posted about 6 hours ago on re/code
Dan Levin, the former No. 2 at Box, has joined Khosla. He talks to Recode in his first interview. It’s hard for Silicon Valley investors to not coddle a young, hotshot CEO. Being too mean draws a bad reputation among entrepreneurs, and could lead the investor to not see the next great deal. And focusing on older, less-spry founders might cause a venture capitalist to lose touch with today’s consumers, customers and products, and totally whiff on a wave of innovation. Khosla Ventures has hired Dan Levin, the longtime No. 2 at Box, to run against those headwinds. Levin helped grow the cloud-storage company from 50 employees to 800 by the point he left last year, and he still sits on its board. Recode chatted with Levin for his first interview as an operating partner at Khosla. The newly minted venture capitalist is critical of Silicon Valley for failing to support and challenge CEOs who don’t have much life experience but do have huge checkbooks, thanks to VCs. It raises an interesting question: Are tech CEOs too young to be handed this long a leash? Here’s our conversation, edited for length and clarity: Levin: A lot of venture capitalists are not operators. They have not been executives at the large organizations. They are finance guys, and they’re very smart finance guys. They’re not in a position to teach a CEO how to hire a great leadership team or how to have a hard conversation, or how to motivate a bunch of people. They’re very well positioned to teach a CEO how to manage their board of directors, how to deal with a fundraising strategy. But the realities of — for example, creating a very positive, healthy culture in a company and thus avoiding all these horrible things that have been coming out about sexism and racism and gender bias — that’s a skill: How to create and manage a fabulous, inclusive, diverse culture. And that is not something your typical venture capitalist is in a position to teach a CEO how to do. Recode: Just in general, how critical are you of the VC industry? You were saying there’s a lot of NBA player/investment banker hybrids before. You were saying that you feel like the VC community has kind of failed to support younger CEOs. How much blame do you lay on, not on anyone specifically, but on broadly the advisory set of investors? Levin: I don’t think “blame” is the right word. Venture capital firms were not designed to teach. They were not designed to help entrepreneurs beyond a fairly narrow set of skills. They’re designed to make investments, to provide capital. And by doing so, to enable innovation. Firms like Khosla, and there are one or two or three others, have chosen to focus not only on venture investing, but also on venture assistance. Recode: You were just saying before that you feel like that the Valley failed our younger CEOs. But you’re not saying it’s specifically VCs. You’re saying it’s the Valley overall. Levin: Yeah, that’s right. I mean, there’s been a very fundamental shift in the types of people who are running many of today’s startups. I’m not pointing a finger at the venture capital community. I’m saying the Valley as a whole has struggled to adapt to that new reality. For example, you see an awful lot more CEO coaches than you ever used to. Recode: The job of a VC is kind of a hybrid between investing dollars and then doing the support function, right? Which is serving on a board, being a sounding board for CEOs. Do you think that coupling of those two jobs, which admittedly are pretty different — one is kind of a financial decision, not dissimilar from an investment banker, and the other is kind of a CEO coach — do you think that makes sense, as an industry? Not that you can change that overnight. But when you just take a step back and think about the job of a VC, do you think that it makes sense for those two things to sort of be under the same job description? Levin: No, I don’t think it makes a lot of sense for the same person to try to do all those things, and I think that’s a big part of the reason that Khosla has chosen to separate the investing team from the group of operating partners whose job it is to support and enable and teach these entrepreneurs how to be most effective. Recode: It sounded like you were somewhat critical that the VC industry may have gotten too founder-friendly. Obviously, part of that is competitive advantage. Do you worry about that? Just that as part of the effort to kind of see deals, win deals, burnish their brand, that the industry has gotten too accommodating towards CEOs and sometimes doesn’t deliver the tough love that they need? Levin: I think that many investors, in the pursuit of a brand that will enable them to see as many deals as possible, choose not to be as frank or as open as they could be with the CEOs that they work with and the entrepreneurs that they work with. And I personally don’t agree with that as an approach, and Vinod [Khosla] has been quite vocal in his disagreement with that as an approach, as well. It’s very hard to sort of square the circle of “I wanna be nice and I want to be popular,” with “I’m gonna help with as much as I can.” Because helping requires candor. Recode: Can you talk about just how you have kind of seen the profile of founders change over time? You feel like, in general, you’re just seeing a lot younger CEOs? Good ideas from people who are 22, 23? Are you noticing a lot more of that than you were at the beginning of your time in the Valley? Levin: I do see a real change. I think that’s driven by a number of factors, one of which is the relative ease of creating especially consumer-facing, web-delivered applications and mobile applications. You’re seeing much younger and much less experienced and much less well-trained individuals showing up as entrepreneurs and getting funded by top-tier firms. You know, Sequoia used to be very well known for replacing entrepreneurs with professional CEOs. That was their brand for years and years. And they’re not doing that anymore. And they’re not doing it because they know that if they did do it, they won’t see the deals that they need to see to be successful.

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posted 1 day ago on re/code
An offer they should have refused. Good news for MoviePass, the might-be-to-good-to-be-true company that lets you see unlimited movies for a monthly fee: It is still alive. Bad news for MoviePass: Gotti. That’s “Gotti,” the new John Travolta film about mob boss John Gotti. It debuted this week, and appears to be one of the worst movies of the year. It was also supposed to be one of the things that kept MoviePass alive. That’s because MoviePass invested in “Gotti” earlier this year, as part of its new MoviePass Ventures unit, which takes equity stakes in movies. The idea is that MoviePass can help make those movies a hit, by promoting them to its users, and can share in the upside when that happens. “‘Gotti’ is precisely the type of film we established MoviePass Ventures to support,” MoviePass CEO Mitch Lowe press released at the time it announced the deal. But it sure doesn’t look there’s any upside to “Gotti,” which stars John Travolta, and was directed by Kevin Connolly, who you know as the guy who played “E” on “Entourage.” It appears to be astonishingly bad, at least according to people who are paid to review movies for a living. It’s currently sitting at 0 percent at Rotten Tomatoes. Some highlights of the lowlights: “A dismal mess”, says the New York Times. Its “shabby aesthetic and narrative shortcomings are outweighed by its more drastically questionable moral ones,” says the Guardian. “It’s not a good movie,” Entertainment Weekly TLDRs. “The worst mob movie of all time,” rules the New York Post. More if you want to keep going, here. The good news for MoviePass is that “Gotti” is the company’s second movie investment. “American Animals,” MoviePass’s first stab at this, came out earlier this month, to positive reviews. But there are very decent odds you haven’t heard about it — it’s in a few dozen theaters and has grossed $544,426 over two weeks. More positive news for MoviePass, which loses money every time you see a movie using the service, but hopes to eventually get enough scale to somehow fix that: It is now up to 3 million subscribers, up 2x from the beginning of the year.

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posted 1 day ago on re/code
Recode talks design and technology with the legendary inventor. It is rare but refreshing when a technology CEO can explain how their product actually works. Steve Jobs, the late Apple founder, was great at this — the pitchman who could explain deeply why a new device was special; the specific engineering or design trick that made it work like magic. Watching Dyson founder James Dyson unveil another sort of gadget — his company’s latest vacuum cleaner, the Cyclone V10 — earlier this spring in New York conjured a similar feeling. In another Jobsian move, the legendary inventor Dyson says he’s managed to create a handheld, battery-powered vacuum so powerful that he’s no longer investing in developing new vacuums with cords. Dyson The Cyclone V10 In this case, it’s because the tiny, precise, digital, electric motor, which weighs 125 grams, uses “secret” magnet technology and spins 125,000 times per minute, its turbine blades developed in the same lab as those for Rolls Royce. And it’s good enough to usher in, as Dyson says, a new “genre” of vacuum — reminiscent to this technology writer of the transition from desktop to laptop, or PC to smartphone. “We believe this is the future, and this is the way you should clean your home in the future,” he tells an audience gathered in a studio space in Manhattan’s Greenwich Village. “It’s quite a brave step for us, but we think we’re doing the right thing.” Later, over smoky lapsang souchong tea in a Midtown hotel lobby, Dyson spoke with Recode about our changing relationship with our devices, how he balances a gadget’s capabilities with its cost, which part of an electric car he doesn’t want to make, and about those Dyson “blade” hand dryers. What follows is a transcript of our conversation, condensed and lightly edited. Dan Frommer, Recode: What did you learn making these latest products? Sir James Dyson: Technology is now moving so fast and is becoming ever more complex. Even we, who started off as hardware engineers, now employ more software engineers than hardware engineers. And vision systems people, artificial intelligence people, robotics people. We now have five times the number of engineers to do a product than we were doing 10 years ago. It’s a massive change. Dyson strikes me as a company that uses hardware industrial design as its main competitive advantage. Do you also need to be doing your own machine-learning software? Yes. Things like voice recognition — we wouldn’t attempt to do that. But interpretation of vision — what you see with the camera — we are doing. We think that’s key for us. We think batteries are key for us. And robotics. And with the car, there are certain technologies that we’re doing ourselves and it’s certain that we’re buying in. The thing is to be selective and to choose the ones which are really, really important to you and which you can make a real difference. And then buy or direct others in. What’s your job now? How involved are you in developing new products? That’s what I do. In the beginning, I did everything — I was on my own, building those 5,127 prototypes, every day. That’s what I was doing, totally hands on, making them myself, testing them myself, and coming in at the end of the day covered in dust. As we’ve gradually become successful and now have 5,000 engineers. I’m obviously not the person making the prototypes, and most of the time I’m not the person coming up with the ideas. My role is that of a sort of old tutor, a slightly grumpy old tutor, going around, saying what he likes and what he doesn’t like, and listening to their ideas and encouraging them. The people are very young, by the way, I’ve really exclusively recruited graduates, and now undergraduates — because we now have a university — and I find working with people who haven’t got experience much more exciting than working with people who have got experience. Experienced people always say why it can’t be done or how it should be done. And I want people to be pioneering and do all sorts of wrong things and make mistakes and understand from their mistakes what could be possible. I have very little to do with sales. I have a little bit to do with marketing. I think it’s important — if you’re making those sort of decisions in front of the engineers — to explain why people will like that thing or why people won’t like that thing. And also to make sure the marketing people say the right things about it. And don’t get carried away with thinking that the brand’s going to carry it through. The performance of the product is what carries it through, not the brand. I hate the word brand. It’s banned from our building. Dyson Emptying the Dyson Cyclone V10 In your demo, you called extra attention to the specific, clever task of emptying your new vacuum. Why? We feel quite vulnerable on that point. If the dirt goes into a bag, in theory, it’s sealed in the bag. It isn’t, but that’s what they claim. So emptying a bagless vacuum cleaner is, in theory, a slightly messy task. We’ve wanted to overcome that issue for quite a long time. And I think we’ve gone quite a long way to overcoming it. So I wanted to explain that in some detail. Dyson products are not cheap. How do you balance design and functionality versus cost? Cost? We don’t worry about the cost! No, I’m joking. I’m really joking. I’ll tell you what I don’t do. I don’t design down to a price. You can say that’s my undoing. Inevitably what we’re doing costs more and is usually more expensive than what other people are doing. But. A lot of the time you have to make a decision about, “Do I include that?” “Do I not include that?” “Can I afford that?” “Can other people afford that?” And we know that if we add a dollar to the production cost, you’re adding many more dollars to the price in the shop. I’ll tell you what I don’t do. I don’t design down to a price. I’m sure we get it wrong half the time or three quarters of the time — our products are too expensive. But that’s what they are. That’s what we wanted to make and that’s what it is. And, of course, you can buy one that’s cheaper if you want to. And a lot of people do. How is our relationship with devices changing? It’s going to have to change, and it will change a lot. They’re going to get incredibly complex — sensors, cameras, artificial intelligence, machine learning. All of this is going to make products very powerful and do extraordinary things. It’s happening. We have the technology now, we can see it happening. But what we don’t want to do is make them complex and difficult for people to operate. I don’t want for people to have to reach for an app to make it work, or to reach for a remote control, which would be wholly inadequate anyway. So I’m for automating things so these things just happen for you. What parts of the home do you think will become automated? And how is our relationship to our home going to change? Lights are going to get very interesting because of your circadian rhythm and that kind of thing. That whole thing is going to change. The idea that you come in and switch on the light is in the past. You don’t need that, so you can save the light switch. That’s an obvious, crude example. But I think people are becoming acutely aware that humidity, dryness, it’s important to control that. It’s obviously important to control all the things that make smell and pollution in the home. Floorboards create formaldehyde. Dealing with hidden things and making the home a really safe place that reacts to you and monitors your health and keeps you in the best possible health. Home isn’t just going to be a place that keeps you dry and warm. It’s going to be a lot more. How do you sell design in an era of great uncertainty? I’m old enough not quite to remember the second World War, but certainly the Cuban Missile Crisis and the whole Cold War, so I think now is actually quite a calm time, in spite of what everyone is saying. Home isn’t just going to be a place that keeps you dry and warm. It’s going to be a lot more. How do you think about which new product markets to enter? Not very intelligently! We think more about the product. We had the idea for a hand dryer at a time when we were making products entirely for the home. We didn’t do any market research, we just did it because we thought it was a better hand dryer. And it was difficult because you don’t sell it how we normally sell things. You have to go and sell it to architects or B2B. We were actually developing air knives — a very thin blade of air coming out at a very fast speed is called an air knife. They’re used for various drying applications in industry, or as a gate — you can make an artificial door with an air knife. There’s nothing new about air knives. But we were playing around with one for a particular job and we ran it across our hands and discovered it scraped the water off our hands. And so we thought: That’s very interesting. Because a hot-air hand dryer uses a vast amount of heat — I mean, they’re 3 kilowatts — and they’re trying to evaporate the water off your hands. In the process, they’re using a lot of energy. It takes a long time, and also it’s not good for your skin. So we realized with this blade of cold air that we would use very little energy and we would’t harm your skin and we’d do it very much quicker. So we said: Right, we’ve got to do a hand dryer. We just produced it and started selling it. And of course we made terrible mistakes. There’s a sort-of cult of people who really feel ... weird ... about Dyson hand dryers. Some guys I know even tweet photos of them at each other as an in-joke. I mean, the problem is that it’s not obvious how to use it. That’s the trouble. They’re used to this tube that’s blowing air at your hands and you’re supposed to rub your hands. Ours you have to use in a particular way to get the blade to work effectively. Dyson / Screenshot Dyson’s “Wash+Dry” tap But the one I really like is the tap. Because you go into the washroom and you’ve got the tap and the dryer that’s part of the same device, and you can stand there and do it all there and then get the hell out. Whereas the other ones, you have to go and wash your hands and then drip across to the dryer, or queue for the dryer. And also the water that comes off your hands goes onto the wall or onto the floor with a normal hand dryer. But with the tap, it’s all going into the basin. And when the water turns on, it’s actually flushing out the basin. So it’s a very good thing. But it’s difficult to get facilities providers to fit it. It’s been very slow to take off. The hair dryer is quite interesting because that’s a weird market for us to go into — beauty and personal care. What on earth is a vacuum cleaner company doing going into beauty and personal care? It’s a mad idea. But we had the motor. We had the technology. So we went into personal care, which is a very different thing. You have to go into beauty salons and hair salons and talk to people. We’ve got a hair salon in our own shop just around the corner. So it’s a very odd thing for us to do. But we did it because we had the right technology. Funny enough, the car is the same thing. We’ve got what we think are the right technologies. We suddenly realized we’re developers of electric motors. Air flow is really a key thing of ours, because we develop turbines, and of course the fans — they’re all about air flow. And not sort of crude air flow, very subtle air flow around all those shapes — creating something out of nothing, that’s what that is doing. We’ve been developing batteries for five years. Not specifically for cars, but last year we sold 100 million cells. We’re a big, big consumer of batteries. So electric motors, batteries, air purification and air temperature, and circulation is a key thing of ours. And robotics and vision systems and interpretation of images and what’s going on. And apart from the chassis, that’s a car. We won’t make tires, but we will make a chassis. What companies do you look up to? I used to enormously look up to Sony in the early and mid ’80s. The Walkman came out and I really admired that, because making a tape recorder that doesn’t record takes guts. But he had the vision about that and people suddenly tweaked and off it went. I admired that enormously. Almost everything they did then was magic and great. And when Akio Morita died, they lost their way a bit, I think. They’re still a great company — they’re one of our battery suppliers and we work with them on that. I mean, anyone, really, who introduces new technology and bravely pioneers things, I admire that.

