging self-harm, and threats, including those that may be violent.” A year ago, 0 percent of the tweets Twitter removed from these categories were identified proactively by the company. The blog post included a number of other metrics Twitter shared to try and convey to people that Twitter is getting safer, but the 38 percent number was the most important. The reality of having a platform as large as Twitter’s is that it is impossible to monitor with humans alone. This technology is not just useful — it’s a necessity. Facebook, for example, has for years been proactively flagging abusive posts with algorithms. With “hate speech,” Facebook says last fall it removed more than 50 percent of posts using algorithms. In the “violence and graphic content” category, it proactively identified almost 97 percent of violating posts. For “bullying and harassment,” Facebook is still just at 14 percent. Algorithms are far from foolproof. On Monday, as video of the Notre Dame Cathedral burning was shared on YouTube, the company’s algorithms started surfacing September 11 terrorist attack information alongside the videos, even though they are not related events. When a shooter opened fire at a New Zealand mosque late last month, algorithms on Facebook, YouTube, and Twitter couldn’t stop the horrific videos from spreading far and wide. But algorithms designed to improve safety are the only way Twitter is going to keep pace with the volume of tweets people share every day. Twitter is far from “healthy,” but it may be getting a little closer to cleaning up its act. One element missing from Twitter’s blog: Any update on its efforts to actually measure the health of its service, something Twitter announced over a year ago it would work on. Those efforts have been slow, but Twitter executives told Recode last month that some of their work in measuring the health of the service could appear in the actual product as early as this quarter.

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posted 4 days ago on re/code
Kamala Harris, Beto O’Rourke, and Cory Booker are battling it out in the fundraising streets of Silicon Valley. Silicon Valley’s biggest Democratic donors are still wrestling with which candidate they want to support in the upcoming primary. There is no clear frontrunner among the donor class, according to the first fundraising snapshot released Monday. Tech money has for decades powered the Democratic fundraising machine, especially so in the age of Barack Obama, who embraced Silicon Valley. But the temperature has turned sharply against tech giants — and, by extension, the people who lead those companies — and just as donors are wrestling with who to support, Democratic campaigns are wrestling with how publicly they want to ingratiate themselves to those donors. Democrats who are able to raise money online organically no longer need the blessing of big donors to run competitive races. But the best-capitalized campaigns tend to have strong support from both committed, high-dollar bundlers and low-dollar givers who can be tapped again and again for more money. And support from Silicon Valley millionaires ... doesn’t hurt. Many tech donors have given to multiple candidates or none at all yet, waiting until the race develops. And so while defining support from “tech donors” is up for interpretation, one quick way to judge candidates’ support from Silicon Valley is to look at which Democrat received the most max-out checks from employees of Facebook, Apple, Amazon, or Alphabet, the so-called Big Four. That shows that Kamala Harris has so far corralled the most support from well-heeled insiders, with eight executives from those companies writing maximum checks. Harris drew support from people like former Facebook security chief Alex Stamos, Y Combinator chair Sam Altman, and investors like Ron Conway. While she is not dependent on big money — she has a healthy mix of small donors, who are responsible for 37 percent of her fundraising — she also at this point has the longest list of max-out contributors, from Silicon Valley or elsewhere. The incumbent California senator has been a fixture on the Bay Area fundraising circuit in the first quarter, drawing on her relationships with longstanding local high-dollar givers. Beto O’Rourke also caught the attention of Silicon Valley’s wealthiest during his Senate run in Texas last year. It’s different in a presidential race, of course, but O’Rourke seems to have retained some support from high-dollar tech donors (and has five Big Four executives on his max-out list). Venture capitalists flocked to him last quarter, along with well-known executives like April Underwood, formerly of Slack. He probably could be doing even better here: O’Rourke has not been doing high-dollar fundraising events and has yet to make a finance trip to Silicon Valley since announcing his run. But the candidate with the most bold-faced names — and the longest relationship in the Valley — is Cory Booker. Booker has five executives from the Big Four on his roster, but his FEC report is littered with marquee names that send signals to other donors that he is a favored choice of the industry. Among Booker’s largest donors this quarter are Eric Schmidt, the former Google CEO who epitomized Silicon Valley’s close relationship with the Democratic Party; Salesforce CEO Marc Benioff PayPal CEO Dan Schulman; former eBay CEO John Donahoe; and a litany of elite venture capitalists. This all makes sense given Booker’s ease with these people — he’s known some of these donors since they were undergrads together at Stanford — and because the New Jersey senator has worked the Silicon Valley donor circuit as hard as anyone since announcing. The most intriguing name on Booker’s FEC report is Reid Hoffman, the founder of LinkedIn who is now an ascendant Democratic powerbroker and megadonor. Hoffman and Booker are personally close, though he will not endorse any candidate; Recode has previously reported that Hoffman is expected to write $2,800 max-out checks to as many as six Democratic primary candidates. Filings show that Hoffman wrote a maximum check to Amy Klobuchar this last quarter. Several tech financiers have privately told Recode they plan to back Joe Biden should he choose to enter the race, as expected later this month. Other Democrats with promise among Silicon Valley donors include Pete Buttigieg, who venture capitalist (and Sheryl Sandberg brother-in-law) Marc Bodnick told Recode he is backing exclusively, and — somewhat surprisingly — Elizabeth Warren. Despite calling for the breakup of tech giants like Google, four Google executives gave the senator maximum contributions — three doing so after she rattled the cage.

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posted 5 days ago on re/code
Facebook and Google could soon be forced to pay more creators for the content that appears on their sites. Facebook and YouTube will soon face strict new copyright laws across Europe that could impact what content users share on social media. The new rules, which were initially proposed more than two years ago but were finally approved by the European Parliament last month and the European Commission on Monday, will require platforms that host user-uploaded content to cut licensing deals with creators so that they are paid when people share their content online. The law would apply to music and film producers, but also to newspapers and magazines, according to the European Commission’s FAQ page. The move is meant to hold content tech platforms accountable for the content its users share, and to try to return some of the billions of dollars in revenue that Facebook and YouTube make each year to the people who actually create the content that appears on those sites. (Perhaps coincidentally, Facebook CEO Mark Zuckerberg recently discussed a plan to pay news publishers for putting their stories into a dedicated news section in the Facebook app.) What’s unclear is how exactly this law will be implemented and what, specifically, companies like Facebook and Google will need to do to comply. YouTube, for example, already uses technology to search for copyrighted videos and music through a matching system called Content ID. Facebook offers something similar, called Rights Manager. In YouTube’s case, if content owners find that someone else has uploaded their video, they can ask YouTube to remove it or make money off the video by having YouTube run ads alongside it. It’s possible that matching technology could be used for these new EU laws, though the European Commission FAQ page says that building those kinds of matching filters won’t be a requirement. “The text of the political agreement does not impose any upload filters nor does it require user-uploaded platforms to apply any specific technology to recognise illegal content,” the site says. If companies like Facebook and Google can’t come to licensing agreements with content owners, they’ll need to “make their best efforts to ensure that content not authorised by the right holders is not available on their website.” What exactly does “best effort” mean? It appears to be up for interpretation. Facebook and Google are not pleased with the proposed rules. For starters, each European Union member country will implement the rule in its own way, which could mean tech companies need to abide by a different set of guidelines in each country. Then there is concern that while trying to comply, tech companies will take a heavy hand with moderating what is allowed and what isn’t. Google’s senior VP of global affairs Kent Walker wrote a blog post published last month titled “EU Copyright Directive: one step forward, two steps back.” “The directive creates vague, untested requirements, which are likely to result in online services over-blocking content to limit legal risk,” Walker wrote. A Facebook spokesperson declined to comment Monday on the laws but pointed Recode toward a statement made by the Computer & Communications Industry Association, a tech trade group of which Facebook is a member. In a statement from one of the association’s policy managers, the CCIA echoed Walker’s concerns. “Despite recent improvements, the EU Directive falls short of creating a balanced and modern framework for copyright,” the statement reads. “We fear it will harm online innovation and restrict online freedoms in Europe.” While Monday’s approval by the European Commission has brought the copyright rules back to the surface, they may not affect consumers for a while. Each EU member country has 24 months to create laws that enforce the rules.

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Plus: People around the world were stunned as images and videos surfaced of the iconic Notre Dame Cathedral in Paris engulfed in flames. And Winners of the 2019 Pulitzer Prize were announced on Monday.  Here’s a fascinating, incredibly detailed look inside Facebook over the past 15 months, which has been rife with scandal. If you’ve been following Facebook news (or reading Recode), you’ve heard about much of this: The Instagram founders’ abrupt departure, product boss Chris Cox leaving after disagreements over product direction, and the day Apple pulled the plug on all of Facebook’s internal apps. But Wired’s Nick Thompson and Fred Vogelstein tied it all together in one in-depth exposé that gives you a sense of just how chaotic the past year has been for one of the world’s largest tech companies.[Nick Thompson and Fred Vogelstein / Wired] [Want to get the Recode Daily in your inbox? Subscribe here.] The European Union will require tech companies like Facebook and Google to take a stricter stance on copyrighted content as part of a new set of rules endorsed on Monday by EU member countries. The new rules will require tech platforms that host copyrighted content, like YouTube or Facebook, to establish licensing deals with creators of that content. “If licences are not concluded, these platforms will have to make their best efforts to ensure that content not authorised by the right holders is not available on their website,” the European Commission wrote in a press release. The rules will go into effect sometime in the next two years, but the idea is to force tech companies to take responsibility for what people share to their services — and the hope is that content creators will be more fairly compensated when their work is shared.[Foo Yun Chee / Reuters] Winners of the 2019 Pulitzer Prize were announced on Monday. The Wall Street Journal won a Pulitzer for its coverage of President Trump and payments he made during the 2016 US presidential campaign to women with whom he had affairs. The Pittsburgh-Post Gazette won the “breaking news” category for its coverage of the shooting at the Tree of Life synagogue in October, and the South Florida Sun Sentinel won for public service for its coverage of another shooting: the massacre at Marjory Stoneman Douglas High School in Parkland, FL, last February. People around the world were stunned on Monday as images and videos surfaced of the iconic Notre Dame Cathedral in Paris engulfed in flames. The footage was shared widely on services like YouTube and Twitter. In true YouTube fashion, the service flagged the videos as potential misinformation and accidentally started showing news snippets about the September 11 terrorist attacks alongside footage of the burning church. President Trump weighed in on the fires with condolences shared on Twitter, and then offered his own solution: “Perhaps flying water tankers could be used to put it out. Must act quickly!”[Adam Nossiter and Aurelien Breeden / New York Times] Top Stories from Recode New immigration rules could prevent our next Elon Musk. Silicon Valley wants people with experience. US immigration services want people with grad degrees.[Rani Molla] This is Cool Star Wars’ new teaser trailer came out Friday. We’re still thinking about it.

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posted 5 days ago on re/code
There’s no algorithm for creativity yet, Sapan says on the latest Recode Media. Design within tech companies is often data-driven: People click this button 50% more when it’s red than when it’s blue, so it should be red. TV companies like AMC Networks are looking at data about what viewers like, too — but there’s a still a fuzzy side of making good TV that can never be reduced to a number, says AMC CEO Josh Sapan. “I don’t think that you can be either enlightened or reductive to the point where you make final decisions [about greenlighting a show], because you really will, one will, eliminate the possibility of surprise and touching people with great stories and characters,” Sapan said on the latest episode of Recode Media “So I don’t think that if you allow yourself, for data to become all-encompassing and singular and monolithic that you’ll end up in a good place.” Shows that AMC Networks has produced, such as BBC America’s hit Killing Eve or AMC’s Better Call Saul, are a reflection of the value that “the first screen is creative,” Sapan explained. In other words, those programs were greenlit based on their stories and characters, not surveys showing demand in the market for shows about female assassins. But at the same time, he said data can be incredibly useful as a show progresses. “The data will provide the best guideposts there absolutely are, and one’s judgment, I think, needs to submit, ultimately, to what the data tells you,” he said. “Which is not to say it doesn’t have a seat at the table. And I work with people whose instincts and wherewithal is spectacular, and so they are a factor in what we do, but denying the data is a silly exercise.” This episode also features a bonus mini-interview with Vulture’s Joe Adalian about Disney+ and the future of TV. You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast. Below, we’ve shared a lightly edited full transcript of Peter’s conversation with Josh. Peter Kafka: This is Recode Media with Peter Kafka. That person laughing, I’m just gonna tell you now, is Josh Sapan. He is CEO of AMC Networks. I’m part of the Vox Media Podcast Network. I’m here in New York City with Josh, who I’ve been looking forward to speaking to for a long time. In part because he’s funny, also because he runs a big TV network. Is that the right way to describe it, a TV network? Do you want to call it something else at this point? Josh Sapan: Content company, TV networks, anything you like is good. You have a really cool job because you get to bring people like me shows like Breaking Bad and Mad Men. You bring a lot of people The Walking Dead; Killing Eve is running now as we speak. Yes, it is. I like McMafia. I think you met a smaller group there. And then you do cool stuff on IFC and Sundance and all that. So that all sounds great. You get paid a lot of money, you get to do cool stuff. But whenever I see you being interviewed or listen to you being interviewed, everyone is pretty concerned about your well-being. And the concern is, “Hey, Josh, how’s it going? It seems like you’re in trouble here. Your company is too small or there’s a problem with TV.” And you seem pretty chill about it. So we’ll talk about all those. Sure, good, good. That’s a long, extended welcome. Okay, good. Well, thank you for having me. It’s a real pleasure. I mean it. I appreciate it. The last time we talked in public was fall of 2015. It was right after Bob Iger had done an earnings call and said, “We lost a couple subs at ESPN this last quarter, but it’s nothing to worry about.” And then everyone freaked out and all the cable stocks tanked. I think they’ve come back since then, right? Yeah, I think so. Yes, they definitely have. So this is kind of an extension of that conversation. Because everyone was freaked out about the future of TV in 2015 and I think even more so now? The landscape has changed, but the tech guys have finally showed up or are about to show up. There’s still a concern about cord-cutting and audience and all of that. You’re still here, you’re still making cool TV. That’s good. Yeah, yeah. What is your average day like? Oh, average day is, it’s Upfront season. So I’m going to an Upfront event tonight. Where you’re gonna show off stuff that you want advertisers to buy? We will, indeed. And we’ll spend some time with them. Which is not an average day, but it’s an important day. We’ve been talking about Upfronts on this show a bit because I went to what was basically the Apple Upfront last year or last week, two weeks ago? But they didn’t show the shows. But we’ve been referencing the traditional TV Upfronts. Do you wanna explain what goes into an Upfront? Oh, sure. It’s the time of the year, for those who are unexposed to that particular ecosystem, when those who sell advertising in media come to the media-buying community and essentially present their wares or opportunities. It’s a long-standing tradition. And it’s the part of the market where buys are made in advance of the coming year. “Here’s what we’ve got. You know some of our shows are coming back, here’s some new shows you haven’t seen before, here are clips of them. Here’s some talent, here’s some alcohol, here’s some food.” Yeah. But most importantly, it’s a chance for the media-buying community to make determinations, and it’s a market, it is a market about what they want to lock in for the coming 12-month period, essentially. And so those prices get established. And at least the history of television advertising is that that’s where the substantial amount of commerce occurs. And then there’s what’s called the scatter market. For those who are not familiar with it, that market it a sort of day-by-day or moment-by-moment market that goes along with the Upfront that has established the bulk, generally, the bulk of commerce for traditional TV networks. Now, the entire world is changing, but you do have this sort of nomenclature, right, and the feeling. So we were privileged last night at our Upfront, which was a smaller venue, to have Jodie Comer and to have Sandra Oh and to have Fiona Shaw from Killing Eve. To have Colman Domingo from The Walking Dead, to have a bunch of people from our We TV shows. To have Seth Meyers from Documentary Now. So they get to meet talent, and they get a sort of feeling of texture about what the shows are. They know them, but it does give them an opportunity to really understand better what we’re doing. And this is a high-stakes thing for you, right? Because you’re gonna determine, to some degree, how much revenue you’re gonna have for the coming year. Sort of kicking off last night and then you’ll have a negotiation with the buyer in the next couple of months. And that, in large part, is gonna sort of determine what your year is. Yeah. It has a very significant effect. Not the only effect, but it establishes, to some degree, price, and to some degree establishes volume. And very happily, notwithstanding your earlier comments about some of the issues surrounding television, our pricing has been going up very strongly as television advertising is actually increasingly more precious. And I don’t mean to pitch our book, it’s quite so that dramas, immersive dramas, on television, if you’re an advertiser, are increasingly challenging to find. I really mean this. It is part of what we say that is appealing about us, our so-called pitch. It’s also quite true, which is, if you wanna advertise on Game of Thrones, you can’t. If you want to advertise on Billions, you can’t. If you want to advertise on Outlander, you can’t. Or a Netflix show. Or the Kominsky Method, you can’t. So there are really two, I think, places on television that would be known to have quality dramas and comedies where you can advertise: AMC and FX, or the AMC Networks and FX, I should say. And so it’s not lost on the smart people who are buying media, who are selling their products, that that type of experience tends to move products. Because people are paying an awful lot of attention when they’re watching. This is a very persuasive pitch. If I was buying advertising, I would buy it. I am someone who buys advertising. And so you don’t do it casually, you do it carefully. You do it with all the data available to you. And you watch what your sales are, you’re not sitting around just making random judgements. You have to move product off the shelf or subscriptions or financial services or people into fast-food establishments. So you know what works over time and your job is dependent upon that. And television is a very important piece of that. And immersive drama and comedies are truly increasingly hard to find because of the proliferation of non-commercial streaming services. Make the case for the idea of the Upfronts period. Because every year there’s a discussion like, “This seems like a really anachronous way to sell advertising. This is all based on a fall TV schedule when TV really should be a 12-month-a-year thing. On top of that, you’re showing off stuff that a lot of these shows will only be on air for a few months. This seems like we should get rid of this process because they’re