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posted 2 days ago on re/code
“I think [young] people are waking up to saying, ‘Okay, we need to have some rules in this new world.’ And then they look to the Congress and they said, ‘Wow, those are the folks who are going to be writing these rules?’” On this episode of Recode Decode, hosted by Kara Swisher, U.S. Representative Ro Khanna, D-Calif., talks about his proposal for an “internet bill of rights” to protect consumers’ privacy, security and ability to move or delete their data. Khanna represents California’s 17th district, which includes the headquarters of tech giants Apple and Google. You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation. If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Kara Swisher: Hi, I’m Kara Swisher, editor at large at Recode. You may know me as someone who might run for Congress just so I can ask Mark Zuckerberg better questions the next time he testifies, 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 Congressman Ro Khanna, who represents California’s 17th congressional district, which is the key one. He’s been on the show before, but I wanted to have him back on to talk about a project he’s working on called the Internet Bill of Rights and everything else that’s going on in Washington right now. Congressman, welcome back to Recode Decode. Ro Khanna: Great to be on. The Congress could have used you for questioning. Yes, I could’ve. I was like ... I sat ... You don’t know. I was screaming at the television. It was like I was watching “Game Of Thrones” or something. It was an astonishing display of idiocy. I don’t know ... Well, I think the country started out by thinking, “Wow, Facebook has really done something wrong,” and by the end of the hearing, the congressmen ... Mark Zuckerberg looks sympathetic because it looked like the Congress was totally out of touch. Right. Exactly. And you would never say ... If someone were to call Lebron James Lebron Jameson, you wouldn’t say, “They don’t know basketball.” You’d say, “What world are they living in?”” So first, you had people mispronouncing his name. Then, you had people asking, “What is a cookie? How does Facebook make money?” And the biggest thing I didn’t understand is they were like, “Tell us how we should regulate you.” That was my favorite one. Oh, there were so many moments. We’re going to go through them all. Yes. So we’re going to talk about the Internet Bill of Rights in a second, but I do want to talk about the hearings, because one of the things that was amazing is, before it started, I was the one that made Mark Zuckerberg sweat with Walt Mossberg in that famous interview. And all the coverage was like, “Will he sweat? Can he answer questions?” And I was like, “Look. He can. He can wear a suit. He can actually ... He’s an adult and everything else.” And so I was talking about the juvenilization of the billionaires, essentially. We treat them with kid gloves. But what I was struck by in the hearings, and let’s go through a couple of things, was, one, the lack of information about what they did. That was astonishing. Lack of preparation. Two, the lack of focus on the real topics, the obsession with terms of service, on cookies, on things that did not matter for what’s going on right now. And then, third, was that taking of his information as fact, like, “We do not sell information, Congressmen,” which technically he doesn’t, but he does, that kind of stuff. And then, lastly, that they didn’t really, that they were asking for his help in terms of doings this, which was sort of like letting the fox guard the chicken coop. So let’s go through that, because he’s testifying today in the U.K. and this is going to go on for a while. Why do you imagine ... I think it’s too much of an excuse that they don’t know the area, because you represent the area. Yeah. And I’m not a techie by background. I don’t think you have to know how to code to ask tough questions. Members of Congress ask tough questions of the financial industry, and they haven’t worked in the financial industry, or the health care industry. I think there are a few things. One, some of these folks have actually not lived on these platforms. So it’s not just that they don’t know it, it’s that they have staff delegated to go on Facebook or Twitter or other social media platforms, so they don’t have hands-on experience. And how would you make laws for traffic if you’ve never driven? That’s a very good point. So part of it is just being ... not actually having a sense of experience. The second thing is people are so afraid of being portrayed as out of touch, as not part of the future. And I think Silicon Valley has given that patina of being part of the future. Bill Clinton came out there, Obama came out there. So there was a reluctance to push back on Zuckerberg, and they took some of his answers as fact. And there was almost too much of a deference to techno speak, whereas this is much more about values. What I’ve said is internet security or consumers’ privacy are too important to leave it to 30-year-old entrepreneurs. It’s not their job. It’s the government’s, Congress ... And they also don’t want to do it. Interesting, Mark has talked about ... I think he should have values. He does not. He does not. He feels like he should not be responsible for the platform he made. And my argument is listen, Dr. Frankenstein. You made the monster. You’re going to have to help us work with it, that kind of thing. Right. So when you talk ... In those hearings, what do you think happened there? What do you think the result is going to be? Because I don’t think there’s going to be any result from that. Well, I think unfortunately the result to some of the people like Mark and others is, “Wow. Congress isn’t going to do anything. We can probably skate. That they ask these questions. We survived for two days. And now what? And let’s just keep kicking the can down the road and delaying.” I mean, that was, I think, the unfortunate result. And that’s why, when we speak to leader Pelosi, she said, “We’ve got to come out with some principles, Internet Bill of Rights, and then some legislation to let people know we’re serious.” So let’s talk about what those priorities are. So, privacy would be one of them. Privacy would be one of them. So, the Obama Administration tried this twice, and it didn’t go anywhere. So this has happened before. But the basic things is when you want to get your health care data, you’re able to get your health care data. You can tell people. If you want to switch from one doctor to another, you have the right to do that. When you want to get your financial data, you have the ability to do that. People should be able to get basic access to their data online. They should be able to ... You should have basic consent on certain forms when that data is collected or when it’s transferred. It doesn’t have to be as far as the GDPR. It doesn’t have to be on every use case where you may be clicking too many times if any time you’re seeing an ad, any time you’re seeing something you’re having to click, but it definitely should be more than just once on the original use of that data. You should be able to move your data if you want. You should be able to make sure that you can delete your data, you can update your data. So I think there are some very basic things. And I say on the homepage, just like when you get into a taxicab you see those passenger bill of rights, you should see, “Here are your rights on these platforms.” Mm-hmm. So privacy is an issue in this Internet Bill of Rights. What else? Privacy, the sense of ... Portability. Portability. The ability to correct or delete, accuracy. Security of your information. And then, net neutrality is a part of it in that you want to make sure that you have access to the Internet. Now, I think people confuse ... There’s net neutrality with competition. I think we also need a competition aspect where you have multiple service options. But you can’t talk about net neutrality in the context of Google in this sense. What would net neutrality look like? It would mean randomized search. So the very sense of having an algorithm that orders search is not neutral. I think net neutrality applies to the internet service providers, but then to the edge providers having real competition, having multiple platforms and allowing that to emerge. And Metcalfe’s law, as you know, the value of a network increases exponentially with the size. And so when you have two billion people, it’s hard to compete, and what are we going to do to foster the ... So why a Bill of Rights? Explain what the thinking is. I mean, I know she, Speaker Pelosi, has said this, but what’s the goal of it? Because one, I’d imagine, let’s just, if the Democrats get in, do actual legislation like you would on a cigarette maker or anybody else, kind of stuff like that. Well, before we get to legislation, we’ve got to agree on the principles. So we could say you have the right to your data, and then we need to figure out, okay, if we agree to that, how are you going to define data? Do you have a right to your name? Well, probably in some cases, but not in all cases. Do you have ... What is personal information? So, the legislative process, which is the goal, which is to actually have legislation guarding privacy, protecting net neutrality, having competition, we’re so far from that that the candid truth ... Yeah. No, we haven’t defined terms. We haven’t even ... We don’t even have the principles right now. We don’t even have a sense of, when should we have consent? When should people have the right to their own data? When should we have the ability to move data? And Obama tried it twice and failed and didn’t get anywhere. So Pelosi’s point is at least let’s get the principles. Let’s get some of the tech leaders on board. And I’ve talked to folks at Apple, at Google, at Facebook, at all of these companies. I’d like ideally Tim Cook and Sundar and others to say, “Yes, we can at least get behind these principles.” The next step would be, let’s get legislation. Mm-hmm. So you have to set out the rules. Why has this not been done before, from your perspective, from Congress? They’re happy to take the money from the tech people. Well, I think there’s ... I think when Snowden happened, the culture shifted the other ... This is Edward Snowden. And the leaking. Yeah, Edward Snowden. And privacy. He became affiliated with privacy in the Beltway. And I think there was not as much of a momentum to care about privacy. So some of the conversation shifted because he became a poster child for it. And it was only after the Equifax scandal and the scandal with Cambridge Analytica that people said, “Look. This is a big deal. We need to do something.” But it’s a very complex issue with a lot of different interests, and Congress has been unwilling to move something. I mean, that’s the truth. And also, I think tech people have been unwilling. I just had Michael Hayden in, former CIA director and NSA director, and he was saying that these companies always felt extra-territoriality. They didn’t feel like they were part of the country. They just operated on their own, and they wanted to have their own rules. And now they, of course, have been pulled rather starkly into the equation because of their impact on it. Now, we’ve talked about this before. I think they didn’t pay sufficient attention to the country, and that’s why we had in part a reaction in this 2016 election where people across the country said, “What about us? Where do we fit in in a knowledge, digital economy? Where is our livelihood?” And that to me still is the biggest challenge. Where is the Moore’s Law going to be for job creation in places left behind? But in addition to the economic dislocation, now people are saying, “Wow, these platforms are still interesting and great.” Most people, I think average Americans like FaceTime. They like their Amazon Prime. They like their Amazon. They like Facebook. They still enjoy these products. The #DeleteFacebook movement didn’t really gain much traction. And when I talk to my cousins in Ohio or my aunt or uncle, they use this stuff, and they often like the products, but they also realize the dangers of it. They realize, “Wow, our kids are getting addicted to this stuff at such a young age. We don’t have really a control over what we’re doing online. We have to make sure that this new world, we have some grasp over.” And then young people were offended for the first time ... Young people, I don’t think, care about privacy as much, but they thought, “Wow, our data was manipulated possibly to support a candidate whose values we didn’t agree with? That’s scary that that’s happening.” And so I think people are waking up to saying, “Okay, we need to have some rules in this new world.” And then they look to the Congress, and they said, “Wow, those are the folks who are going to be writing these rules?” Right, who are making these rules. And so this is the concept behind it. So, talk about the process, because you guys aren’t in power from what I understand, from what I’ve noticed. Yep, unfortunately. Yeah. Yeah. That might change. That might change. Well, the process is we’ve come out with five or six principles that we’re working on. We’re getting feedback from the Center of Public Knowledge, Democracy and Technology, some of the nonprofits, Electronic Frontier Foundation ... So you just went out to everyone and said ... None of whom agree. But go ahead. Yeah, none of them agree. At first, I started, I reached out to Nicole Wong ... Facebook. And Alexander Macgillivray, [who] were the deputy CTOs in Obama’s administration, and Todd Park. And I was taking Obama’s name into Congress, and then someone came up to me and said, “Ro, don’t talk about Obama. We want to get Congress on board, that’s not going to do it.” But there are a lot of people who were thoughtful. So we’re getting their feedback. I’m getting the tech leaders’ feedback. I mean, I’ve said, “We’re open to getting your thoughts.” And the ideal situation is you want ... I would think their thoughts is, “Let us do whatever we want,” but go ahead. Yeah. Well, that’s not going to fly, right? What I tell them is, “This is coming out one way or the other. It’d be great if you get on board with it. And if you have a legitimate criticism ...” Let me give you a legitimate criticism that folks had which made us slightly change the language. We had, “Be notified in a breach immediately.” And they said, “Well, it should be as soon as possible, within three days.” I said, “Okay, that’s reasonable. If there’s a breach, you don’t have to within 20 seconds notify it. Within 48 hours is fine.” But not never. But not never. Which is their practice now. Right. Which is their practice now, right, exactly. Interesting. When the Yahoo breach happened, the reason I got that scoop is because one of the engineers was so upset they weren’t releasing the information, so they told me, because Yahoo was dragging its heels on doing it. That’s not surprising. And think about how different the context would’ve been if Facebook had to notify people about the breach. People would’ve been ... It could have changed the consequences of that election. I mean, the New York Times, others, would have been writing about the Cambridge Analytica scandal on notification or if they have to notify the FTC. So there has to be some notification requirement. But the process is, before the August recess, let’s come out with principles. We’ll get a lot of the Democratic caucus hopefully behind it. And ideally, I’d like to see Tim Cook, Sheryl, Sundar, Satya, some of these tech leaders come out for it and say, “We’re committed to this framework.” And what I tell them — this is overly simplistic, but what I say is — in the United States, we have too few clicks. Europe probably has too many clicks. And the balance is in between. So Europe, you got to ... I was buying my wife a Mother’s Day gift. I went to some European website. I had to click 15 times on consent for this, consent for that. Okay, not the end of the world. It’s a little bit annoying. Here, you don’t ... After the initial agreement, you basically are signing your life away. Download your information now. All right. We’re here with Congressman Ro Khanna. We’re talking about the Internet Bill of Rights that he’s working on. We’re going to talk about that and more other things that are happening in tech — he represents California’s 17th district — when we get back. [ad] We’re here with Congressman Ro Khanna. He represents California’s 17th district. Tell people where that is. I know where it is. It’s Sunnyvale, Cupertino, Santa Clara, sliver of Mountain View, Fremont. All the internets are belong to you. Apple, Google, Intel, Yahoo. Right. Yeah. So, do you consider yourself a fan of tech? Or do you have to be being ... Yes. Well, no. I mean, I assume I probably wouldn’t get elected if I wasn’t, but I genuinely am a technology optimist. I mean, I believe that technology is going to help empower individuals to have better information and better connectivity. I look at the Parkland kids who have used these platforms to mobilize. And I don’t know if I would have won for Congress if it weren’t for tech platforms. I don’t know if Bernie Sanders would have done as well, or Obama. That said, I think there has been, I’m not an unabashed apologist. And I have come out and said ... Which older Congressman in the day would’ve been, because all the companies are there. Right. And I have been critical of tech when it comes to doing more for internet privacy and our rights, but also when it comes to doing more for jobs in places left behind. The knowledge digital economy’s problem is it’s too exclusive. If we’re going through this transformation from an industrial to a digital age and there are only certain places that are getting to participate in the unleashing of creativity and ingenuity and all the great things that the knowledge tech economy allows and so many people are being left out, that’s a huge issue. And it’s an issue for tech leaders to grapple with and figure out. And I think they need to do more to rise up to that challenge. When you think about it, the Democrats were so friendly to tech. It was a much friendlier environment. What’s really interesting to me is to see them being much ... Now, I’m not saying President Trump is very friendly to tech, because he’s not. He’s oddly negative, because they’re big businesses, and ... Although, can I share a story? Sure. Please. Go ahead. I don’t think it’ll get me in trouble. So, I had gone to meet with the president with a bipartisan group on term limits, a different issue. And guess who was right there before our meeting? Tim Cook. And so the president ... Right. He was just here. The president, in a moment of, when I’ve never seen him be self-deprecating, says to the five or six of us members of Congress, he says, “Oh, you don’t want to meet the President of the United States. You’ve got to meet Tim Cook, the person who’s going to be the first trillion dollar company,” which made me think two things. One, he probably does respect deep down some of these tech companies. And two, what has happened to our values? I thought we used to admire people like Rachel Carson and Jane Goodall, and now this is just the celebration of wealth. Look, I love Tim Cook, but it gave me a sense of Trump. So I think he’s ... Yeah. It gave me a sense of Trump. I think he’s ambivalent to tech. He admires that they built something of value, he gets that they’re fueling his stock market, and yet he probably disagrees with their liberal, pluralistic values. Yeah, and he loves to go after Amazon, which is fascinating. Has the Democratic Party shifted away from tech? Because the Democratic Party will eventually get back in power. Right. Probably. Who knows? I’ve noticed from Cory Booker, from different people I interview, it’s a much more negative take. Is it because of the election? Is it because ... I think it’s a ... Maybe nuance doesn’t work in modern-day politics, but my view is it shouldn’t be either-or, right? It went from kind of tech is going to save the world, is going to bring democracy around the world, is going to ... Eric Schmidt gets to eat in the White House dining room, yeah. [Tech] is going to be the answer to all of these problems. Now it’s gone, I think, too far the other way, where you literally have the No Labels group or some of these people starting out, and the problem is, “Tech’s big and tech’s bad.” I don’t actually, genuinely, intellectually, have either extreme view. I think the reality is that the digital knowledge economy has an extraordinary potential. It can connect us in extraordinary ways. It makes the electorate potentially more educated than ever before. Think of this one point. In the 1940s, the average white American had nine years of education, African-American, four years of education. Today, the average white American has about 13 years of education, average. African-American, 12.5 years of education. We’re the most educated society in human history. There’s no reason that these platforms can’t get people more expressive doing things, having their own podcasts, having their own views. I think in the long run, it’s a good thing, but its biggest problem is exclusivity. There are communities — the African-American community, rural America, middle America, women — that have been excluded from this extraordinary potential. Its second big issue is defining the rules of citizenship and privacy in a way that has some ethics standards. Right? Right. I mean, for them to just say ... You can’t have it both ways. Right. You can’t be Facebook and say, “We are bringing democracy around the world.” How often did you hear Zuckerberg say that? “We’re responsible for the Arab Spring.” Yeah. Then say, “Well, we’re not a media company. No, we’re just a platform.” Oh, they’re a media company, yeah. I mean, come on. You can’t say you’re ... Then, “We’ve caused all those problems in the Philippines,” or Indonesia or stuff like that. Yeah, and so okay, if you are a media company, then we’re not saying be like a newspaper and make sure that you fact-check every post, but if I were to post on Ro Khanna’s site that, “Since I got elected to Congress, there’s been 10 percent economic growth in my district, and that’s a great thing and please re-elect me because of that,” the New York Times or the San Jose Mercury News would say, “Ro Khanna goes a bit crazy,” and they would have two people saying how I’m lying and I’m absurd. If I put it on Facebook and I start getting all these shares and “Likes,” at some point it’s not asking Facebook too much to say, “Okay, if it crosses a certain threshold, have some verification, have some ethics check, take some ...” Well, interestingly, they didn’t want that responsibility. They’ve talked about it excessively, like that they don’t ... Mark talks about it, “I don’t want to sit at my desk and I don’t want to make these decisions. I don’t want to do this, I don’t want to do that.” The fault is making a decision, right? Mm-hmm. They’re claiming they’re value-neutral, but their value neutrality is basically saying ... It’s a value. Is a value. Right. Newspapers ... And newspapers, it wasn’t that we regulated newspapers, it was that we had ethics in newspapers, right? Right. Why do journalists, why would a journalist not quote me without asking for two quotes saying I was crazy if I said I was responsible for 10 percent economic growth? Not because they’d fear being sued, not because of the legal framework. Because they grew up with some sense of ethics that they have an obligation to the public. Right. Well, Facebook should hire, in my view, 50 Deans of Journalism from Columbia, Northwestern and others to rethink, to create a new ethics for new media platforms. That’s a great ... It may not be the same as newspapers, but if they want to really lead, right, as opposed to, “Well, we answered the hard blog questions and we did third-party verification.” Part of it is these are really tough questions, right? Right. Right now, they’ve come out with a sense of, “We’ll rate news sources.” Oh god, you don’t know. I have gone round after round with those executives on that one. Right, and so if, so what is the value of Kara’s podcast? If people like the podcast, then it must be true, right? Mm-hmm. You think, “Well, is that really the value of truth?” Right. So the New York Times should have a rating for its reporters, and the most popular reporters would be the ones that get the most credibility? No, it makes no sense. If you’re writing about Meghan Markle’s wedding, then you’re more credible. You’re more credible. If you’re writing about Ro Khanna’s EITC plan and you don’t get any “Likes,” then you’re not credible? Right. Part of me, it makes me think, is it that they’re not well-intentioned? Or is it that they just never took a class in philosophy or literature or ... Well, it’s interesting, it’s a very interesting question. They literally believe that ... And I was like, you cannot, you have to make decisions about things. Adults make decisions, they make choices. I think what they like to do is pretend ... They’re happy to take the money, they’re happy to take the status, they’re happy to take the power, but they’re not happy to take the responsibility that comes with that power. Literally, they can convince themselves. When Tim Cook made that comment on the MSNBC show I did, “I wouldn’t be in this situation,” instead of listening to his entire answer ... He gave a very cogent answer. He was very thoughtful. He’s one of the more thoughtful people. Thoughtful. Yeah. “Here’s why. This is why we think it’s important.” The first thing they did was, “Oh, he’s just trying to make his business better.” Right. That may be, but that doesn’t mean he didn’t say something worth listening to. They were, “iPhones are expensive.” That was their next argument. Like, “Well, he’s running a company where things are expensive.” I’m like, “Newsflash, iPhones are ...” This is not news to anybody who’s bought an iPhone. Yeah. Again, not the point. Instead of going — which I would have expected an adult to do is — “Wow, he’s a pretty prominent, important guy and is thoughtful, and has run a pretty good company there. Maybe we should listen to him for a second.” Didn’t occur to them once. Tim Cook, when you talk to him as you have, his two idols are John Lewis and Mohandas Gandhi, right? Yeah. You get him ... Well, he’s an adult. I don’t know how else to put it. He cares or thinks about the broader world. If Zuckerberg had come to him, “iPhones cost a lot of money and there is a trade-off between privacy and cost. We’re making that trade-off, and maybe new platforms can emerge that will charge a $15 subscription but will give greater privacy protections. This is a trade-off that we need to balance, and our model ...” It’s not thoughtful. It’s just ... They’re not interested in reflection. Yeah. They start from a crouch instead of a, “Wait a minute, we’ve made a mistake.” They’re too cohesive as a group of people, they all agree with each other. Which is, I think, is always a problem with any organization. They don’t think they’re ... They don’t have responsibility for what they’ve done. It’s as basic as that. When we get back, I want to talk about, more about the Internet Bill of Rights and what you’re going to do with it, because I think what’s important is to understand where it goes. Yes. Because I think one of the things that has been very hard is the regulation of tech has to be done in a way that’s very careful. Although every other industry has been regulated, this one has not at all. You’re absolutely right. In any way. No. Can you think of? This big an industry. No, it hasn’t been regulated, and the things that probably will, people are getting behind, “Oh, let’s have the Disclose Act.” And I love Amy Klobuchar’s bill, I’m on it, but that’s like saying if you were going to regulate traffic to say, “Well, don’t put traffic lights or stop signs. Okay, let’s just do some minor lanes,” right? Mm-hmm. I mean, it’s such a small regulation. The question is, “How are we going to actually regulate tech?” We haven’t done anything. All right, we’re going to talk about that and more with Congressman Ro Khanna. He represents California’s 17th District. He’s working on an Internet Bill of Rights, and we’re talking about legislation and how that impacts innovation. [ad] We’re back with Congressman Ro Khanna. He represents California’s 17th District, which is pretty much the internet district, right? That’s all of them. Yes. They’re all in there, aren’t they? These are companies ... Yes. Yeah, we got nurses and teachers and all, too. I know that. We’re going to talk about them in a minute. I want to talk about this idea of regulation of tech, because that’s really what you’re talking about eventually. Yes. This is something they have resisted forever. Yes. Even despite the Microsoft trial, which was 20 years ago, really. It was 20 years ago. Despite all attempts to throttle back tech, it hasn’t had any significant legislation. It has not. Roger McNamee ... and I don’t agree with everything McNamee says, but he had a very good point. He said the 1956 IBN Consent Decree, which allowed, basically it said to AT&T, Consent Decree, which said that Western Digital needed to share their patents, and their patents were for transistors, really led to the spawning of Silicon Valley. In the past, the regulation of industries — whether it was AT&T, whether it was IBM, whether it was Microsoft — has actually spawned competition. Absolutely. Got them out of the way. There was a plug in the hole of innovation. What’s interesting now is instead of just a single company, though, which those were all cases of that, you have separate companies that are all powerful in their own way. Amazon, Google, Facebook, Apple, essentially. Right. They’re all powerful, but you couldn’t say one of them dominates. They all dominate, which is really a different situation, so it’s super hard to do, say, I know Secretary Mnuchin was talking about the idea of ... What was he saying? Regulating one ... Oh, Google or something, breaking it up or something like ... He should keep his mouth shut as far as I’m concerned. Yeah, well, Mnuchin also said we don’t have to worry about automation because it’s not happening for at least 50 years. Right. Well, we’ll get to that at the end, yeah. He should not speak. One point which I would have told him is, 90 percent of our GDP used to go to income, 56 or 60 percent goes now. What do you think, that wasn’t automation? Right. I just wonder, how do they get these people to be running the country’s Treasury Department? Yeah, well, yeah, that’s a good point. That’s another good point. When you’re talking about this regulation, it’s harder to do when you have this many companies, this powerful. You literally can’t point to one that’s making trouble, they’re all making trouble. If you talk to them, as I know you do, they are actually paranoid with competing with each other. Now I’m not saying that ... I don’t think they compete at all. That’s the case, but they are ... You talk to Apple or Google or others and they will spend more time saying how they’re different and the other ones are the bad actors. I say well, from ... Which you get a sense that they’re different, they are. Because you have ... Like, Apple is different from Facebook. Yes. How do you then, when you put regulation in place, you were talking about Europe, which is highly regulated. You have Margrethe Vestager is on their tail. Right, right, yeah, She’s not going away. Right. They’re like, “Oh, we’re going to shake her.” I’m like, “You’re not shaking that woman until she has you down.” Right. “She’s going to have you down.” Here you have Europe doing this, a lot of regulation. Right. Then here, zero. Yeah. The FTC, whatever agency just lets them go every time they get near something. Right. I mean, the FTC doesn’t have the staff and they don’t have the resources. I personally, I mean, there’s a different opinion. I wouldn’t wholesale adopt the European regulator model. I do think that there’s something to the First Amendment innovation, but the answer can’t be out of a scale of 1 to 10, Europe’s regulation’s a nine, we’re at a zero. I mean, why can’t we get to a four or a five? There’s some very, very simple things we could do. We should have, for example, mergers, right? In retrospect, we should have looked when Facebook was saying, “I’m going to buy up Instagram and buy up WhatsApp.” These were direct competitors. Why was there not any ... None. Any sense of, “Okay, should we review this merger? Even if we’re going to approve this merger, should there be a tax because of the cost on society?” Why? Why? Because I think that there was a sense of zero price monopolies. They don’t charge a price, there’s no problem with it. Robert Bork defined, and I trust law to be all about consumer welfare, and that was a turn for the worse. Basically, under Bork’s definition, if someone wasn’t charging a price, it didn’t matter. It goes to live the experience, right? When I have to go buy an EpiPen because I’ve got allergies and I realize, “Wow, it could cost $4,000,” but I have insurance. Folks who don’t have insurance, they say, “We don’t want to pay $3,000 for medicine or a thousand bucks. Those pharmaceutical companies, they’re evil. My grandmother, my mom is not getting, my son isn’t getting medicine because of that.” That’s something very, very tangible. When it’s the internet and you’re not paying anything and you’re saying, “Yeah, but there are these costs of propaganda. There’s the cost of privacy,” it’s a bit more abstract. I think that’s what ... Right, and that’s why they’ve not done anything. Is their lobbying intense on that regard? They certainly have muscled up in that area. They have and they certainly are on the Hill, but I’m not convinced that that is what is preventing the regulation. I think one, it’s a lack of full understanding. It’s a lack of prioritizing, going and doing something about it. There’s the divide between the legacy companies — the AT&T, Comcast — and the edge providers — Facebook, Google and Amazon. I think that those divisions are partly what’s causing the gridlock. It’s, I don’t think it’s as simple as saying, “Well, Google is lobbying and that’s why someone isn’t going to regulate them.” Right. All right, and so you create this Bill of Rights. Yeah. Which could, you presumably don’t want a watered-down version where it says nothing, right? This doesn’t ... No, no. Then I’ll get blasted by people like you. Exactly. That’s a danger, that’s a danger here. Yes, yes. It’s like it’s sort of a catchall. Right. Is it a dessert topping? Is it a floor wax? kind of thing. Right. We don’t know what it is. That’s an old “Saturday Night Live” joke you may not know. You want to have some certain ... People have the right to privacy online. People have the right to ... Those kind of things will be in there. What else belongs in there? The right to ... Knowing your data, I think, is critical. It’s a key part. Is a key part, because you can then request information about how people obtained your data, if they’re going to give your data away. The right to consent in a meaningful way, and that’s the one that’s most controversial. These tech companies don’t want consent part of it. Because it’s a step. Because it’s a huge burden on them to have people having to consent. At one point, I ... I’m not going to mention the names, but some of these lobbyists said ... Where people from these companies were in there and they said, “Ro, you can’t have consent. You’re going to have to click on everything, click on every time you see an ad, and you don’t want consent.” I said, “Look at the language. It says ‘consent if you collect information or you give it to a third party.’ It doesn’t say ‘consent on every use case.’” They kind of paused and I said, “Yeah, that distinction matters.” Here’s the point, it’s not ... You have to be able to push back with them because they will come up with an extreme case. Yes they will. That’s what happened in the hearings. Then some of the members of Congress, they didn’t push back the one extra level. It doesn’t require ... I’m a lawyer by training, I don’t have ... It’s not like I know how to code or I worked at these companies. It’s just doing the homework and saying, “Here’s where we need to push back.” We’re going to get a number of these principles that are going to have teeth. The goal is then to get the thoughtful tech leaders. I think, I’m lobbying to see if we can get Tim Cook and others out for it, because I think that will send a big message that something can happen. Once we get the principles, then I think it will be time for draft legislation. Right. That legislation is going to have to go through the Energy and Commerce Committee, but if you can get the principles, then I think once the Democrats hopefully are in charge ... Then in the Senate. In the Senate, it’s going to have to go through the Energy and Commerce Committee. Who is there? Who is the person you’re working with on the Senate side? On the Senate side, they have their own process so we’ve been very House specific. I mean, obviously, there’s thoughtful people. They’re like Ed Markey and Amy Klobuchar, Senator Kennedy. Senator Warner. Senator Warner. Our focus is, my focus is can we get the House caucus with some of these principles? Can I get some of the tech leaders to endorse the framework? Then can we ... And the groups against the tech leaders. And the groups against them, so Center for Public Knowledge, Center Democracy and Technology. I’ve met with Open Markets Institute. I’ve met with Free Press, the Electronic Frontier Foundation. Can we come up with some compromise issue? Can we come up with some compromise legislation principles? And then let’s start the legislative process and get Frank Pallone, who’s the ranking member, and Mike Doyle, who’s .... So I was going to say there’s a thing called the Republicans. How are they on this? I think we can make progress with the Republicans. Right now, the reality is the Republicans have been very sympathetic to the AT&Ts and Comcasts and the internet service providers, and that’s just been the divide that they have. So they are less concerned about privacy. I mean, AT&T’s got the AT&T bill of rights, which is a little bit laughable if you ask me. But ... I’d like to have Randall Stephenson onstage. I’ll ask him about it. Yes, and ask him about the Michael Cohen stuff. Oh no, he’s not happy about that. He’s going to have to answer those questions. I’m not, you know people are like, “Oh I can’t believe he did that.” And I’m like, “Of course he did it. Why wouldn’t he do it? It makes perfect sense to me.” And he should just disclose it. The one thing I will give it, look, I’ve been critical of AT&T and a lot of the net neutrality issues and others. But maybe one of the interesting things someone told me he was doing is taking linemen at AT&T, giving them full paid credentialing in education and getting them jobs in a totally different field and a different career. And that’d be interesting if you have him on to see how that’s worked. Yeah, yeah. They’re in a hard position in a lot of ways, Ro. As big as it is, it’s got challenges everywhere you go. I would not want ... That’s a tough company to run. But when you have all these opinions, like I said, so you get the Republicans on it, you feel like they’re interested in it, because it seems like they’re interested in nothing. Like almost nothing. There are some of the libertarian members who are interested in privacy, but then they default on those committees to defining privacy the way AT&T, Comcast and the internet service providers define it. And they basically want to go after the Facebooks, Googles and social media companies, because they feel like those companies have made billions of dollars and they’re not getting their fair share. And it becomes ... When it devolves into the Congressional debate, the internet service providers versus the edge providers. If it was, if you took that out of it, and you said let’s just get the basic principles ... And not privacy. And not privacy, I think there will be some that could be sympathetic, but I do think that the Bill — and I’m sympathetic to Frank Pallone, who’s the ranking member’s, point that the Bill should start, especially if we have the majority, when we have the majority, so you don’t get some totally watered-down privacy bill which is what the Republicans would propose, that allows them to claim they’ve done something and not have any of these real principles. We’re talking about what then comes next? If these companies are regulated, they’re facing enormous competition in China, from all across the world. Are you worried about the, I’m doing their side. Yeah, no, sure. The tamping down of innovation? I think it’s kind of hard on them. You know, look. That is where I say we don’t need to go the full GDPR. Right. Which tends to benefit them because they’ve all those lawyers. Right. They’re not smart. That is true, but I don’t think that the regulations on privacy or the regulations about data are going to have some mass exodus from Facebook or Google, or is going to impose some huge cost on them. They’re going to, they have been such beneficiaries. Because of creativity and innovation, genius in some cases, but also based ... The internet, thank you very much. The Federal government. And the Federal government. But benefiting from this trend and this change of the economy. I mean, they have gone, they have two billion people. I’m not that concerned about their ability to innovate. I will defend them when people say, okay let’s just break them up because they’re too big without any thought, or let’s treat them like a utility. But if they want to avoid that ... So you don’t believe in breaking them up? Not wholesale, no. I don’t think, I think ... Not yet. Not yet. I mean, if there are ways. I wouldn’t have approved the WhatsApp merger. I wouldn’t have approved the merger with Instagram and I certainly think it ought to be reviewed. And I don’t think they ought to be treated like a utility where they’ll have a guaranteed rate of profit and have the government ... With the strictures of what, say, Comcast has on them, right? Right. But I do think that if they want to avoid that and if they want to avoid the anti-immigrant backlash and they want to avoid the anti-globalization backlash, they need to get ahead of gaining the public trust by supporting and really implementing privacy policies and taking seriously their obligation to having a reasonable democratic conversation, not having false lies and propaganda. And considering jobs. And I think they don’t understand how much they have to lose, and maybe I get it because I’m in a body that has an 8 percent approval rating. Mm-hmm. People don’t trust members of Congress. They don’t trust politicians. Tech is on the precipice, they have some of the highest approval ratings any industry has had. If I were in one of those positions, I would say, “Wow, what an asset.” At a time where people don’t trust anyone ... Yeah. Oh it’s definitely headed down. And it’s headed down. I’ve noticed it with some of my kids. I was literally in an elevator, and two elevator guys were talking about Facebook privacy. And it’s like, what? The numbers show it has fallen, and Facebook’s brand is falling. But wouldn’t you want to get ahead of that? Wouldn’t you want to say ... Of course. And that’s what I don’t get, and I think that there’s a mishandled ... I mean, they should have had Zuckerberg testify a year ago. They dragged their feet and it didn’t turn out that badly for him. Oh you’ve never seen the Facebook spill over everything. You’ve been slow, Ro. You would know it. Yes. No, no. I mean if there’s any lesson they should learn, I think it should be overcorrect. Unless something is an existential threat to your business, do it. If something is really an existential threat, fine. But is it going to be an existential threat to have stronger privacy regulations? No. Is it going to be an existential threat to allow other platforms to emerge and have some competition? No. Is it going to be an existential threat to think about what you could do for job creation and the fact that when John Lewis is saying in an op-ed that I wrote that technology rights are the new civil rights? That you have whole communities that don’t have equity ... Absolutely. ... in the new economy. Is that going to kill you to do things there? No. So do the things you can do which aren’t going to be existential threats to your business. And I think they are, there is a spectrum. I think people, there’s some people like Tim Cook, and he’s not perfect, but we’ll get there. We’ll talk about a business and moral responsibility. And lastly, jobs. You’ve mentioned them a couple of times, and you and I have talked about this before. And you know it’s one of my big issues. I do. With automation, robotics, AI, self-driving, all these things. Where is Congress going to be on that, on that issue? We’ve got a ... Because who’s responsible? That’s my big thing. Is it the tech companies? Is it citizenry? Is it Congress? Is it government? Like, where is the responsibility? I think it’s all of the above, but I think Congress needs to lead. One of the things we ought to do is create tech institutes across America. There’s a National Science Foundation that has a grant, that does this in 60 to 70 places. But like the Land Grant colleges, let’s create these institutes across America that’s not going to just teach people to code, but is going to give them credentialing and certification if they want to become an auto repair mechanic, if they want to become, in West Virginia, do outdoor recreation, but have the technology skills. Right, to do it. Let’s create subsidized employment where they get the opportunity to get a job. Let’s figure out how we can bring anchor companies through Federal government grants into places that don’t have them. And then if I were a tech company, I would think about what can I do symbolically to get more people invested in the digital economy success. Two quick points. When Hillary was running, I told John Podesta, I was just a candidate. I said instead of coming out for the 15th fundraiser in my district, you know, have one of these tech leaders go out and announce 500 jobs in Ohio. And he said, “Ro, that’ll be PR. It’s like the carrier deal. It’s not really substantive.” Well, first of all, the guy who did the PR ... Good point. The reason he won is because he sent a signal to people that he cared about them. And this struck me when I was in Oakland in Merritt College, and they had asked me to help set up some internships at companies. And Facebook, to their credit, took a few of these kids who were doing cybersecurity. And I talked to one of them and he said, “Ro, thanks for making that introduction.” And I said, “Oh great.” So let me tell you what that meant. I’m an auto repair mechanic. I think building is building, whether you build the cars or you build on a computer platform. I’ve got a young kid, I’ve got a family. I take this class in the weekends and I do my homework, and it ends up adding 30 hours to my week. And there are many, many days that I think, “Is it really worth it?” Well, after I did that internship, I’m not going to quit. Right. So many people like me, we saw opportunity at every stage of our life. When I was in college, when I was in high school. And so when you have the break-ups, when you have the hardships, you keep going because you know that there’s light at the end of the tunnel. For so many Americans, they don’t see the light. They don’t see the future. They’re scared of the future. And yes, it’s symbolism. But the symbolism matters. It says you can do this too. So I think the tech companies can engage in some of the symbolism, but also really thinking about distributed networks of jobs, but they need the Federal government to partner. The Federal government has to have a huge role. And to think about regulation. I was at a parent/teacher meeting the other day and it was about, we were talking, we will ultimately get to whether kids should code argument. And every parent in these groups of parents and stuff ... Right. And it goes on and on. And it’s sort of like, I can’t believe we’re still arguing about it, of course it’s the language. But it doesn’t mean it’s just coding, not just. And that often defaults to a certain kind of student kind of thing. It was more, one of the examples that we were giving was, look, think of self-driving cars. They’re coming period, period, end of story. Yes. They’re coming, we’re going to have them. How do we want to regulate them? Who wants to design them? How are the algorithms going to go into them? Who’s making it? And then who makes the decisions about those? Because just a simple thing, facial recognition. Who’s designing? What’s happening around facial recognition? People of color are getting left out of this. They’re not getting recognized as quickly. That’s interesting. You know, because it’s being designed by a certain kind of guy ... Yeah. ... Like a white guy who’s designing, making the decisions that are important to them. And they can’t help it because that’s where they are. No. But if you take it to an extreme, when you’re doing facial recognition and it’s not as good at finding people of color, they will run over you. Like it’s not just they won’t pick you up, the cabs won’t pick you up. They’ll run over you. That’s a great point. You think about it. Like if they’re not thinking of those issues. And the same thing on Twitter. I remember being with a Twitter engineer, like, “I’ve never been abused on Twitter.” I was like, “I understand that, but everybody else has been.” Yeah. They didn’t think, they didn’t correct for anything that they didn’t understand. So instead we get in San Francisco, you get scooters and a really great take-out. Who likes scooters and a really great take-out? Right. No, I mean it’s a ... These are social platforms excluding half the population as a consequence. Right. It’s just a thought process. Yes, it’s a really thoughtful way of putting it. Or if you think about the #MeToo staff, the two stories that broke them. A bunch of women and a gay man broke those stories. Why? Right. There’s a link. They understand victimization. Sure. They’ve been victimized. They have ... And it doesn’t mean they’re victims. It doesn’t mean they want to whine about it. But they saw it when you can’t see it. Right. The abuse. So I think that’s one of the things. The same thing with Congressmen. When I saw that group of people asking questions, I was like, “These are not the people that need to be asking the questions.” Well, Kara, I think a very ... I’d support a Kara for Congress, a Kara for Senate campaign, if you do decide to get in. But here’s ... I want to be Governor, I want to be Gavin Newsom. Gavin, I’m taking your job. Yeah, for President in 2020. Here’s, I think ... Do you think those tech people are not going to run for office now? I think it’s harder, don’t you? Oh yeah. I think Zuckerberg’s presidential hopes have gotten dashed, because don’t forget, there may not be regulation but it’ll be tough to see that. But here’s, I think, why it’s scary and why that hearing — which you and I both share frustrations for — mattered more than we even think. People understand what you’re saying, that we have this whole future coming, and they’re scared about it. They’re scared about what the rules are going to be, and they’re scared about what jobs they’re going to have. And so, they see a bunch of people ... all of us are supposed to help chart that future, and they say, “Wow, we got no confidence in them to help navigate this. You know what, let’s just default to the guy who’s saying we can keep the past: Donald Trump.” Right. You know, the only way they’re going to not default to that nostalgia is if they have confidence that these people in Washington, they know what they’re doing about the future and they’re going to make sure that future is better for us. 100 percent. And I think that’s where there was such a blow to people who were seeing their elected officials, and I know this and that’s why I think we need more folks to spend time in Silicon Valley on these tech platforms and really have the confidence to push back. Right, right. It is true. It is interesting, I was in Kentucky. I was talking to a bunch of coal mining people, and my family has a coal mining background. And they were like, “Well, he said he’s going to make jobs.” They said, let me just explain something to you. It’s going to be done by robots and it should be done by robots. Yeah. And sorry to tell you that but you shouldn’t be ... humans shouldn’t be coal mining. Humans shouldn’t be putting things in boxes. Humans shouldn’t be doing a lot of jobs that are either dangerous or stupid or mind-numbing and they’re not going to be. Because guess what, these big businesses, they’re not hiring you to do that if robots can do it faster. Well, there’s a brilliant philosopher, Roberto Unger, who’s a Brazilian minister, and he has this whole thing about the knowledge economy being unleashing human creativity and ingenuity and making the work that is harmful to people less necessary. But his whole point is right now that’s only working for like 10 percent. Right. So if you’re not getting to participate in this new economy, you’re going to be very suspicious. I went to West Virginia ... Yeah, you did this ... Tech, and so I asked one of these coal miner’s kids who was doing tech, I said, “What would your brothers who are in coal say to me?” And they said, “Well, we go 10 feet under and get dirt on our face, then tell that Californian congressman so that they can get electricity.” And I said, “So do they think coal is going to be there?” He said, no, they get that it’s temporary, but there’s a small resurgence right now and there’s not a clear vision of something else. Why are we pouring billions and billions of dollars into West Virginia to create new industries, new jobs, where we’re saying transition, but then we’re not giving them what the transition is? Yeah. So do you blame them for saying, we’ll pick the ... The guy who’s ... ... Who’ll cling on to the past. No, I don’t. And that’s a topic for next time. There’s lots more to talk about because then you can get into universal basic income. Whether we should work 40 hours a week? Why do we work 40 hours? And then we didn’t even get to tech addiction. But we’ll do that next time because that legislation’s coming, I’m guessing. And it should come. You know, I rarely talk about my son, and he’s 10 months old and it’s amazing to me with all the toys, he still goes for the iPhone. iPad, yeah, iPhone. So there’s something to it. It’s like sugar. Have you given your kid sugar yet? No, no. Give them ice cream and watch what happens. It’s really quite a ... Oh. It’s the same thing, it’s the exact same thing. It’s something in your brain that is just so attracted to it. But take some time, trust me. I have two teenagers and getting them away from Snapchat is literally like cutting their arms off. That’s the same thing. Right. But hopefully Snapchat won’t be around for your kid. We’ll see. Anyway, it was great talking to you, Congressman. Great. And thanks for coming on the show. And you’ll be back again and again, I hope.

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posted 2 days ago on re/code
People are going to pirate World Cup highlights. What can social media companies do to stop them? The 2018 World Cup has started, which means you’ll soon see a lot more soccer (or football, depending on where you’re from) on Twitter or Facebook or anywhere else you hang out online. And because the World Cup is a massive global event, people will inevitably want to share highlights from the games online, even if they don’t have the rights to do so. This was a problem four years ago. Rights holders for the 2014 World Cup, ESPN and Univision in the U.S., had to file complaints with platforms like Twitter to stop users from posting highlights and, in some cases, had to complain directly to media organizations that were sharing World Cup clips without permission. This year, Sony, which owns World Cup broadcast rights in India, has already issued a warning to potential streaming sites that may try and pirate 2018 matches. A day and half into this year’s tournament, pirated highlights are already appearing online. A search for “Russia Saudi Arabia” on Twitter returned a number of video highlights of goals, posted by regular users, from yesterday’s opening match. On Facebook, you could see entire highlight reels from Russia’s 5-0 victory from Pages like “God55Sports” and another called “Away Goal.” So what’s the plan to stop this? Fox Sports, which paid more than $400 million for the English-language broadcast rights for the 2018 and 2022 games in the U.S., told Recode that “FIFA takes the lead on anti-piracy enforcement,” and declined to comment further. Facebook and Twitter and YouTube all declined to comment on specific plans to combat piracy, but pointed us to their respective policies or technology features meant to prevent pirated content from spreading. FIFA did not reply to a request for comment. Either the platforms have a plan for stopping this kind of content and aren’t sharing it, or they don’t have a plan for this, which seems hard to believe. In either case, the onus for chasing down violators is on the rights holders, who either need to complain to the platforms to have stuff taken down or upload their content to Facebook or YouTube, which both have technology to then take down illegal copies automatically. Facebook Facebook, for example, has what it calls “Rights Manager,” a feature that scans the service looking for videos that match whatever videos the rights holder uploads into Facebook’s system. The rights holder can then choose to leave the video up and monetize it, or have it removed. The system even works with live video streams, according to a company spokesperson. The rights holder feeds a “reference stream” of the video into Facebook’s system and the matching technology works simultaneously to search for other, duplicate livestreams. Rights Manager didn’t exist four years ago, which means we could see fewer pirated soccer highlights on Facebook and Instagram than we did in 2014. YouTube has a similar feature, called “Content ID,” that does the same thing, including matching pirated live video streams, according to a company spokesperson. Rights holders can ingest live events into YouTube’s system for matching purposes as they are happening, and then the technology will simultaneously look for duplicate streams. Twitter, meanwhile, says that it responds to takedown requests from a rights holder but doesn’t proactively go hunting for clips or use any kind of matching technology like Facebook or YouTube. That could pose a big problem considering Twitter is best suited for quickly sharing clips of goals and other highlights that then go viral. It’s in the best interest of these platforms to do a good job policing their services, though, as most of them have deals with broadcast partners to show World Cup content. YouTube is boasting that it will show official highlights from some 80 broadcast partners during the 2018 tournament and will stream the games live in the U.S. through YouTube TV. Fox is producing a live World Cup show for Twitter and is also partnering with Snapchat for official “Our Stories” productions around the games. Broadcasters want people watching as much World Cup as possible, but only if they’re the ones benefiting.

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posted 2 days ago on re/code
We have some ideas. We still don’t know what Apple’s TV plans are, but we do know Apple wants us to know it is serious about its TV plans. Latest example: Apple says it has a “unique, multi-year content partnership” with Oprah Winfrey, who will “create original programs that embrace her incomparable ability to connect with audiences around the world.” Apple didn’t offer any other details about what Winfrey would make and whether she would star in the stuff she makes for them, though it’s a very reasonable bet that she will. She’ll continue to work on other projects, like her Oprah Winfrey Network and CBS’s “60 Minutes.” Also not spelled out in Apple’s brief message to the press: Whether the “content partnership” would extend beyond video projects. Apple’s Winfrey announcement follows similar announcements about video projects involving Jennifer Aniston, Reese Witherspoon, Steven Spielberg and other well-known creators and brands, all engineered by Jamie Erlicht and Zack Van Amburg, the former Sony executives Apple hired to reboot its original content plans last year. But Apple still hasn’t told the world — or most people in Hollywood, including some of the ones it is making deals with — what it plans to do with all the stuff it is making. Except that it won’t be ready to roll that stuff out until the spring of 2019, at the earliest. In the meantime, here are some of the theories and thoughts TV and media executives have about Apple’s content plans. Note that these aren’t mutually exclusive: Some industry observers expect Apple to make some or all of the content available for free for users of Apple’s TV app, which Apple first introduced as a would-be TV guide/hub a couple years ago, and is installed by default on all of its devices. Apple has told some industry executives it intends to strengthen that hub by making it a focal point to sell subscriptions to other companies’ TV services, as Amazon already does. Other watchers are convinced Apple will bundle all of its content into a very big subscription service, which would include Apple Music, along with other benefits like AppleCare. Most interesting and confusing to me: One TV executive who has talked to Apple tells me Apple says it intends to sell a standalone subscription to its original video shows, priced below Netflix, whose standard offering costs $11 a month in the U.S. Hard to figure out what the consumer proposition for that standalone subscription is: Even with the flurry of programming announcements Apple has made in recent months, it is unlikely to have more than a couple dozen shows ready for air over the next year, and it has yet to acquire a library of content to backstop the new stuff. Meanwhile, every other digital TV subscription service, from Netflix to HBO Now to CBS All Access, offers a mix of new shows backed with a large catalog of older stuff. It’s possible that Apple will argue that its stuff is so special it’s worth paying a few bucks a month for it. Or, alternately, that Apple doesn’t really think many people will pay for a standalone service, but wants that option out there as a way to illustrate the value that consumers will get if they get Apple’s stuff via some other offer, liked a bundled subscription. Apple declined to comment on its content plans.

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posted 2 days ago on re/code
Plus, AT&T wasted no time completing its merger with Time Warner; Steve Bannon wants to disrupt banking with cryptocurrency; machine learning predicts the World Cup winner. Facebook’s policy and communications head, Elliot Schrage, is stepping down after a decade with the social media giant. Schrage will stay on to help hire his replacement before transitioning to the role of an adviser to Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg. He has been criticized for the company’s response to the Cambridge Analytica privacy scandal. Meanwhile, Aleksandr Kogan, the former Cambridge Analytica contractor who reportedly harvested personal data on up to 87 million Facebook users, is set to appear before a Senate panel next Tuesday. [Kara Swisher and Kurt Wagner / Recode] AT&T completed its acquisition of Time Warner, just two days after a federal judge ruled that the $85 billion merger could clear and just hours after the Justice department said it would allow the deal to close. Law professor Tim Wu, the author of “The Curse of Bigness: Antitrust in the New Gilded Age,” has some second (and third) thoughts about the court’s decision to approve the megamerger. [Jacob Kastrenakes / The Verge] Here’s a look inside Amazon’s $3.5 million competition to make Alexa chat like a human. Each of this year’s eight teams, selected from universities around the world, will build chatbots using Amazon’s resources — basic speech recognition tools from Alexa, free computing power from Amazon Web Services and stacks of training data from tens of millions of Alexa users. [James Vincent / The Verge] After being pushed out of the White House and then Breitbart News, Steve Bannon is now focused on cryptocurrencies, which he thinks can disrupt the financial world the way Donald Trump disrupted America politics. [Jeremy W. Peters and Nathaniel Popper / The New York Times] No one wants to work at the White House, so it’s having a job fair today. Despite the president’s insistence that “everybody wants to work in the White House,” the steady stream of exiting officials shows no sign of slowing. The Trump administration is looking for “competent conservatives” of “every experience level” at the Executive Branch Job Fair at the Dirksen Senate Office Building. [Adam K. Raymond / New York] Recode Presents ... Do you have questions for entrepreneur Anil Dash? He’ll be joining Kara Swisher on an upcoming episode of our Too Embarrassed to Ask podcast. Tweet your questions for Anil with #TooEmbarrassed or email them to [email protected] today before 9 am PT / noon ET. Top stories from Recode AT&T can buy Time Warner. What does that mean for everyone else? “This is going to reshape the media world,” Recode’s Peter Kafka says on the latest episode of Too Embarrassed to Ask. This is cool Machine learning predicts the World Cup winner. And here’s a guide to all 736 players from 32 squads.

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posted 2 days ago on re/code
“This is going to reshape the media world,” Recode’s Peter Kafka says. After U.S. District Judge Richard Leon ruled that AT&T could buy Time Warner, likely ending a lawsuit brought against the companies by the U.S. Justice Department, everything changed. “Anyone who had any concerns about whether a media merger would be blessed is now assuming they can go ahead and buy whatever they want,” Recode’s Peter Kafka said on the latest episode of Too Embarrassed to Ask. Most immediately, the ruling prompted Comcast to make a $65 billion bid for 21st Century Fox, which Disney had been publicly courting at a lower price. And any other tech giants like Verizon, Charter or Amazon that might have had qualms about big M&A can now start sniffing around media companies if they want to mirror AT&T’s planned marriage of distribution and content once it owns Time Warner’s channels, such as HBO, TNT and TBS. “Now you can go ahead and do it,” Kafka said. “It doesn’t mean they will. Verizon may not buy a media company for Verizon-specific reasons … but anyone who was thinking about this really no longer has to worry about, ‘Can this deal get through regulators?’ Right now, go for it.” Among the three companies noted above, he predicted that Amazon might be the first to explore a big, game-changing content company acquisition. “I think everything they’ve done to now is still them playing around, and they’re stopping and starting,” Kafka said. “They’re the ones who go, ‘We are a technology company, but fundamentally, we sell stuff to consumers. We use tech to do it. We’re less hung up on the idea that we’re a platform.’” You can listen to Too Embarrassed to Ask on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. On the new podcast, Kafka also talked about the broader implications for consumers of these mega media mergers. In particular, he called out the FCC’s coinciding repeal of net neutrality, which took effect on Monday, June 11. “You should be wary when all the stuff you like to consume and/or need to consume or think is important to democracy to consume starts getting owned by a smaller group of people,” he said in reference to Disney or Comcast buying Fox. “That has been happening for decades, but now it’s really going to acclerate. It’s worrisome.” “And by the way, this is all happening while net neutrality is now officially off the books,” Kafka added. “So when you have a big content company combining with a distribution company, there’s even more temptation to make it more difficult not to consume rival content.” Or, to borrow an analogy from “30 Rock,” there’s even more temptation to make corn chips that cause indigestion: If you like this podcast, make sure to check out our others: Recode Decode, hosted by Kara Swisher, is a weekly show featuring in-depth interviews with the movers and shakers in tech and media. You can subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. If you like what we’re doing, please write a review on Apple Podcasts — and if you don’t, just tweet-strafe Kara. Tune in next Friday for another episode of Too Embarrassed to Ask!