expensive. You gotta fly the talent in, you gotta rent out stuff.” But we keep having them. And in fact, the digital companies are all doing them now. Yeah. I think that, to my evaluation, markets work in different ways for multiple reasons. The way people trade anything, and I’m not an economist, but the way people trade anything has to do with the clarity, specificity, and, if you will, perfection of pricing in markets. And it also has to do with other conditions. How much time you can spend, whether you want to lock in prices, whether you want to lock in partial prices, how much of your market dynamic you want to be volatile versus fixed. So all of those influences go into the sale of advertising. In all markets, which as you said, so-called digital companies are doing Upfronts. Yeah. I got my invitation to the Hulu one, the YouTube one. But your point is well taken, I think. And I think the reason conjecture is fairly frequently raised around, “Why Upfronts, if there’s a better way to do it?” is a very fair and good question. And if I may, it’s something that we have a fair amount of focus on and interest in, in the broader sense. And it is because the system surrounding the calculation and so-called counting of television eyeballs and then advertising, is imperfect. It is based on samples and it is based on projections of samples. It’s not based on true, granular, individual data. So guessing how many people are watching. Yeah, it’s a projection. But the thing that’s meaningful for us, if I may, which I think is an important notion about the future health of AMC Networks, is that we have a lot of viewing consumption. People spending the time watching it that is not adequately monetized because the system surrounding it is somewhat anachronistic. Now, there’s new systems being set up that to say it in the most simple terms, count more effectively, they count more properly. And they allow the advertising to be placed with greater proximity and with greater specificity. Meaning, there are now ads going out on cable television, not to quote everyone, but to people whose car leases are expiring and who may be interested in cars, so-called addressable advertising. All of that is something that the digital companies, in fact, came by birth. It was native to the manner in which they inhabited the globe. And was not native to those who began their television enterprise through distribution medium or media some time ago. That will catch up. When that catches up, the pricing or the CPMs will escalate for television. You think better measurement increases your pricing on TV? Because in digital, it’s a race to the bottom. In the digital world, we have a very good sense of who is watching, who is consuming something. I can look at Chartbeat right now and tell you how many seconds the average person has spent on my story and pricing. And the better we get at counting, the lower pricing goes. The better counting television gets, the higher pricing goes, the more addressable the ad is, the higher the pricing will go because there is, today, some degree of waste in your buy. And you’re mindful that there’s some degree of waste in your buy, so you’re calculating that into your price. This is the ad tech pitch on the digital side, too. “Oh, we’re gonna find inefficiencies. And it turns out that you had more eyeballs there. And also we can track conversions and all of that.” But the price keeps coming down, down, down, down, down. But television price keeps going up, up, up, because each year over year, and particularly with the shows that are commanding, because the experience of being deeply, deeply engaged in something is, for an advertiser, very important and very hard to find. It simply works better than having something adjacent on a screen that your eye may wander to or not. And it has its own place in life. But I really do believe that the experience of immersive television, it has already been increasing, even with its historical, if you will, imperfections. And I think the pricing will increase as those imperfections are overcome and more specificity and addressibilty allows you to buy more with greater effectiveness and efficiency. I’m assuming that, for a bunch of different reasons, some of which we’ll discuss, your business, the focus on ads has changed for you over time. That maybe they are less important to you than other forms of revenue, or you’re adding new revenue streams in part to supplement advertising. Is that fair? I think it’s fair to say that we have been diversifying our overall business. So we separated, just a little historical map, AMC Network separated from Cablevision some eight years ago. Cablevision is the smallish, or used to be the smallish New York-based cable provider, now is ... That’s exactly right. Thank you very much. Yup. And so we’ve been publicly traded under our own name for eight years. And during that period of time, we mindfully went out to diversify our business. We mindfully went out to become what probably was fairly described as a group of cable TV channels, to become, over time, a content company that — impolite word — exploits its content in a number of different media and finds value in different geographies and in different platforms. So that’s been a very important initiative for our company. So today, to your point, advertising represents somewhere around 25 percent or so of our overall revenue, what is commonly referred to as studio business. Which is our ownership of shows. Making the shows that you run, and I guess in theory could run on someone else’s network, but primarily you’re making stuff for your own consumption. We make them for our own consumption and then we sell ancillary rights or subsequent rights, or different geographical rights to Amazon and foreign territory that we don’t operate a cable channel in. And that’s become, perhaps, 15 or so plus percent, round numbers, of our business. So we’ve become a studio, to use that word, doesn’t mean we have a commissary, it simply means that we manufacture and own material. And we have distribution revenues and then we have license and commercial revenue. So yes, we’ve actually, significantly, diversified the nature of our revenue. How does the fact that when you’re thinking about making a show and putting a show on air, the fact that you are also now thinking that you are gonna sell that now to an Amazon or Netflix or somewhere outside of the US, how does that affect sort of what you might purchase and also how long you might air it? I have this notion in my head that you guys and other networks are keeping stuff on longer when I don’t know, five, six years ago you might have pulled it because the ratings weren’t great, but you’re thinking, “This is gonna have value when we sell it somewhere else.” Yeah, I think it’s a fair point. So we first and foremost have a vigilant creative screen because we have believed from early on and continue to believe that there would be many new entrances moving in to television, which there have, many more opportunities for people to find what they want and to stand out and to be distinguished, you’re gonna have to be not okay, not good, but great to whatever group of people finds you. You’re gonna opt in to watch this, “I choose to watch this.” You’ve got to really make your way to go find it. I’m not flipping through the dial. You’re not. And so I will say it’s so important, you mentioned Killing Eve, and thank you for doing that, because I think there are a number of entities that are sort of pressing the green light button with great speed today, and they’re moving to do very high volume because it suits their business model. This is the main conventional TV criticism of Netflix and then the others guys, but it’s mostly been ... I would call it an observation. They’re making too much stuff. No, I’m just calling it an observation. So I don’t think that we would find our way to Killing Eve if we were pressing a button that said, “A show about a female assassin and a so-called cop in pursuit of one another” is necessarily going to be the winning formula that will rule the world, it was in the nuance of the script that made Killing Eve Killing Eve. Similarly, I think Better Call Saul would not have been ... we wouldn’t have made it just so-called “for the money.” We’re mindful of ROIs, of course, we’re in business, but first screen is creative. Will it be a great show? Will it tell a great story? Will the characters live in your skull in a way that you actually adore? And is it compelling? But what I was asking about, what was something that might have modest ratings that you’re more likely to keep it on air because you want to be able to have multiple seasons to sell in a couple years? Is that a fair way to characterize how your business has changed? I think the answer is, by degree, yes. And it is because we’re ... I mentioned the multiple means of exploitation. If we’re getting money from subsequent sales in the US and from foreign sales and other means of distribution, then the economic return of that show has different genetics. And the immediate rating used perhaps was paramount earlier and it’s now a piece of what we ... Got it. So I’ve mentioned Netflix several times, I don’t think you’ve mentioned them by name, but you work with Netflix. Yeah. The Netflix narrative in the olden days used to be, they have got a bunch of junk, and then for a while it was, they’re helping people. And you guys were often the prime example, they helped build an audience for shows like Mad Men because people who didn’t see it when it aired have been watching it, have been binging on it for seasons and now they’re watching it live. And now the conventional wisdom from the TV guys is, “Netflix is a mortal threat and we need to muster all the defenses we have and/or offense and take them on.” Has your view of Netflix changed over the years? You know, I think that rolling sequence could fairly be described as common wisdom, for okay reasons. I think it is, however, not quite as clear in your sequence ... That’s why we’re here, to talk about it. ... of the pieces as those chapters might describe. If you look at the history of the United States of America, you can say there was this and then there was this and then there was that. But if you’re looking through it in real time, the Revolution and the Civil War are indeed central events, as is World War II, but if you’ve lived through the 1950s and ’60s and ’70s and ’80s ... Some stuff happened there, too. ... some things occur in a slightly more evolutionary manner. So I think, if I may, if you’ll indulge that analogy, I think that the material influences it an awful lot. Certain shows benefit from very wide exposure on an SVOD platform and subsequent sequences, and you see ratings bumps. We just saw it on Killing Eve, when something returns to linear. I think other shows might be, if they’re less important, they might see a sort of decline because of their availability and lack of urgency. So, the sort of chemistry or the recipe has more than one ingredient and one variable, and I think those all go into the mix. Does that change your thinking about how you decide to license an individual show? Like, “This thing, I think if we sell it to Netflix it’s probably not going to help our business beyond whatever check Netflix gives us.” Show two, Better Call Saul, “This is going to help us.” Yeah, you know, I think it does influence our thinking. We’re happily in charge of that choice and we make decisions selectively about whether we think it will aid us or whether it will work against us. And of course, because we’re in business, where there is the best return. And just the one last thing, which I just find personally rather curious, which is there has of course been a huge increase in people watching, and I’ll use the word on-demand very broadly, it could be cable on-demand, it could be purchasing via iTunes or another transactional platform, or watching on a subscription video-on-demand service. There’s also an interesting increase, I think, in appetite for people viewing together because it’s become a less common experience. You see it to some degree of course in sports and news, but it also occurs around natural history. So when we put on material like Planet Earth, Blue Planet Two, Dynasties from the BBC, we see the phenomenon of people and their families wanting to watch together, it’s a curious phenomenon. And so BBC America in the not too distant future will have a micro net, if you want to call it that, of natural history programming on weekends, so that people can experience it with the television on all the time. And we’ll see how that initiative goes, but my instinct is it will be very welcomed. So, even though this is stuff that presumably lives on multiple on-demand platforms, you think ... And by the way, you’re not the ... I mean, they’ve had marathons of stuff for a very long time. Yeah, of course. That’s a standard thing, but you think in particular that programming will attract an audience that couldn’t find it somewhere else, but since they’re there, they’re going to watch it together? Yeah, this is a minor anecdote, I say it only to sort of illustrate the point if you don’t mind, which is, this Christmastime we did something called Best Christmas Ever in which there was basically just a linear schedule of Christmas-oriented movies, and our ratings doubled or tripled versus prime average, and people were flipping on the television set and keeping Christmas movies on. I don’t know if they were avoiding relatives that they were hostage with inside of a cold environment. Probably. Or they wanted the Christmas spirit to live deeply inside themselves, but there are multiple things occurring — not to say that on-demand and subscription video-on-demand are not very appealing mousetraps, we’re in that business ourselves. So my personal anecdote that runs counter to that is, I’ve watched three seasons of Better Call Saul, love the show, had Michael McKean on, he’s great. Fourth season concluded a little while ago, and I mostly intentionally did not watch it because I said, “You know what? I’m behind, I had other stuff to do, I’m going to watch it when it’s on Netflix and it’ll be ad-free and I won’t have to worry about whether it’s on my DVR or whether the on-demand thing that I’m watching it on allows me to fast forward, any of that, and I’ll just wait for Netflix to tell me when I can watch it.” And that it seems like is less good for you. Yeah that would be less good, I just put ... And I don’t do this, this is my personal life, I’ll compliment FX, I just recorded the first two episodes of Verdon/Fosse, do I have it right? Or Fosse/Verdon, the FX show. I think it’s Fosse/Verdon, but yeah, yeah. Fosse/Verdon or Verdon/Fosse, and it’s on my DVR because I like to organize my own personal viewing via DVR and I’m immensely curious now — by the way, because I have the wearwithal, I backed it up by purchasing it on iTunes, and also putting it ... You are a big Bob Fosse fan, right? Well, I’m curious about the subject, I want to see how it was rendered, so I’m anxious to see it, so it’s on my iPad and it’s on my DVR, and I don’t feel like waiting. By the way, it’s not our show, it really is on my iPad, it really is on my DVR and I’m quite anxious to see it. Fosse/Verdon is very on-brand for you. Well, I’m just curious about it, yeah. It also makes me really want to go back and watch All That Jazz again, which I haven’t seen in a long time. Yeah, I also of course, if I talk about podcasts, I was provoked by listening to a podcast with the participants — Verdon — and I have some other personal connection to it, believe it or not, through someone I know who’s a dancer. So I have excessive interest, but, it’s not the only time that I engage in that behavior, and sometimes I’ll wait for something on Netflix. To broaden it out, as you well know, this is the year where Disney said — well, Disney said it last year, a couple years ago — “We’re going to stop selling stuff to Netflix and we’re going to make our own version of Netflix.” They don’t call it that, but that’s the premise. Time Warner/AT&T is doing a version of this, and again, they’re not explicitly saying they’re pulling stuff from Netflix in some cases, but they are. Other folks are having this debate about whether they are essentially their competitors or not. I assume you guys are talking about this internally all the time, “Do we sell our stuff to someone else who’s eventually going to erode our business, or is it still worth our while to keep doing this?” Sounds like it’s still worth your while to keep doing it. Yeah, and those are all valid conversations and valid conclusions for any one entity, and I really mean, forgive me if I’m trying to put this in a larger perspective, but I do, in the sort of historical media plot, if you don’t mind, when cable TV came into being, the broadcast networks chose either to join it or they said, “They’re molecular ratings, I don’t need to bother with a cable channel.” Different companies chose to enter the 24-hour news business, some didn’t. They saw it as incidental, whether they had incumbency and news views. Yes, there was a time when 24-hour news was not a thing. It was not a thing, and then there was a time when broadcast networks were seen as beleaguered and completely bereft and now that’s not true, as a consequence of a number of factors, and we’re seeing an evolution now in subscription video-on-demand, particularly and for very good reasons, and so we have set up four-plus of our own subscription video-on-demand services, and we’re now in that business. And we can select and make a choice about whether to take our original shows and put them on those services or not, we can choose to put them on those services first or second, we can choose to share them. And I think over time we’ll find ourselves, excuse the expression, running multiple playbooks, and we’ll find out what happens when we run various different playbooks. That is not to invalidate or question the plot of any of the companies who have said, “No, I’m going to do it this way only.” I was going to ask about this later, but you’ve provided a segue, you do have your own SVOD services, you are selling your own stuff direct to consumers, this is what many people say they wanted, you have done it and for whatever reason haven’t generated that much attention from people like me, at least. But you’ve been doing it. The one I can name off the top of my head is Shudder, right? I want to make sure I got it right. Yes, you did. That’s horror films, there’s three others? Yeah, so you may not be a fan of British mysteries, you don’t look like you are, and so ... I find that judgemental, but it’s correct. It was actually done on pure demographic basis, it tends to skew a little bit older. My parents, yeah. It tends to skew a little bit older, so you didn’t seem like you were in the right demo, because I’m familiar with the demographics, and so I made that harsh, cruel judgment. And so, it tends to skew older, and we purchased that business last year, we’re in partnership where we own 80+ percent of it with Bob Johnson. And it’s growing extremely well, it’s called Acorn. Right. And along with that came I think a brilliant service called Urban Move channel, or UMC, that is the first dedicated service to urban audiences in the US, and then worldwide, that is free to really try and connect the creative community with people, that’s the ambition, and it too is growing. And then we have another one called Sundance Now, which is trading on, I think, thoughtful documentaries and some interesting crime dramas, but not salacious crime dramas, ones that are really about the human condition, and they’re all going well and they’re all growing. So you’ve been running these ... I have Disney on the brain right now just because they’re going to announce their thing tomorrow as we’re recording this, but so everyone is wondering how the TV guys are going to do at selling stuff direct to consumers over the internet. You’re doing it, you’re in it, what have you learned? What did you get right? What did you have to go back on the drawing board? Yeah, so I think a few things. We’ve now had it for four to five years, so it’s not new to us, we got in on the earlier side, but we determined that we wanted to get in for a series of reasons, with more dedicated, highly specific audiences as opposed to general interest entertainment. ”You like horror films, you should subscribe to Shudder.” It is the one, it’s the one, and one, and one. And if you look at the ratings, people love it, they stand up in applause, they think it’s the thing that speaks to them, the coolest thing in town if you like that. And we think that ... Have you guys put out numbers for this? We have not, so because there’s resilience and predictability, and less churn if you have someone who’s enthusiastic truly about a genre, it’s very meaningful, because otherwise, you tend to be subject just to get to one piece of it ... The answers are, what matter are, churn rates, disconnect rates, the tech stack, and getting the tech stack right so your interface is seamless on multiple devices, your cost per acquisition, or how you sell, and you could engage in and have available all sorts of metrics that are not standard to historical television rendered through a remote distributor, if you want to call it that. And then of course content, which is similar, but once again you have much more data available, so that is a bit of new muscles, and now we’ve gotten some of those muscles by training ourselves and by borrowing and recruiting, if you will. Of those four things you listed, what was the most difficult thing for you as an old-school linear programmer/cable network to figure out? Yeah, you know, the real answer is going to be the least simplest, it really is the confluence of the four and where the leverage points are. The content, you knew about. We were pretty familiar with content. The tech stack admittedly, for someone like me, was new to understanding because we didn’t build it ourselves, and so we built it once and then built it a second time. It does seem like something you can go out and either find smart people and they can make this thing for you, or you can buy it. It seems like that’s less challenging than maybe people thought. You know, it is. The only thing I might offer — and I say this as a non-engineer — is that the interplay of the tech with what’s commonly referred to as product or consumer experience is really profound. And I’ll say it just anecdotally, which is, if you press the button and love it and are delighted, it matters a lot. If you press the button and are even momentarily frustrated, and you’re asked to resubmit credentials, or you timeout or your credit card is expired, or something else happens, it is not a happy day. It’s not a happy day, and if you’re going to be buying, you’re probably not going to be buying. Right. Credit card goes back in the wallet. So if there’s any one piece of it that for me was eye-opening, it was the tech, the product experience, the interface, and the complete nuance of whether it was spectacular, good, okay, or subpar, could almost be called equivalent to a script that’s predictable and average versus one that’s spectacular and unpredictable. I think it matters profoundly. Yeah. And then the customer acquisition, I mean, anyone who’s selling stuff sort of has a sense of how that’s important. I assume you guys knew it was important. And then what is the experience like of selling the stuff directly to consumers and getting real-time feedback and really granular information on what they’re consuming versus what you’ve been doing all your life up until now, which is putting it out and getting maybe at best a guess about how many people are watching something or enjoying it? It’s profound. It’s really profound. Because if you take advantage of all that data and all those responses, you have insights that are ... frankly, they’re deeper and richer and broader than that which is available through old ways of ... How does that square up for someone like you who has been successful at this, who has a gut and has taste and you have a sensibility, right? We were just talking about your love of Fosse/Verdon. Even if I watch your network, that sort of seeps through, right? You hire really good programmers to put that stuff there, but if reflects your taste and stuff to some degree. As you’re getting data points back that say, you know, “X percent of Shudder users like this,” and maybe you find that stuff repellent or you just don’t like it or whatever it is, how do you square sort of what the data tells you versus what your gut or brain or sense of taste ... Yeah. Well, I think that I can answer quickly, which is the data will provide the best guideposts there absolutely are, and one’s judgment, I think, needs to submit, ultimately, to what the data tells you. Which is not to say it doesn’t have a seat at the table. And I work with people whose instincts and wherewithal is spectacular, and so they are a factor in what we do, but denying the data is a silly exercise. But also extinguishing judgment and so-called notes on scripts and participation and making a story great is also, there’s no point in not doing that. It can be something that contributes significantly to a better TV show. So if you flipped that around, right, so where in conventional TV where you still are just guessing at what people will like ... Well, there’s a fair amount of data that ... There’s a fair amount of data but you’re still guessing, right? Yeah. So, I mentioned McMafia, I liked that show, I told someone else on Twitter about that show, so that’s two people who watched it. From what I can tell, it’s a pretty small audience for a significant percentage of that show. I think it was very successful in the UK ... I could introduce you to some people who also were big fans of McMafia. Okay. We’d all fit in one room. And you could have a support group. Yeah. So is that something where, had you had a better sense and better data, that you actually don’t go forward with that show? Or do you go, “No, no, we still have to gamble on stuff like this and even if we get it wrong, it’s still a worthwhile ...” Or are we getting to a place where you’re going to extinguish the McMafias of the world because you’re just going to get better data and you’ll know there’s no way we’re putting that out? No, I don’t think that you can be either enlightened or reductive to the point where you make final decisions, because you really will, one will, eliminate the possibility of surprise and touching people with great stories and characters. So I don’t think that if you allow yourself, for data to become all-encompassing and singular and monolithic that you’ll end up in a good place. And I think it’s something that should be applied appropriately. By the way, I think its application is probably first and foremost to marketing as opposed to content development. Because I think in marketing, when it relates to cost per acquisition ... Let’s figure out where this audience for this thing is. Yeah, you can market just with so much better efficiency. And figure out how to do so effectively. So it’s irresistible. But I think on the creative side, I don’t think there’s any — yet — algorithm that can tell you whether the story development or the character that’s being shaped, like the medicine dude in McMafia, who is just heartless and would like to kill everybody, or the old guy who is trying to sort of get redemption for his son, you’re probably not going to data your way into figuring out whether those characters are going to be appealing to viewers. That was part of the pitch when Netflix first got into this. They were kind of back, they went back and forth on how they were going to use data or not to ... And since then they’ve been quite clear and say, “No, no, you make whatever you want, and then we’ll tell you if it worked or not and order more. And that will affect our buying, but you, the artist, go ahead and make it.” I still think there’s a desire from some people to say, “If we could just figure out that this script and this idea and this character and this actor, if we put them together, we will have an audience of X or Y.” I just don’t think we’re going to get that for a very long time. If ever. To my mind, that is akin to emulating the behavior of someone you admire or like and think you’ll be them if you imitate their behavior. Well, that explains many, many assholes in Silicon Valley saying, “It worked for Steve Jobs.” I don’t want to let us go before we talk about the tech guys getting into your business. You mentioned Netflix. Yes. Again, this is the year where Apple is doing something, still confusing, Amazon is taking sort of a second stab at this. I guess those are really the two big guys, right? So one thing I know is that Netflix and Amazon and Apple have made it much more difficult for you to do your job because they’re bidding up the price of talent. How else are they affecting what you do day to day and then more broadly strategically? Yeah, you know I just may, if I may, I’ll sort of take not quite exception but maybe just slightly refined definition to bidding up cost of talent. We are not filling a Walmart with TV shows. We are selectively programming for AMC, for IFC, for BBC America, for Sundance TV, for We TV, we’re selectively doing that. And so we really don’t have huge aisles to fill. We have selective content to make and we have a development process that we take very seriously and do with great care. And so there may be the occasional packaged show, that so-called “comes to market” that gets bid up, but our development process yields, I’d like to think, wonderful material that we work on and with. So the common wisdom that the market’s been bid up as if there’s a paucity of material a la in sports rights, there’s one NFL and if you don’t get it, you gotta pay more. If you want these rights you gotta pay more. Well, some people are completely come from nowhere to do spectacular work. Some have projects that others are not buying because they don’t see the wisdom or wit or beauty in them. And so while there is that element occurring, it is not sort of a simple game of limited ... I get that you guys are, again, make cool stuff and you do less of it, and you probably have a better hit rate, but I’m sure that you are often in a room with a Sandra Oh or Phoebe Waller-Bridge, name the talent, and you would like them to work with you and they are also either explicitly or at least in the back of their head thinking, “I bet I can get a lot more money on Netflix.” I think, sure, there’s some degree of that sometimes. I think we’re also, and I think it’s true, starting to see some of a phenomenon in which some of the creative people think that their project may get slightly lost. This is part of the ... this is what the TV guys like you say about the Netflixes. It’s true, because if we do have limited shelves and if we have limited street front, shop window, and we make something heroic, it’s really heroic. And we are far from indifferent about its success, and I think that both by virtue of the number of things that we do and the manner in which our business operates ... You’re going to market it, you’re going to showcase it, you’re really going to push it. Yeah, I think it’s a different shot, to tell you the truth, I really do. I mean it’s not as if ... Chris Rock had a comedy special on Netflix last year, and I watched it and I never heard anyone say a thing about it. Right. And I’m not knocking anything, it’s just different models that occur differently, they have different ... over time they have very different consequences. So anything that’s true for a period of time is only true for that period of time. So I imagine your pitch as something like, “Sure you could go to McDonald’s or Walmart or whomever, but we have this cool bistro, it’s in Brooklyn, it’s in a harder-to-get part of Brooklyn, it’s cool, you’re going to like it there, we’re going to take really good care of you and you should come work with us, you should come eat at our bistro.” Well, you know, we have a history to point to of what we’ve done, and the way those things have worked — and Killing Eve is just an interesting example that was on a channel called BBC America, which is not the biggest cable TV channel in America and it’s not Netflix or Amazon. And so I would ask rhetorically, how did it become, if not the show of the moment certainly a show of the moment? Maybe the show of this moment on BBC America. And the answer is, not accidentally. Because of its quality, because of the writing of Phoebe Waller-Bridge, because of the actors and because of the manner in which we brought it to market. And then there’s a similar sort of size/scale question just about your business, period, which is, we just republished this chart, it’s our media landscape that says everyone’s size by market capital, it looks like a constellation of the universe. People really like this chart. You guys are on there, you’re very small compared to the behemoths, the Disney/Fox thing just got much bigger than it did last year. And so the inevitable question is, for all the little dots, the assumption is they’re going to have to be consumed. They’re going to be bought by someone, somewhere. How often are you talking about whether or not someone is ... makes sense to sell the company? I get that you’re running a public company, you’re constrained about what you can actually talk about in regards to M&A, but I’m sure it’s top of mind all the time. Yeah, you know, yes and no. It’s ... we’re a $3-plus billion company which relatively has become smaller in your chart, but that’s its absolute worth. I’d like to work at a $3 billion company. Well, it’s just, that’s the size of it. So we have a couple thousand employees, $3 billion ... our numbers are public, last year we had half a billion dollars of free cash flow. So I think we have adequate resources to do what we do, and we’ve been growing and expanding it now for many years in a row. And I don’t want to say something radical just for the sake of it, but there have been acquisitions in the media world in the past that have not necessarily worked out perfectly. There’s been some misalignment, and some expectations that have been perfect. So there’s certainly a rush to, in some cases, for companies to ... Bulk up. Bulk up with some clear and I think some less clear notions of what the absolute benefits will be. Yeah, I guess the counter is that there actually hasn’t been this bulking up. After the Time Warner deal got cleared by the Supreme Court last year, we all, many of us including me, said, “This is it, everyone’s going to get bought, all the buying is going to happen.” It’s a year-plus later, hasn’t happened. Yeah. And I also think, I would ask it rhetorically unless you want to answer, do you think that — and this is not meant to be defensive, it’s a subject that of course crosses our minds. We do think we’ve operated successfully now for some fairly long period of time. We’ve asked ourselves and been asked questions about consolidation that occurred in the last 10 years in the cable distribution side of the world, whether that would be threatening. It turned out to be very beneficial to us because we were selling to companies that had more smarts, wherewithal, and capability. The fact that Comcast and Charter bought everyone turned out to be fine for you. It turned out to be excellent for us. I think our business, if you look at the numbers, our distribution actually increased, our distribution revenue increased, and we prospered in a regime in which at least the immediate skeptical response was “it will not be good for you.” So I think some trends, when they’re in the moment, don’t turn out exactly as people think the story will be written. Sometimes they do, but they’re not all linear. I think this is a recurring theme of this discussion, it’s good. I’m going to go back and see how many times we talked where you said “your plot or your summary of the plot is incorrect.” I think a bunch. I hope I didn’t say it too many times. No, it’s good. I like push-back. I liked having you on. I would like to do this at a longer length, but there’s people out there ... By all means. Yeah, yeah, yeah. Who want to take the studio back from us. Thank you for coming on, Josh. Thanks so much for having me. It’s great to have you. It’s a pleasure.

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posted 5 days ago on re/code
Silicon Valley wants people with experience. US immigration services want people with grad degrees. Silicon Valley’s highest echelon is filled with examples of successful people who have eschewed degrees in favor of entrepreneurship. It’s also filled with immigrants. No one illustrates this better than Tesla and SpaceX CEO Elon Musk, who was born in South Africa. Musk did attain two bachelor’s degrees in the 1990s, one in economics and one in physics, but much of his relevant education came from his own experience. Musk taught himself both computer programming and rocketry. He dropped out of a Stanford PhD to found his first company. Musk was able to continue working in the United States — where he would eventually become a citizen and household name, founding several billion dollar tech companies — thanks to a high-skill immigration visa called an H-1B. These days, Musk would have had a much harder time. According to new data from US Citizenship and Immigration Services, some 52 percent of those who applied for next year’s 85,000 H-1B slots have a US master’s degree, more than double the rate it was in 2015. That’s been ticking up as immigrants and their US employers try to anticipate the Trump administration’s increasingly strict immigration policies that prioritize immigrants with graduate degrees. !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}})}(); Accordingly, master’s degree candidates are being selected at a higher rate. Some 63 percent of fiscal year 2020’s new H-1B recipients have master’s degrees, up from 56 percent the year before. “Our efforts to improve the H-1B program are working and increasing the number of US advanced degree holders who are selected for the limited number of visas subject to the annual H-1B cap,” USCIS spokeswoman Jessica Collins told Recode. “Due to the new H-1B cap selection process, preliminary data shows that the number of petitions for US advanced degree holders selected toward the annual numerical allocations increased by more than 11 percent over last year.” !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}})}(); The idea behind the new regulation is that raising the education level will prevent immigrants — and the tech companies looking to employ those immigrants — from replacing American jobs with workers willing to fill them for less money, something that’s already prohibited in the H-1B rules. However, the data shows there’s not much difference in pay between H-1B holders and US citizens. H-1B holders are usually paid the same or higher, if you account for age and occupation, according to the Government Accountability Office. A more recent study by salary information site Glassdoor backs up those findings. Furthermore, the H-1B process is in itself expensive and time-consuming, so it’s not likely a money-saving mechanism. When an employer has a highly specialized job candidate, it files an H-1B application on that employee’s behalf. The application includes the employee’s exact duties and wages, which cannot be less than the prevailing wages for that job in that area. The process requires thousands of dollars in fees, can take up to six months, and is ultimately decided by computer-generated random selection. The companies that have H-1B high approval ratings are some of the biggest, most innovative tech companies in the US. Amazon, Google, and Facebook last year received 99 percent of the H-1B visas they requested. These are companies that can afford to pay for the best talent, no matter where it’s from. But US companies of all sizes are having a hard time finding enough tech talent to fill open positions, according to data from New American Economy, a bipartisan business research coalition. The organization has also found that an inadequate supply of H-1B workers in the American labor market has resulted in fewer jobs and lower wages for citizens and immigrants alike. Notably, the number of high-skill immigrants allowed into the US annually hasn’t been updated since 2004, before internet companies dominated the US economy. Trump’s Buy American and Hire American is meant to “promote the proper functioning of the H-1B visa program,” but it has so far only made the process more complicated. “By favoring individuals with master’s degrees, you risk favoring some industries over others,” said Sarah Pierce, a policy analyst at the Washington, DC-based think tank Migration Policy Institute. The tech industry is particularly susceptible. “Tech companies spend a lot of time looking at skill sets which may or may not be tied to a degree,” immigration attorney Dagmar Butte told Recode. “Usually they are experiential as opposed to being part of an advanced degree.” According to a survey of 700 software engineers on Hired, a tech job platform, more than a third learned to code either on their own or through bootcamps. The rest took some sort of relevant college computer course, though it’s unlikely many of those resulted in grad degrees. !function(){"use strict";window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}})}(); “For technical roles like software engineering, on-the-job experience and a lifetime commitment to learning are often the most important things,” Hired CEO Mehul Patel told Recode. “While having a background in computer science can be incredibly valuable, I think most employers would agree that technical talent will learn more during two years on the job than two years earning their master’s.”

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posted 6 days ago on re/code
Plus: Amazon is in talks to launch an ad-free music service, Reed Hastings is leaving Facebook’s board, and Microsoft reveals some Outlook accounts were compromised Law enforcement agencies are using Google’s location history feature to track down crime suspects. An investigation by The New York Times revealed that law enforcement agencies are increasingly issuing “geofence” warrants to tap into Google’s massive “Sensorvault” database of their users’ locations. The increasingly frequent warrants will ask for information about all the devices Google tracks in a specific area and a time period. According to one Google employee cited in the article, the company received as many as 180 requests in one week for information. As The New York Times writes, “Technology companies have for years responded to court orders for specific users’ information,” but “[t]he new warrants go further, suggesting possible suspects and witnesses in the absence of other clues.”[Jennifer Valentino DeVries / The New York Times] [Want to get the Recode Daily in your inbox? Subscribe here.] Amazon is reportedly considering offering a free music streaming service as soon as next week. According to reporting from Billboard, the company is planning on introducing an ad-supported music service, in direct competition with Spotify and Apple Music. Amazon is reportedly offering to pay record labels out of pocket to license music, flexing the company’s power “as a distributor that can afford to discount music as a loss-leader to support its core retail business.” Currently, Amazon has a paid ad-free music service for $9.99 a month — it doesn’t disclose how many subscribers it has for that service. Spotify meanwhile has about 96 million paying subscribers and Apple has 56 million paid subscribers.[Hannah Karp / Billboard] Netflix CEO Reed Hastings will not be re-nominated to Facebook’s board of directors. On Friday, Facebook announced it will not be re-nominating Hastings for re-election at the company’s next annual stockholders meetings. Another board member, Erskine Bowles, the president emeritus of the University of North Carolina, will also be departing. Instead, Facebook will nominate Peggy Alford, PayPal senior vice president of core markets. Alford will be the first black woman on Facebook’s board. According to Andrew Ross Sorkin, Hastings departure has been “talked about for some time” because of potential “conflict as Facebook moves more into video services.” Hastings has served on Facebook’s board since 2011.[Salvador Rodriguez / CNBC] Microsoft disclosed that hackers had access to some users’ outlook accounts for months. According to the company, hackers compromised a support agent’s credentials, allowing them unauthorized access to web mail servers. The company has not yet disclosed how many accounts have been affected. Hackers were able to view accounts email addresses, folder names, and email subject lines of a “limited number of accounts” between January 1 and March 28, 2019. “We addressed this scheme, which affected a limited subset of consumer accounts, by disabling the compromised credentials and blocking the perpetrators’ access,” said a Microsoft spokesperson in a statement to The Verge. Microsoft faced another recent security breach when, weeks ago, a former security researcher pled guilty to hacking into Microsoft and Nintendo servers. [Tom Warren / The Verge] Top Stories from Recode Nancy Pelosi says Trump’s tweets “cheapened the presidency” — and the media encourages him. Pelosi spoke with Kara Swisher about Trump and other topics like regulating technology on the Recode, Decode Podcast.[Kara Swisher] If Congress cancels federal funding for PBS, rural areas will be hurt the most, says CEO Paula Kerger. All 335 PBS stations use federal funding, but the ones that depend on it are largely in Trump country Kerger said on the Recode Decode podcast.[Kara Swisher] This is Cool Bon voyage to the world’s largest airplane.