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posted 3 days ago on re/code
He explains Vox’s new Netflix show, “Explained.” On this episode of Recode Media with Peter Kafka, Vox.com Editor at Large Ezra Klein talks about Vox’s new Netflix series “Explained.” The first season of the show, which debuted May 23, features 20 mini-documentaries about topics such as monogamy, cryptocurrency and the racial wealth gap — topics that are too big to be tackled in a three-minute YouTube video. You can read some highlights from the interview here or listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Below, you’ll also find a lightly edited transcript of the full episode. Peter Kafka: This is Recode Media with Peter Kafka. That’s me. I am part of the Vox Media podcast network. I’m here at Vox Media headquarters in New York City. If you like this show, please tell someone else about this show. This is a very exciting crossover episode of Recode Media. I’m sitting here with Ezra Klein, founder of Vox.com. What’s your current title, Ezra? Ezra Klein: Editor at large. Editor at large, polymath. You are ... That’s not actually in my title. TV guy, now a Netflix guy. Now a Netflix guy. Writing a book guy. Fighting for thousands of words with other podcast hosts via email guy. We’ll talk about all that. But we’re talking today specifically about the Netflix show. What’s the name of the Netflix show? “Explained.” It’s just called “Explained?” It is just called “Explained.” I should know some of this as I’m a Vox Media employee. This is some solid research you’ve done. Yeah, I did some Googling. Title. I watched some episodes. They’re great. So this is ... In your words, tell me what the show is. We came up with the idea for this show a couple years back. When we launched Vox, there were a couple of ideas behind the whole operation, I would say. And one of the big ones was that the underlying technology on which we were doing journalism had changed. It had changed in a bunch of ways, but one of the ways it had changed is that it had become persistent. When you’re writing in a newspaper or you’re showing something on cable news, one of the fundamental qualities of that is it’s going to go away. People can’t keep the newspaper in their house forever; they run out of room, it gets moldy, they breathe in spores, they get sick. Cable news, after something airs, it’s gone. Where do you find it? One of the things about the digital era is that things stick around. You have links. And not only are those links always available if you’re doing your hygiene on your website correctly, but they can be updated, they can be put back on the front page. They’re always manipulable. And similarly, at the same time, we were seeing the development — it was a little bit newer — but we were seeing the development when we launched Vox of the Netflixes and Amazon Primes and Hulus and so on of the world where you all of a sudden had these libraries of content, of video content that were, again, always there. And so we began thinking, how could we do ... What would it mean for explainer journalism, the kind of stuff we love — and we can talk about what that is — to be in a place where instead of going away, it stuck around? What would it mean to create a show where we’re telling people about and trying to help them understand really important things in the world around us, but we were doing it with the knowledge that somebody would be watching these episodes in a year, in three years? This show “Explained” is ... What we’re doing with it is picking, every week, a new topic — the racial wealth gap or monogamy or cryptocurrency — and trying to give people a real understanding about that topic. Talking to the top people in it, trying to work our way through the thorniest questions of it and recognizing that what we’re doing here is laying the groundwork. We want it to be the case that if you watch our crypto episode, our racial wealth gap episode, that you now understand that issue well enough that all the stuff that will be new and disposable and changing about it in the coming years will make sense. That if there’s another Mt Gox hack or whatever, it’ll all make sense to you from here on out. It’s a very Ezra Klein answer to, “What is your Netflix show?” That was great. You’re welcome. Another way of putting it, the shorter version is these are ... I don’t do a shorter version. I know, it’s great. Well, we were talking once about podcasts and he said, “You know, your podcasts are running half an hour at the time. That seems too short.” I’m like, “Eh, that’s about right for me.” He said, “I need to do at least 90 minutes.” Oh yeah. We’re not going to get to 90 today. You haven’t seen how long my answers are. These are 15- to 18-minute videos, which is unusual for Netflix. They have not really done short-form up until now. These are, if you’ve seen a Vox.com video on YouTube or Facebook, pretty similar, right? I don’t think so, actually. I think there are certainly ways in which they’re informed by ... There’s no doubt that this is a scaling up of journalism we’ve done. By the way, I don’t mean that as insult. I don’t mean that in a bad way. I think our videos are amazing. They’re great. They’ve been nominated for big awards, people like watching them. Emmys, Emmys are the awards you’re mentioning. They like watching them, they’re genuinely good. It’s not like lots of other video you see on the internet. It’s really great stuff. And to me it seemed like, “Oh, you’ve taken a format that you’ve gotten really good at, you’ve taken the people who create that stuff, and you’re porting it to Netflix.” I talked to someone here who said, “Oh, there’s more budget.” But you can’t really tell there’s more budget unless you’re producing it. Yeah, I disagree with that. So again, it looks like you’ve taken one thing that works and said, “Well, we’re just going to move it over here and tweak it a little bit, but bring it basically to a new distribution format.” The place where I’m not sure I buy into that, and I think that might just be ... look, I’m on the other side of the camera on this stuff so I see what goes in on the other end. The kinds of questions we have been able to take on and answer in the bulk of web video were just a very different kind of question. So the scale and ambition of the journalism was, we couldn’t hit some of the things we wanted to hit in the way we wanted to hit them. When you’re doing a video and you are going for somewhere between three and seven minutes, and you’re doing it with one producer and you’ve got a week to work on it, at the beginning of the editorial process you have to define a question that you can actually take on that way. There are many questions you can. I think that the team, that we’ve in general, done a really good job on those kinds of questions. But say the racial wealth gap is not one of them. You can’t do the kinds of on-the-ground reporting combined with ... One of your most successful videos explains the Syrian civil war, right? Yep. That worked, right? I agree with you. That’s a pretty knotty, heavy question. We have had some videos — we’ve not been able to do this in every one — we have had some videos that have been big, ambitious expansions of what our norms are. Over the past couple of years, we’ve begun to do more of them, but we have not been able to do that at a clip or honestly ... If you look at the Syrian civil war video , for instance, one of the things about it is there’s no on-the-ground reporting in it. There’s no interviewing in it. It’s an extraordinary video. It’s one of the best things Vox has ever produced. But the set of tools that we could bring to bear on it was really different. Right, so I think if you’re inside, and I’m a little enough inside to go, “Oh, they went on location and they talked to so-and-so,” but I think if you’re a regular consumer, you think, “Oh, this is a short video. It’s shorter than an hour-long documentary. It’s short enough that I could watch it en route to something on my phone.” I made a point of watching your screeners on my phone; they work really well there. It’s, again, it seems really like a logical extension of stuff you were already doing. It’s the same talent. You’re doing it, Joe Posner, the guy who creates all your videos, is doing it. No, it’s a whole new team. The credits look all the same. I know that you brought in all new people because I had to go to the WeWork for a while because I was displaced. Sorry, I want to be careful on this because I don’t want people who deserve credit not to get it. As with a lot of things, there are members of our original team who were involved. I’m an EP, Joe’s an EP. We have a 20-person team that is all new on this show. Now, a lot of our other journalists are involved. Some of the episodes come from folks who’ve been on, some from folks who don’t. But I just want to be careful on this because a lot of people have come on in the past couple of months, worked incredibly hard, and I don’t ... Yeah, I don’t want to take credit from them. Duly noted. Is this the show that you pitched? I know you guys were interested in TV for a while. Is this the show you thought you’d do from the beginning? Is this the show that once you got to Netflix, you said you wanted to do? How did this evolve? This is the show we pitched. One of the really great things about working with Netflix on this has been from the beginning, they were into the thing we wanted to do, not the things we were a little worried but sort of willing to get cornered into doing, if that makes sense. Because I’m assuming that a version of this, or a version of when you went out and talked to people at various networks, is, “Oh, let’s do an Ezra Klein interview show,” or other variants of that, or “Instead, let’s not take what you’re doing on the internet and put that on our TV network or on our SVOD. Let’s do something else.” We never pitched to Netflix or most of these networks. We have ... I’ve talked to people about interview shows at different times and have not gone into that direction, but when we went out and did our roadshow with different networks, we decided that the first show we were going to do no matter what was going ... If we were going to go into TV or streaming or one of these networks, we were going to start with the explainer journalism, that if Vox was going to create a beachhead there, it was going to be in our core editorial mission for the audience. It wasn’t going to be a spinoff or secondary thing, which if it had been me or you can imagine a documentary series, it was based off a particular regular thing we did. There are things you can do where you’re monetizing some of the intellectual property you’ve created as a journalistic outlet into some kind of TV. It was really important to us — who knows where we go from here? — but it was really important to us that the first thing we did was we have made a promise to the audience as Vox about what we were going to do for you, and the first show we create is going to fulfill that promise. Netflix is core to what I think about and write about and talk about. I make a point of bringing on [people] who make Netflix shows, I want to ask them what that process is like. It’s one of the reasons you’re here. Inevitably, they say, “We pitched the show to Netflix and they said, ‘Great,’ and we went and made it.” They didn’t really have a lot of notes. I keep waiting for that to change, especially as Netflix gets bigger and has more power, and also has a better idea of what they want. So what was their level of input like on this show? One thing, to be honest, is I don’t have anything to compare it to. I have never been an EP on a show that was working with a ... I found them really easy to work with. They’ve had notes, but I just found their notes, in general, really helpful. Do they ever say, “Look, we have a 150 million, 125 million, 100 million subs. We know from our data ...” This was a big thing when they started doing “House of Cards,” this was going to be data-informed. “Our data tells us that our customers like X or Y and not Z.” Did you get that kind of feedback? No. No. What kind of feedback did you get then? I do not know what feedback I should convey here so I’m probably not going too deeply into it, but the kind of feedback I got is very much the kind of feedback we have expected. They watch the episodes and they send us a series of ideas on things they liked and didn’t like in them. We greenlight in consultation with them. They have, to my great gratitude, had a fair amount of trust in us. I think there have been places where we’ve been like, “Let’s try this.” And there’s been a little bit, but in the end, they’ve listened if we think something is a really good idea. And we also take their feedback seriously. It has been a partnership. But again, one of the hard things for me here is that I can’t tell you if that’s different or it’s more notes or less. Yeah, I’m not asking you to compare and contrast. I’m asking you to compare to what you thought it would be like going in. This is mostly, to be honest, I think it’s been more or less what I thought it would be like. And this is a little different. In addition to these being short-form, they’re going to release a bunch at a time, right? We are going to release three at once on the 23rd, on May 23rd. And then after that, it’ll be one a week. The first season is 20 episodes, so it’ll be one a week for 17 weeks. And these aren’t time-pegged, right? These will be about ... Mm-hmm. And intentionally so? The idea is that they can live for a long time. We’re intentionally ... One of the things that I think has been important in the editorial process is we are being pretty tough on ourselves, and Netflix has been very bought-in on this, that these are shows you should be able to watch in a year. We should at least be able to believe you can watch them in two years. A lot of the things we are doing here, certainly there will be changes in the underlying topic, but they should not be big enough or we should not expect them to be big enough that this is disposable. We’re not doing the Trump in Russia investigation. That’s not a topic that would work for this show because by the time we brought that episode out, that episode would be outdated. Right. Do you think, “Boy, it would be interesting, if we can’t do Trump Russia. There’s no way, it’s constantly going to get lapped by news. But is there something we can do that has echoes of this, that’s relevant, that goes 50 years back?” We definitely are thinking a lot about that. We are definitely looking ... And this is the thing about expeditionary journalism in general. What we’re trying to do there is find the context around issues people are talking about, things people are seeing, things that they’re living out in their lives. What is this piece of news? Or what is this part of life actually part of? What is its bigger frame? And so we’re often looking for what we call the zoom-out. We’re often looking for, “Okay, yeah, it looked like it was part of this, but step back, and it’s actually part of that.” So on a lot of these different topics, we are seeing something we see in the news or we are seeing something that people just talk about a lot and trying to then ask the question, “Okay, do we have something bigger we can put this in the context of after doing the reporting and after doing the research?” So you kind of look at it like, “Oh, okay. I get where this fits into everything. I get what this is really a part of.” Vox.com is published on the internet, which really means you create stuff that is designed to be consumed on a mobile phone. I told you I made a point of watching this stuff on a phone. Netflix, the majority of their viewing still happens on a TV. Have you thought about, “All right, are people going to watch this on a phone? Are they going to watch it on TV? Do we create things differently with that in mind?” This would probably be a better Joe Posner question because I’m a little bit less involved in the visual design of the show. Or even just how they’re going to ... Or do you think about how they’re going to consume it time-wise? Anything else? I have not beyond ... We try to be very audience-focused, but I don’t know. I have a little bit of a weird view on this compared to a lot of other editors in this space. I think that we, in the media, are spending too much time trying to game platforms and devices. There are, particularly early in the adoption of a new platform or device, there do tend to be quirks of that space that you can take advantage of and boost viewership or readership or whatever it is for a little while, but over the long run, actually, people tend to gravitate toward quality content across different areas. So of course it has to be usable on different devices. If you have something that does not display on a phone, it is not going to get watched or read or whatever on a phone. But I am a lot less sold than other people are that these devices have very different habits or these platforms have very different habits. And I think, to me, the archetypal example of this is Facebook silent video. Facebook comes out, they create a product that will do auto-play. You guys and your audience knows this story better than I do, probably, but everybody jumps on that and begins pumping out this silent newsreel video. Silent newsreel that has to get your attention in the first few seconds. It’s front-loaded that way. One way of interpreting that is, “Oh wow, people have found a whole new form of user behavior here. There’s this big untapped demand out there that there wasn’t before and we’ve gotta fill it.” Another version is, “Actually, we’re gaming the system and it’s going to work for like two years.” Our view at Vox is this is kind of gaming the system, we’re not going to do this. So what is our biggest-ever Facebook video? As you’ve said, it’s a seven-and-a-half minute dive into the Syrian civil war. We began seeing that kind of thing really early. That informed us in saying, “You know what? People do not want this other thing.” They do not just want this low-touch, low-energy thing. They actually want good stuff. And it’s probably not there. Why are they not seeing it? This is not there. There’s a corollary there where a couple years ago the most engaged story, 2016 I think it was, per Chartbeat, was a very long ISIS piece. We again, at Vox we’ve seen this over and over and over and over again. There is also this whole thing about the YouTube and Facebook videos, super different. Some places have found it is, we have not. We have made decisions about how we did our video that we’re only going to do video ... we’re only going to judge the video we did on how people consumed it as video. The more we did that, the more we found that the things that really worked would work in a lot places. When we thought about this show, we’re thinking a lot about the Netflix audience that has a different characteristic than the audience we’ve built. There’s going to be some overlap but obviously it’s a much bigger audience. We think a lot about that. But the question, are people going to watch it on the phone or a tablet, I think if it’s good they are going to watch it. The other related interesting question — we can’t have an answer for it yet because you won’t know — is you have an idea of how things travel on YouTube and Facebook, for one thing, data. You get to see, “Oh, people came through this door to watch this show and they stayed this long.” So one, Netflix is a black box. They’re not going to tell you what the viewership is and you also are not going to know how they’re getting to it. You’re not going to know how people found it and how much of this is dependent on Netflix putting it on their homepage versus you talking about it on your Twitter feed. People finding it that way. I would assume especially someone like you. You’ve grown up digitally, publishing things digitally, getting feedback. A child of the web. A child of the web, a child of feedback, right? This is one of the things Vox Media used to pride itself on. I think it still does. We know a lot about the work of publishing and seeing what works; being able to play with levers and guess, fundamentally. We want to make good content but we’re smart about this. Here you’re making your show, you’re handing it to Netflix, you’re done. As you say, I don’t actually know what kinds of information we’re going to get back, that’s part of it. Let me say something, actually, about that. It’s actually a topic I would love to talk about. I think that a lot of the analytics talk in the media has been bullshit for a long time. I think that the amount that people do, that thing you’re talking about is not zero but it is like 15 percent of what ... By the way, I agree, because I came to Vox Media and I thought, “All right show me the magical levers!” and there’s less levers there than you’d think. There’s some basic SEO stuff, and by the way, we’ve got smart people working on this stuff. They can tell you this thing performed this way. But fundamentally, there’s no magic key, but that’s different than having zero insight into what you make for Netflix. Well, here’s where I was going to go with this. So I think that one of the places where there’s particularly no magic key is ... I think if you look at BuzzFeed — not BuzzFeed news but BuzzFeed’s core work, listicles, that kind of thing — which I’m not saying it with any ... I think there has been a lot of tremendous innovation there —I think they really did do a version of this, more than, I guess, anybody else did. Where they will say, “Okay, we have found a format and now we’re going to start plugging things into the format until the format dies on us. Then we’re going to find another format.” And this went on a lot of times. When you’re doing news or news-adjacent work — here I’m not even talking yet about the Netflix show but just about what we’ve done at Vox — I think there’s a lot less of that. I think it’s true, I’ve been at the Post and know how people operate at a lot of other organizations. I think that it’s true actually about BuzzFeed News, would be my guess. You have a bit of a sense, right, there are things people care more about than they care about other things. But you are working, one, with an issues space, and like an actual news space you can’t control it. You can’t just say, “Well, two years ago people really loved reading about the Hillary Clinton campaign. So today we’re going to ...” You know what I mean? She’s not running for president anymore. By the way, that’s a lot of the analytics there. “People like this thing, make more of this thing.” It’s basically that crude. You can see the effects of that all over media. And so if you’re doing news, it just doesn’t work. Because you don’t have that control over it. It works in a very bad way. Or works in a very bad way. Which is, “Do more of that story in every iteration. Do 20 versions of that story.” It’s often the reason people even like that story, that the wave of the current events base had crested there for a minute. I mean, there is a week where you can write about ... Last week the Iran deal was in the news because Donald Trump tore it up. So writing a lot about that had a different Chartbeat valance than it will have three weeks from now. It isn’t what people’s energy and attention are focused on. To bring this back to the Netflix show, this is something that we came to a long time ago. But I’ve a lot more comfort with the idea that a lot of what we do is employing an editorial taste in a sense of our audience and also a sense of what we think is important in the world. And where we can find good sets of answers, too. When I launched Vox, I sat down ... I actually don’t remember who it was so I apologize to whoever gave me this advice. I was asking what is it like being an editor in chief. What do you do? What is your job? I’ve never done it before. He said to me, “The job of the editor in chief is to impose my editorial sensibility on the publication.” I recoiled. I had such a negative reaction to that. Like, who cares what you think, right? He was analytic. Have some sense of the world. And over time … I’m not saying it’s my sense. I don’t really ... If there’s a sensibility, it wasn’t created out of nowhere. It wasn’t just created out of data. I’ve come to believe a lot more that for an organization to develop a sensibility and a sense of what is important in the world, and how to write or video or podcast or whatever about these things in ways that are interesting, that that is actually more of the work. It’s funny, because you just asked me about ... I’ve not even been really thinking about the analytics of the show. I will be upset if Netflix comes to me and says, “Nobody is watching your show so we’re not going to air.” That will be sad. In terms of how we’re thinking about coming up with the episodes, in a real sense it hasn’t changed our process at all. When we sit and think about features for Vox or when we sit down and think about videos for the YouTube channel or whatever, we’re not sitting around thinking about what worked on Chartbeat months ago. We’re actually asking these questions about what feels interesting and important and fundamental to us right now. There’s a middle ground where you say, “Hey, we made this thing. We liked it. No one watched it. No one read it. So what went wrong here? Is the topic uninteresting? Did we deliver it correctly? Did we make incorrectly?” And I think that’s the middle of the road now for a digitally savvy publisher today. That is, we’re thinking through that. I was here to cover news or I was here to do things that are important, but if we’re not finding an audience we have to think about why we’re not finding an audience. Always. For you, this is just, “Hand it back for Netflix.” You’re handing it to them and they’re going to come back and it’s going to be binary, basically. Yes, give us more, or no, don’t. If they say yes, give us more, they’ll give me some notes about maybe more or less of that. Probably not much more than that. It’s a great question. You probably know it a lot better than me. I hope we’re going to find out. All right, as you said, I asked you a good question, so I don’t want to press my luck. We’re going to take a break. We’re going to listen to an ad or two from the sponsor that lets you listen to this show for free. We’ll be right back. [ad] I’m back here with Ezra Klein. You know I’m back here with Ezra Klein because you’ve listened to us talk for 22 minutes or so. Yeah, but life is change. Like, who’s to even say we’re the same people we were a couple minutes ago? Oh man, we’re all living in a simulation! I just had Michael Pollan on my podcast talking about psychedelics. Constancy even in mental state is a real ... When is that one going to air? It just came out today. I wonder if you beat Kara Swisher to the punch. She’s very excited by Michael Pollan, it blew her mind. It is literally ... I think I called mine a mind-expanding conversation with Michael Pollan. It’s a mind-blowing conversation. Not so much for the psychedelics part of it as the theories of consciousness. I want to stop this podcast and go listen to your podcast, but I can’t do that. But you know what, if all Peter’s listeners want to stop this podcast and go listen to my podcast, I’m not going to argue. Wherever you listen to podcasts like this one, g listen to the Ezra Klein show. You were referencing a few times about launching Vox.com. That was how many years now? Four. Four years ago. Prior to that you were at the Washington Post, ran Wonkblog for them. You were at wunderkind. I’m pronouncing wunderkind correctly? Well, that’s arguable. Not the pronunciation ... On your profile it said so. It’s great when you get back and research someone and you find multiple competing profiles around the same time. There’s a great New Republic profile of you. There’s a great New York magazine profile of you, right before you launched, right after you launched. It’s great. And you referenced ... I get uncomfortable just hearing the remembrance of these profiles. If you don’t want any profiles, don’t launch a giant corporation from Vox Media. What has changed at Vox.com from conception to today in terms of where you thought this thing is going to go? And where it has ended up? A lot, actually. Here’s the biggest thing: I don’t think that our theory of the journalism has changed that much, but our theory of what that journalism would be? How we would show that theory has changed dramatically. We have this idea, and a big part of the idea was, to shorthand it, was this Wikipedia for the news. I had been at the Post, as you say, and I covered policy. So I covered in the past couple years the Obamacare and the financial crisis and the debt ceiling fights in 2011 and all this things that are happening. One thing that united a lot of these issues was they had a fast-moving news story on top of a poorly understood but very important topic. So take Obamacare. I would say by the time that passed — a year and a half or however long into debate over it — the number of people who could really explain that bill well, given how many times it had changed and so on, it was pretty small. And I explained at Wonkblog that we had done honestly the best coverage that we possibly could have of the question, “What happened in Obamacare today?” What happened? What argument about the public option and the iterative stuff. I felt we were about as good as anybody was at that, because I think it’s genuinely the best health care port in the country. I mean, we really worked hard on that. But I would get all these emails from people saying, “I don’t understand the individual mandate or the subsidies or whatever,” and I’d be like “Oh yeah well, if you look back in June we had piece about the individual mandate.” And you would link to them. I’d link to them. But the degree to which across the entire media we were not giving you a patch to all these news stories we were doing, just like an ongoing, continuously updated, here’s what Obamacare is so that you could join the news story midstream and get caught up and then come in. It’s really frustrating to me ... It’s much better than the pre-internet era ... Yup. ... where there’s literally no way to go back other than literally going to the library. I don’t think it was that much better. If you wanted to, you could go find this thing on the internet. That’s exactly the thing. I think a huge failure is when we put the bulk of the work on the audience. You have to be a Google Jedi to understand what collection of keywords do I need to ... Because also, think about this, right? Let’s say it’s about the individual mandate. You’re searching “individual mandate.” The number of stories that have a recency bias in Google about the individual mandate ... I mean, if you’re trying to find when did Wonkblog at the Washington Post write its story, ‘Here’s what the individual mandate [is]’ — it’s very hard, actually. So I think we’re not doing a good job meeting people. Even if people had the curiosity for it, I don’t think we’re doing a good job meeting them. It is possible, but I think we were failing. Then we have this idea of, okay, what if the reporters who are covering these stories are creating and continuously updating as they cover these stories? These sort of underlying topic guides. And that’s the kernel of the idea for Vox. When we came to Vox Media, we built a publishing platform that was really designed to showcase this idea. At that time, a particular product to me ... If you had asked me in 2014 what will be whether or not Vox succeeds or fails? What would be the hinge? I would say, “Do card stacks take off?” This card stacks idea. If you’re very old like me, you remember hyper cards. Again, this digital version of index cards. Stuff you needed to know, it’s attached to the story. Your very product specifically ... It was a product and workflow-based idea of expeditionary journalism. We did these card stacks and we had this whole thing and we had special links in the whole piece and there was yellow highlighting on the words. It’s like if we ever mentioned the individual mandate, you click on that and up will come the card for the individual mandate. And the card for individual mandate ... We are going to bring this library to you, organize it and sort it so that you don’t have to go fetch it. Would be embedded in broader cards for Obamacare. I loved it. I was still, I get excited and my heart races talking about it. What happened is, those worked great and some of them did incredibly well. Like, our card stack for ISIS had 10, 20 million views, something like that. The thing that happened is the platforms fractured. When we launched Vox, there was no Facebook Instant Articles, no Google AMP, and Flipboard was much smaller than it is now. There is no Apple News, no Google Newsstand. The possible returns in very tightly designing a platform to do exactly what you wanted it to do were very high, potentially at least very high. Then very, very quickly the platforms began to splinter. It was very clear that the audience is going to be primarily offsite. They were going to be reading you on Facebook, literally on Facebook on their phone. They were going to be reading you on Google on their phone. Apple News is a huge thing for us. And so product things we built couldn’t port. You think the problem is the distribution, not defective. People didn’t really want to engage with the product that you made the way you wanted them to engage. No, we actually found the engagement pretty good. I won’t remember the exact numbers but I think it was something like if you came to a Vox story — and again this is from memories so I apologize if I get it wrong — 7 percent of people would click on the card stacks, and if you clicked on the card stacks on average you would look at at least four or five cards. That to me was pretty good. That was the user behavior I was hoping for. Now what I will say was that the two things that made this hard were one, the platforms began fracturing. So continuing to pump resources into that was not seeming ... we wanted to start to discover around this time. A lot was happening, we couldn’t do this. Then the other thing was that it was also a huge workload. Like a huge, huge, huge workload. So to have that much work going into something that only let’s say 30 percent or 40 percent of our audience could see, it just didn’t make sense. To create this product, this bespoke product, and then the bespoke CMS doesn’t work and you replace it with what? The thing that then happened — and it took me a while to see that this was happening — was that what we did was we built an organization around the values that got instantiated in card stacks. We trained writers. You would come in and, as a writer, you would have to ... one of the first things you do is we make you start doing card stacks, show you how to do it. And we do editing and maybe we’d release it, maybe we wouldn’t. Best thing you learned at Vox. And we began to see that the ideas of that were inflecting a lot of different products we were making, our videos — which of course never had card stacks attached to them — they were really explanatory. They really had the same DNA in them but it was being interpreted in a different way, into a different form, into a different medium. Some sort of creating a special content vessel for this, right? You just bring the idea of explaining, which you had from the get-go anyway ... You don’t call explainers, you make them more explainery. Yeah, Snapchat Discover was a whole nother thing where, I think, we really created something cool there when we were on that. That was “Explained” on Discover. So overall, now you see it on “Today Explained,” our daily podcast, to me, it’s such a beautiful explainer project, “Explained” on Netflix. We ended up creating — and again, I didn’t see this happening as it was happening. I was very depressed. I felt the card stacks moment was going to pass by, because I had a lot of personal love invested in this project. But we’d created not a product but a culture. And as new opportunities came, one thing we were good at doing was, as Jim Bankoff put it, thriving on change. When things changed we were there, and we would jump in and figure it out. Sometimes your call was a pivot, right? Pivot is a freighted word sometimes. But I think of it as in a good way of, “This thing isn’t working, let’s try a different thing.” And if you are not doing that, you’re probably not succeeding. Maybe. You would probably know the language better than I do. As I understand, the pivot language is actually moving into a different idea of what you are selling? Often it can be, yeah. And that wasn’t what we did. We really held to explanatory journalism of which, in the end, card stacks was one product in it. It turned out instead of, in my head, to be the product of it, it was just one product of it. It worked in its time and then its time passed. But it was much more ... it turned out what we had built was much more of a culture and a training ground around explanatory journalism. But then as things came up we would create new products that we interpreted to that mission and those values and that approach in different ways. Did you have second thoughts about the word “explain” and any derivations of it? I don’t. Sometimes it is used pejoratively. You guys ... I just saw it in my feed, “Vox tells you how you should feel about this.” Did you think, “Well, we don’t want to seem prescriptive.” I always think that. “We want to be useful.” This is something I used to tell the staff, very early on. This is not going to succeed unless the brand of it becomes strong enough that people make fun of us for it. Would I love it if nobody ever heard it pejoratively? And I do. I don’t like it when people think that “Explained” has this definitive meaning, because that isn’t how we mean it. To do expoundatory journalism as an approach to doing journalism, it isn’t to say it’s the last word. A thing has many different explanations, potentially. But that said, no, I think it does define the journalism we do. And also people understand, it is what we do. And in the same way that I don’t think there is a version where you get a space like that and you get it a little bit more to yourself and nobody ever has resentment around that. Nobody ever gives you shit for it — and by the way, sometimes the shit is deserved. The version of it that I will say is what I hate is when we call something an explainer that isn’t. Then people are, “Well, Vox said this was an explainer and I don’t ...” That’s really bad. On the other hand, sometimes you do something that isn’t an explainer and some people would be, “Vox said it was going to explain but here they have done this thing ...” Well, that is okay with me, right? We are an organization, we do many things, and we have a code. But so now the idea of actually defining ourselves around something has been such an incredible boon both internally and externally. Both internally in a way that we can help people who join the organization understand what we are and what we intend to be. Then externally in giving people a reason to want to work with us. Giving people something we actually do really well. And if they want this done for them, they should partner up with us. It’s actually, I think, the single best thing we ever did. One reason Wikipedia sucks is that you have got all these different voices. I really don’t think Wikipedia sucks, for the record. Wikipedia is a great research tool, it’s terrible to read. It is super unsatisfying to read. It is a great thing to be able to Google, get some general background. But if the topic is any kind of new ones and any kind of debate, it often breaks, right? You can’t read Wikipedia with any Israeli and Palestinian conflicts. You see all these voices and they all do not agree on anything and it ends up as a muddle. Vox has a voice, you talk about this kind of your voice. The center-of-the-left voice, it’s rational. In 2018 we are in a world where alternative facts and the entire spectrum instead of what is a fact and what the viewpoint is, it’s all muddled. How much time do you spend thinking about it? “All right, we want to make sure that we are clear about, this is our buyers, this is our ideological bent or we don’t think we have that ideological bent or we do and let’s counter it by getting in someone from the national review to come write stuff for us as well.” How do you think about balancing all that? This is something I think about a lot, actually, and I have a couple answers on it. One is that I don’t really think that in 2018 it’s all that different from how it was in 2016 or 2014 or, you know, the issue set has changed. I am not someone who actually buys into the idea that alternative facts and fake news are some sort of very new thing or even the most difficult of the things we are facing. I think they’re hyper charged. They are hyper charged but ... They are hyper charged and the range of bullshit that’s in the discourse, it’s gotten much broader. You used to have to work really hard to find extreme viewpoints and now they’re delivered to you by the president of the United States Sure. For the work we do, I actually think the difficulty of something like the Israeli-Palestinian conflict is a lot harder than the president calling the crowd-size estimates at his inaugural “fake news.” It’s really hamstrung lots of news organizations, who say, “Well, the president said it. We can’t just say that is a bunch of bullshit, we have to say the president said it.” I don’t think it even hamstrings them anymore. I think now ... They are getting better at it, but it’s a couple of years of them adapting to, “How do we deal with someone who does not believe what he says, knows he’s lying, doesn’t care?” And then it seeps all the way through the administration. I don’t know, I have a little bit of an alternative-fact view on this where it is true that I think the media had for a little while, is somehow ridiculous to debate about whether or not you can call a flagrant untruth from President Trump a lie. Because maybe he believes in lies. I think, by the way, often he does believe things that are untrue. But I don’t think it’s truly reasonable to say that if you’ve been reading, say, the New York Times on Trump since 2016, you didn’t know the president lies constantly. I just don’t buy it. So that’s one thing. You know, I agree. And by the way, if you’re getting any news from Sinclair or lots of other places right? And by the way, you are watching the news, you are doing your part to be an informed. But that was just true ... Again, I don’t mean to be too contra in this but the Fox News thing was true. I covered it on Obamacare. In some ways the fact that it’s much more obvious now is more helpful to me because I can see what needs to be ... But I was asking you about the Vox version of this. There are a couple things here. One is really around this question of how, when you’re doing an explainer, do you simultaneously represent a debate that is contested. And also represent the fact that in the end maybe you’ve come to an explanation. Maybe you’ve come to believe that there is something true here versus something untrue. And how does that then differ from being a take? Are you just writing an op-ed column? Or you start with a set of commonly assumed facts, what you believe to be commonly assumed facts, they never did occur to you that someone else has another version of this. Or values. If you are explaining an issue related, say, to gay marriage and you believe that it is just true that it is a human right: You should be able to marry a same-sex partner you love. Your explanation of that issue can be different than if you believe it is contrary to God’s law. The genetics episodes of the Vox show that I just watched starts with the assumption, yes of course we have science, people have the ability to manipulate this stuff and we’re not just leaving it up to ... Of course, right, exactly. To me, this gets to some of this questions around ... you used the word objective earlier. I have worked in a lot of news rooms, including news rooms that were built around the idea of objectivity. I don’t believe — and I never have — in this concept of objective journalism. There is a great line from Hunter Thompson which is the only time you ever saw objective journalism was on a closed-circuit camera in a Woolworths, which I’ve always enjoyed. But obviously people can try very hard to represent, people can try very, very hard to represent multiple sides of an issue. But even in choosing what you are going to report on you are making important choices. If you decide that day as a journalist, if it turns out that in your work you only report on embarrassing things people on the right do, but every one of those stories you do ... Every part of what journalism does has some kind of biased decision making process. There’s not a commonly received set of facts. So what we’re trying to do is to be very transparent and open in our process, and here is the key, to me, distinction. Because I’m part of the generation of bloggers who came in and said all this objective journalism stuff it’s bullshit. I actually think a lot of that ended up going too far. We sort of threw the baby out with the bathwater. Because you decide that the decision that you were going to end with an even-handed product, despite the fact that reality may not be even handed, reality may be more to one side than the other. You then throw out the even-handed process too. And the thing that we try to preach internally to Vox is we do not demand that you come out on both sides of an issue. But we do want you to have an open and neutral process on your way to finding an answer on that issue. So if you’re trying to do an explainer on something as contested and you haven’t spoken to the smartest people contesting it, then you’ve not done the explainer. You have to earn the authority and you have to also show the best versions of the arguments you’re rejecting in the end to have done the work. And so I think there is a place to have what I call an even-handed process. Even if you have a result that comes down on one side of an issue or another. And I think that that is where a lot of good work not just at Vox but elsewhere is happening right now. Whereas pretending an issue does not have an answer is a way of not informing your audience. And also, though, pretending the issue has a clear answer, when you’ve not done the work to even know if that answer is really true, when you’ve not done the work to understand the counterarguments . You’re just giving a shrug and saying “Well, let’s hear from both sides.” And that’s not acceptable. Yes, exactly. I have a related question. But first, I want to take a quick break so we can hear from our sponsors and also I see Golda looking at me. I’ll ask Golda what her question is and we’ll be right back. [ad] Back here with Ezra Klein and so are you. We had talked about bias and ideology. I have two related questions. Have you thought about saying, “Vox, we’re left-center, left-centrist, we’re a little to the left side of the political spectrum. Why don’t we bring in a consistent voice from the right to counterbalance this?” This is the New York Times op-ed version of this, which throws my Twitter feed into a frenzy. I’m a little confused about why the frenzy. But you’ve seen versions of this now. The Times and the Atlantic and people are dipping their toe into saying, “We’re going to expose you to a view you’re not normally used to seeing. We think this is a good idea.” We can debate why that tends to end in flames, but why haven’t you guys tried that? So my answers to these two questions are actually pretty linked. One reason that it’s important to me I did not say, “Hey, Vox is a liberal publication,” is that I’m not trying to have Vox be a liberal publication. And I should say, I’m now editor at large so I shouldn’t speak of it like these are all my calls. They’re not. When I was running it, it was important to me not to do that because that’s not my vision for it. But it is a center-left publication, right? So let me go through this. One, when we launched, particularly, we had some people in it who were on the right, who are libertarians and who had different views. So even then, it actually was not the case that everybody there was a liberal. But there’s no doubt that the bulk of the people there are center-left, and in some cases more left. Over those years, I made a couple hiring runs of conservatives and I didn’t do it to quote-unquote balance it out. I don’t think that does. I don’t think anybody cares. It’s not like if I hired three conservatives all of a sudden there’d be some ... Forget balance, let’s just expose your readers to another viewpoint. I think that there are things that — just as in other areas that are nonpolitical, we have people who are covering from different groups and covering from different perspectives and just people who I think are good and maybe I disagree with them on a bunch of things but I think they’re good at the work they do and we hired them. We made some hiring runs at folks who are on the right, and the folks we tried hiring didn’t work out in part because it ... One of the reasons it’s actually hard to create ideological diversity within a publication is that people do want to be in a publication where they feel their views are a little bit more the bulk of the views, it just feels more comfortable and I totally get that. So that’s something that I wish I had been more successful at, to be honest. It’s something I’ve tried to do and it’s something we’ve tried to do in other ways, creating the big ideas section, which was something where we publish a lot of views and we actually disagree with. We make sure those views are not just a bunch of big ideas that Ezra Klein already holds. One of my lessons of all that was that it’s tougher. I did, I made a very conscious choice in the beginning to not create a self-consciously liberal publication. But even so the way polarization even within hiring structures and the nature of the media works, it gets hard once there’s momentum internally around a kind of set of opinions, which are opinions that I hold and find congenial. It gets harder to diversify out from them just because it’s a little bit of a bigger ask to ask somebody to come in to an organization where they have to worry about that. You’ve seen the Atlantic, the New York Times go ahead and hire Bari Weiss and Kevin Williamson and Bret Stephens. And it looks like from the outside that both the audience and then the people who work at these publications really reject the idea of having them there. What do you make of that? Do you think that would happen at Vox if you hired one of those folks? Again having, one, had people at Vox who are libertarians and that didn’t happen, I don’t think it would happen. I want to be a little careful here, partly on what I comment on, because I have friends at the Atlantic and Kevin Williamson there was hired for the Ideas section. My wife works in the Ideas section at the Atlantic, so there are things that I don’t want to ... Step back from the microphone. I understand. Exactly. But to use the New York Times example, there are certain kinds of folks you can hire — and I’ve hired people who have created controversy, too. One of the early hires we had was a guy named Brandon Ambasino who had a lot of very heated arguments, he was an LGBT writer who had a lot of very heterodox opinions in that space, and it created a lot of backlash. It created a lot of backlash in part because he had been at places as a young writer where he was pushed to do very, very controversial forms of his opinions. I think that there’s been a tendency — in part because organizations are looking to prove that they are balanced — to hire very provocative versions of the other side. Kevin Williamson is a very — whatever you want to say about him — an extremely unusually provocative conservative writer. May I argue that some of these folks that are supposed to be provocative aren’t that provocative? Bret Stephens is fairly in the middle of the road. I think that’s probably right. But in my Twitter feed, “Oh my God, can you believe he said this?” I think that the Bret Stephens thing is a little bit in a different — to me, and this is only my impression of these. I think that there’s been a lot of backlash on Bari Weiss particulary not when she was hired but for things that she said subsequently. Tweeted subsequently. Tweeted subsequently. Williamson was literally, the moment he was hired and things he had said. Stephens, I think some people didn’t love the hire. I don’t remember it — and again, this could be my ... I don’t remember it as being a total meltdown collision. I think initially it was, “Oh!” because he was a never-Trumper. I think he’s sort of conservative but not too conservative, like, “He doesn’t like Trump, just like you.” I think the Post has a lot of different people in these different spaces. I think we’ve been in a thing recently — and I’m not sure that this is not actually a new thing emergent, that this will get harder and harder and the Twitter outrage will get higher and higher — but I don’t know, I think that I could name a bunch of conservatives that the Times or the Atlantic could have hired who would not have created these kinds of problems despite not holding super-different views. I think there is a question of — and this is true no matter which direction you’re hiring from — there are a lot of liberals I could hire who have made extremely provocative arguments who if I hired them there would be a backlash from the right or there would be a backlash from another part of the left, or maybe they have views on Israel that ... I’ve been around a lot of versions of this. And I think that part of it also is, well, literally not just imagining the conservatives or liberals or whoever as an undifferentiated mass, but who did you just hire? And what do they believe in? And do you want to stand by that or not? I think in a lot of cases you should stand by it. I’ve had to made decisions like that and stood by them, and I think it was the right decision. But you have to make choices about individuals and I think we get into trouble when we just see them as everybody is just a nameless representer of an ideology. You mentioned you’re no longer running Vox.com. You’re editor at large this is a site you launched four years ago. Why aren’t you running it? One because we had amazing people who could run it better than me. The big reason is that I do sort of three things, or was doing three things. One is I was managing the organization, right, I was what I like to call a manager of last resort: If a problem didn’t get solved, eventually it came to me. Two is I have a big strategic role at Vox. I help imagine, I launch products, kind of chart our course. And then I have been my whole career a writer and a creator. I was never willing to give that up. As we got bigger and bigger at Vox — I think it’s well over a hundred people now — I could not do all three of those things. And of those three things, the one that I am unquestionably the worst at and that I do not bear well myself is managing the personnel of a large organization. Was that your roadmap? Or did you think, “I’m going to get this thing up to size and then I’m going to step aside”? No, I actually didn’t realize ... It’s not that it wasn’t in my road map, it’s not that I thought I’d necessarily run it forever. I liked managing at the Post. I liked managing at Vox too, actually. But by the way, I’ve seen you in meetings, you’re someone who gets passionate about workflow. Absolutely I do. You are into this stuff. I am very into it. I found that when I was managing ... when we got big enough, I was managing the managers of managers. I was dealing with problems that I had — actually, just to be honest about it — trouble putting down myself. I can deal with the stress of a lot of our editorial management really well. I think I deal with the stress of my own editorial work really well. I can deal with the stress of launching a Netflix show pretty well. The stress of knowing people are unhappy, or knowing that I have to have a series of conversations with them about what’s going wrong, or even much more normal stuff than that. Just ... you’ve just got to deal with the day to day of redesigning an organization, but it’s not for me. And over the years at Vox I wouldn’t have stepped down if it wasn’t the case that I could look around me and say people have risen up here and taken responsibility who are genuinely better at this than me. And so if I had thought — and I mean this very truly — if I had thought the best thing for the organization would have been for me to continue on in that role I would have done it. I feel a lot of responsibility towards Vox and a lot of love for it. It is the thing that I feel most passionate about in my working life. But I didn’t. Lauren Williams is an incredible, incredible manager. Allison Rockey is an incredible, incredible manager. I could look around me and say there are parts of this job that I’m shirking that are becoming central to it that I can no longer pretend that by managing the product I’m actually managing the organization. And so it is no longer the best thing for me to be continuing on in this. And to be practical about it, right, Jim Bankoff, Vox investors and folks like that, they’re happy because you’re still contributing to Vox.com You’re making new products for them. You’re appearing on the site. You’re publishing even though you’re on book leave right now, you’re still publishing thousands of words there weekly. You’re doing a weekly story or periodically? No, I published one story while on leave that was mostly written before I went on [leave]. While I’ve been on leave, I’m working a lot on the Netflix show and I’m doing my podcast. I’d mostly written it up before I left. It was like, I had to do some editing on it that hadn’t gotten done. That’s the only thing I’ve put up. But this is where I was headed, which is you had this fight discussion with Sam Harris ... A debate, not a fight. He’s a podcaster, not an ideologue. I think I will say he’s not a conservative, to be fair to him. We would be here a whole nother hour to go deep into it so I’m not going to ask you to recast that discussion. The thing that amazes me — and other people noticed this as well — was both of you I think at one point published your email exchanges. No, just he did. They’re thousands of words, and most of them are from you. It’s you explaining your point, you going deep into why you said or didn’t think this or why you do think this. Again, I can’t summarize it adequately. I was in between a piece we had published and his anger about a piece we had published. It was not my piece at this point. Later on, it would be my piece. I read that as you initially being polite and thoughtful and trying to respond to someone who’s upset with you, and he’s a person of some stature and he won’t take you seriously, it becomes ... when you’re reading it, it becomes quite clear that he’s unhappy and is going to continue to be unhappy. You continue to respond with these emails that if you printed they’d go pages long. If you’re listening to this podcast, at this point you have a sense of Ezra can be verbose, which is good, but I just don’t understand how ... I don’t even know if that’s negged. Just straight up ... I literally don’t know how you had the time to engage in that, because you’re doing a lot of other stuff, like launching a Netflix show. If I write a paragraph or a paragraph-long email I feel like I kind of went off. Literally, is this standard for you to have that colloquy? What’s the right word for that? Epistolary conversation. I went into that exchange expecting a very different outcome. What had happened there was, again, we had published a piece about his podcasts. He didn’t like the piece. He challenged me to do a podcast with him publicly. His producer emailed me, I said sure, give me Sam’s email, we’ll talk this out. I’d just come back from a vacation and so had not actually been involved in the editing or commissioning of this piece. First, some of the emails from me were trying to understand what the nature of the fight was here. That’s what happens at the beginning. So I assumed this would come to some conclusion, either I would do the podcast or he would calm down. It didn’t go that way. And he kept getting angrier and angrier and so eventually it was like me trying to figure out, are we going to do the podcast? It was a pretty abnormal situation. That is not your standard customer service. I found his reactions to be part of why I kept trying to double down or re-explain was I was a little bit befuddled by his reactions. And so my impulse on that was I must just not be being clear enough. These are things that a publishers says, yeah, “I’m going to publish the Ezra Klein emails and you’ll see.” And you’ll read them. And if you keep reading them you see Ezra is patiently trying to explain his argument, which doesn’t really change. You don’t appear to have lost that argument. It was a bizarre exchange. I would say — because this plan is out there — found ultimately, then, we had a — like, this came out much later, when he published the emails — we had a sort of secondary debate. I debated him directly. You did do the podcast initially, right? No. No. He challenged me, he privately rescinded the thing. This all went fallow for a year, basically. Then he tweaked me on Twitter, I published an article that said things I had always wanted to say, things I said in those emails but I never published on this publicly at all. Then we did a podcast together a couple weeks ago. People can find it on my podcast under “the Sam Harris debate.” I found it actually really helpful as a going through this as insight into ... I really, really hate that this thing has been called the intellectual dark web. I think that we are seeing the development of cleavage in American life that is not traditionally left-right but is a cleavage about social justice, is a cleavage about political correctness, is a cleavage about what people would call identity politics, although I don’t think that framing is exactly right. And really digging into what is uniting and seeing what is uniting folks like Sam Harris — who I think sees himself as actually a liberal — with a Ben Shapiro, with a Jordan Peterson, with a Dave Rubin, with an etc., etc. For me it was a really helpful insight into something I’d been seeing and sensing for a long time but had not engaged with enough directly to understand what it actually was. So part of why I spent a lot of time on that is that I actually had been a listener of his podcast. I had enjoyed some of what ... I didn’t agree with them a lot of times and I thought it was interesting. And so something was happening here that I didn’t understand and that’s where I get interested as a journalist. And you know, that whole situation to me has ended up being profoundly clarifying about things I think I’m going to end up covering, we’re all going to end up covering a lot in the coming years. Some of this gets boiled down to race, because that discussion was about race. The last essay you put out is a lot about you guys think this is bad but actually if you’re African-American, American history has been pretty awful for a lot. It seems — I don’t know if it’s true — is race something that is newly interesting to you or increased interest? I wouldn’t say newly interested but I think that to try to understand the politics of the Trump era, to try to understand the politics of this era broadly, an era where we just had the first African-American president, an era where in 2013 for the first time a majority of infants under 3 were nonwhite, an era where we’re going to become a majority-minority country by roughly 2045, so not that long, 25 years. I think that the amount of this that is both explicitly and implicitly about race and worries about power. So much of the political correctness debate is actually about folks who are oftentimes not white the not exclusively folks who are nonwhite getting the numbers and power and confidence to say, “Actually the way you’ve been talking for a long time is incredibly hurtful or unnerving or just locks me out of the conversation.” And I think a big question right now is when you hear that, do you say, “Oh that’s ridiculous,” or do you say “Oh if you think that, I need to take a second look at this.” And I think that there’s a lot of folks who this is very profoundly threatening. And it always is threatening, right, when you see this kind of change in society, and I think Trump is one expression of it. I think this kind of emergent more intellectual but nevertheless kind of anti-PC group is another expression of it. I think you see certainly also a lot of energy on the other side of this debate and you know that’s a side that I understand better. But this cleavage which I think is very central — it explains Trump a lot better than a traditional taxes/no taxes cleavage does. I think you have to look at this as fundamentally about race and other kinds of demographic change. And the fundamental driver of political conflict right now and possibly in the coming couple of decades, unless we have something massive like a war or another financial crisis that displaces it. This is why, of the three episodes of your show that I watched, it was the racial wealth gap one that I found the most intriguing. I’m glad you enjoyed that. Which by the way, I saw you co-wrote as well. And so I’ve tied it back to the show. Ezra, I figured this was going to be pushing up against an hour. We should make this a two-parter. We will do another one at the end of the year. Deal? I’d love to. Thank you for coming.