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posted 6 days ago on re/code
All 335 PBS stations use federal funding, but the ones that depend on it are largely in Trump country. Once again, PBS president and CEO Paula Kerger has to justify the 50-year-old institution of public media. Last month, the Trump administration proposed for the third year in a row the elimination of the Corportation for Public Broadcasting, the “quasi-governmental” organization that distributes federal money to more than 300 PBS stations across the country. “I don’t understand why we’re a political pawn,” Kerger said on the latest episode of Recode Decode. “And it’s frustrating, because I will tell you, Kara, the amount of time and energy that goes into this every year to have to make this case is time that gets pulled away from other things.” On the new podcast, she explained why eliminating federal funding for PBS would not hurt all stations equally. Some in urban centers like New York and Washington, DC, might be able to get by with the money they get from other sources, including corporate underwriters and individual donations. But the threat is a more “existential” threat for stations in rural areas that “are not going to make it ... unless there is some federal support.” Kerger recalled a story from 13 years ago, early in her tenure running PBS. During a visit to Nebraska Educational Television, she was greeted by a farmer who said he drove three hours to attend a reception for her at the NET offices in Lincoln. “He said, ‘I came because I need to tell you something. You cannot screw this up,’” Kerger said. “‘I am raising my children on the farm I grew up on. And I worry a lot that my children are going to have disadvantages because we’re in a remote part of Nebraska. But you’re in our lives and you make the difference to my kids. And if you mess this up, you are putting my kids at risk. And I just want you to remember that.’ And I think about that guy every day.” You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast. Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Paula. Kara Swisher: Hi, I’m Kara Swisher, editor-at-large of Recode. You may know me as the new host of the Antiques Roadshow spin-off where we appraise the value of old internet memes, but in my spare time I talk tech, and you’re listening to Recode Decode from the Vox Media Podcast Network. Today in the red chair is Paula Kerger, the president and CEO of PBS. She’s been in that role for more than 13 years, but recently, PBS has been in the news a lot more than usual. We’re recording this in mid-March, shortly after President Trump proposed a federal budget that would close down the Corporation for Public Broadcasting. So, we’ll want to talk about that and more. Paula, welcome to Recode Decode. Paula Kerger: Thank you, Kara. Pleasure to be here. You’ve been there 13 years. I know. That’s astonishing, I’m the longest-standing president in PBS history. How was that? I think I’m actually one of the longest-serving media executives right now. Right. They’re dropping like flies. Plepler’s gone. Yeah. I don’t know whether it’s a good thing or bad thing, but I’m still here. So why don’t we talk about how you got here? I like to get people’s history. And then, I do want to talk about where we are with these budget cuts, which has been a feature of life for you for many years, I’m guessing. So, let’s talk about how you got to run PBS. Well, it all began in a small town outside of Baltimore ... Actually, when I was in college I thought I wanted to be a doctor. I’m really interested in science. Then I flunked organic chemistry. Yes. That’s a key one. Yep. That’s the great separator, I’ve come to find. And then, I took a lot of humanities classes because I was just interested and thought I would never be gainfully employed and would never be able to leave home. And so, I got a business degree with no real fix on what I was going to do with it. Graduated from school, started looking for jobs in the want ads, which is where you looked at the time. Yep. I remember this. And found a job working here in Washington for UNICEF. Oh, wow. And so, I started in the nonprofit sector and at one point in my career, I worked at the Met Opera — not in a singing capacity, believe me — but on the business side. And I got a call one day asking me if I’d consider going to WNET, which is the public television station in New York. I thought it would be an interesting gig for a few years. I went there to actually help them put together an endowment and to raise some money. And I then became the station manager — crazy — and COO. I was in that job when I got tapped to do this. And so what did you think? Where was PBS at this point? Often rides high during different things that were going on. What period of time was this for PBS? So when I came to PBS 13 years ago, well, I remember my first speech. iTunes was announcing the sale of Desperate Housewives episodes for a $1.99. It just sounded like such a crazy thing. PBS itself had gone through some rocky years. Our stations are all independent and so they’re locally owned, locally operated, locally governed. I run in essence, a co-op. If you want a lesson humility from better-rated organization ... I’ve worked in co-ops. Right? Try working in a San Francisco co-op. You learn a lot of things. Well, I don’t know. I might give you a run for it. So, you have a lot of responsibility, but not a lot of absolute authority, and so, you end up doing a lot of work by a sense of common purpose. In the period that I’ve been at PBS, when I first came, we understood what our business was. We had broadcast towers, we reached a certain geographic area. We were on cable and satellite. We did all this great work for little kids and for adults and felt great about it. And in these last 13 years, everything, well, everybody in media, has gone through the same thing, but for a public media system, again, this federated systems ... Loose federation. Right. There are stations, I’m sure there’s still a couple of general managers out there that think that we’re going to go back to those good old days when it was just a handful of stations and you have just to stand up to change the channel on your television set. But being able to get everybody on the same page of, “We’ve got to really try to do things in different ways. And look guys, we’re going to do this together. We’re going to figure this out together.” So, we’re not a network, we’re not navigating all of these new platforms. Just to put Ken Burns up. We want to get your local content there, too, but we’re going to have to do some things that are going to put people way out of their comfort zone. Right. Right. And so, because I came from a station, even though it was New York, which doesn’t really count, that’s an island off the coast of the United States. The biggest station, right? But still, I’d come from within. And I went on the road and I’m still on a road trip. I’ve been to every state except Hawaii. How stupid is that? How many PBS stations are there? There’s 335 stations. Yeah. Why haven’t you gone to Hawaii? Hawaii’s very pretty. I’m going. I’m going at the end of June, as a matter of fact. I’ve been to Scranton three times, not to Hawaii once. My family’s from Scranton. I like Scranton. I’m so sorry. I’m going there this weekend. Three times. Three times I’ve been. They have a nice station there. Do they? But the thing is, the way to understand this job is you spend time on the road. And in many of the communities I visit, we’re the last remaining local broadcaster. You know, there are television stations there, but they’re being controlled by someone far away. And a lot of times, even their weather is done by four states away. Right. And you see the consequence in print journalism when you don’t have reporters in a community covering a story. Sure. And you see that play out in public ... So coming into this role, really working with our stations to help them see that if we really are willing to take some leaps together, we can do some interesting work. Because they’re also in kind of the same bind that local TV stations or local newspapers have been in. Yeah. Which is the declining amount of, first of all, television watching or how people get things. Yeah. And then also the declining ability to fund those things. Yeah. And so that’s where our funky business model sort of helps. I mean, a lot of media organizations are now trying to fund themselves in the way that we have, which is appealing to people, to give you money for something you actually could get for free. I belong to an association of the public broadcasters globally, and when I first came into this job and I’d go to meetings, they look at me like that strange cousin because they’re all state-funded, for the most part. And here we’re begging people to give us money, or not begging. No. You guys beg. You’re excellent beggars. We’re asking people to invest. Well, maybe sometimes ... I have a tote bag for you. But we try to make the case of why it’s important and why we’re in it together. And the thing is that some things in the public interest have to be funded by the public. Right. And so now, it’s interesting because if you are following, as I know you are, what’s going on around the world, a lot of governments are now either getting out of the television business and our public broadcasting colleagues are and all like, “Ooh,” you know? But, it is interesting as we think about all these platforms because our legacy broadcast business is growing, you know, as cord-cutters, cord-nevers are realizing you actually can watch television for free. And we were very early on in multicast. And so, we have a lot of channels that we offer up. And if you do that and you package it with some other digital media, you actually can have a pretty rich media experience. You may not need all the cable channels. Right. So how many PBS stations are there across ...? 335. 335 across the entire country? Across the entire country. And they are funded right now by? Depends on how they’re organized. So some of them, like my old station in New York or the station here in Washington, WETA, have their own boards. The lion’s share of their money comes from “viewers like you.” Thank you. And then, they get some corporate money and then they get some government money, because you’re dying to ask me the government question. I’ll get to government. I’m not dying. I know. We’ll get there. We’ll get there. How can we avoid it, Paula? I’ll give you the backstory first and then you can ask me the deep questions. So, in aggregate, take all our stations, about 50 percent of their funding comes from the federal government, and the lion’s share of the federal appropriation actually goes directly to them. That was the whole idea when Lyndon Johnson signed the Public Broadcasting Act and had this idea of this public-private partnership. What he was really thinking about was the fact that, a city like Washington, a city like New York City, like LA, some government funding would help. But cities like Cookeville, Tennessee, or Juno, Alaska, are not going to make it in funding a media organization, a television station, unless there is some federal support. And so for those two stations that I happened to mention, it’s closer to 50 percent of their funding is government. So that’s existential. So if you asked me where’s the money comes from ... It depends. It depends. Right. And some of our stations are part of state governments. In the South, for example. Till they get funding from it. Our public television stations came together because the states thought this is a way of getting classroom education across the state. We’ll use television. And so, their state licensing, some of our stations are part of universities. So some of the infrastructure, a lot of public radio by the way, are part of universities. So, some of the infrastructure is funded by the university, but for the most part, you can pretty much say more than half of the money for every station comes more or less from the public. From the public, in some fashion. And most of it, small contributions, which has made us, I think, more secure during these funding issues, and it’s like a political campaign. If you have a lot of people that give you small ... Sure. You were Beto before Beto. We were Beto before Beto, baby. If you have a lot of people that give small contributions, they’re invested. Right. They care. Right. And then they get in the practice of thinking of you like that. Like, not like a subscription service but by these donations. Yeah. It’s like one of those things you do. Yeah, exactly. So you preside over these and you’re trying to bring them all together, you’re saying, into the digital age. Talk a little bit more about that. Give me some of the things that were critical for you to try to do that. So, a whole series of things. One is, we’ve tried to help them build their own infrastructure so they can be in the digital space. So to begin with, we have pbs.org, which in its earlier days was really one of the most visited .orgs, not only in the United States, but in the world because we were there early. It was mostly text. And then we evolved into a video and more stations utilize that. We built the player that enables video to be carried and most stations use that, but then, all of that seems pretty straightforward. PBS App, being on places like Roku and Apple TV and so forth, and building those platforms. At first people were like, “Well, that means they’re not coming through our local station.” Our local station, right. So, we built the platforms so that if you have Roku or Apple TV and you wanted to watch your PBS app, you have to localize. Usually, you pick the station that is in the market you live, but look. I spent a lot of time in Maine and I’m interested in what’s going on in the state of Maine. I localize to Maine Public Broadcasting. Right. From here, yeah. So, what we’ve tried to build is to create an experience in the digital realm that looks like what you would experience if you were watching your station. It would be easier for us to just think about ... Nationalize it. Nationalize everything. As we make all of our deals just to create a national — you know, we’d been talking to some of the proverbial skinny bundles and they’re not so excited about all these local stations and we’re really trying to help them see, actually, there’s a lot of interest in local content and if we can figure out how to make it not as painful for you and do a lot of the backend work ... Because they just prefer to have “the PBS.” They just want a national feed, but they’re missing out on a lot of great stuff. I mean, I talked about ... Right. And some of your shows are from those stations, mostly from the big ones, right? Yeah. We’ve got great shows that come from small stations. Look, I talk about Cookeville. Cookeville is in Appalachia. They are the only television station in the community and they have an amazing cultural archive. They do a lot of work in bluegrass. And I mean, that stuff is fantastic. It’s not just of interest to Tennessee, and to be able to elevate that up so that it has access to a much larger audience around community of interest, not just physical community, I think it’s pretty powerful. Right. So, you’re building a local app on a national level, is essentially what you’re trying to do? And so, obviously you have the website, you have the app. What other initiatives? We’re on Apple. We’re on Amazon. We have channels there for some of our content, which for years we used to sell DVDs and now on the streaming business, part of our economic model is that we were distributing on Netflix. Were? We’ve been disturbing on Amazon. We have a little bit on Netflix, but they’re not as interested. They want originals or they want to own outright. And I can’t... I want to have stuff that’s available free, right? That’s what “public” means. And so for Amazon, for example, we have a drama channel, we have the Masterpiece channel, we have a kids channel, and we have a lifestyle channel we just launched. And we do that. It’s helping us clear the rights for streaming that we can offer up for stations. We built a service for our station that is a library of content. So, if you’re a member of your local station, you can watch everything for free and broadcast. You can watch everything for free streaming for some period of time. If you want to see a larger library, if you are a member, then you have access to a streaming service. We have built a whole scope of work on YouTube under the banner of digital studios. We’ve had about 2 billion streams, and we’re now teaching our stations how to do more effective work on YouTube. Anybody can think they know how to shoot work on YouTube. Right. That’s beyond just putting up Antiques Roadshow on [YouTube]. Correct. And in fact, when we started it, the idea was not to take television producers and throw them onto the YouTube space, which I know some media companies did. We recognize that because look, the through-line through all our stuff is education. I mean, that’s why we were created. The “E” in a lot of station call letters, that’s what it stands for. And so, we’ve thought a lot about particularly ... How old are your kids? They’re 16 and 13 now, but they watched a lot of PBS. Yeah. When they were little, but not so much now probably. Uh, you’d be surprised. Yeah. They watch some of it. They might watch a little of the nature — good. Well-brought-up kids then. Yeah. They watch it all on YouTube, though. That’s where we went. So, there are a lot of people like the Greens that are doing great work. They do crash course and so forth. And they think of the medium differently than a television would. Until they’re making it for that. So, they’re making it for that platform. So that’s what we’re teaching our stations how to do. And I think one of the big sea changes is getting past this idea that being a producer on YouTube is not a first step to doing something on television. Right. It is an important platform in its own right. And every once in a while, we’ll do something on YouTube that might become a television series, but that should never be the intent. We did a kid’s television series called Word Girl and it started out as little shorts on YouTube and then became a series. But most of the stuff we’re doing ... It’s just living there. It’s Okay to Be Smart, a lot of science, it’s a perfect platform for all of that. And so, to get stations excited about the fact that, for a different price point, they can actually produce really great engaging content and that’s where all the kids are. Right. Then you can make money from it, from some of the platforms. For some of it, you can. Absolutely. We’re here with Paula Kerger, she’s the president and CEO of PBS and we’re talking about their digital efforts, which I think are much more involved than people realize because people think of ... you know, NPR has gotten into podcasting, but slow. Podcasting, in a deep way. Deep way, but was slow originally, but it has a lot of stuff. And meanwhile, the public, the private sector, I guess, stuff like they make became big. How are you looking at all the stuff being made that is not unsimiliar to a lot of stuff on PBS? Like, you’d think some of the Netflix shows, for example, could have been PBS shows. I’m thinking Salt Fat [Acid Heat], that one. Yeah. Some of them could be. And you know, it’s interesting. How do you look at that? There’s so many content creators now and in documentaries and stuff like that. This is not a time for the faint of heart and I think it would also be, you could easily be distracted by the fact that there’s a lot of people playing in a lot of space. But look at Netflix, for example. Netflix, a couple of years ago, was at all the festivals and it bought everything. And then two years ago, I’ll use Sundance for example, bought nothing. And then this year is now back and buying and so forth. So I think it’s cyclical. It’s not that different than what happened on cable. So you have all these cable channels that cropped up ... That’s a fair point, yeah. That in their first incarnation were supposed to be PBS, but the commercial version. A&E, if you remember, it was arts and entertainment. Abbe Raven is a great person, but I don’t think she thinks she’s trying to do great art on A&E. She’s doing interesting and engaging programs, but it’s different. You could go down the line and look at a whole series of cable channels. We’re watching it actually on a faster trajectory with Netflix and Amazon. There’s a wash of content there, but where are the priorities? They’re not in the same business as we are. We just happen to use the same tools. For us, it’s a really interesting balance of understanding our North Star of the kind of content that we produce, not being stuck in the mud and that we’re only doing the stuff that we did 30 years ago because that’s who we are. What works. Right. But also really paying attention to the fact that even with this wash of material out there, there’s a lot of stories that aren’t told, there are a lot of storytellers that don’t have profile, and we’re in every home. We are seen in every home across the country. For kids in particular, it’s huge. I’ll tell you a story. A couple years ago, we launched PBS Kids as a channel. When our content came and initially talked to me about it, they said, “You know, look. We want to launch a broadcast channel.” I was like, “Oh, come on. You’ve got to be kidding. A broadcast channel?” They said, “No, no, no. There’s all these kids that are in homes that don’t have cable and that don’t have access to broadband. We think that it’s a big enough market.” We pushed on it because — do our stations actually have the capacity to take another broadcast channel? A multichannel. Right. A lot of them were multichanneling, but they were already filled up capacity-wise. I was convinced to do it. I will admit part of what convinced me is that we were also going to stream the channel. I thought, “Okay. I’ll agree. We’ll do the broadcast channel. I know that’ll reach kids that need us,” particularly kids that are in low-income homes or kids ... That only have broadcast signals. ... or kids that may be in homes where English is not spoken. A