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posted 3 days ago on re/code
The longtime exec has been criticized recently for the social networking giant’s rocky responses to a series of controversies. Elliot Schrage, the high-profile exec who heads Facebook’s public policy and communications efforts, is leaving the company after a decade at the social media giant, according to a company spokesperson. Schrage, who joined Facebook from Google where he held a similar position running global communications and public affairs, will stay on at the social networking giant for a time to help hire his replacement. He’ll then serve as an advisor to Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg. In his tenure at Facebook — Schrage just celebrated his 10-year “Faceversary“ in May — he has became one of the most influential voices inside the company, working closely with top executives like Sandberg and Zuckerberg, often traveling with them on international trips. “After more than a decade at Facebook, I’ve decided it’s time to start a new chapter in my life,“ Schrage said in a statement to Recode. “Leading policy and communications for hyper growth technology companies is a joy — but it’s also intense and leaves little room for much else. Mark, Sheryl and I have been discussing this for a while.“ This is so, according to many sources, who said Schrage has been contemplating a departure for a while. Still, a spate of recent controversies around the mismanagement of the massive platform has weighed on the company and some have justifiably criticized Facebook’s slow and overly cautious response to the crisis. Schrage has been the point person on that response. Most recently, for example, Schrage has been a key player in coordinating Facebook’s response to the company‘s Cambridge Analytica privacy scandal, which has included lots of apologizing by Zuckerberg and a promise from the company to “take a broader view of our responsibility.” When Zuckerberg testified before Congress in April, Schrage was sitting in the hearing room. While Facebook was initially slow to respond to the scandal, it has since been relentless in pushing its messaging and making a number of moves to open up its platform and be more transparent about the huge amount of data it has collected. Schrage has been pushing internally for Facebook to be more open with outsiders and came up with the idea for Facebook’s ”Hard Questions” blog series. He has also been overseeing Facebook’s recently formed independent elections commission. Still, the breadth of Facebook’s reach and questions of how much data it collects continues to be a big issue for the company and how well it communicates that externally will be critical. Numerous media reports continue to focus on how it shares user information with outside partners and how well — or badly — it monitors its platform. The upcoming midterm elections will a a big test for Facebook, too, especially after the 2016 election in which trolls tied to the Russian government used Facebook‘s platform to try and sway voters. Schrage’s departure is notable not only because he’s influential inside Facebook but because top executives hardly ever leave the company. Facebook just finished a major reorg for its product and engineering teams, but Schrage’s team was also restructured. Longtime VP of Communications Caryn Marooney split her job running all of Facebook’s communications, keeping the product communications responsibilities and giving corporate comms to Rachel Whetstone, another former Googler and, more recently, head of comms at Uber. Schrage will help look for his own replacement, and Facebook plans to search externally to bring someone in. In the meantime, Facebook has Marooney and Whetstone running the communications team, and VP of Global Public Policy Joel Kaplan, who was also in the congressional testimonies and by Zuckerberg’s side in Brussels last month, to run the policy side. Facebook COO Sheryl Sandberg also shared a statement with Recode. Elliot is one of the most creative and strategic people I have worked with. He’s been instrumental in building our policy and communications teams as well as pushing many of our key initiatives — including the recent publication of our community standards, data about our effectiveness enforcing those standards and the creation of an independent election commission. Mark and I look forward to his ongoing advice over the years ahead.

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posted 3 days ago on re/code
Plus, a viral reality show pieced together from Facebook comments, texts and Instagram Stories; a viewer’s guide to World Cup 2018; high-stakes raccoonaissance. Comcast is offering $65 billion in cash for much of Rupert Murdoch’s 21st Century Fox; that’s a 19 percent premium over Disney’s bid for the Fox properties. This move comes a day after a federal judge gave the green light to AT&T’s plans to buy Time Warner. Next steps: Disney will decide if it wants to counter Comcast’s bid. Meanwhile, both Disney and Comcast are willing to walk away from Murdoch’s local sports networks if regulators insist. Which might not be a terrible thing. [Peter Kafka / Recode] Apple is going to close the iPhone security loophole that let police unlock devices. An upcoming software update will disable an iPhone’s Lightning charging and data port if the phone isn’t used for an hour. Law enforcement officials have been opening locked iPhones by connecting another device running special software to the port, often days or even months after the smartphone was last unlocked. [Jack Nicas / The New York Times] An addictive new online show called ”SKAM” pieces together a teen drama narrative from real-life Facebook comments, texts and Instagram stories. The concept ran for four seasons in Norway and became a worldwide phenomenon. The first American version, “SKAM-Austin,“ features a “cast” of real Austin teenagers. The post-by-post clips are packaged into compilations at the end of each week — within two-and-a-half weeks of the launch of “SKAM-Austin,” the first compilation had garnered 7.4 million views on Facebook Watch. Is this the future of TV? [D.T. Max / The New Yorker] It takes a lot of money to run home-flipping startup Opendoor‚ which buys houses from people and flips them. The company has already taken out $1.5 billion in loans to buy homes; now it has accepted another $325 million in new financing that values it at more than $2 billion. [Theodore Schleifer / Recode] Amazon has long used robots to help humans move merchandise around its warehouses. Now automation is transforming Amazon’s white-collar workforce, too — retail veterans who once decided what to sell on the site are being replaced by software that predicts what shoppers want and how much to charge for it. Since the debut of the first ATM on June 27, 1967, automation has changed how people shop, park and fly — reshaping architecture in the process. [Spencer Soper / Bloomberg] The 2018 World Cup 2018 kicks off today at 11 am ET, when host team Russia plays Saudi Arabia. Benchmark VC Mitch Lasky has a useful guide to the first round. Meanwhile, FIFA voters overwhelmingly opted for North America — the U.S., Canada and Mexico — over Morocco to host the 2026 World Cup. [Mitch Lasky / Medium] Recode Presents ... AT&T can buy Time Warner, and Comcast has put in a bid to buy Fox … what’s next? Kara Swisher and Peter Kafka will be answering your questions about media mergermania on this week’s Too Embarrassed to Ask. Tweet your Qs with the hashtag #TooEmbarrassed or email them to [email protected] before 8 am PT / 11 am ET today. Top stories from Recode Fortnite has taken over the live video game market. And it’s not even on Android yet. Snapchat is finally opening its apps to developers — and has clearly learned from Facebook’s mistakes. Snap is launching APIs, but won’t share much user data with developers. Automated vehicle technology is starting to show up wherever there’s wheels — including motorcycles. The market is attracting startups and traditional automotive suppliers alike. When you run a startup, “it feels like everything is about to break.” On the latest episode of Recode Media with Peter Kafka, Gimlet founders Alex Blumberg and Matt Lieber talk about Startup, their podcast about the trials of entrepreneurship. This is cool Raccoonaissance.

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posted 3 days ago on re/code
Snap is launching APIs, but won’t share much user data with developers. Snapchat has spent years closed off to developers — it never offered a public API like competitors Facebook and Twitter that let outsiders build features using the app or its data. That’s about to change. Snap announced today that it is launching four new APIs, including a Snap login API that will let people use their Snapchat username to create accounts on other apps, and what amounts to a Snap camera API, which will let people share things from other apps directly to their Snapchat Story. Another API will let you use your Bitmoji avatar inside other apps, like Tinder‘s messaging feature, and the last API will let developers use public snaps (user photos and videos) to create themed Stories on a third-party app or website. Snap tipped its hand on the APIs a few months ago, pushing some of the details live to the app early, but hasn’t commented on them until now. The moves should, in theory, help Snapchat grow its brand with people who don’t use the app. If people start seeing Stories on third-party websites, it could help encourage more sign-ups, or at the very least help people understand what Snapchat does. (This has worked to varying degrees with Twitter — tweets are everywhere.) The Snapchat login option could also help retain existing users. If you rely on your Snapchat account to get into other apps, you probably won’t delete it. Snap’s timing with these APIs opens the company to some scrutiny. Facebook just spent the past three months trying to clean up a mess that was created because the company shared too much user data through its login API. Facebook CEO Mark Zuckerberg told Recode in March that his original belief that people wanted to bring their Facebook data to use inside other apps was “wrong.” There could be a lot of scrutiny on Snap’s APIs, both from the press and from users, given the environment Facebook has created these past few months. It’s also clear, though, that Snap learned from some of Facebook‘s mistakes. Snap‘s APIs share much less information with developers than Facebook’s APIs did. Snap’s login API, for example, only gives developers access to a person’s Snapchat username. It does not give them other demographic information like age or location, and Snap VP of Product Jacob Andreou says, “we definitely are not planning on ever making the full friends list available to developers.” Snap also plans to manually review all API partners. “Any future third-party Snap Kit app integration submitted to us will need to go through a review and approval process to make sure we know how their integration will work,” a company spokesperson wrote in an email. Snap likes to say that its privacy policies are stricter than Facebook’s — CEO Evan Spiegel was particularly clear about that at Recode’s annual Code Conference last month — and with these APIs, Snap‘s trying to prove it.

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posted 4 days ago on re/code
When you run a startup, “it feels like everything is about to break,” co-founder Lieber says. Alex Blumberg and Matt Lieber are seeing a therapist and they don’t care who knows it. More specifically, the Gimlet founders are seeing a business therapist — executive coach Jerry Colonna, who they first met when he appeared on Gimlet’s first podcast, StartUp. That show, hosted by Blumberg, exposed the “myth of the entrepreneur” and how fraught founding a business can be. “If you ask any entrepreneur how it’s going — ‘Oh, we’re crushing it, Peter!’” Lieber said on the latest episode of Recode Media with Peter Kafka. “‘We just made a great hire! We just closed our most recent round of funding! We got Mastercard as a client! Everything’s going great!’ The truth is, the way it feels is 180 degrees the opposite. It feels like everything is about to break.” Now, Gimlet has more than 110 employees on the payroll and, last year, it raised $20 million, bringing the company’s valuation to $55 million. Blumberg said the stakes have been raised such that when he and Lieber make mistakes, they have the potential to do more damage. He praised Colonna as “instrumental” in helping them identify their own limitations before those mistakes happen. “A thing that brings down lots and lots of leaders is their own blind spots about their own triggers, or their own things where they’re acting not out of rational interest but because they’re acting out of emotion that they don’t understand,” he said. “And I think that’s very real. If you haven’t fully come to grips with what your baggage is, it just spreads throughout your organization.” You can listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. On the new podcast, Lieber and Blumberg also talked about how Gimlet is expanding beyond original audio shows like StartUp, Crimetown and Reply All and into two newer businesses: Film and TV adaptations of their podcasts, such as a TV series reworking of the show Homecoming, now starring Julia Roberts, that will hit Amazon this fall; and branded podcasts, which are completely underwritten by a single sponsor. “No one is going to listen to a 20-minute advertisement for Gatorade or Tinder or anyone else,” Lieber said. “So our starting assumption is, put the listener first. Let’s actually make a show that we feel like fills a need in the market.” So for a show like The Secret to Victory, a sports podcast sponsored by Gatorade, Gimlet has educated its sponsors about the importance of “emotional honesty” in audio, Blumberg said. If people hear other people talking in an authentic way, they won’t turn it off or tune it out. And from a business perspective, that sound also ripples out to how a podcast goes viral. “Podcasts are an intent-driven medium,” Lieber said. “Podcasts are not like Facebook, where someone goes and just sees what’s in the Feed, and if the Feed serves you branded content or it serves you your cousin’s photos or it serves you news, you’ll take a look at it. Podcasts, people actually have to seek them out, or a friend has to tell them, ‘Hey, this is a really interesting show.’ That’s the final argument for why you have to make the programming good and it can’t feel like an ad.” If you like this show, you should also sample our other podcasts: Recode Decode, hosted by Kara Swisher, is a weekly show featuring in-depth interviews with the movers and shakers in tech and media every Monday. You can subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Too Embarrassed to Ask, also hosted by Kara Swisher, answers all of the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. If you like what we’re doing, please write a review on Apple Podcasts — and if you don’t, just tweet-strafe Peter. Tune in next Thursday for another episode of Recode Media!