lot of those are disproportionately broadcast-only homes. We will have done an important thing, and so forth. I was all on board with that, but I wasn’t ... But at first you weren’t because of what the future is. I wasn’t convinced that we were making a big bet on something that maybe would become of less importance as we move forward, but the reality is that the broadcast audience is big and is an important piece of how we’re distributing. Here is a project we did just a few years ago, which is broadcast, which is as legacy a business as we can be in, and is streamed. Then through the streaming, we’ve been working on embedding games into the live streams so that kids can watch a live stream, pause, play the game. Then it becomes even more interactive. It just increases the educational value of the work. Right. I think that it’s a really great example of this just schizophrenic world that you have to live in, where you really have to pay attention, particularly for the core business. If our core business is to reach people and change lives, obviously we have the biggest possibility of impact with those who have less choices. The broadcast piece has to be a focus, but at the same time really thinking about how technology has evolved and figuring out how to push the envelope. As there’s more and more digital access by everybody, by the way ... That has increased for everybody. Everyone’s got a phone. My kids watch everything on their phone, pretty much. They hardly turn on the television. Just to play games, actually. To play Fortnite or something like that. Do you have to have a broadcast element? Do you imagine that in your future to have or is it just the full accessibility because broadcast is what broadcast is? It’s signals. Everybody has phones, but not everybody has access to broadband. Right. I’m a big advocate for broadband for a lot of reasons because I just think access is such an important ... Oh, it’s critical. We’re like a third-world country. The digital divide, which we just continue to talk about, doesn’t get bridged in the way that it needs to. It has such huge implications, both from a moral standpoint as well as an economic standpoint. There was that article in the Times, I think it was last year, that had that ... A great photograph of the two kids that were standing outside their school, trying to do their homework, tapping into the broadband from the school on their phones. One of the things that we’ve done in the kids space is that we also are building games that parents can download, but kids don’t have to be online to play. We’re constantly thinking about ways that we can use capacity ... On a lower ... Yeah, but the other thing that I’ll say about broadcast is part of the work we do is broadcast as a media organization. The other thing that we do is that we use our spectrum for first alerts. People don’t know that, but we’re the backup redundancy for the first-alert system for the country. The reason that broadcast is important is because digital overloads. If you’ve ever been anywhere like New York after 9/11 or after a power outage, you know that you couldn’t call anyone because everything just melted down because of the demand. Being able to have a one-to-many infrastructure I think still matters. Where does most of your viewing come from? Still broadcast by a large amount? I’m guessing lesser and lesser, right? Well, we’re all watching the trajectory. I think with kids, it probably is going to cross within the next couple months, as a matter of fact. Oh, wow. So streaming. Streaming more than ... We build our streams for mobile. Mobile has obviously surpassed desktop as a way that I think ... And these televisions. I think over the top is really important. I used to say that people always gravitated towards the biggest screen at their discretion. It’s not the case anymore. You know it. You can sit in your living room or your bedroom with a TV set bolted to the wall, but you’re watching on a pad. The interesting thing about also the space that we’re in right now is so much is on demand, but I’ve always believed and now I’m starting to see articles of other people that believe the same thing I do, is it’s almost too much and that people really also look for curators. Programming. Yeah. We’ve had these endless conversations for years about does broadcast schedule even matter anymore? Actually it does, because there are a lot of people that really do rely on the fact that they can sit down and they go to a brand that they like. Not all brands are equal. I’m not sure that every brand has the same significance. I think ours does. People know what PBS is. They’ll turn to PBS and they’ll see something they like or don’t, but it’s easier to do that than to think, “Okay. What do I feel like watching tonight? Am I in the middle of that series? Do I want to ...” You’re right. Yeah. I feel like that all the time. I know, right? I just turn on the TV and let it go. You turn on the TV set. Yeah. It’s like, “What’s there?” Yeah, but then I just have cable people screaming at each other and then I turn it off. Yeah. Well, watch us. Watch us. Watch us. I do watch PBS, all the time. When you’re thinking about the content itself, that’s the delivery systems. Obviously it’s going to be mobile. It’s going to be streaming. It’s probably going to be in lots of different devices and things like that, as you move forward. Have you made a big investment in VR and AR or anything like that? Yes. I wouldn’t say big, but we are making investments in that. Probably the person in public broadcasting that’s doing the most interesting work in that is Raney Aronson, who is executive producer of Frontline. I think Frontline of all the series ... People always ask me this question, which they always think is a softball. “What’s your favorite program on public television?” I don’t care. They don’t realize that you pick one and you put everyone else in therapy, right? But it is the most important that we do. I think that I’m proud of the NewsHour, so I don’t want anyone at NewsHour thinking, “Why didn’t she mention the NewsHour?” The thing is that there’s so few people truly in the investigative journalism space. Yes. 100 percent. I was just on your one about Facebook. Yes. I saw that last night. The power of the content itself is important, but for a very long time, they have thought about, how do you extend the reach of a broadcast event into something that actually is more deeply felt? They were very early on in probably more than any of our other producers in putting content online and then putting full interviews online. Full interviews online. I think that’s great. Then really keeping a resource and ... Look. For a long time now, people go online to look for stuff, but I used to get calls from congressional offices, think tanks, the White House and everything, looking for programs that have been on. To be able to have that collection and full interviews, she’s very interested in transparency. Also, if you see something and you’re not quite sure the source of anything, you can go online and look. She’s begun to experiment more heavily with other platforms. VR is a place that she created some work out of a Syrian refugee camp. She, partnering with NOVA, has done some great things. Looking at the disappearance of glaciers. It’s the most empathetic of media. Absolutely. It’s perfect for us because it’s purely an immersive experience, and you can be part of something and understand it in a very different way through VR. 100 percent. Everyone’s always down. I’m like, “No, this is going to be ...” I’ve spent a lot of time in the empathy labs at Stanford. All kinds of different things. Stuff that Laurene Jobs did around art and around immigration. It was the most moving ... It really is moving, if it’s done correctly. You could see it being badly used or used for entertainment purposes in ways that are icky. Correct. Oddly enough, I was talking to ... I’m blanking on her name. She’s an actress, but she was going to do ... Not King Lear. She was going to do Shakespeare in VR and thought it would be great. It was amazing. There’s all kinds of cool ideas coming around. Educational ideas. In part of my side life, I’m involved with the National Museum of Natural History, and I think that as a media platform, it’s huge. I think for museums, it’s huge, because if you think about things like helping people understand the impact that we’re having on the environment, to be able to put you immersed into an environment I think just creates a whole other ... It just creates a whole other experience. Expensive right now. Of course it’s expensive. And the devices. Yeah, but eventually the cost will come down. I think that perhaps games will drive some of it. I don’t know, but I think it’s a platform worth watching more than some others. Then last thing in this section: Content. How much has it changed, the content? Obviously you’re known for Downton Abbey and the Masterpiece Theater stuff. Whatever. Of course, I make jokes about Antiques Roadshow, but it’s popular. It remains ... Hugely, it’s our No. 1 show. Yeah. Has content changed or shifted in mentality? Yeah. Well, a couple things. One is look, we’ve been talking about different platforms and the length of programs. I love short film. Short film just has struggled forever because it’s broadcast. What do you do? You put a bunch of films together that may or may not connect. It’s always very unsatisfying. We started doing film festivals online. Of course they’re online. Yeah. They’re offline. Short film festivals online. The thing is, I think it’s a format in itself. I love short stories. It’s a great use of online. It’s beautifully done. It’s a great use, but I think beyond that ... Look, we want to continue to evolve the content that we’re doing, and we want to create ... One of the things that does make us different than anyone else is, Netflix isn’t local. Amazon’s not local. I don’t have $15 billion to spend on content. I never will. No? You don’t? We’ve never been over-funded. Shock to everyone. We’ve always had to think a little more creatively. We do a lot of stuff in partnerships. In full disclosure, we have a partnership with Vox with a film we’ve done with Marcus Samuelson called No Passports Required. Oh, yeah. I think that part of what we’re looking at is building partnerships with other organizations. Not just the BBC around drama, but other types of media organizations. You know, that British drama thing just always works. Doesn’t it? I know. It’s beautiful, right? Do you think there’s any era it’s not going to work in? We’re going to be on Mars and watching. No, we’re going to be watching from Mars. But something British. They’re going to be in outfits and they’ll be ... It will be, and people will love it. Yeah. I think the other thing about content that we’ve spent a lot of time thinking about is the fact that we are local. This past fall, we did a project called Great American Read. The whole idea was to try to identify ... Really, was to get people excited about reading and to talk about books. Books that are meaningful to you. It didn’t really matter what book was picked. It was just an organizing principle to get people excited. The thing is our local stations could do stuff around it. You had book groups and all this other kind of stuff. It was a simple idea, but I think more things that we can do that really leverage the fact that we actually have local media organizations that actually can bring people together. Physically. I think that’s an interesting way to think about how do you develop content around it. We have two projects that we’re thinking about for the future that would fit into that, that would really get people interested and excited about having local conversation. That’s the thing we’re missing in this country. Local conversation. Interesting. Is there a length thing? You’re talking about shorter films, but that’s just because you want to show off your films. Do you have to change things? One of the things that I was talking about when Mic went belly up was, “Millennials don’t need different content.” No. They don’t need “snackable” content. They might like some content that’s snackable, but it’s such a terrible word. It’s my least favorite word about content. I’ll say two words: Ken Burns. Yeah. People always clutch a little bit when you have the next big Ken Burns. We have 16 hours of Country Music coming up this fall. So excited. It’s going to be fantastic. Do you know how much I love country music? It is fantastic. People are often surprised by that, but I do. It is fantastic. I cannot wait. You have no idea. I’m literally going to just park myself in front of the whole thing. You should because it is ... He always says, “This is the best thing I’ve ever done,” but it might be. It’s just because the stories are so powerful. Bluegrass. Everything. Yeah. It’s all personal stories. Is Dolly Parton in there? Oh, yeah. Big time. We need some Dolly. We need some Dolly. That’s great. You’re not necessarily thinking these changes, it doesn’t have to be twitchy or it doesn’t have to be slower or faster or ... No, I don’t think so. The only place where I would say we have really thought a lot about different forms of content is with kids. I wouldn’t say twitchy or any of that stuff, but we do pay attention to what kids are watching because the thing with our kids’ content — you know this — is it’s all based on core curriculum. We’re focused principally on kids up to the age of 8. We work with experts that help us understand what are the things that kids need to know before they go into pre-K for the first time or any kind of formal pre-K because sometimes ... Look, I go to communities where kids are like 5 before they actually enter a real school, or as young as 3. There’s skills that kids need to learn. There’s social/emotional skills. That’s what Fred Rogers knew how to deal with, emotions and all that stuff. What are the most popular ... Ours was Tinky Winky. There were Wiggles involved and I think there was The Magic School Bus all the time. Yeah. Those are all great. Those are all yours, right? The Wiggles are not ours. Okay. Wherever they were. The Magic School Bus you had. The No. 1 show for kids is Daniel Tiger’s Neighborhood. No idea. Which is the successor of Mr. Rogers’ Neighborhood. Okay. For years, we have talked to Fred’s company about doing a new Mr. Rogers’ Neighborhood. There is no other Fred. No. A woman, Angela Santomero, who was quite inspired by him, had interned with him, had gone on to do Blue’s Clues for Nickelodeon. Blue’s Clues. And she really spent time thinking about how could you reinvent Mr. Rogers. So she did it animated. She did a little live action, and Daniel Tiger is Daniel Stripe the tiger’s son. And it’s also social/emotional skills, everything from potty training to how to deal with anger. There are episodes that I’ve benefited from tremendously these last years. And it’s the No. 1 program, very heavily streamed, by the way. Yeah. Interesting. And Sesame Street, that’s ... And Sesame Street is celebrating its 50th anniversary, God bless it. Did you say The Electric Company, or is that on ... Electric Company is now gone ... Sad, that was when I was younger, younger. Not young. Yeah. So, the recent budget. The federal budget that’s been proposed, it doesn’t mean it’s going to be the federal budget, I think that’s going to change rather dramatically, but it would close down the Corporation for Public Broadcasting. Can you explain to people what that means so that people understand? Yeah. I can also give you a civics lesson on how budgets become law. Okay. “I’m just a bill.” There was a children’s show ... That’s it. That’s it. So as you know, the budget belongs to Congress. Conjunction Junction, it stays with me to this day. And it should. And it should. So the president submits his budget recommendation and this year, as it has been for the last two years, the recommendation is zero funding for public broadcasting. And so where we start is ... Explain CPB, just ... And it’s a little more complicated, because we actually ... Our funding is put forward two years in advance. And that has been historically how we’ve been funded. The idea was ... It was actually two reasons why we were in the category of which ... there are very few organizations left in this category. One is to preserve against editorial influence. We do something that irritates some member of Congress and then they try to take all of our money away. So if you have that buffer ... Which has happened. If you have that buffer. And then the second was really anticipating the fact that our work is ... It takes a long time to produce work, and if you want to enter a project, you want an idea that you have the funding on the other end. So what he’s recommended, what the administration has recommended, is really eliminating the Corporation for Public Broadcasting, which is a quasi-governmental organization, which is actually how the federal money flows from treasury to our stations. And so it is an entity that takes in the federal appropriation. It makes sure that our stations are operating as they should, as nonprofit public broadcasting entities. And then it distributes them out based on a formula. And so by zeroing the money flowing to it, it eliminates the organization because you don’t need an organization if you have no money to divvy up. And it would be an existential issue for probably a third of the stations in our country, largely in rural communities. And so what we ... So that means no funding whatsoever to public ... It means zero funding. And right now the number is? And right now the number that comes into public television, public radio is 445 million. Mm-hmm. Small. Small. $1.35 per person per year. Can’t even buy a cup of coffee in most communities for that. That’s for both of them together. That’s for both together. That goes into the Corporation Public ... Goes into the Corporation. One piece goes to radio, one piece goes to television. And so the thing that has, and I made reference to this a little while ago, the thing that I think has been very helpful for public broadcasting is that there are a lot of people around the country that really count on us. It’s truly a gift actually, this job, is being able to visit communities. And I remember one of the very first stations I visited was Nebraska. And I was very focused when I first took the job on visiting parts of the country that I didn’t know as well, and particularly smaller communities. I wanted to understand how the public television stations worked, because although all the stations are similar, they’re different. Priorities are a little different, and I knew my station in New York, but I knew it was very different than our station in Peoria, or Nebraska Educational Television, which is a statewide network. So I went to Nebraska and they had a nice little reception for me. And this guy came in, he was a farmer, and he had driven three hours to come to this reception. And he walked over and he looked me the eye and he shook my hand and he told me that he had driven three hours and he said, “I came because I need to tell you something. You cannot screw this up.” And I said, “Well, well,” doing my little Paula thing, and said, “Well, this is what we’re going to do and everything.” He says, “No, no. I want you to hear my story. I am raising my children on the farm I grew up on. And I worry a lot that my children are going to have disadvantages because we’re in a remote part of Nebraska. But you’re in our lives and you make the difference to my kids. And if you mess this up, you are putting my kids at risk. And I just want you to remember that.” And I think about that guy every day. Yeah, Paula. Yeah. But the point is, you know one of our biggest advocates on Capitol Hill is Tom Cole from Oklahoma. He knows what we do. He also knows we do this other work, you know, we’ve been talking a lot about digital and all this stuff that we’re doing for the general audience population, we run a project called Learning Media. It is a broadband pipe into classrooms with educational assets. Now what does that mean? I don’t know if you remember this, remember when you were a kid and the teacher would want an hour off in the afternoon? Yeah, they’d put on a movie. And they’d find the kid from the AV club with a pocket protector and he’d go into the closet and he’d get the cart and he’d thread the film and we’d all watch it with our heads on our desks. But teachers today, really what they want to be able to do is use bits of content in the classroom. Kids are surrounded by media, and then they go into classrooms that a lot of times look like they did when you and I were in school. And so creating ... So if you look at this legacy of all this great content that we use, and I was always impressed when I’d see a teacher that would buy a DVD and then figure out the right place in the DVD to play the ... You know. And so everything’s digitized and we can also take the content and break it up. So rather than having 16 hours or 18 hours of Vietnam from Ken Burns or the Civil War series, you can take the curriculum that teachers use in the classroom, because the other thing besides money that teachers don’t have is time, you can pull out the right clips so that they can ... You know, most classes are now wired with broadband, so they can use it. So in addition to using our own stuff, there are a lot of organizations that have really great content: Smithsonian, National Archives, NASA. All of these organizations have really beautiful material and they always think, “Well, the teachers will come and they’ll find our stuff and they’ll ...” They’re not going to do it. Right. Instead of pushing it out to ... And so taking their stuff and doing for them what we do on broadcast. And vetting it. Which is taking other producers’ stuff and vetting it. And vetting it properly. And then putting it in the right context and putting it with lesson plans and offering it up is something really powerful. All of that is what the federal budget helps to fund. Right. And so what happens now? Because this has happened before, right? They tried to zero out the ... I remember Jesse Helms was involved in something. I can’t remember. So what happens now is actually really important. And when I really worry about, because I just was talking to someone this morning who said, “Are you really worried about this? Because you always go through this and it’s all going to be okay, right?” And I said, “Only if people reach out to the legislators and say, ‘This matters to me.’” Because the two things that legislators care about is they do care about their constituents ... Three things. I think that most people come to Washington wanting to do right. You might agree or disagree with what “right” means, but I think most people have a larger idea of what they think is good for their community. Sure. So you assume that. The second thing is they care about their constituents. That’s who they’re representing. They definitely do. And they want to be reelected. And so if their constituents say, “This matters to me,” then chances are they’re not going to vote to wipe us out. But you know, look, I am very sympathetic. There are lots of things that could be funded. And we could very easily fall off the table like the NEA and the NEH and all these other wonderful organizations ... That’s what I was thinking. I wrote about those at the Washington Post. … if people don’t step up and say, “This matters.” And I think that’s the important thing. So the argument would be, you’d raise your own money. Yeah, so the argument is, yeah, go raise your own money. And then they point to “Oh, the commercial market will pick it up.” And I always say, “Oh really?” That works maybe in the short term for a project or two, but on a sustained basis, who’s there? And go to all the communities I’m visiting where ... There isn’t. ... the only remaining reporters there are television and radio reporters. And I think it really matters in this society. Have you gotten pulled into the political fight, like whether you’re liberal or ... It does, right? Radio more than ... Probably a little bit radio more, but look, I’ve talked to enough people who say, “Well you know, you’re awfully liberal.” And I said, “Well, just point to me what that is. Tell me what that is, because if liberal means that we really work hard to try to have lots of different perspectives, then I don’t think so.” And when you talk to most people, they don’t see it. So I don’t understand why we’re a political pawn. And it’s frustrating, because I will tell you, Kara, the amount of time and energy that goes into this every year to have to make this case is time that gets pulled away from other things. Yeah, PBS is not particularly ... I can’t think of ... What was the most controversial show for you all? Well, if you look back, I mean, people will take exception with Frontline. They’ll point at documentaries that we’ve done. There were some hearings, I think it must have been last year’s go-round where people were looking at some of the independent film. We do a lot of independent film, more than some of the stations that get recognized as being “the home of independent film.” We’ve always been. And if you show different people’s perspectives, that makes people uncomfortable sometimes. Sure. Absolutely. That’s the most liberal we get. Most of the tentpoles are pretty down the line. But not political. Yeah, but you know, I don’t know. I mean, look, we live in this weird time and I loved Gwen Ifill. I knew her well. She was, in addition to a fantastic colleague, a great friend. And she used to always say, “Look, our role is to bring light, not heat.” And some people aren’t comfortable with light. Yeah. Absolutely. So how do you imagine it’s going to ... You guys are lobbying your ... You’re using social media and other ways to do that. We are using Protect My Public, if you’re listening and you want to be part of a movement, go to Protect My Public and you can be part of it. You don’t even have to do that. Just call or email your legislator. Do you happen to know the reason why ... Is this just the Republicans do this all the time, or is just this particular administration? You know, we’ve been in this situation before. Situation many times. So I just think it’s just ... If I understood what fired it, I just don’t know. But it is what it is. And so all we can do ... And look, we have ... Barry Goldwater, for Pete’s sake, was a huge fan of public broadcasting. We have great conservatives. Barry Goldwater, for Pete’s sake! Barry Goldwater, for Pete’s sake. C’mon! So you know, he was very close to Joan Cooney, who founded Sesame Workshop. There’s a wonderful video of Fred Rogers on Capitol Hill talking about what he was attempting to do with his series, and I think if people really understand what we were doing, then they would say, “You know, maybe we should give you more money, not less.” But anyway. Right. Right. Right. And so if you had to pick PBS in 20 years, how would you look at that? What would you think it is? I think in 20 years ... You know, it’s interesting. We do a strategic plan that we build on a three-year basis. Because for me, it’s always hard to ... I just look back three years ago, not to mention 13 years ago, when I started and how much shifts. But I would hope a few things. One is that the principles around our content are intact. I think that’s our guide star. I mean, we want to do important stories that are authentic and that make a difference in people’s lives. And I would hope that PBS 20 years from now would not trade on that. I would also hope that as media continues to evolve that PBS continues to be innovative. I mean, people don’t know that we created closed captioning, that we were the first big media organization to use satellite broadcast. Tech. Tech. We’ve been ahead of the curve every step of the way. Both of those things are tech. And so I think we need to be 20 years from now as innovative as we can be. I work with a lot of creative people that are all in the tech space. And we can’t be afraid to be bold and to move into that space as much as possible. And my goal, before I hang up my skates, whenever that is, is I would love to see us with more funding so that we’re not lurching from year to year trying to figure out how to knit things together. So you need an internet billionaire. Yeah, I need an internet billionaire. I know a lot of them. So if you’re listening you could ... How many billions do you need? I would take ... Even one would make a big difference, because I think as a lot of people are worried about the future of journalism and are investing in a lot of great organizations ... I’ve been looking at things like Report for America and others. But we’re here and we have an infrastructure and we are hugely trusted. So this is a place where you can make a big impact. I hear Facebook’s giving away money out of guilt, out of sheer guilt for ruining the entire ... Anybody wants to write a check, I’m here to talk to you. Just call me. You’ll take their money. I got some ideas for you, Paula. I know some people and I can irritate them into giving you money. I’m always trying to take their money as much as possible, make them feel bad about it so they feel good. I can make them feel great about it. Good. You make them feel good, I’ll make them feel guilty. I can promise they’ll go to heaven, you know. All right. This has been a great conversation. This is Paula Kerger, the president and CEO of PBS. Thank you for coming on the show, I really appreciate it. Thank you Kara. It was fun. I’m very excited to watch the country music thing. I’m so excited. You have no idea. It’s great.

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posted 8 days ago on re/code
“He’s just being a freak.” Enough people use Twitter to get their information that politicians have to be there, Speaker of the House Nancy Pelosi says. But on the latest episode of Recode Decode, she said the way President Trump uses Twitter has “cheapened the presidency.” “He’s just being a freak, I mean, he’s just terrible,” Pelosi told Recode’s Kara Swisher. “There’s a more of a responsibility for a president to communicate his point of view, which we should respect, he’s the President of the United States, whether you agree with him or not, he has a point of view. But to use the office as the president, as an attack vehicle ... for his market, it seems to have worked.” She criticized the sometimes-obsessive coverage of Trump’s Twitter outbursts in the political press, particularly the stories about a recent weekend in which the President tweeted more than 50 times in just two days. Pelosi said that time could’ve been better spent talking about healthcare, prescription drug prices, infrastructure, government transparency — or really, anything. “All they want to talk about is, how on Earth did he do 50 tweets in 48 hours? I think the press is an enabler of him,” she said. “And I think on the other hand, they are the best defense of him. The freedom of the press is the guardian of the gate of our democracy.” “He makes assaults on them and they strengthen him by just talking about that and that’s what an authoritarian wants you to be talking about him,” Pelosi added. “Even if they don’t like what you’re saying, if they’re talking about him, they’re not talking about us.” You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast. Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Speaker Pelosi. Kara Swisher: Hi. I’m Kara Swisher, editor-at-large of Recode. You may know me as the sponsor of the Red Chair New Deal, but in my spare time, I talk tech, and you’re listening to Recode Decode from the Vox Media Podcast Network. Today in the red chair is Nancy Pelosi, the speaker of the United States House of Representatives. She’s been on this podcast before, back in 2016, which seems like a lifetime ago. Today, we’re going to talk about privacy, hate speech, and whether the big tech companies should be broken up. We’re also going to talk about Trump on Twitter and Nancy Pelosi’s red coat as a viral sensation online. Speaker Nancy Pelosi, speaker of the House Nancy Pelosi, thanks for talking to me. Nancy Pelosi: Oh, it’s my pleasure. Thank you. So we have talked before. We talked before the election last time, and it was when we didn’t know what was going on. We didn’t know so much of what was happening with social media and everything else. So we’ve got a lot to talk about. We have a lot of things to discuss. I look forward to it. So let’s start with what you guys are doing here. You’re meeting with House Democrats to do ... We’re having a ... Some would call it a conference. We call it a massive workshop, because it’s such an interaction among the members, hearing from outside folks, the grassroots level, the evidence-based level of science and the rest on different issues, challenges that we face. During the campaign, our theme was “For the People.” Right. To lower healthcare costs by lowering the cost of prescription drugs, increase paychecks by building the infrastructure of America in a green way, and cleaner government by HR 1, our resolution to do that. Now we are following up on all of that and going beyond, so ... And discussing that, sort of the strategies ... Yes. ... and things like that. All right. Let’s talk about what you’re doing. I’m going to focus a lot on the tech stuff, ‘cause that’s what we talked about last time. Before the election, let’s go back, then, at the time you thought Hillary was going to win, and you said ... Oh, you’re talking about the election-election? Yes. Election-election. The big election, not the one you really won. The one ... Oh, yeah, yeah. Not the last one. No, for sure I thought Hillary would win. Yeah. Yes, and one of the things that happened was the intervention of foreign influence on the social media platforms. You’re from San Francisco, represent some of these companies. Yeah. Talk about how you think about that now, given ... and we’ll get to the Mueller report and everything else, but how do you look at that when you look back on it, what you were thinking at the time and what you think happened? Well, first of all, we were totally shocked that Hillary Clinton did not win. Now, we know that there were interventions that stood in the way of that, but, again, you take responsibility for your race and you always have to just be prepared for the unforeseen. Little did anybody know, the unforeseen would be Russian intervention into our election, a real disruption of the basis of our democracy. That’s what’s so frustrating, now, because we don’t see a commitment on the part of this administration to get to the bottom of it. But we are awaiting the Mueller report in that regard. But it did ... But the Russian intervention did have an impact on the election. What do you think you, as Democrats, should’ve done? ‘Cause President Obama was in charge of the country at the time. What was unforeseen, and, when you look back on it, what were the mistakes that were made? Well, I don’t know if there were any mistakes made. I think that President Obama, in his judgment, talked about not interfering into an election, which is what you shouldn’t be doing. We did try to get the Republicans to join us in taking a harder look at it, but they would not do that. But, again, I don’t know that anybody had a full grasp of the extent and the impact. The election happened. We found out it is the high-level, high-confidence consensus of all elements of the intelligence community that the Russians disrupted our election, and they have specific ways. We look forward to seeing the Mueller report to see more specifically what that is. What are you doing yourself? There will be the Mueller report, but what do you see yourself as your duty to protect elections, going forward, especially on social media platforms? I want to get into the various social media companies. Just a step before that, what we tried to do last year ... and we didn’t have the majority. Now, this year, we will be able to do it. But last year, we tried to allocate resources for the states, in order for them to protect the integrity of the mechanics of the election. The Republicans refused to do that. They absolutely refused to do that, in the House and in the Senate. This is with voting machines, with everything? Voting machines and all of that. Voting machines, uses of social media? Yes, and they absolutely would not put the resources there. The states need the resources. States run elections. They run at the state level. Even a federal election is conducted at the state level. So we wanted to make that ... It was strange to us that they would not want the states to have the wherewithal to protect elections. The issue of going beyond that, to the social media, is a much more sophisticated and challenging initiative for us, because you have to always keep ahead of them ... Right. ... no matter where you are. They’re resilient, and they can get ahead of you, but at least we know this: to be vigilant, to be on the lookout for any strange interventions, which were not really looked into or prevented last time. And so that makes a difference. But more importantly than us being aware of it, it’s really important to inoculate the public against some of this, to say to them, “While we want you to participate in every way and the way you enjoy doing so, whether it’s social media, traditional media, or whatever, your own activism, you should be alerted to the fact that there are those who want to play with your mind, really.” Behavioral. Including the companies themselves do that all the time, but that’s another topic. That’s another topic. It’s an important topic, but it is ... It’s a moment of truth, really, for our country to say what the beautiful advantages we have from technology ... and I’m a big believer in technology. Tasked for a solution, let’s look to technology. However, it isn’t without collateral damage. Right. What is your relationship with the social media giants - Facebook, Twitter, Google, and others? They’re not your constituency, but they’re in California, and obviously ... Yeah, they are. They’re in California. They’re our friends, on many good things. Some of them are now in San Francisco as well. Right. But, even so, in Silicon Valley, they’re our neighbors, and so we have a good rapport with them on some issues. But we also now have a questioning attitude, especially toward Facebook, in terms of how they have ... not only what happened, but how they are addressing it, and let’s hope that they’re addressing it correctly. We see different reactions around the world. We see the EU giving people, what, one hour to get something off. Right. We see Australia ... Australia, New Zealand will be acting soon. New Zealand taking the actions that they are, being very suspicious of any improvement on algorithms being disingenuous, as has been proposed by Facebook. So I think that they have ... I don’t want to say a wake-up call. It’s more than that. Right. It’s a big alarm that they’re hearing, that there has to be some kind of behavioral change in how ... I don’t want to say business, but the regular order of things are conducted. Well, it’s more than that. I think the question is what you all are going to do as regulators, as in charge of regulators, and also Congress, is going to do. Right now, there’s a lot of activity in Europe - very stringent and strong and quite hard. There is stuff happening in Australia and New Zealand. There’s stuff happening in France. California is going to put its ... Yes. That’s right. ... privacy bill into place, and that’s just privacy. I’m not talking about misinformation ... That’s privacy. ... and disinformation. Right now, what’s happening is they’re making real actions, and these companies ... I was on a panel last night, and several reporters — Maria Ressa, who’s being attacked in the Philippines, a reporter that’s being attacked in India, Carole Cadwalladr, who broke the story about Cambridge Analytica — they turned to me and said, “It’s not our companies. It’s US companies that are doing this. What are you going to do about it?” So what are you going to do about this? Well, you mentioned several countries and what they’ve said. In the UK, as you know, they’ve said the era of self-regulation ... Is over. ... of these companies is over. Is it over in this country? It probably should be. Yeah, I mean, I think we have to subject it all to scrutiny and to cost-benefits and all that, but I do think that it’s a new era, and we ... I mean, there are people who have superior technology credentials, shared values, who could help us weigh in on legislation. We’re very proud of California’s legislation. They tried to weaken it. At our federal level, people are working on ... Committees of jurisdiction are working on privacy. We haven’t seen anything in writing — that is to say, for review yet. I’m sure they have it in writing someplace. But it is ... We cannot accept anything ... For example, the Republicans would want preemption of state law. Well, that’s just not going to happen. We in California are not going to say, “You pass a law that weakens what we did in California.” That won’t happen. Right. So perhaps if they want to say, “We’ll have a federal law, but nothing that weakens state laws” ... Right. ... to have an impact on state law, but nothing that weakens it. I think there are ten states working on privacy legislation, but nothing out of the federal, the federal government. Well, we’ll have something. I mean, this takes time. This is ... It’s complicated. It’s one piece of it all. Right. We’re going to talk about the other pieces. You want to do it right, because there ... What are some of the criteria? What information of mine do you have? How are you using it? Are you paying me for it? Are you at least informing me that you’re using it certain ways? What accomplishes our goal in the strongest possible way that we can pass this? What would be your goal, if you were thinking of it? You’re not an expert on privacy, but for the ... No. ... privacy, for example, what would be your ... What do you think the most important parts of that are? Well, I think that what — we have overarching goals about the Internet, that it be accessible and free and the rest, and we’re very proud of what happened with net neutrality yesterday. Yeah. This was about ... It was pretty ... It was ... It was 100% of the Democrats voting for it ... Right. Exactly. Right, right. ... and a few Republicans, but I bring it up because of the fact that over four million, maybe up to six million, people watched the committee hearing and what happened on the floor. That is extraordinary for a committee hearing. Right, right. So the public interest in this, especially among young people, will have an impact on the passage of net neutrality, whether their Senate thinks it’s going to pass or not. But that also then transfers. So Mitch McConnell says we’re not going to take it forward. What do you do then? He doesn’t know. I mean, I’m a big believer in public sentiment. Lincoln said, “Public sentiment is everything. With it, you can accomplish almost anything; without it, practically nothing.” So we’ll have to weigh in. But there were millions and millions of comments when the FCC was acting upon net neutrality, both during the Obama administration and then the Trump administration and now in this legislation. But I only bring up net neutrality, not as a necessarily privacy issue, but a values issue, in terms of access, that it be accessible, that it be free ... Right. ... that it would be a place where there’s communication, and not just the will of the ... The cable companies. ... platforms. The platforms that say, “We’re cutting you off.” So passing it, knowing that it wasn’t going anywhere ... No, I think it’s going to go someplace. You do? I don’t think they understand the power of public sentiment ... Right. ... on this. Right. If they are not going to pay attention to the public will, I think there’ll be a price to pay. We wish they would. We’d rather have the bill passed than them play a political price for not passing it. So they will weigh in, and it is a barrage, a storm of public opinion that just bombards the Capitol like they have never seen. What had happened is that it goes back and forth in the FCC, and it changes with every administration. That’s the problem. It’s got to have a legislative answer. That’s why we have to codify that. Right. We need to have this be