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posted 4 days ago on re/code
The market is attracting startups and traditional automotive suppliers alike. It’s not only cars and trucks: Some companies are starting to focus on making motorcycles safer with automated-driving technology. Exposed to the elements and operating on two wheels instead of four, motorcyclists are particularly defenseless in the event of a crash. According to the U.S. National Highway Traffic Safety Administration, motorcycle fatalities in 2016 happened 28 times more frequently per mile traveled than car fatalities. Yet there’s been little innovation in the motorcycle safety industry until recently. Earlier this year, major auto parts supplier Bosch announced it was working on driver-assistance systems for motorcycles, like adaptive cruise control, which accelerates and decelerates to avoid potential collisions. Before that, a Canadian startup called Damon X Labs also launched with the intention of creating a similar system for motorcycles. Now, Israel-based startup Ride Vision is also working on rider safety features for motorcycles and recently raised its first round of financing, $2.5 million, led by YL Ventures. For now, Ride Vision is focused on creating an alert system that uses relatively inexpensive front- and rearview cameras to give a 360-degree view of the motorcycle’s immediate surroundings. The system uses lights attached to the motorcycle’s rearview mirrors to alert the motorcyclist when there is a chance of collision — whether there’s a car passing or if the rider is leaning too hard. The idea would be to build these systems into future bikes from traditional motorcycle makers — Ride Vision isn’t trying to become a manufacturer like Harley or Honda. While some of the self-driving sensors and systems are the same between cars and motorcycles, it’s a notably different product. For one, because most motorcycle usage — and some 97 percent of motorcycle accidents — occurs in good weather conditions, it’s less important to design systems for rain or snow. That means cameras may be sufficient for their vision systems — and expensive radar or lidar sensors may not be necessary, according to Ride Vision co-founder Uri Lavi. That has the potential to cut the cost and time to integrate these systems into production vehicles. Another difference relates to the driving mechanics of a motorcycle. While driver-assistance systems for cars typically incorporate automatic emergency braking, it’s actually less safe to force a motorcycle to stop abruptly, according to Lavi. Depending on the situation, it may make more sense to speed up or slow the motorcycle to avoid collision. “It can’t brake like a car,” Lavi told Recode. “You’ll kill the driver.” While the mechanics are different, the automated motorcycle industry will likely move in a similar direction as the autonomous car industry. Startups and suppliers alike will rush to partner with major motorcycle manufacturers to begin testing and then eventually producing vehicles with this technology. Ride Vision, for example, says it’s currently in discussions with a number of suppliers and motorcycle manufacturers, but wouldn’t disclose which. Considering the systems’ relatively low demands for hardware costs and capabilities, there may also be an opportunity to sell direct to consumers. It’s unlikely Ride Vision, Bosch and the few others in the space will be alone for much longer. The death rate alone is reason enough for new and existing players to look at making motorcycles safer. And while the motorcycle market is a fraction of the size of the passenger car market, U.S. motorcycle sales still average about 500,000 units a year — which still pales in comparison to motorcycle sales in places like China which saw 1.35 million units sold just in April 2018.

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posted 4 days ago on re/code
If regulators insist. Which might not be a terrible thing. Sometimes you ask a question, and it takes a while to get an answer. Like here: In December, I wondered why Disney, which was already committed to expensive TV sports rights through its ESPN unit, would want to buy even more expensive sports rights by acquiring 21st Century Fox’s regional sports networks. It took until today for the penny to drop. Disney may not end up owning Fox’s 22 RSNs after all. Turns out that Disney has already told investors that it would be willing to get rid of Fox’s RSNs, after buying them, if regulators require it. (This is a little embarrassing: As far as I can tell, Disney has been disclosing this via public filings since April. On the other hand: I can’t see any evidence that anyone else in the press picked up on it, either.) Disney’s stance came to light today when Comcast made its own bid for assets currently owned by 21st Century Fox, and promised to match any regulatory commitment Disney had made, including the possibility that it would have to "divest ... any of 21CF’s RSNs.” Which doesn’t mean that either Comcast* or Disney want to get rid of Fox’s RSNs. The rights those networks own — which give local viewers the ability to watch teams like the New York Yankees — are very expensive, but they’re also very valuable. You could make an argument that pairing them with Disney’s ESPN or Comcast/NBCUniversal’s existing RSNs would be a nice thing to have. But you could also argue that being on the hook for what appears to be a never-ending escalation of rights fees, at the same time that audience and subscriber demand for live sports may have peaked, isn’t a great place to be. And now both companies have said that if push comes to shove, they’re willing to walk away from those assets altogether. * Comcast is an investor in Vox Media, which owns this site.

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posted 4 days ago on re/code
Comcast’s new $65 billion bid for some of 21st Century Fox will force Disney to raise its own bid. Comcast has spent the past few weeks telling everyone it was going to compete with Disney for a big chunk of Rupert Murdoch’s media empire. Now it is making it formal: It is offering $65 billion, cash. That’s $35 a share — what it describes as a 19 percent premium over Disney’s bid. As we’ve noted multiple times, this offer has been telegraphed for a long time. A couple of weeks ago, Comcast even took the unusual step of formally announcing its plans to announce its plans. The only thing that would have derailed that would have been a ruling against AT&T’s plans to buy Time Warner. But yesterday’s ruling in that case — a thorough trouncing of the U.S. Department of Justice’s argument against that vertical merger — looks like a regulatory green light for Comcast and anyone else who wants to buy anything else. Next steps: Disney will decide if it wants to counter Comcast’s bid — but there’s little chance it doesn’t. And the two sides will spend a lot of energy talking up the relative merits of their bids, above and beyond the purchase price. We’ve already laid those out for you (you’re welcome!), but here’s a new one we haven’t written up before from the Comcast team: Almost everything we want to buy from Murdoch — Sky, Star India, etc. — isn’t in the U.S. anyway; by our count, 70 percent of the revenue from those assets is generated outside America. So U.S. antitrust regulators won’t have much to look at it. Your move, Disney. Here’s Comcast’s letter announcing the new bid to Murdoch and his sons Lachlan and James, followed by a press release: Dear Rupert, Lachlan and James, We have long admired what the Murdoch family has built at Twenty-First Century Fox. After our meetings last year, we came away convinced that the 21CF businesses to be sold are highly complementary to ours, and that our company would be the right strategic home for them. So, we were disappointed when 21CF decided to enter into a transaction with The Walt Disney Company, even though we had offered a meaningfully higher price. We have reviewed the publicly available terms of the proposed Disney transaction, as well as the joint proxy statement/prospectus filed with the SEC describing the reasons for the 21CF Board of Directors’ decision. In light of yesterday’s decision in the AT&T/Time Warner case, the limited time prior to your shareholders’ meeting, and our strong continued interest, we are pleased to present a new, all-cash proposal that fully addresses the Board’s stated concerns with our prior proposal. Our new proposal offers 21CF shareholders $35.00 per share in cash and 100% of the shares of New Fox after giving effect to its proposed spinoff, providing superior and more certain value as compared to Disney’s all-stock offer. Our proposal represents a premium of approximately 19% to the value of Disney’s offer as of noon today. We are highly confident in our ability to finance the transaction, and our offer includes no financing-related conditions. We are also highly confident that our proposed transaction will obtain all necessary regulatory approvals in a timely manner and that our transaction is as or more likely to receive regulatory approval than the Disney transaction. Accordingly, we are offering the same regulatory commitments as the ones 21CF has already obtained from Disney, including the same $2.5 billion reverse termination fee agreed to by Disney. To further evidence our commitment, we also are offering to reimburse the $1.525 billion break-up fee to be paid by you to Disney, for a total cost to Comcast of $4.025 billion, in the highly unlikely scenario that our transaction does not close because we fail to obtain all necessary regulatory approvals. We welcome the opportunity to discuss the regulatory issues presented by each deal. We note that there should not be any meaningful difference in the timing of the U.S. antitrust review between a Comcast and Disney transaction. We have made our HSR filing today, which formally begins our regulatory review at the DOJ. In addition, we have already submitted a large volume of documents and data to the DOJ in connection with its review of the Disney transaction. This information largely overlaps with the information that the DOJ will need to review a Comcast transaction. As a result, our transaction should be reviewable by the DOJ in the same cycle as Disney’s transaction. We similarly expect that our transaction should be reviewable by international regulators in as timely a manner as the Disney transaction, and should be as or more likely to receive international approvals, given our relatively small presence outside the U.S. Our Board of Directors has unanimously approved this proposal, and no Comcast shareholder vote will be required for this transaction. Because of your decision to schedule the vote on the Disney merger proposal for July 10, time is of the essence for your consideration of our proposal. We are available to meet at any time to answer questions of the Board, management or your advisors, so that you are in a position to validate the superiority of our offer, and negotiate and enter into a merger agreement, as soon as possible thereafter. Given the very short time frame, today we are filing a preliminary proxy statement with the SEC in opposition to the Disney merger proposal, as we have been advised this is necessary to be in a position to be able to communicate with your shareholders directly regarding the votes they are being asked to cast on July 10. We hope this is precautionary only, as we expect to work together to reach an agreement over the next several days. More detailed information regarding our proposal is attached. I look forward to our discussions and working with you toward completing this exciting transaction for the Fox shareholders. Very truly yours, /s/ Brian L. Roberts Brian L. Roberts Chairman and CEO COMCAST’S SUPERIOR PROPOSAL TO ACQUIRE TWENTY-FIRST CENTURY FOX All-cash consideration Comcast proposes to acquire 100% of the outstanding shares of 21CF for $35.00 per share in cash, reflecting a $65 billion equity value for 21CF (after giving effect to the proposed spinoff of New Fox) and a premium of approximately 19% to the value of Disney’s offer as of noon today. Our all-cash proposal will provide 21CF shareholders with certain value and immediate liquidity. Our proposal is not subject to a financing condition. We have received Highly Confident Letters from Bank of America Merrill Lynch and Wells Fargo. We have prepared a draft merger agreement reflecting the terms described herein and our legal team of Davis Polk and Wachtell Lipton are available to meet with their appropriate counterparts to discuss and review the document. Our draft merger agreement differs from the Disney agreement only to reflect the superior terms described in this letter, to adapt the agreement to reflect an all-cash transaction (including no Comcast shareholder vote) and to provide greater certainty by eliminating the need for any 21CF charter amendments. Our draft is subject to review of any material non-public information relating to 21CF’s proposed transaction with Disney, including with respect to Disney’s regulatory undertaking and the separation of New Fox. Allocation of regulatory risk We have revised our proposal to specifically address the 21CF Board of Directors’ stated concerns regarding the treatment of any required regulatory divestitures, including their tax costs, and a reverse termination fee. · We will agree to the same divestiture package as Disney, i.e., a commitment to divest (i) any of 21CF’s RSNs and (ii) other 21CF assets representing up to $500 million of EBITDA (less up to $250 million of EBITDA attributable to divested RSNs). · We will agree to the same allocation of any tax obligations as Disney in connection with any required divestitures. · We will agree to the same reverse termination fee of $2.5 billion as Disney, in the event the transaction does not close as a result of a failure to obtain the required regulatory approvals. We will also agree to behavioral restrictions as extensive as those agreed to by Disney and, like Disney, we will also agree to litigate any action taken by the Department of Justice to block the transaction. Reimbursement of Disney Break-Up Fee In addition to our payment of the $2.5 billion reverse termination fee, in the unlikely event that our transaction is terminated due to a failure to obtain the required regulatory approvals, we will also agree to reimburse 21CF for the $1.525 billion break-up fee required to be paid to Disney in connection with termination of the Disney transaction and entry into a merger agreement with us. Sky Comcast has separately announced, pursuant to Rule 2.7 of the UK City Code on Takeovers and Mergers, a pre-conditional all-cash firm offer for the entire issued and to be issued share capital of Sky plc. We intend to pursue this offer in parallel with our acquisition of 21CF. Of course, the terms of any transaction between Comcast and 21CF will need to be consistent with our respective obligations under the UK takeover regime.

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posted 4 days ago on re/code
And it’s not even on Android yet. People aren’t just playing Fortnite in droves, they’re watching other people play it en masse as well. Epic Games’ Fortnite accounted for more than a third of streaming video game views globally in May, up from just 2 percent in February, according to viewership on Mobcrush, a platform that lets gamers stream video across social media sites, including Twitch, YouTube and Facebook. The free “battle royale” game, which became available on PC and gaming consoles last September, didn’t even launch on iOS — where it is more popular than on PCs or consoles, according to Mobcrush — till this March. Yet it took just one month on mobile to supplant Vainglory, which has been around since 2014, as the most popular video game to watch. Fortnite isn’t even available on Android yet, so viewership will likely jump much higher when it is. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["JGJQg"]={},window.datawrapper["JGJQg"].embedDeltas={"100":600,"200":600,"300":600,"400":600,"500":600,"700":600,"800":600,"900":600,"1000":600},window.datawrapper["JGJQg"].iframe=document.getElementById("datawrapper-chart-JGJQg"),window.datawrapper["JGJQg"].iframe.style.height=window.datawrapper["JGJQg"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["JGJQg"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("JGJQg"==b)window.datawrapper["JGJQg"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Hundreds of millions of people watch competitive gaming, known as eSports, and in the U.S. already outnumber NHL viewers, according to a March report by Bernstein Research. By 2020, eSports is expected to be the second-most-watched sport after the NFL. The eSports market — which includes revenue from sponsorships, advertising and media rights — is currently worth around $900 million worldwide and is expected to reach $1.65 billion in three years, according to the report. Fortnite generated $300 million in revenue in April through nonessential in-app purchases like clothing, and currently has 125 million players. It’s the fourth-most-downloaded iOS app in the U.S. and the No. 1 action game, according to App Annie. It’s bringing in more in-app revenue than Pokémon Go or HBO Now.

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posted 4 days ago on re/code
Plus, inside Trump’s new world order; why is Twitter stock at a three-year high?; Apple’s AirPods as an omen of cultural change. A federal judge ruled that AT&T can buy Time Warner — and didn’t apply any restrictions or conditions to his decision. That clears the way for other “vertical” mergers. Next up, sometime today: Comcast will formally announce a new bid for the 21st Century Fox assets Disney has already agreed to buy. [Peter Kafka / Recode] Twitter’s stock is at a three-year high after being a relative train wreck for years. Yesterday it closed at $43.49 — up 155 percent from a year ago. What is going on? [Kurt Wagner / Recode] Tesla is laying off 9 percent of its workforce. Elon Musk said it was a “difficult, but necessary” restructuring that would help the company turn a profit, and wouldn’t affect its production of its mass-market Model 3 cars. [Washington Post] E-scooter startup Bird is seeking a $2 billion valuation, just weeks after it raised $150 million at a $1 billion valuation and only three months after raising at a $300 million valuation. One possible investment thesis: Big ride-hail players like Didi, Lyft or Uber will soon pay up to acquire Bird. The concept of dockless scooters is one of the purest manifestations of what analyst Ben Thompson referred to in 2016 as “Everything as a Service.” [Dan Primack / Axios] After pressure from Amazon, Seattle’s city council has voted to repeal its contentious so-called “head tax,” less than a month after unanimously passing the tax, which would have taken $275 per full-time employee from companies generating over $20 million in revenue, including Amazon and Starbucks. The tax was earmarked for homeless services and affordable housing. [Bryan Menegus / Gizmodo] Following a two-month suspension, Chinese telecom firm ZTE will resume trading tomorrow after agreeing to pay up to $1.4 billion in penalties to the U.S. government, radically overhaul its management, open itself to U.S. inspections of its sites and improve public disclosure of its supply chain. [Sijia Jiang / Reuters] Are Apple’s AirPods an omen of cultural change? The company’s slick, wireless earbuds work great, but they may foreshadow startling changes to the social fabric. [Ian Bogost / The Atlantic] Recode Presents ... So AT&T can buy Time Warner. What’s next? Kara Swisher and Peter Kafka will be answering your questions about media mergermania on this week’s Too Embarrassed to Ask! Tweet your Qs with the hashtag #TooEmbarrassed or email them to [email protected] today. Top stories from Recode As a record exec, Lyor Cohen used to be a bit anti-YouTube. Now he’s soaking in it as the company’s global head of music. Listen in or read along as he talks about the launch of YouTube Music on Recode Media with Peter Kafka. This is cool Couch shows vs. phone shows.

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posted 4 days ago on re/code
Ex-Uber CEO Travis Kalanick is also disclosing his first venture capital investment. The real estate industry requires a lot of money to challenge it: Startups like Opendoor — which buys houses from people and flips them for a profit — not only need investment to grow into more cities, but also serious lines of credit in order to purchase homes. Opendoor has already taken out $1.5 billion in loans for home buying. And the company now says it has accepted another $325 million in new financing that values it at more than $2 billion, according to a person familiar with the matter. That valuation validates the expensive business model and the company, which was last valued in 2016 at about half that figure. But that’s not all: Opendoor remains in serious talks with SoftBank’s Vision Fund for additional money that could arrive in the next few months, according to people familiar with the conversations. Those talks are still active despite the new funding. Opendoor will expand to 50 cities with the $325 million round. But SoftBank, with its huge $100 billion checkbook, could help Opendoor expand to even more as soon as later this year. The Japanese investor typically invests hundreds of millions of dollars into private companies, and that sort of check would be expected here, though some of the money tends to buy out existing investors. SoftBank has been negotiating with the startup to try and find deal terms that appeal to such a large investor, the people said, but Opendoor did not want to wait for those talks to settle before closing on the first tranche of $325 million, according to one person. Opendoor CEO Eric Wu declined to comment to Recode on any future funding talks. But he acknowledged that his business model required tons of money. “We recognize it’s both a technology software business and an operations and capital business,” he said. “It’s similar to Apple or Amazon or Tesla.” Wu said that in addition to growing from the 10 markets in which it operates today to a goal of 50 by 2020, Opendoor would double its current staff size of 650 over the next year or so. Opendoor competes with the legacy real estate broker industry and offers a two-sided marketplace that tries to remove the hassle of buying and selling houses. The company uses its loans to buy homes sight unseen, makes improvements and then flips them for a small profit. The company makes money by charging about a 6 percent fee on the sale price. This round is led by typical big-money backers like General Atlantic and some real estate-specific names like the large home-building company Lennar, but two smaller investors also stand out: Andreessen Horowitz and the 10100 fund, the new investing vehicle of former Uber CEO Travis Kalanick, in his first disclosed venture capital deal. How did Wu convince Kalanick to invest? Wu’s chief operating officer, Gautam Gupta, was one of Kalanick’s key deputies at Uber, and made the connection.

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posted 5 days ago on re/code
Unlike years past, people aren’t just buying Twitter because they think the company will be acquired. Here’s something that few would have predicted last summer: Twitter stock, which has been a relative train wreck for most of the past few years, is suddenly at a three-year high. Yesterday, it closed at $43.49, up 155 percent from a year ago. Why? On the surface, this doesn’t make much sense. Twitter’s user count last quarter — 336 million — was just 3 percent more than it had a year ago. CEO Jack Dorsey still has two jobs. And while first-quarter revenue was up 21 percent year over year, it was up just 12 percent from two years ago. (For comparison, Facebook’s revenue is up 122 percent in the same two-year stretch.) if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["D3gI2"]={},window.datawrapper["D3gI2"].embedDeltas={"100":675,"200":575,"300":550,"400":550,"500":550,"700":525,"800":525,"900":525,"1000":525},window.datawrapper["D3gI2"].iframe=document.getElementById("datawrapper-chart-D3gI2"),window.datawrapper["D3gI2"].iframe.style.height=window.datawrapper["D3gI2"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["D3gI2"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("D3gI2"==b)window.datawrapper["D3gI2"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); But there are reasons Twitter stock is doing well. And unlike years past, they aren’t just tied to the belief that Twitter will simply be acquired by Google or Facebook. Twitter is profitable This one’s easy: Twitter is finally making money. Not a lot of money, but some money, nonetheless. The company turned its first-ever profit in the fourth quarter of last year, and was also profitable in Q1, bringing in $61 million. Twitter’s path to profitability was centered around cutting costs, but managing money appropriately is important, and Twitter is doing a better job of that now than it ever has. Twitter’s growth is fine — if you look at the right audience Twitter’s broad, monthly user base isn’t really growing, but the population of people who use it every day is growing. Twitter daily active user growth was more than 10 percent for the fifth straight quarter in Q1, which means more people are coming back to the service more frequently. That matters, even though Twitter doesn’t actually reveal how many daily active users it has. Twitter Twitter’s product is getting better The fact that people are coming back more often is also a sign that Twitter’s product is simply getting better. Twitter isn’t taking the Facebook approach, which seems to be expanding into every industry imaginable. Instead, it’s focused on improving the kind of stuff Twitter should have done right all along, like showing you tweets from people you actually find interesting, or curated tweets from live events, or cleaning up its abuse problem. “Execution is improving,” said analyst Rob Sanderson from MKM Partners, who bumped Twitter up to a “buy” rating in April. “They were [previously] stretching their arms pretty wide and not really intensely focused on that core. And since they’ve streamlined, I think that helps.” It’s hardly perfect — cryptocurrency spammers are one of Twitter’s many underbellies today — but seems to be improving. People still believe Twitter has potential Some believe it can still be huge, though the belief that it could become the next Facebook is long gone. Twitter is truly the go-to place for live events and breaking news. And despite all of its troubles these past few years, nothing has been able to surpass it in that department. Facebook, for example, has struggled to get into breaking news and just closed its trending topics section. “People used to say it’s just Trump using [Twitter],” says BTIG analyst Rich Greenfield, who referenced tweets from Israeli Prime Minister Benjamin Netanyahu. “This is way beyond Trump. This is becoming the platform of choice for information dissemination and engagement.” Twitter isn’t just rising on takeover speculation anymore Twitter has been a popular takeover target for years, but many believe Dorsey has little interest in selling. And a failed sale attempt in late 2016 proved Twitter was already too expensive for anyone to stomach. That part certainly hasn’t changed. Twitter’s projected price tag two years ago was probably half of what it would be today — its recent stock surge put Twitter’s market cap at $32.5 billion. “I think very little of that [takeover speculation] is in the stock,” Sanderson said. “I think a lot of that has subsided and doesn’t seem to be much of the narrative today.” Greenfield said earlier this year that he thought Twitter could get acquired. Now he’s less sure. “Just think of how many companies are tied up in large acquisitions,” he said. “But I do believe this is an incredibly strategic asset for a wide array of companies.”

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“I think as Americans we’re raised to believe that hard work and a good idea will lead to success and riches, and that’s simply not true.” On this episode of Recode Decode, hosted by Kara Swisher, author Corey Pein talks about his new book, “Live Work Work Work Die: A Journey Into the Savage Heart of Silicon Valley,” a critical look at how tech might not be the solution to all our problems. You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation. If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode. You may know me as someone with a savage heart, 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 Corey Pein, investigative reporter and a regular contributor to The Baffler. He’s the author of a new book called “Live Work Work Work Die” — which is my favorite headline ever of a book — “A journey into the savage heart of Silicon Valley.” Savage heart. Corey, welcome to Recode Decode. What are you, Joseph Conrad? Corey Pein: That was the allusion. I figured. Anyway, so let’s talk about your background. I want to get to how you wrote this book, but give me your very quick bio, how you got to where you got. Oh, that’s difficult. I grew up in a trailer park in eastern Washington State. I tinkered with computers since I was a kid, then discovered that there was a whole world of arts and music and writing, and I made the foolish decision to become a journalist. Not go into computers, right. Okay. I got into the campus newspaper at my college, and then went to Columbia Journalism School. I did too. And then I’ve been globetrotting. So I hear. Yeah, a waste of time. But go ahead. Oh, J school was a waste of time. Yeah, my time, but I don’t know about yours. I met a lot of rich people. That’s been useful, so that’s my ... I already knew a lot of rich people. Well, congratulations. Not all of us are so lucky. I grew up in a very large mansion myself, not a trailer park. So I kicked around newspapers for about 10 years until the bottom fell out. Yeah, I know. You talked about that in the book. I want to go into that a little bit. So you didn’t just kick around newspapers. You worked for newspapers, but you also did some news startups, so talk a little bit about those. That’s true. Well, the first time I left a newspaper job, I launched a one-man-band investigative reporting operation back when crowdsourcing was the thing. It was called WarIsBusiness.com. I would say that editorially it was more successful than it was financially. Okay, explain what you were doing because I love ... You called it a journentrepreneur, and it’s a reportrepreneur, just so you know. Yeah. Well, when I thought that was a really good idea and still possible. I did before I got educated. The idea was to put a name and face on the people who were profiting from war through defense contracts for the arms trade. There wasn’t really a resource like that. You could go online and look at where federal contracts were going, but the data was really low quality, and nobody still had a picture of who these people were. So that was the original mission, and then I combined that with investigative reporting. I did that for about a year and raised a little bit of money, but it burnt out pretty quickly. What was the problem? Well, I don’t like selling stuff, so. Right, it’s a hard sell. It’s a hard sponsorship, “Brought to you by GE.” Part of it, I realized the only way I could actually monetize it was to sell ads or at least services. To defense contractors. Yeah, to the people I was supposed to be covering critically, so there was a growing contradiction that I couldn’t get around after about a year. I also realized that although I had broken some stories that had gotten picked up by places like Mother Jones and Maddow’s program, the only people that really cared were people in the military. I mean, the American public just isn’t that interested. We don’t have a draft anymore. So, I burnt out for a lot of reasons, but mostly it was overwork. It was trying to be the lead developer, the lead content generationer ... What did I just say, content generator? Generationer, but that’s okay. Cut that. All right. We’re not going to cut it. The lead content generator. And the incompetent salesman publisher in chief, so I kind of gave up and went back to my old newspaper job in Portland, at Willamette Week, which has a bunch of excellent reporters. And then rejoined my wife in London after a little while so she could finish her PhD, and there I joined another startup called Demotix. It doesn’t exist anymore. Fascinating company. Explain what it did. It was a great idea, actually. It was a photo agency, so middleman, essentially, for freelance photographers. When I signed up, we had about 35,000 all over the world. Many of them were in risky places like Syria, Turkey, India, shooting protests and wars. So you were creating a marketplace for war photographers, essentially, or conflict, or difficult places. That was kind of our bread and butter, but we also had just people covering press conferences and red carpet events and anything you could think of. Yeah, about 35,000 when I joined. I came on as editor in chief, and my job was essentially to professionalize the operation. Because we had people from all over, but many of them, English wasn’t their first language, and they didn’t have any ... Right, so you were taking pictures and maybe selling them to a big [outlet], AP or ...? AP, AFP, Reuters, BBC, New York Times, and some would be very big-selling, tens of thousands of dollars if you get the right shot. I mean, that’s how that market works. But most were much, much less than that. So, with the acquisition — it was bought by Bill Gates’ company Corbis, which he then solely owned — I was expecting a big windfall. Here comes my budget, my great editorial budget. This is why I left newspapers. And of course the opposite [happened]. First thing they wanted to do was cut the staff 50 percent, and they had no plans to make people who were in dangerous positions safer, which I thought was ... Or pay them more. Or pay them more. They wanted to pay them less. I thought it was completely unethical. Even though they were going to sort of nudge me out of my editor in chief job, I quit because I wanted to be able to speak openly about that. Because I think that, not just journalists, but any company that employed a freelancer has a duty of care to make sure they don’t kill themselves in the line of their employment. I agree with you. I was pretty disillusioned after that. Kind of kicking around the apartment wondering what to do or if I’d ever work in journalism again? In London? Actually we’d moved to Brighton by that point, another Silicon Beach, one of the 20 Silicon Beaches. You know what I mean? Okay. If you say so. And it took me a while, but eventually I decided to do a novel about tech because I heard that Google hired Ray Kurzweil to be director of engineering. They did. And I thought, “Why? Do they believe this stuff?” And I figured, given my experience ... He’s still there, I think. Yeah, he’s still there. I don’t know what he’s up to. Extending his life, or trying to. I think one time I said, “You’re going to die,” or something to him. It doesn’t matter, I think I’ve ... The early version of this book had an extended dialogue with his ghost. That got cut, cutting-room floor. So you decided to come here. So talk about that journey. Well, I decided eventually to pursue this as a nonfiction project, and I decided to pursue it in a way that I felt like other books that had ... There had been that. People had done this idea of ... Well, I missed it. Not by me. I decided to have ... The entrepreneurial experience as authentic as I could concoct it was the best way to cover all of the things I wanted to cover about the tech industry. If I’d taken a more conventional approach and followed one company or one entrepreneur, then I wouldn’t have been able to hit all the points I wanted to hit, so I had to generate the narrative through my own actions. So, I showed up, and I decided, “Well, How do I break in?” I did what I thought anybody fresh off the boat here trying to sell their company would do, and I opened up Eventbrite and Meetup and I’d just start going to parties. Right. Events. There’s a lot of freebies to be had, and a lot of people hustling and pitching their startups, and everybody’s looking for a better job, and that’s where you get the gossip. So it was a great way in, not just as somebody doing the entrepreneur thing but also as a reporter, because that’s where people talk, is when they’re lubricated. Right. Give me some examples of places you went to. Had you lived here? No. I’m from the Pacific Northwest, but I’d never really been to San Francisco. What was your concept of Silicon Valley before you ... Just exactly when it happened, or just the show “Silicon Valley”? I’d seen the show. I’d seen the first season. I haven’t really caught up with it then. My concept was, of course I’d read books too. Which ones guided you? I’m just curious. Well, there was the ... Dan Lyons’ one was pretty big, but that back was in Boston, very funny. I didn’t read it then. Yeah, that was after I signed the contract. There was the one about the Google guys that came out pretty early. The Amazon book “The Everything Store” had come out. The book about Apple, not the Isaacson book but sort of the main tome before it. I’m really flubbing the titles here. Crazy or something still ... Whatever, yeah. Yeah. And the one with all the psychedelics and the counterculture origins. So I’d read all those, but actually I would say that Evgeny Morozov and Jaron Lanier, and their kind of polemics were more influential in how I approached the book. Why’s that? I think they’re right, and they’re not obviously selling something, unlike many of the other writers on Silicon Valley. So when you got here, you were expecting what? And then what did you find? Honestly, I was expecting to walk into some easy money. You know, I have an Ivy League degree. I’m a white man. I was wearing a hoodie. I thought I had everything that I needed to have. There were stories coming out all the time about these ridiculous startups that were getting funded and I thought, “Well, how hard could it actually be?” It was harder than I thought. All right, so let’s go through that. You arrived and your idea was ...? I had a few, but only one made the book. The startup that I write about pitching in the book was called Laborize. It’s a unique SAS product. It’s strikes as a services. The idea was, you would hire us to organize a union drive at your competitor, thus slowing their operations, distracting their management, and demoralizing their ... Did people realize you were fucking with them or not? Well, people ... no. I mean, some, maybe. It’s a good question. I never quite let them know one way or the other, honestly. Right. Explain your process of going around. Well, I tried everything. I tried cold calling, cold emailing. I tried going to networking events and buttonholing VCs. I went to Cougar Night out at the Rosewood Hotel, there are a lot of VCs there. I just tried to have my ear to the ground. Where are people? Where can I get them in social situations? And that proved completely fruitless. Like there was an incubator in the Twitter building that I went to an event there and saw that somebody, a VC, had office hours. It was written on their whiteboard, so I just took a note of that and then showed up later for the office hours hoping to crash. And none of that ... I had very bad luck. So talk about those experiences. Give me a bad luck [example]. What happened? You go into ... Well, once there was one down in SOMA, and I forget the name of the place but I waited outside and followed somebody in when the doors were opened. I gave them my card. I had these business cards printed up that said, “Future billionaire at AOL.com.” Oh, no. Oh my god. You were just fucking with people. What do you mean? I’m just ... Okay, go ahead. People complimented my chutzpah, but I didn’t get any meetings that way. Eventually I resorted to something that I haven’t really seen a lot of reporting on, and which should probably be illegal. Because it’s illegal in Hollywood to scam aspiring actors by doing fee workshops to ... Sure, yeah. But there’s a huge pay-to-pitch industry around here. Yes, there is. And so that’s really where I ended up getting in front of people that supposedly could invest in my company. Go through that experience. Let me ... There were a couple. Startup Weekend isn’t really ... I mean, you do have to pay a fee, but that’s not exactly the thing. There was one I went to down in San Jose, and it was like a $30-$40 ticket. You would show up. There would be 100 other people there who’d paid to get 20 seconds or 30 seconds in front of a couple of VCs, like a “Shark Tank” kind of situation. And everybody would just get up and pitch and people would clap or not. And then the investors would ... I guess the supposed value proposition is that they’d give you feedback that was supposed to be helpful, but. I’m not sure subjectively, and I’m not really the expert, I’m just a humble reporter, not a genius investor, but it seemed like the feedback kind of changed just on a whim. You know, like they were just trying to think of something to say to shoo the people along. They were, just so you know. So what was your goal here? Is it a game for you, or that you really wanted to see if you could actually succeed? I wanted to write an entertaining book. Right, that’s what I figured. So what happened to your startup? What happened to the ... It’s still online, Laborize.com. If anybody’s interested, there’s a contact email, and we’re accepting all C-stage ... So you got no money. You got no money whatsoever. So that means Silicon Valley works, right? That it didn’t give you ... Why? I mean, it was a great ... I had a lot of people say it was a great idea. Really? It’s a terrible idea. Why? It’s just terrible. There’s so terrible ... The only problem with it is that it’s illegal. I didn’t even know that, but I just think it’s terrible on the face of it. I don’t think it means Silicon Valley works. I mean, look around. So go more into your experience. I want to ... I think it means that I was not very persuasive, so that’s perhaps on me. But talk about, what did you hope to accomplish by doing this? Is it just to see the scene and how it worked? You tried to get meetings. You didn’t get any. I got the pay-to-pitch meetings. You did the pay-to-pitch meeting, and then what? I want to hear your story. To pursue? Yeah. Well, this is ... I mean, I want people to buy the book. No, I get that. I get that. The goal of it is to show how it works, or to give a guide. I hope to illustrate some of what it’s like for someone who doesn’t have a lot of connections, and it’s one wall after another. We’ve heard the story of the winners time and again, and you don’t hear about the overwhelming majority of startups that fail. So that’s part of the goal, to show what it’s like for the losers, and there’s a lot of them. But also I was kind of hoping that somebody would say yes so that I could humiliate them. Meaning? Meaning I have a chip on my shoulder about the tech industry. I’m a newspaper guy and they ruined it for me. All right, so we’re going to talk about that more when we get back, about your chip and what you think tech is doing to media and other things. I do want to hear more about this journey of yours and what you were trying to do. We’re here with Corey Pein, investigative reporter and a regular contributor to The Baffler. He’s author of a new book called “Live Work Work Work Die: A journey into the savage heart of Silicon Valley.” [ad] We’re here with Corey Pein, the author of “Live Work Work Work Die,” which is about his experience — fake experience or sort of experience — as a ... trying to become a ... I was definitely trying to have it both ways. I’m not. All right, that’s what I mean. So can you explain the title, “Live Work Work Work Die”? Well, that’s the future that I believe Silicon Valley is building for all of us. Explain that. Our lives are turned into a profit source through data mining. If we are an employee or a contractor or even a user of these ... I mean, users are part of the labor force for the big platforms now. I think the vision is they have obligations to us as labor, and we have no or few options but to do what they say, and to abide by the terms of service until we’re all used up. So talk about that idea, because it’s one of the things that Facebook and others pushed back on. I just did an interview with Tim Cook and he said, “You’re the product.” He was declaring what I think everybody thinks, which is the user is the product in most of these business. Which caused Facebook to be very angry at him for pointing out what I think was the obvious. It’s not like he’s the first person to say that. Exactly. No, but they got real mad because he did it, I guess. I don’t know why, whatever. They’re very touchy, aren’t they? It’s kind of weird. They’re very touchy. Yeah, it is kind of weird. Tell me of that idea of recently ... Use Facebook in the example, the concept of what you’re putting out, which I think is completely right. Look at this so-called Cambridge Analytica scandal. As far as I can tell, they were using Facebook for the purpose that Facebook exists. Facebook’s business model is to package, compile, collect and sell our information to whoever pays. Along the way there’s a lot of perhaps under-examined damage that it’s doing to us as human beings, I mean in terms of the reward, the dopamine cycle in our brains. I would really like to know what they’ve learned in their own internal research as far as how the algorithm works, what we see when we log on. And then what we do. Yeah, and what we do. What it’s showing us. What it’s not showing us. How it tracks our usage and perhaps sends messages through notifications to manipulate our responses, which are totally ... I mean, we’re animals. It’s not a big mystery that we have predictable behavioral responses. I think it’s troubling that a few tech corporations seem to know more about that than most governments or certainly the public at large. And I don’t think that ... Frankly, I don’t think it should be legal to make money the way that Facebook does. I heard Ron Wyden onstage at the conference in Portland. He said, “People should own their data. That should be the new legal principle.” I think I couldn’t have said it better myself. Why should we allow companies to profit from things about us that we don’t even know simply so that we can access a phone book? So what do you think is the result of these hearings? Ron has talked about that for years, the concept of it. Why has it not gotten to the general public? Do you know what I think it is? Well, first of all, the democratic party has been very close to Silicon Valley all through the Obama years and since Clinton’s, right? Yes they have. I did a reading in D.C., and I was just there. The word around the Hill was, I’m paraphrasing. I’m putting this in the simplest and most cynical terms that I can: “We don’t care if you disrupt newspapers or schools or the trucking industry and put all these people out of work. But, you mess with the elections and that’s where we eat.” So that’s why they’re mad, and that’s why I think that you’ll see more mainstream media coverage be more critical of the tech platforms, because the Democratic party is maybe just not as friendly as it was during ... That’s putting it mildly. Oh, they’re very unfriendly, not all of them. I had an interesting interview with Chuck Schumer where he was way too positive about Facebook, and then I had one with Cory Booker and others who were not. Well, Schumer probably just hasn’t been briefed yet. That’s a fair point. But what was interesting was the tonality had changed really drastically. You’re 100 percent right. I don’t know if it’ll stay that way because I thought those hearings would ... There’s a lot of money. There’s a lot of money in it. That’s part of the book, too. It’s not simply a misadventure story, although that’s part of it. I tried to make it fun. I do go through the unicorns and what made them all work. One pattern I discerned of successful startups large and small was just a willingness to flout the law and regulations and then patch it up later once you’ve made a lot of money. Right. Well, we’ll get to that in a second, but I want to talk more about the concept of what, when you talk about this, the uses of data and you as the product, essentially. Where does that lead, from your perspective? To a feudal society. Okay. Explain that. There’s not really ... What does that look like? How is it feudal? I think it looks like ways that you would hear it described by some people in the Valley. I suppose Balaji Srinivasan would be the most carefully worded advocate of something like this. He’s advocated what he calls a cloud kind of governance structure for the world where people choose their countries or how they want to be governed in a very consumer fashion. So, you don’t like your government; you pick up and leave. And I think that’s actually a really popular idea in Silicon Valley. Another way I’ve heard it expressed is from Peter Thiel’s friend, Curtis Yarvin, a.k.a. Mencius Moldbug, who talks about having a global patchwork of small city states, which would be essentially corporate shareholder dictatorships. I suppose you could have one where all the hippie anarchists would go and do their own thing, but it’s hard for me to imagine how democratic states would survive in that kind of environment considering that corporations have all of the money and power. Right. I do look at these companies like nation states, and some of them are better than others. There was a point in the conclusion ... Apparently last year, I think it was Denmark hired the first ambassador who’s not an ambassador to a country, but is an ambassador to like Google, Apple and the American tech companies. I think we’ll see more of that, especially with Trump in charge. I mean, if you’re a foreign government, would you want to deal with the Trump administration? Or Google. Or Google? Google. Exactly. I think a lot of companies are going to make that calculus and frankly consumers already are. In many ways we already treat these platforms as the suppliers of bread and security. We just had this news about Twitter today and it’s like, “Oh my ...” It’s like a national security crisis. Explain, because this will be later. Yeah, sorry. Twitter just announced before we recorded that there was a breach and they had basically every user’s password in plain text sitting around somewhere. For the citizens of Twitter this is a big deal. This is like the gates are open. For a second, yeah, 100 percent. They should force-change everyone’s password. Well, that would be the right thing to do. Turn it off and then ... But here’s the thing. This is another way that they’re already more powerful than governments, these companies. You would think that there would be a government agency or entity or a regulator or somebody who would be able to hold a company accountable for a breach like this, but I’m not aware of what that is. There isn’t. Yeah, later. Later, when it happens. Yahoo was just fined a certain amount of money and probably faces other charges but has yet to really pay for a massive data breach. And it happens again and again and again. Elizabeth Warren talks about this, but very few others. I think there’s still a lot of educating to do with the political class. It may take a whole new class or generation of ... You’re right. They are catching on because of the election manipulation, not anything else. And they should be paying attention to job disruption . So let’s get back to your book. Talk to me about some lessons you learned from doing it, from your journey. No. 1 lesson, if you’re hearing about an opportunity, it’s probably too late. The people that have made their money have moved on to the next thing. I was a little naïve about that. Meaning? When I came to do my reporting, most of which took place in 2015, I thought that the easy money was still flowing freely, and I was mistaken. I think it had pretty much, the ladder had been pulled up by that point. Clearly you hadn’t got into blockchain yet. That’s the perfect time. Well, right. I thought it was all Internet of Things. Oh, damn. It is hard ... And also that it’s essentially random, what the next big thing becomes. It’s all marketing. I learned that. I was surprised how little tech and innovation actually mattered when it came to which companies blow up and which wither away. Actually, it’s the stupidest thing to do, to invest a lot in research and to invent something new. I mean, you want to sell the product first and then have somebody underwrite all that stuff. Usually it’s the government, right? For the largest, most-successful companies. Now, I don’t know, but I was actually surprised. I was maybe not cynical enough about that side of the process, how much of it was sales. I was surprised how unhappy a lot people that work at tech companies are, especially considering their salaries. Why do you think that is? Talk about the unhappiness. Well, I talked to one guy. I took him as an inspiration. I met him at a conference, and he was just kind of a chubby, goofy, young guy, and he was glad-handing everyone and schmoozing and pitching a startup, and he’d already raised four million in the seed round or something. I was like ... And just for a Groupon clone, right? Right. And I thought, “Wow, that’s really impressive.” Good for him. I’m talking to him, and after a few drinks he says, “I was happier when I was working as a manager at a restaurant. I’m losing friends. I mean, my friends are in this startup and it’s too stressful. It’s become tense. I never see anyone anymore. My apartment sucks. I should have stayed at the restaurant.” He said, “I would have been happier if I’d just gone to work for the government, had a steady nine to five.” I think there’s probably a lot of people who feel way. Why do you think that is? You have this “Live Work Work Work Die,” but what do you think is wrong with the culture in that regard? I think as Americans we’re raised to believe that hard work and a good idea will lead to success and riches, and that’s simply not true. The main factor is probably who you know, and then on top of that luck. And who you know is a byproduct of luck, so you can really just boil it down to that. I think people create a lot of unnecessary stress and misery for themselves trying to achieve something that, one, may not be possible for them because of who they are or just their luck. Two, it may not be that desirable anyway. I don’t see a lot of startups that are even pretending to do good anymore like they did a few years ago. Now it’s like, “Who’s throat can we slit to pick their pocket?” It’s really ruthless and mercenary now about extracting value from users. And labor and all the usual suspects, and privatizing public assets and on and on. I mean, they’re giving Wall Street a run for their money here. So why does that idea persist that they’re doing good? Because they still do have a do-gooder mentality. I agree with you completely. I get that. I don’t know if they’re very adept throat slashers particularly, but. Well, it is a little silly sometimes, right? So the Trump people are incompetent too, and they still do a lot of damage. Right. Why does it persist? It’s a more appealing story. I did a reading at Stanford last night and I got a question. It was like, “So what’s a good thing that the tech industry’s doing that’s just unambiguous?” I said, “No, nothing.” Nothing? Yeah. Well, I was happier before I had a smartphone. I’ve downgraded to a dumb phone. Most of this stuff I don’t need. I like my 2008 MacBook Pro a lot better than my new one. I could change the battery. Every new release and innovation is just designed to extract more money out of us and degrade the product. I’m not sure how my life has been improved. So what should happen? I want to get into the next section about where tech is going because I think it really is in a crisis in the area that they did it in. When it initially started there are, compared to, I don’t know, a chemical company, there were bigger goals. I think that’s probably fair. You know what I mean? There were bigger goals of expanding people’s intelligence, expanding people’s meaning. I do think they were there at the start, and it certainly wasn’t, “Let’s make some pesticides and sell them,” you know? Right. But I think there were blinders on in that period. Guys like Ray Kurzweil, who was kind of the inspiration for the book, I respect his intelligence. Explain why that was. Well, because he got hired at Google, and I just thought it was crazy that a company of that size and power was interested in the singularity. So they’re trying to accelerate this vision? And I think yeah, actually, they are. I think Google just collects china dolls. That’s what I think. I’ve seen them do it for decades. Okay. That’s a good theory too. I used to when I was a ... Years ago, when it was very small, every now and then someone would pop out of a room at the old Google, which was a very small place, when I was walking around with Larry or Sergey. It would be like Doug Engelbart, or suddenly there was Vint Cerf. “Oh hi, Vin. You created the internet, right?” But he was working there, just working. I think he still is. He’s the chief internet evangelist. Whatever, they just collected people, like someone from very early days. You’d be like, “Oh, hello you.” Or they were doing something. It was like you were collecting dolls. Well, I think the optimism was misplaced because I remember from one of Kurzweil’s books, it was like, “Oh. Well, we don’t really need to change anything right now. The important thing is that we keep funneling resources to the tech sector so that we can accelerate the singularity, and then the nanobots will clean up all the pollution that we’ve made.” And I just ... I don’t think that’s a safe bet when we’re talking about seven billion people. You don’t believe that nanobots are our future? Well, even if they are, what if something really bad happens in the meantime? I mean, it already is. Yeah, contingencies is not what Silicon Valley does well, do they? No. And also immediate harm reduction. Meaning? Like what can we do to make things better now? You just saw Jeff Bezos talking about, “The best thing I can think to do with my $130 billion is to build rockets.” And it’s like, people are starving. The world’s on fire. Rockets are great, but there’s not room for everybody on them. Yeah, but then they can leave. Well, that’s the idea, isn’t it? I talk about that at the end. We’re going to get into that next when we get back. We’re here with Corey Pein. He’s the author of “Live Work Work Work Die.” Obviously, he does not have a positive outlook on where Silicon Valley’s going. But we’re going to talk about that and where it is going, next. [ad] We’re here with Corey Pein. He’s the author of “Live Work Work Work Die,” three “works.” You write for The Baffler. Explain what that is to people who don’t know. The Baffler was sort of an indie magazine founded in the ’90s by Thomas Frank, who people probably know from “What’s the Matter with Kansas,” and I think his most recent book is “Listen, Liberal.” He’s a leftist commentator, a historian, economist. I’m not sure of his exact field, but he’s known for his biting sarcastic wit, and that’s really the tone. And the mission of the magazine is to, as they put it, “blunt the cutting edge.” When you think about tech and where we are, you were going into it, I think, to point out the ridiculousness of it, the canard that is Silicon Valley. That’s what I do. Yes, I know. Let me go back to that question. Is there anything good about it? Do you feel like it’s ... that it has things? And where is it going? Or will it just continue to sort of twist and eat itself? I’m not sure where it’s going. Two years ago, or even last November when I was finishing up the last draft of the book and getting it ready for publication, I thought, “Maybe this bubble won’t end. Maybe they’ve actually succeeded in reordering the economy in such a way that it doesn’t matter if they screw up, and they’re too big to fail, in a sense.” And now I’m not sure. My idea about how it’s going to play out changes on a weekly basis, I wouldn’t hesitate to say. I can tell you where I think it should go. All right. Let’s talk first about where it is right now. Where do you put tech now? On a very precarious point. I think they need another major breakthrough along the lines of the smartphone or touchscreen computers to bail them out of what looks to me like a kind of inflated numbers game like we saw in the first dot-com bubble. Because when you look at what’s really underpinning the growth rates of the big platforms, I think if somebody ... If a reporter like John Carreyrou with the resources that a major news organization has were to ... This reporter who wrote about Theranos? Yeah. Were to dig into the metrics that companies are using to justify their growth figures, I suspect we’d find a lot more stories. Maybe not as shocking as Theranos. I thought it was significant. Before Cambridge Analytica shut down but when Facebook was essentially saying they were a rogue actor, their bigshot, brainy engineer was on CNBC or on some network like that saying, “Well, you know the interesting thing is that the data that Facebook was supplying to us was not all that accurate or useful,” which I thought was quite a counterpunch. “Yes, we’ve used it, but it wasn’t effective.” Yeah. Well not only that, we had to take what they had and piece it together into a useful product. So if you’re listening carefully, what kind of message does that send to advertisers? It’s shitty data. It’s crap. Garbage in, garbage out. It was interesting. Nonetheless, they have a lot of it. Shitty or not, it’s a lot of it, and it’s got a lot of signals. And if they’re selling it to the Russian mob, I’m sure they’re smart enough to figure out ... They don’t sell data. They just hoard it relentlessly, and then massage it and lend it out. That’s what they do. Right. Somebody got mad at me the other night ... They don’t sell data. That’s their line. Every time he said that, every time Mark [Zuckerberg] said that on the thing. I’m like, “They hoard it relentlessly and reuse it.” Like it’s the same thing. It’s a distinction without a difference. Oh but it’s perfect because then the senators went, “Oh, okay. Good.” And I was like, “No, no. The next question is, what do you do with the data then?” That’s like the same thing that happened in 2008 when everybody was bedazzled by all these Wall Street jargon terms like collateralized debt obligations. And nobody was brave enough to be like, “What the hell are you talking about? What does that mean?” Right. Well, in that case there was actual money and houses on the line. Here, it’s data. What is it exactly? Well, exactly. I mean to say, I don’t think it will be quite the same economic repercussions because those were real houses with real people. And these are just some companies with a lot of ... No, the data has ... They can manipulate elections. That’s what they can do. I mean, it has a different kind of damage. It’s not a necessarily a house damage. It’s not a physical damage. It’s a psychic ... Psychic damage. Psychic democratic. Let’s go Joe Rogan here and arrest this fuck. So you think they’re on precarious place. Where does it go then, from your journeys? Well, like I said, I think you need a big breakthrough. What I’m worried about is you saw the demonstration from MIT Media Lab with the ... Oh, the thinking. The mind-reading helmet. Yeah, the mind-reading thing. I’ve been trying to figure out if that was a rigged demonstration or not, and I don’t know the answer. It reminds me of the Jeff Bezos drone thing on “60 Minutes.” I remember that. Well, look, it’s been their ambition for a long time, and I’m worried that eventually they will figure out how to get in our heads. And then we’re looking at a ... I don’t see how an invention like that, unless we get a handle on tech from a regulatory point of view, would not quickly become mandatory, and that would be a nightmare. Given how much every major tech company has screwed up on security, privacy, just basic decency. You know, how come it took so long to get rid of the Nazis on Twitter? They’re still there, and same on YouTube. I thought the YouTube Kids ... I thought some Republicans were going to jump on that YouTube Kids scandal last year and run with it, but it hasn’t happened. I guess they just got lucky or something. But these things happen again and again. People don’t maintain their indignance, I think. It’s hard to ... In this environment which is made, amplified, the quick, twitchy environment amplified by social media, indignance is too fast burnt. It burns, burns. Isn’t that interesting? It’s an interesting byproduct of ... I mean, we have to look at these companies as they’re big media now. They don’t like to call themselves that, for sure. Well, we still hear a lot about the mainstream media, but who is it really? I think it’s hard to sustain any story. I’ve noticed that just in this short time. We would have lots of impact sometimes, years ago, much more impact than that. But now we have impact, and then it goes quickly. I have an expansive definition of literacy, I think. That to be truly literate, you need to have a background of knowledge and context, and you need to be able to maintain your attention span for more than five seconds, so I’m worried about a degradation of literacy across the board. Yes. No, 100 percent, you just see it. You can certainly have impact because us and other reporters did a lot of stuff on Uber, and he finally was kicked out. You can have that impact. It took a steady drumbeat. It took a while. You were like, “Stay down. No, stay down. No, stop getting up. Stop getting up.” It’s the same with Trump. It’s like, “Stay down. No? Okay, you’re going to get up again?” And ultimately you get weary versus the subject, but they get up a lot more than they used to. You know what I mean? They don’t stay down. That’s discouraging. I know. It is discouraging. So talk about where tech should be then. Let’s finish up talking about the idea of where you imagine it should be. There are a lot of heartening things. I think if The Dodo can organize then Facebook can organize, let me just say, and I think that would be to the good. I also think that we need a fundamental rewrite of the networking protocols that create what we call the internet. I think we need to go back to the drawing board and come up with something that’s more secure, that guarantees privacy, that perhaps has a built-in way for creators to get compensated for their work. A new internet, perhaps, which is the plot of “Silicon Valley” this season, just so you know. Well, I know. But they want a private one. I think we need a public one, and not to privatize it again like we did in the ’90s. Yeah. Is it a private one on the show? Oh. The show. The TV show. I haven’t made it past Season One. The HBO show, “Silicon Valley,” this whole season is creating a new internet because the old internet, it isn’t privacy protected, doesn’t have a way to ... It’s funny. Oh, wow. And just the other day I was talking to someone, a pretty big wheel in Silicon Valley, and I said, “What are you working on? Blockchain, of course, because you all are, because you think it’s where to make even more money, obscene amounts of money?” And he was like, “No, the new internet.” And I was like, “That’s the plot of ‘Silicon Valley.’” He’s like, “No, there’s going to be a new one.” Well, they’ve been pressing it, I guess. That’s what Curtis Yarvin’s startup does. Essentially it’s that kind of effort. And the European Commission is funding efforts to do the same thing, so maybe it is the next big thing, the new internet. I also know that ... I think part of the reason Internet of Things fizzled out is that there’s a fundamental infrastructure problem. I remember hearing a guy from Akamai talk about how there’s not a bandwidth limitation but there’s a ping problem with the current architecture, so you really can’t have a network chip in everything that’s talking because it will jam up the tubes. Well, it wasn’t created for this. No, and the only reason it’s been allowed to persist is because our society values profit over everything else, and some people are making really good profits with this current infrastructure, but it’s not in the public interest to keep it how it is. So design the way it should be. I’m not an engineer. Some of the proposals I heard from network engineers who were thinking and working on this stuff included ways ... So if you were to post something, an image, a piece of writing, you could perhaps be compensated automatically through the protocol whenever somebody looked at it, for instance. So there you have a kind of built in ... Can’t be stolen. Yeah, and I don’t see why that wouldn’t be possible. I suppose that what the crypto people have been asking for with end-to-end encryption on everything, I don’t see why that shouldn’t be a basic principle. And what was the other thing? Security, privacy, that kind of covers both. Yeah, and again, I think should be publicly owned because I think public ownership of at least the physical infrastructure and probably the protocols is the only way to ensure that we don’t wind up with a huge private black ... Fight over net neutrality. Well, black boxes of data, too. Right. When it comes to the relationships some of these companies have with the government, in government there aren’t enough people who are technically literate enough to understand the basic problem with having Amazon run the CIA’s cloud, or with having Palantir having access to all of this government data and selling it back to the government. I remember all this news. It was that Amazon’s going to get attacked by Trump for the cloud thing. I’m like, “Is that so bad?” You know what I mean? A little bit of me was like, “But then the alternative is Oracle.” Yeah. You sort of sit there and you’re like, “I don’t like either of these choices.”” It’s basically a Philip K. Dick novel. Yeah, it is. And I’m like, “No.” But then there is nobody else. What if you’re the government? What do you do? They’ve already outsourced the talent. Right. That’s what I mean. You create it yourself. I think it’s a generational effort. But then you go, “Do I want these guys to run it either?” Not so much. Like once you start to even read even the small amounts of stuff ... So I guess first things first, the government has to let people who smoke weed get the security clearances to work because that seems to be the bottleneck right now. That’s next. So I want to get back to your book. I want to finish up telling about your book. What do you hope to accomplish? Without giving away, what ... With the book? Yeah, what is your ... besides being the cynical guy on the sidelines saying, “This sucks.” I want to take this industry down a couple notches. As a reporter, I’m a little bit disappointed because I read my book and I’m like, “I didn’t break a whole lot of news,” in the sense of there’s not a lot of scoops in here. But I think it’s written in a way that will make people that haven’t thought about this stuff or maybe haven’t caught every story like the kinds we’ve been talking about will see the tech industry and the services they use in a new way. That’s my main goal, in addition to being funny and hopefully selling some books so I can do another one, because I don’t have a plan B as far as my career goes. Do you think people will become aware of it? Because part of me feels like there is people’s awareness. I was in an elevator the other day and after the Facebook hearings, I kept saying, “Oh, nothing’s going to happen with this. He did fine.” He managed to snow them in some fashion. And two guys, elevator operators fixing something, said, “All my public information is on Facebook. That’s really disturbing.” Not because they were elevator guys, but it’s not people I expected to ... You didn’t expect them to be that tech literate. Not tech literate, but just like understand in a lizard-brain way like a lot of people, like, “Wait a minute.” I think a lot of people do. Like people who aren’t technical. I think a lot of people do understand it in that intuitive way. Also, I taught a university writing class for the first time this year, so the students were like 19, early 20s, that age. They got it. If anybody would be expected to not understand, you’d think it would be people that grew up with this, swimming in this water, but they understand exactly what’s wrong with the current state of affairs when it comes to social media especially. It’s an anxiety machine for them. Well, it is. But they have ... I don’t know, I find my kids have a lot more control of it than I thought. You know what I mean? I thought they were addicted to it. It’s an interesting thing. My 13 year old, I was taking a picture and I was going to put it on Twitter. Alex was like, “Yeah, I didn’t give you permission to do that.” And I was like, “Okay. You’re right.” I didn’t. And it was sort of like, “Good for you.” Yeah. Well, that’s to be applauded. But I don’t think that ... I mean, you obviously didn’t have to ... Listen to him. I was going to say you didn’t have to teach her that. He knew it without me teaching him. Excuse me, him. He had a sense of his privacy that was very different. We just went along with it, and they aren’t. That’s my perception from my kids and their friends. I don’t want to ... I remember very clearly when Facebook came to my campus and everybody signing up, and I didn’t want to because I was reading blogs like GoogleIsEvil.com or whatever it was. Remember those old days? Remember sucked.com? Oh, I loved sucked.com. Yeah, sucked.com. And he was like, “Whatever. You’re crazy. It’s going to be fine. Just do it. Who cares?” And I was like, “Okay, fine.” I basically succumbed to peer pressure, and I still think back sometimes. What if I just held firm? But that was long ago, maybe in another timeline. Well, now you can download all your information and rid yourself of it, allegedly. Do you believe that? No, not for a second. What happens when you delete a post? We already know. You can’t delete anything. I mean, come on. And there’s no way to audit that. This is why we need the government involved. Oh, that’s the other lesson. I wanted to get people off this idea that there’s a tech solution for everything, especially technological problems. Some problems only have political solutions. I think we’ve reached the point where we need a political solution. Interestingly, Barack Obama gave that speech. It wasn’t much noticed at the end of his tenure. He said, “Tech people think there’s a tech solution for everything and there’s not. Some problems don’t have a solution.” So I guess he changed his mind about the VC thing, right? It was interesting. No, he’s not going to be a VC. I think he’s going around and being just cool. I think that’s his job, right? Yeah, he’s hitting the beach. I wish he would not do that so much. I’ve been asking ... It’s a little painful for the rest of us to watch. Yeah, I know. I’m like, “It’s not time to be cool. It’s time to be not cool.” I agree with you. I just said that the other day. Like, “When you’re tired of going on celebrity interviews, it would be really nice for you to speak up.” Yeah, show up at women’s march or something. Sure, something. But we’ll see. Anyway. Corey, it was great talking to you. Here’s the book. You should absolutely read it. It’s very dyspeptic, but I like dyspeptic stuff. Would that be correct? Yeah. It’s very funny. It’s a very funny book. There is a genre. There’s a whole bunch of books like this, and I read them all because I think they’re all ... They remind us a great deal of thinking hard about the choices we’re making. But thanks for coming on the show. It’s called “Live Work Work Work Die.” A journey into the savage heart of Silicon Valley. Thank you very much. In bookstores everywhere. Okay, in stores everywhere. Anyway, thanks for talking to me. It was great for you to come on the show.