legislation. Now, Republicans, from time to time, would say, “We’re going to have the legislation.” But they wanted the weakest possible version of the story, and, again, with all these things, you ask, “What is our relationship with the tech companies? What is our relations with the platforms?” So we have relationships with them. This is a kaleidoscope. Sometimes you’re in the design together, in terms of advancing communication and that. Other times, you’re not. Right. With this, we work with the platforms on some issues. But on this, in California, for example, some of them were calling seniors and telling them their phone bills would go up if net neutrality ... Right. It wasn’t their best behavior. Right, right. Well, this has been a fight that’s been going on for a long time. Yeah, but this is the public process. This is what it’s about. It’s about a democracy, and I believe we’re crossing a threshold, in terms of how laws are passed. We had promised, as Democrats, a transparent Congress, transparency and openness, so the public can see, in time that gives them time to understand it, what is at stake. Right. When they see that, what it means to them and that they can weigh in. So we’ll try to have it open. We’ll try for common ground. Hopefully, we will have it, bipartisanship. If we don’t, stand our ground, and then we go to a place in which we try to be unifying. Now, this is really a good thing for the country, even though the platforms may not think it’s in their financial interests, and they have some sway with the Republicans. But I think this is going to be an example of ... Net neutrality will be? Net neutrality will be, but it will apply, again, to other aspects of the Internet, of privacy and the rest. I want to get to some of the proposals of too powerful tech, that tech has become too powerful. Right. Hate speech. Right. They’re moving so hard in Europe and everywhere else about this, and we were just having hearings on whether white supremacy is bad. Oh, we just got the majority. Right. The Republicans were not having hearings about that. No, not at all. No, no, I got that. I got that part. But we move so much slower on these things, and I get the free speech elements and things like that, which you’re always pushing back against. The right to be forgotten is not going to happen in this country, for example. But when you think about what has to be done on that area, you do run into free speech issues very quickly and who should be tolerated on the Internet and who should not. The issue is a lot of these companies are private companies. It’s not the public. The Internet is not the public square. It is owned by private companies, many of whom’s founders are billionaires. So it is not a public discussion, precisely. Well, I think we take it to a different place. We take it to a place that says, “What is the advantage of this technology?” It has opened so much opportunity for conversation to so many people, and they want that access. On the other hand, if somebody is engaged in hate speech and the rest, should you shut it down or should you have a discussion? And I think that ... Where do you stand? I think we have to stand in a place where there is a discussion. It just depends on what the speech is, but who’s to be the judge of that? At least there should be some sequencing of it. Somebody says something, okay, let’s hear it out because otherwise the haters — because that’s what they are — the haters would just make themselves victims. And the fact is, is that with a conversation, which the technology enables to happen, and can enable to happen in such a way, it can be ended up to be a plus. Can be a plus, but at least in hearings on white supremacy, they had to shut off comments on YouTube because the antisemetic comments, all kinds of things, just overwhelmed the system- Well, it was what? 42,000 comments, some antisem … some bad, some not. We don’t know the difference between some are not. We’re talking about millions here. Perhaps there was a path of discussion even there. I mean, we all get a steamed up about hearing comments that are antisemitic or white nationalist and the rest of that. But I think people have to see it for what it is. And that ends up to be a plus in the discussion. 42,000, it sounds like a lot, but ... It isn’t on the Internet, but do you think the company should be making these decisions? They took a long time, for example, to remove Alex Jones from the platforms. And even though he had broken their rules numerous times. Should they be the ones ... They don’t want to decide actually. So they’ve decided to create a free-for-all on these platforms, which I think many people feel is damaging and then we’ll get to the real damage, which is what happened in New Zealand. But do you feel like you should be doing this as regulators or should it be these companies? Who is responsible for something that is an unprecedented level of human communication and it’s not going well? Well, I do think that that ... he has painted himself outside the circle of a civilized discussion and he’s been given the chance to be part of a discussion and he’s defined himself. And so I think that I would support a decision that says that he shouldn’t be on there. In addition to that though, talking more in terms of the technology, when for example, Facebook says they’re going to improve the algorithms and the rest, you see the New Zealanders have said that that is disingenuous and that’s ... “Don’t take us for a fool.” Right. Right. Again, there’s this subjective decisions that have to be made and on- But should it be you making, not you Nancy Pelosi, you Congress people? No. I think they have a responsibility. I think they have a responsibility. But they have been unable to meet the demands of the task as it becomes more complex and as they make more money from these things. Well, they have to make a decision. It’s a decision. In other words, this is not, “Oh, I didn’t even realize,” or “it drifted” or “happened.” That was the first excuse. But go ahead. Everything is a decision and everything is an opportunity. And so how do they use the considerable power that they have to have discussion, which can defeat some of this, or at least have these people understand this is not going to be your comfy, cozy home to spew forth your venom without there being a response to it. But the haters are very well organized. Certainly. It’s almost as if they’re ever-alert. Even if they don’t know something is coming, when it comes, they’re ready and they’re there. And so others have to be ready as well. Well, something I always say is, the Russians didn’t hack Facebook, they used it the way it was built. They’re using as tools. They used it. Do these companies have to be more ... You all went after Microsoft when it was monopoly power, you went after AT&T, IBM. There’s been a history of throttling back these powers. How do you look at that? Like Senator Warren put forward a ... One, she’s focused on antitrust, not just laws. The idea of breaking them up, that they’re too powerful. Do you think they’re too powerful? Well, I have to hear a range of opinions. I hear a range of opinions that she didn’t go far enough! Yeah. Yeah. What do you think? What is your opinion? I haven’t actually studied her. I mean, I know that there could be some clear lines that we see right in our own community, companies that maybe could be easily broken up without having any impact, one on the other, one on the other. But I think, well, I’m a big believer in the antitrust laws. I think that’s very important for us to have them and to use them and to subject those who should be subjected to it. I don’t know, again, I don’t know how all of these should be painted with the same brush, but I think that’s a look that should be taken. Should these companies be allowed to buy more things? I’m talking about Facebook, the FAANG companies. I guess Facebook, Amazon. They include Netflix, but it’s probably doesn’t belong in there, and Google. Essentially it’s Facebook, Amazon and Google. Yeah. Netflix is different. That is to say it depends on what they’re buying. Is it horizontal? Is it vertical? Is it just power? Is it an antitrust violation? You have to make a judgment about each of them, but I think they should be more cautious. I mean, now they’ve free reign. That’s right. Nobody’s ever even said, “What are you doing that for?” That’s a good question, Nancy, why hasn’t anybody said anything? So now, just let subjected to the scrutiny. And I would say without making any specific mention, some are worse than others. Yes. Could you make a specific? I won’t. Why not? I think that some are a little better behaved than others. Maybe it’s just that they haven’t had the opportunity. Have you had discussions, strongly worded discussions with them about this of where it’s going? I’ve had conversations. Yeah. And? Do they think that they hear you? They make their case. I mean, it’s in the context of a full range of issues that we would be talking about. I haven’t had the conversation of, here I am the speaker of the house “now, you come in and justify your existence.” No, I haven’t had that conversation, but we’ve had conversations about the drift of it all. “The drift.” Is that what you call it? Well, whatever. The direction they’re going. I call it the giant traffic accident. They’re going a hundred miles an hour and don’t have any governance. Oh, that could be. That could be it. And what is the intention? In other words, is this just commerce and they see a market opportunity and decide to take it on? Or are they in competition with each other, buying something before somebody else doesn’t buy it and then all of a sudden, three or four firms dominate the marketplace and engines of search and the rest of that? It’s a challenge. It’s an interesting one. It’s one we have to have. What about the Communications Decency Act, section 230, that gives them broad immunity? That’s really what’s allowed them to have a free-for-all. Well, 230 is a gift to them. That was a gift. Yes. It is a gift to them and I don’t think that they are treating it with the respect that they should, and so I think that that could be a question mark and in jeopardy. In jeopardy for them and that it would be removed or it’s been sort of chipped away at on certain topics, but now brought more broadly, you think there could be... Well, they just love 230. Why wouldn’t you? I would like broad immunity, I do a lot of things that ... When we come to 230, you really get their attention. But I do think that for the privilege of 230, there has to be a bigger sense of responsibility on it. And it is not out of the question that that could be removed. All right. So the Democrats’ relationship with tech used to be quite warm. How do you characterize it now? Again, we all live in a kaleidoscope. There are different interactions. It used to be pretty tight. They used to be their big donors. Not to me! Okay. How do you characterize it now? I’ll be very honest with you. The community of people that I love and know and we’ve known each other for as long as they’ve existed and we have interactions on many things, whether it’s immigration, gun safety, women’s right to choose, LGBTQ, climate change, issues, they’re all out there on those issues and take pride in their involvement there. But I think all of that — you’re maybe not going to like what I have to say, they won’t. I think all of that interest, and I believe it is sincere on their part, is trumped — pun intended — by their interest in a tax cut. Right. They did like the tax cuts. That’s it. And like getting back their money from abroad. The repatriation, all of that. And I wish that they had used some of their support for the tax cut, which I think is a scam. It’s taking us deeply into debt, giving 1% of the people 83% of the benefit of it. I think it’s a disgrace. But if they believe in it, then they should have said, “Can you cooperate with us on something else?” Whether it’s immigration or gun safety or LGBTQ or the rest of ... But, boom. Boom. Didn’t mean anything. Well, those sweatshirts cost a lot of money, Nancy. What on immigration, let’s move to immigration and then I want to get to Twitter and Trump and stuff like that. But immigration, where can they help you there? Because this is an area they stood out on and then seem to have fallen back. Well, on their nonprofit ... certain people there. Laurene Powell Jobs, she has been wonderful on immigration, sincere and fully committed and ... Creative. ... creative and recognizing talent and allocating resources there. That is a pillar of our fight for ... Well, what we’d hope would be comprehensive immigration reform. So again, some of them talk about it, some of them do something about it. And I do think the employees care about it. I do know this … on this I agree with Ronald Reagan. Ronald Reagan said the most beautiful things about immigration. I’ll read ‘em yo you on my phone if you want me to. Sure. Please. But because it applies to the Valley, because so much of the talent, what is it, like 30% of the IPOs ... It is. And you could name all the CEOs, they’re all immigrants. They’re are immigrants and some the start ups ... Elon Musk, Sergey Brin, Satya Nadella, Sundar Pichai. And they’re the big names, but there are many ... I’ll just read you this about him. It’s a big, long thing, but I’ll just read you the ending. This is Ronald Reagan. I quoted him more than any other president during the campaigns. “Thanks to each wave of new arrivals to this land of opportunity, we are a nation forever young, forever bursting with energy and new ideas and always on the cutting edge, always leading the world to the next frontier. This quality is vital to our future as a nation. If we ever closed the door to new Americans, our leadership in the world would soon be lost.” Are you worried about that? Especially in tech, which we’ve dominated. Well, you may recall that when we did in 2005, 2006, our innovation agenda, we said right then and there, staple a green card to the diploma for one piece of it. Of course, we want comprehensive immigration reform, on H-1Bs, H-2Bs, all of that. But in order to do that, you have to have ... I’m going to just see if there’s something else that it goes ... Well, he talks about the Statue of Liberty and ... He was a good talker. Well, it was his last speech as president of the United States. His last speech. He was talking about immigration. He was talking about immigration. Do you imagine there’s going to be any way to bridge this gap? It’s so- On immigration? Yeah. Well, has to be, of course we have 11-plus million people in our country who are not fully documented. They may have been when they came here, overstayed or whatever it is. Not all of them came here illegally. They came here and stayed and then we had the DREAMers and we have the temporary protected status folks again who came here in a documented way. I do think it’s possible. Republicans and the Democrats in the Senate had a bill a few years ago, when President Obama was president. The House Republicans would not bring the bill up. My conversations with the president are, I think he knows we have to have comprehensive immigration reform, but for the moment it’s his red meat that he feeds to his right-wing base. And I don’t mean to paint them as any kind of bad people. They have their own economic insecurity. They’re afraid of innovation, they’re afraid of globalization. Job change. They’re afraid of newcomers to the country and all of that. So what do you do? You scare them with trade, you scare them with immigration, which is a giant plus to our country. And when the president just recently said, “we have no more room,” it just reminded me of Christmas, it was “there’s no room in the inn.” Of course there’s room in our country and in fact our birth rate and replacement rate and the rest as such, we need immigrants. And if you have economists come before our committees, then you ask them, what’s the best thing we could do to grow our economy, they will say comprehensive immigration reform. Are you worried about the lack of education towards innovation and what’s going on in China, where there’s a lot of focus and a lot of money put to that idea of education, innovation, building new companies? I think we’re at one of the lowest growth rates of startups in history right now. Well we are, but some of that, I think, is just lack of confidence. Let’s hope that that will change. But let me go to your initial point there. We have to do something now in terms of, as I said, lower health care costs, bigger paychecks, cleaner government. And the cleaner government piece, HR-1, is essential to our conveying to the American people that the decisions that we make are in the people’s interest, not the special interest of dark, special interest money. So when we’re talking about the three things we’re saying, build the ... The infrastructure. ... the infrastructure of our country. Build the human infrastructure of our country with education and research and health care and build our democracy, strengthen our democracy, which is being weakened by the challenges that are placed there. Some by the Russians, some by the president of the United States. And so part of all of that is workforce development. Right. Especially the first two, building the infrastructure, healthcare research and all of that. Workforce development, to a greater or lesser degree of education, some of it is vocational, skills training and the rest, where you can be a tradesman, a person, a plumber, an electrician and the rest. And even when we do scientific research and we’re investing in a university at the highest level for a scientist, that physical structure requires a plumber, an electrician, a carpenter. People to support all that, so it’s all job creating. But you have to have the skills development, you have to apprenticeship programs and the rest of that in addition to higher education. Are you worried, though, about ... I’m going to talk about these tonight, these issues around automation, robotics, self-driving, AI, very job replacing types of technologies. Well, you just have to see everything as an opportunity. Okay. I just came from Las Vegas and when I go there I meet with the carpenters there. And they’ve been building robots, robotics for a long time. People are taking it to the next step. They are. Certain things are inevitable. Right. Globalization is inevitable. Innovation is inevitable. So it’s not a question of saying, “let’s protect you from this” — no, let’s introduce you to this. And again, with job training and all the rest, how do we have workforce development that matches up with all this private sector tasking for certain skills coming out of schools. Because we have jobs ... I heard somebody say today they had, I don’t know, such a huge number of job openings even for truck drivers. Even for truck drivers. Mm-hmm. But the directional changes are really clear. Yeah they are. Of course, part of that is self-driving trucks. Right. You can’t avoid the future. And I always believe, as I said earlier, in technology. Let’s task for it, what is the mission? What is the purpose? And whose job is that, Congress, is that the private companies? Is it ... I think we all have ... It’s a public, private, non-profit partnership in all of this, educationally. One of the fights, I guess I should call it a fight, that we have is over the budget. Mm-hmm. Yeah, I noticed there was some sort of fight over the budget you had with the president, wasn’t there? Everybody’s having a fight over the budget because it’s all priorities whether. I meant the shutdown. Oh that. Yeah. But see, the Republicans will say ... Oh, that? “We’re going reduce the debt by cutting, freezing Pell grants and cutting the assistance we have on interest on student loans or this or that.” With stiff competition, and I say this frequently, with stiff competition, their cuts in education to reduce the deficit are one of their dumbest proposals because nothing brings more money to the treasury than investing in education. Early childhood, K through 12, higher ed, post-grad, lifetime learning for our workers. We have to … The inevitable is coming upon us, we have to train for it and it doesn’t mean everybody has to be a Ph.D or even college grad. Most people in our country aren’t, but we have to respect what they bring to the table and have the technological skills whether it’s for vocational or whatever it is. So to cut education, is to do a really bad thing when we’re looking at- The future, where things are coming from. All of the innovation that you’re gonna talk about. Let’s turn, we have about 10 more minutes, to what’s happening to politics with social media and everything else. You have some members, such as AOC, who are excellent at these things. Yes. And you gave a quote last week about, “it’s not Twitter followers, it’s how many votes on the …” You have to have both. Right. You cannot just say, “I’m in Congress, so that I can get Twitter followers.” You’re in Congress to get results. Right. And so some members are there to get results and some to get Twitter followers and some to get both. And God bless them, God bless her because that’s really important to attract. So what she’s doing is very valuable and very successful. Right, she’s good at it. She’s good at it and she’s focused. She’s a good member. She’s prepared, she does her work and that was not to put down having Twitter followers, but it changes kind of how people conduct their hours in the day. Right. And it might even change how some people characterize other people’s motivations. Right, right. You get Twitter followers for a reason. There’s a message there. Do you think it’s an effective communications tool? Because that’s just one member who uses it beautifully. I call her a native internet speaker. That’s great. Ocasio-Cortez, she knows how to speak and she knows how to go back and forth. Do you think ... That’s generational, too. How do you look at that as other members ... It’s great, no, well, we depend highly, up until now, in terms of with a purpose that is connected to our mission. Ted Lieu for example, he really gets under the president’s skin. Yeah he does. He’d say, fire up another tweet. And Adam Schiff, shifty. Adam Schiff does. Many of them do but Ted is really focused on social media to do that. And Adam attracts because of — so does Ted — but Adam has a position, Chairman of the Intelligence Committee. He’s one of their main targets. Therefore, he had a big venue to not only respond but to initiate his comments. No, I think that all of it, as I said to you before, everything is an opportunity. And the social media is how some people get their … communications, I don’t know if you want to call it news, but their communications, their news, whatever. And that’s where we have to be. It’s interesting, what we’re finding out is there is a lot of older people are on the social media. Mm-hmm. Yeah, absolutely. Young people- Chuck Grassley’s really good. Dingell was excellent. There’s some that are better than others. I’m not talking about members, I’m talking about the public. Public, yeah. They’re really important, the VIPs. The public. In addition to that, there’s some who are just not there. So you still have to have a mix in terms of the communication. How do you assess your ability? You’ve been pretty good, you’ve had some good ones. Yeah, they’re good, they’re good. Ours is kind of a serious- Mm-hmm. You take a slap every now and then though. Yeah, every now and then. But the more slaps you want to take, put out there, the more followers you’ll get. But ours is mostly informational for our members and formative in terms of legislation and the rest. And every now and then, a slap, yeah. Yeah, yeah, that was a good one, you did a couple at Trump that were pretty funny. You’re funny, they’re more funny than anything else. How do you assess his use of that? ‘Cause he’s used it as direct communications vehicle to his base and to the whole country, really. Yeah, you have to give him credit for, if in fact he is the one doing it, but even so, the fact it’s being done- It’s him or the caddy guy, yeah. ... in his name. I think that, very honestly, with all due respect to the social media and that, that the president’s tweets have cheapened the presidency. Because they’re not as if he’s delivering a message of any facts, truth, evidence or data. It’s just being- A troll. A smart aleck. A smart aleck! It’s called a troll. That’s an old fashioned word. But he’s just being a freak, I mean, he’s just terrible. There’s a more of a responsibility for a president to communicate his point of view, which we should respect, he’s the President of the United States, whether you agree with him or not, he has a point of view. Yeah. But to use the office as the president, as an attack vehicle ... But again, for his market it seems to have worked and- Does it knock you off because it gets so much attention- Nah, well, I do think that the press has ... And I’ll say this to the press. He does 72 tweets in ... What was it, 48 tweets- Yeah, that was that one weekend. 50 tweets in 48 hours. Yeah, that crazy weekend. For the next three days all the press would talk about is that. Meanwhile, we’re having hearings on lowering prescription drug prices, preserving the pre-existing condition, massive hearings on building the infrastructure of our country. Passing bills that relate to how we implement HR-1 for good governance and the rest. All they want to talk about is, how on Earth did he do 50 tweets in 48 hours? I think the press is an enabler of him. Mm-hmm. Right. And I think on the other hand, they are the best defense of him. The freedom of the press is the guardian of the gate of our democracy. Freedom of press is something that is sacred. But he makes assaults on them and they strengthen him by just talking about that and that’s what an authoritarian wants you to be talking about him. Even if they don’t like what you’re saying, if they’re talking about him, they’re not talking about us. Is that gonna change, or have we reached the sort of rubicon of that’s the way politics are gonna be done? No, no. It can’t be a rubicon in that respect. But I will say this, there is another rubicon that we are crossing and the die is cast when we pass the HR-1, John Sarbanes’ legislation. We have to take the role of big, dark, special interest money out of politics. It has too much of an impact, people have to believe that we can pass gun safety because the gun lobby is not ... Doesn’t own the Congress. That the fossil fuel industry is not dominating any decisions about climate change, which is the generational challenge that we have to protect the planet for future generations. And you name any subject, look at Wall Street and all that, the role of money is- Do you think they should take all political ... Someone presented an idea to me last night, that you should take all political advertising off the internet because it can’t be tracked easily and the dark money, they brag about it, Brad Parscale brags about they use them. I don’t know. You can govern the airwaves but it’s harder to ... It’s hard enough to get them to take foreign ads off the air. I mean, really? Really? Like they say after the election, “Oh, we didn’t know they were foreign.” They were paying you in rubles. Rubles, yeah, yeah. So anyway. So should there be none on these platforms? I think you have to set some standards for it. I think there’s a way to set some standards for it. Just as you have some on the regular communication. If somebody is putting something on TV that is not true ... Yeah, but that’s pretty much in control, this is not. Yeah, but that doesn’t mean it just should run rampant. No. But I do think that one of the things that I would like to see this Congress do and especially when we win the election in 19 more months... Uh-huh. It’s less than that now. Is to, just cross the rubicon in terms of, it’s a new world in terms of we’re gonna have transparency, we’re going to have small donors and grassroots voices being stronger than anybody. And people then have confidence that their voice will be heard. And that they trust decisions that will be made because they won’t be made in the interest. Do you like the Democratic field? There’s a lot of people ... Oh, I think any one of them would be a better president than the current president. Yeah. And they have a variety of points of view and that’s worthy of discussion. And we’ll see how that goes. And the people will decide. The people will decide, not the leaders or anything, the people will decide who connects with them. I say to them all and I say to my own members as candidates when they were running and now other candidates, know your “why.” What’s your purpose? What is your vision for America? What’s the subject that you know about, is it climate, is it technology, is it education? What is your vision? What is your knowledge and therefore your judgment to be trusted because you know what you’re talking about? How do you think, strategically? People think, okay, I see the goal, I know the territory, they have a plan, but all of that is important. And all of them have it. The question is, who’s gonna connect heart to heart with authenticity with the American people. Why didn’t you ever run for president? I like what I’m doing, I’m a legislator. Yeah, pretty powerful. I really enjoy what I’m doing. People asked me to and they always have asked me to, but I like what I’m doing. Lastly, you’ve become somewhat of an internet phenomena. You were so attacked by the right wing, you were sort of their- 137,000 ads just in the November election. Yeah about you were a lizard, you were an alien at one point. I had horns. You had horns. Cloven feet. Cloven feet. Now you and you’re coat seemed to have turned the tide, what happened? On the internet, now you’re cool again. Cool again? Who knows. Why do you think your coat went viral? I don’t know. It was a badass coat. That coat was for the inauguration of Barack Obama in 2012. I hardly ever wear it because I’m from California, I don’t really wear a coat. So that day, I just pulled a coat out of, usually I wear a raincoat, just pulled that out and wore it and didn’t even know that we would be going .... We didn’t know that the president was gonna make a total fool of himself by having the meeting in the Oval Office be exposed to the public and therefore generate more interest as to what happened afterward. Some people said, “Oh, you wore that coat on purpose.” I said, “No, I wore that …” You weren’t thinking of the internet implications or any of the viral ... I was just wearing that coat because it was clean. Okay, all right. That’s my standard. All right, okay, all right. Nancy, I really appreciate it, thank you so much. I’m looking forward to addressing you all tonight. Well, we are so honored that you are here. I’m gonna say some things. It’s a treat for us. Are you ready for some things? That’s what you’re here for, you are ever provocative and that’s what we’re looking forward to. Thank you so much. Okay, thanks Nancy. Thank you.

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posted 9 days ago on re/code
The war for the streaming services is getting very expensive. Disney used to make hundreds of millions of dollars a year selling its stuff to Netflix. Now it is going to spend billions of dollars a year to try to beat Netflix. Disney executives didn’t mention Netflix once during their three-hour-plus investor presentation Thursday, at which the company laid out its plans to build up a suite of subscription streaming services — most notably Disney+, a $7-a-month service bursting with movies and TV shows. Disney+ launches in the US in November and will feature everything from Disney’s recent theatrical offerings, like Captain Marvel, to classic Disney movies like Bambi, and new, original stuff like The Mandalorian, a Star Wars TV-show spinoff. And Netflix isn’t the only company Disney will be battling in the years to come; the list of competitors and would-be rivals now includes everyone from Amazon to Apple to AT&T. But make no mistake: Netflix is the primary reason Disney is making the giant leap from selling its stuff to distributors to launching its own streaming business, where it hopes to sell its stuff directly to tens of millions of consumers, via its own apps. Disney+ Product B-roll As the Information reminded us this week, Disney — and just about every big media company — used to view Netflix as a great place to make easy money. Netflix desperately wanted to build up its own streaming business, and Disney and other big media companies were happy to take Netflix’s money. In 2012, for instance, Disney struck a deal to sell its movies to Netflix for an estimated $300 million a year, instead of striking a deal with conventional distributors like HBO or Showtime. And in 2015, even as Netflix was attracting tens of millions of customers to its ad-free, all-you-can-eat streaming, and while Disney’s cable channels were simultaneously losing millions of viewers, Iger still said he was happy to keep doing business with Netflix CEO Reed Hastings: “We look at Netflix as more friend than foe. They’ve become an aggressive customer of ours,” he told Wall Street. Two years later, Iger had done an about-face: He said Disney would stop selling its stuff to Netflix and would launch its own service, which would stream everything from blockbuster titles like its Star Wars and Marvel movies (after they’d been in theaters) to original programming based on popular Disney characters and brands. All of that is going to cost Disney real money: It has to to build up the technical resources it needs to run its own streaming service and create original programming for subscribers. And, of course, it is also giving up the hundreds of millions of dollars it used to make selling its stuff to Netflix and other distributors. Disney is putting a positive spin on this: It says it will sign up 60 million to 90 million subscribers for Disney+ by the end of its 2024 fiscal year (with two-thirds of those subs coming from outside the US). It also projects up to 12 million subscribers for its ESPN+ service (which sells sports programming that isn’t carried on its regular ESPN cable networks) and up to 60 million Hulu subscribers. But the bill for that will be in the billions. Disney’s three streaming operations will run a loss of $3.9 billion in the company’s 2019 fiscal year, estimates analyst Michael Nathanson. That number will jump to $4.9 billion the next year, with Disney+ accounting for $2.5 billion of that loss; Bernstein analyst Todd Juenger says those numbers will get worse if Disney decides to expand Hulu outside the US, since it will have to spend even more on content. Disney says it will start making money on its streaming businesses by 2024. Context: Disney can afford to throw billions at this venture because it’s a giant that just got bigger by swallowing much of Rupert Murdoch’s 21st Century Fox. Disney generated $59 billion in revenue last year, and made more than $10 billion in profit. This year, as it adds Fox assets like The Simpsons (also coming to Disney’s streaming service), it is projected to make another $10 billion profit on $71 billion in revenue. By 2023, it should be a $100 billion company. More context: While Disney is making a big strategy shift here, it is not blowing itself up. Disney’s core businesses — theme parks, movies, merchandise, and cable TV — are all staying intact, and the company expects it will stay as such for a long time. Notably, while the company is selling ESPN+ directly to hardcore sports fans, it is keeping its main sports product safely behind the pay TV wall: For now, at least, the only way to get ESPN is to subscribe to a bundle that includes dozens of other pay TV networks, too. So what’s Netflix going to do about all this? Per Hastings, the same thing it has been doing for years: spend billions each year to build up its own content library, and hope to add to the 139 million subscribers it already has worldwide. “You do your best job when you have great competitors,” Hastings said when asked about the coming competition from Disney and others last month. If you’re looking for an updated answer, check back Tuesday, when Netflix reports its newest earnings numbers.

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Plus: Alexa is caught sharing conversations with an unexpected audience, Julian Assange is arrested, and Jeff Bezos is challenging his competitors on worker pay. Uber filed its much-anticipated IPO on Thursday, “pulling back the curtain on a company that is still, at times, battling itself.” The 400-page S-1 filing called out the company’s “workplace culture” as a risk factor, saying it “created significant operational and cultural challenges that have in the past harmed, and may in the future continue to harm, our business results and financial condition.” About two years ago, founder Travis Kalanick was ousted from his CEO position amid a series of scandals at the company and a #DeleteUber campaign. In spite of this, Uber has been able to build “a gargantuan business” with $11.3 billion in revenue last year, which is five times as much as its biggest US competitor, Lyft. Uber is expected to be valued at more than $90 billion — although that figure will be finalized in the coming weeks.[Rani Molla and Theodore Schleifer] [Want to get the Recode Daily in your inbox? Subscribe here.] While we often think of Alexa and other AI gadgets as being self-taught, there are real human beings doing the teaching. Thousands of people around the world are listening to snippets of people’s conversations with Amazon’s Alexa, according to a new report from Bloomberg. The article characterizes most of these workers’ jobs as “mundane,” but notes that sometimes employees encounter “recordings they find upsetting, or possibly criminal” such as a suspected sexual assault, and that “[w]hen something like that happens, they may share the experience in the internal chat room as a way of relieving stress.” Amazon told Bloomberg that “[e]mployees do not have direct access to information that can identify” a specific person or account. A screenshot reviewed by Bloomberg shows that the recordings sent to the Alexa reviewers provide a user’s first name, the device’s serial number, and are associated with an account number.[Matt Day, Giles Turner, and Natalia Drozdiak / Bloomberg] The DOJ charged WikiLeaks founder Julian Assange with conspiracy to hack a government computer. A “heavily bearded and disheveled” Assange was arrested Thursday in England, where he had been living for years under protection inside of the Ecuadorian embassy. The charge, filed last year and unsealed Thursday, “stems from what prosecutors said was his agreement to break a password to a classified United States government computer,” but, as the New York Times writes, “is not an espionage charge, a detail that will come as a relief to press freedom advocates.” Assange — who has been linked to 2016 leaks of DNC party emails — was specifically charged for allegedly helping former Army intelligence analyst Chelsea Manning hack government files that documented the US and other countries’ killing of civilians and journalists in the Iraq war.[Eileen Sullivan and Richard Pérez-Peña / The New York Times] Jeff Bezos dared his competition to top his company’s $15-an-hour minimum wage. In his annual letter to shareholders, “Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage,” Bezos wrote. “Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.” Last year, Amazon raised its minimum wage to $15 an hour, affecting 350,000 employees. Its retail competitors like Target and Walmart currently pay less — $12 and $11 an hour, respectively. Still, Amazon was criticized for cutting some employee stocks and grants when it raised its minimum wage. The company then made additional increases to pay. Amazon has also faced criticism over reports of harsh working conditions in its packaging and warehouse facilities.[Vlad Savov / The Verge] Top Stories from Recode New York City wants to make sure the AI and algorithms it uses aren’t biased. That’s harder than it sounds. There is little oversight on the algorithms that help the city decide who gets watched by police, where kids go to school, and in what neighborhoods fire stations are placed.[Shirin Ghaffary] More tech companies are selling stock that keeps their founders in power. Lyft and Pinterest are the latest in a trend of IPOs that mean owning stock isn’t as powerful as it used to be.[Rani Molla] This is Cool How to hack Jeopardy.

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It will launch November 12 in the U.S. Your move, Netflix. And Apple. And AT&T... Disney has been talking about its plan to create its own Netflix since the summer of 2017, but it’s been short on crucial details. Now we have them: Disney+ will launch in the U.S. on November 12, for $7 a month. It will have a very large library of old Disney movies and TV shows — crucially, including titles from its Marvel, Pixar and Star Wars catalog — along with new movies and series made exclusively for the streaming service. It won’t have any ads. And it will allow subscribers to download all of that stuff, and watch it offline, whenever they want. For comparison: A standard Netflix subscription now costs $13 a month. Disney saved the crucial pricing and launch date details for the very end of a 2-hour, 45-minute long event aimed at investors. It spent the rest of the time hammering at one big idea: Disney has a ton of things people already love, multiple brands people watch and trust, and it is willing to bet a lot of money on this plan — both to fund new things and, crucially, to sacrifice money it used to get by selling its old movies and TV shows to distributors like Netflix. If you want to compare and contrast, Disney’s streaming video announcement today — which featured several trailers promoting new shows and movies, like “The Mandalorian,” a Star Wars spinoff TV show — was quite different than Apple’s streaming video announcement last month, which featured A-listers like Steven Spielberg talking about new shows, but didn’t show them, and had no mention of pricing or a launch date. For regular people, who don’t pay attention to corporate launch events, the only thing that will matter is whether they want to pay for Disney+ and ditch other video services, like Netflix and their cable TV subscription, or just add Disney+ to the stuff they are already buying. Disney would very much like customers to keep paying for cable TV, which accounts for a sizable percentage of the company’s revenue and profits. But Disney+ is both a near-term attempt to redirect consumer dollars away from services like Netflix, which have been streaming Disney movies and TV shows for years, and a hedge against a future when many more people have cut the cable TV cord, or never signed up for cable TV at all. Disney told investors it expects to have 60 million to 90 million subscribers worldwide for the service by the end of 2024. Netflix currently has 139 million subs. Disney’s event still left several unknowns, some of which won’t get answered anytime soon: For instance, does Disney plan on distributing its service via big internet platforms like Amazon and Apple, who are now officially frenemies with the media giant? And how will Disney bundle its suite of streaming services, which also include Hulu and an ESPN spin-off? (Kevin Mayer, the Disney executive in charge of all of Disney’s streaming services, said the company would likely bundle them in some way, but didn’t say more.) Still, this is a straightforward proposition for both consumers and investors to ponder: Is $7 a month worth your while to get access to most of Disney’s old stuff, as well as all the new stuff that’s coming to theaters this year (like the upcoming Avengers, Frozen and Star Wars movies), as well as streaming exclusives like a new “High School Musical” series? Oh, and one more thing: Disney+ will also feature shows and movies that previously belonged to 21st Century Fox, which Disney mostly absorbed this year. That means the service will also be the place to watch “The Simpsons,” for starters. One thing’s for sure, the studio’s thrown down the gauntlet for everyone who wants consumers to pay up for their own streaming video, from Apple, to Netflix, to AT&T — which will launch its own streaming service by the end of this year.

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