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posted 5 days ago on re/code
No conditions, no restraints. A victory for mergermania, and a loss for the Trump administration. Verizon? Go right ahead. Charter? You too. Amazon, and other tech company with billions to burn? Go for it. That’s the message from a federal judge, who has ruled today that AT&T can buy Time Warner — and, crucially, didn’t apply any restrictions to his decision. That clears the way for other “vertical” mergers, which means other people who control distribution — cable guys, telco guys, tech guys — can buy content guys. So, again, take a last look at this chart: Because it’s going to be a collector’s item. More shortly.

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posted 5 days ago on re/code
As a record exec, Cohen used to be a bit anti-YouTube. Now he’s soaking in it. This week on Recode Media with Peter Kafka, YouTube global head of music Lyor Cohen talks up the launch of YouTube Music. He says giving consumers the choice of paying with money or “paying with your eyeballs” by watching ads is the right direction for the music industry and will liberate artists to make music on their own terms. You can read some highlights from the interview here or listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts. Below, you’ll also find a lightly edited transcript of the full episode. Peter Kafka: This is Recode Media with Peter Kafka, that’s me. I’m part of the Vox Media podcast network. I’m here at Vox Media headquarters in New York City. Before we start this special episode of Recode Media, one quick request: Lyor Cohen: Yes. If you like it, if you like hearing Lyor Cohen in the background, tell someone else about it. That’s all we ask. No, tell a few people, not one person. How many people ... This is Lyor Cohen, king of promotion. Among other things. You’re underselling yourself, Peter. You have a great podcast, everybody loves it, so sell it harder. At least bring a dozen friends. Do yourself a favor and turn on the Peter Kafka podcast. How do you ... Recode Media. Recode Media. Why do you have to hide behind Recode Media? You’re the star. Damn straight. I like this show, it’s getting better already. Lyor Cohen, music legend, hip-hop legend, record legend, global head of music at YouTube. Do I have your title right? Well, yes. You are here today for a special episode because you guys are rolling something out that we’ve been hearing about for a while. It is called ... Now you can sell it. YouTube Music. C’mon, sell it harder than that. YouTube Music. Which is? Is a critical new subscription service that helps bring diversity to distribution and it’s a very, very beautiful product that we’re very, very proud of. Background is YouTube is the world’s biggest video service, world’s second-biggest search service, world’s biggest music platform. The most music is consumed. And forever, ever since 2006, you’ve been able to listen to music for free on YouTube. Ad supported last couple of years. You guys started a subscription service, we can debate how big or little it is. But it hasn’t really taken off and you guys are pushing again to make a more comprehensive, more popular subscription service which you’re rolling out today. Am I summing that up accurately? I think so. Good. You don’t seem enthused, Lyor? I’m very excited about it, Peter. I’m just worried about every question you have to ask me. I’ve never seen Lyor Cohen nervous around me. This is an odd thing. Where do you wanna start? You wanna start with “frustrate and seduce”? Well, wherever you wanna start. Whatever is good for you, Peter. You were at South By Southwest in March, you were previewing the service, you said, “We’re gonna frustrate and seduce people into using this service.” Because again, you can use YouTube for free, and most people do. We were talking about this off-air: 89 million people and counting have watched the Childish Gambino video for free. It’s great. Did you like the video, Peter? I’ve seen it six or seven times. It’s amazing. Did you tell your friends? A dozen friends about it? Yeah, I tweeted about it. I put it in a newsletter. It was a very exciting thing. I think it’s more than exciting. I think it’s an amazing piece of art and a great conversation piece. Have you had conversation around that video with your friends? I mean, your swanky friends in the Upper East Side? I don’t have any of those friends. No? No. Deep Brooklyn. Deep Brooklyn? What I’ve said is, you should watch it and then we’ll talk about it. And they do. And they call you back? Or do they ... Yeah. They go, “What do you think he meant there?” The actual way to do it, then we send articles to each other and say, “Look at this article that explains this video.” Right, and so what was your view of that video? What was significant about that video to you? There is no way to watch that video and go, “Oh that was an interesting piece of entertainment” and then not think about it. It made you confront something, and you had to decide what you’re confronting and you say, “Well, first of all, what is Donald Glover trying to tell me here?” Do you believe that ... In a way that most popular culture sort of doesn’t confront you these days. I think that’s very true. So do you think that many people have different things that they’re confronting? And if that’s the case, what is it that you confronted? I had to confront how I thought about entertainment. It was something ... The way that I often think about entertainment is I have an hour between my kids going to bed and I’m gonna go to bed or whatever else I need to accomplish that night. I wanna watch something, generally not listen to something, and I want it to be interesting but not too difficult because I don’t have that many brain cells I wanna use. That’s often the way I think about entertainment these days. I’m assuming it’s the way lots of people think about entertainment. Donald Glover is saying you can do that, but I want you to think about other stuff at the same time. Would you suggest that people are starved for things that make them think and maybe they’re on autopilot and getting into the seduction of lazy media consumption? Yeah, but I don’t think that’s me, but yeah, I think ... I mean, there’s this great book by David Foster Wallace, “Infinite Jest,” which is a lot about that. It’s also made me think — and this is not an unusual thought — that we’ve been waiting since Donald Trump was elected to see interesting reactions to that election. Yes. I don’t know if this is explicitly about the Trump era, you can argue that it’s about just modern society, but it seemed like one of the first times we had to go, “All right, we’re gonna stop and look around the world and have a conversation.” All I could say to you is I’m so honored to be working with Childish Gambino. So honored to be working with RCA and Sony and his managers, collaborating and working together. And the fact that an artist was able to also not go on autopilot, because the creation of videos oftentimes is on autopilot. Obviously there was an enormous amount of effort, cinematography. There was a craftsmanship. Choreography. Choreography. I applaud him and I challenge others to understand that video’s a really powerful media. So bring it back: That’s a video that I’ve seen multiple times for free. Whether I’m watching ... Why do you suggest it’s for free? As opposed to ... I didn’t pay for it. Well, you paid with your eyeballs. Yes. First of all, actually, there’s no ads against that one specifically. No, there were ads. I believe that people characterize “free” and I like characterizing that you’re paying with your eyeballs. I think that YouTube is a place that can do both. That you can pay with your eyeballs and there are people that would love to buy a subscription. So I think we should give the consumers some choice and allow them to decide whether they want a subscription or whether they wanna pay with their eyeballs. Let’s start this way: So if I decide to pay ... Just one last thought. Like all mature media businesses, they are ... both engines are working, ad supported and subscription. There’s no reason why the music business shouldn’t have both and enjoy both. This is a relatively new idea for Google, right? Google, giant ad-supported business, they only recently got into subscriptions. I can’t speak for what was new or old ideas for Google, I’m just a simple music person. What I know, having worked closely with the labels and the artist community, the managers, they would like to get in a plane that has two engines, one that is ad supported and the other that is subscription. We’re gonna weave around, which is good. If I pay you $10 a month for YouTube music, what am I getting that I’m not getting ... I would say for free, you would say paying for with my eyeballs. I actually have the real head of music here, T. Jay, he should come up, grab the microphone. C’mon, T. Jay. T. Jay, you wanna jump in? Grab that microphone, T. Jay. Okay, let’s go. Welcome, T. Jay. The head of music for YouTube. T. Jay Fowler: At a basic level you just get features that allow you to remove ads. First of all, you get an ad-free experience. Second, you have the ability to take your music portable with you by making things available offline, without network access. You also are able to multitask, to be able to play music in the background, or be able to close the app and have music continue playing. Those are all features I had available to me before, right? This is a new version of, in terms of the offer ... T. Jay Fowler: This is an evolution. Those are just the basic features. The parts that are actually changing pretty significantly is that we’re investing a lot into assistive experiences. Basically, the app adapts to where you’re listening to music. It starts to begin to understand your habits, the types of music that you listen to in the morning, the types of music that you listen to in the evening, music that’s appropriate for commuting, and those kinds of things. Peter, let me put it to you this way. Yeah. I’m sure you have date night. Yeah. Would you like to make sure that when you have date night, Barry White shows up quick? Or do you wanna fumble around with your phone trying to find Barry White, okay? I mean, just imagine when you brought your wife back home and that the living room was all dim, the candles were up, everything was ready for you. That’s what we’re talking about. We’re talking about understanding that you have date night, and so Barry White should show up when you have date night. Does that help? Is that helpful to you? I think so. Do you want me to start singing some Barry White tunes, just to refresh your memory? No, no, I’m familiar with Mr. White. I’m getting my head around whether I want Google figuring out that I’m having date night, or whether I wanna tell Google, “Hey, I’m having date night, could you get me some music?” Okay, we’ll take it any way you wanna give it to us. We wanna be helpful to you. In fact, when you go to the west coast to meet all your chi-chi friends in Silicon Valley, don’t you want us to know that you’re about to get on a seven-hour flight and cache your favorite music? Helpful. Instead of the stewardess saying, “Go on airplane mode.” And then you’re hitting yourself on the head and saying, “Oh my God, I forgot to load some music up.” Yeah. You know, we’re trying to be helpful here. Are we good, T. Jay? Have we run through the features? T. Jay Fowler: Yes. I mean, the other thing that I think is different is really, really showcasing the official audio catalog. We’re known for video, we’re known for premium music videos, we’re known for great UGC. We’ve built this app so that it’s really, really supporting that use case of listening in addition to watching. In standard Google fashion, pre-Lyor, there were two competing music services. There was YouTube music service and a Google Play music service, and basically they’re gonna get merged into this one thing. Not overnight, but over time. T. Jay Fowler: That’s right. It’s our intent to have a singular music experience going forward. So as the consumer, I just need to think, “All right, do I wanna spend my money on a service that has all the music I want, plus a bunch of videos that I want, or do I want a version of that from Apple or Spotify?” They’re all sort of similar experiences, different bells and whistles, but they’re all about $10 a month. They all offer me basically unlimited music, I can bring it on or offline. Am I summing that up? T. Jay Fowler: Yeah, I think what you’re talking about is the table stakes. I think YouTube Music goes far beyond that because not only do we just have some videos, we have an amazing collection of music that expands beyond the official release stuff. We have covers, we have derivative works, we have remixes, we have the behind-the-music kind of non-music content, like the interviews that happen on the couch with Fallon or the documentaries. It goes far, far beyond just bells and whistles. Good. So what I always say when I’m writing about an app or something like an app, I say, “Well, I can talk some more about it, but why don’t you just go look at it.” So you can stop this podcast now and go check out the app. Come back whenever you want, or you could listen to this whole conversation, check it out, and you’ll get the full array of services. It’s rolling out in some countries today, then more over time. T. Jay Fowler: That’s right. Okay, good. How’d he do? I’m incredibly impressed with his voice. I think he was a DJ in college. I’m putting my money on that. Is that correct? T. Jay Fowler: I did do some radio, yes. You see, I knew it. Pro. It sounds like it. Thank you, T. Jay, you’re off the hook now. T. Jay Fowler: Thank you. Lyor, let’s talk about the industry a little bit. Yes sir. This is a ... Which industry? The music industry. You came from it. Your brief bio is that you started off managing early hip-hop acts. All the great ones that blew my mind when I was a kid. Run-DMC, LL Cool J, Beastie Boys. Moved up into what was then Def Jam Records. That’s accurate. Then that eventually became part of Universal Music. Remember, the management company was before Def Jam. Yup. Rush preceded Def Jam Records, for those that actually know. There’s great footage of you, bumrushing LL Cool J on and off the stage. I saw that on TV. In London? There was an “ABC Nightline,” like, “learn about hip-hop with Lyor.” Really? That’s the one. Yeah. Oh okay. Yeah it’s great. Then you became a record label executive. First at Universal, then Warner Music. Then you went off and you left Warner Music, started your own thing called 300. Then a couple years ago, got hired by YouTube, surprising just about everyone in the music business. The conventional wisdom was what is YouTube doing hiring Lyor Cohen — who had many times been an active critic or moreso of YouTube and technology companies — to work at a technology company? I’ve got all that right? You’re making statements. Are you asking a question or what? Here’s the question. Why did you go to YouTube? I wanted to help bring diversity to distribution. It was my greatest fear. If distribution is highly consolidated, the distribution companies will capture all the money. You’re making it ... This won’t be good for the artist community. This is a gift I’m giving to the industry that I love so much. This is an industry ... I live the way I live because of rap music. It’s a gift. I couldn’t tell you what I would be doing if it wasn’t for my parents encouraging me to come to New York in 1983. I couldn’t tell you what I’d be doing. But this industry has been so good to me. I was frightened that we could wake up and be controlled by distribution and I wanted to bring diversity to it. I didn’t understand why the world’s biggest platform where music is consumed couldn’t have intimate and reliable and working relations with the creative community and the labels. I wanted to try to put together connective tissue. Did YouTube come to you and say, “Would you like this job?” Yeah, and I wasn’t interested when they came to me. What was the initial pitch? The initial pitch was, “Hey, music is too important of a category, I’d like for you to help surface some very good candidates to take the job.” And this is — Apple had Jimmy Iovine as sort of their emissary to the music business. Spotify had hired Troy Carter. The idea was, “We wanna hire someone like that, can you help us find one?” They didn’t refer to Jimmy or Troy, but they said that music is too big of a category and they need someone to wake up every day thinking about that vertical for them. I surfaced a couple of really great candidates that they loved and then one day I got a phone call saying, “We love them, but we actually want you to do it.” Were you dealing with Susan Wojcicki? Who were you dealing with at YouTube? I was dealing with Robert Kycnl. Kyncl, by YouTube standards, is their entertainment guy. By most standards he’d be like a nerdy engineering type. By YouTube standards he’s their Hollywood guy. I don’t find him Hollywood at all. I think he’s an incredible, dynamic media executive. You’re running a label, which presumably you like doing. Loved it, loved it. Gone off safety. So to get you to leave that alone, they had to do what? It wasn’t about them, it was about my partner coming to me and said, “Listen, you know you’ve been talking about what makes you concerned about the industry, you’ve already de-risked 300, if there’s ever a time for you to go be helpful to this industry that you love, do it now.” So, that’s what I’m doing. When you get to YouTube, what are you expecting to see when you walk in the door? I wasn’t expecting to see anything. I tried not to have preconceived notions. When I got there, there were many surprises. One is that the company’s littered with people who absolutely love music. Two is all the music people that are involved in YouTube were deeply, deeply concerned why they weren’t considered as a net contributor. They thought they were doing the right thing. Of course, they were doing the right thing. They thought that by creating an ad-supported business was not only helping kill piracy, but was also supporting what most media companies end up becoming and that is both ad supported and subscription supported. Two engines. They were actually tackling one of the most difficult parts of the business: That is, creating a massive platform that kids all over the world ... Susan mentioned at Brandcast that there’s 1,800,000,000 logged in per month. 1.8 billion users. 1.8 billion. They’re working on creating the apparatus where artists get paid from their works. Then the long-standing criticism from the labels —and again, you were one of the people making this criticism — was, “You’re not giving us enough money from ads, and by the way, we don’t really have control over our stuff, you say we do, we don’t really have control. If we wanna take stuff down, we can’t really take it down.” When you ran Warner Music, you guys took your music down for a year, then she said it was too much of a pain to keep it off. We’re gonna go back on. Listen, a lot of people remember when I took that stance at Warner. Just so you’re clear and you actually have the facts, it was before they cleaned up YouTube. It was hard to get high CPMs for advertisers that one second would get a cat video and the next second would get a Jay-Z video. My biggest beef with them was that they needed to separate those two parts of their store so they could ... There’s a clean, well-lit place, and then there’s everything else. Clean, well-lit place that advertisers feel comfortable to come and participate in this beautiful platform. That was my problem. My problem was that I had a lot of premium content that wasn’t getting the proper CPMs. Everything has context, right? Yes. Let’s tease you out of it in your history to this day, you hear people in the music business saying, the free stuff is not adequate, we’re not getting enough money from it. May I interrupt you? Of course you can, it’s your podcast. The ads-supported business, you keep saying “free.” But you’re paying with your eyeballs. You’re looking at advertisements, okay. So it’s too easy to just say free. Okay, you’re paying with your eyeballs. So go ahead, what’s the question? The ad-supported business ... Thank you. Is not generated ... You’re a quick learner, by the way, Peter. Slow, I’m gonna get there. Is not generating enough money for us, the content owners. Again, just to bring us all the way back to the beginning the idea of YouTube Music in last year’s incarnation and then the one today is to find other ways to supplement that with subscription money. That’s correct. Okay, good. Just like when you decide to get on a plane, you like to see two engines. One that’s ad supported and one subscription. This podcast is a free podcast. You do not have to pay for it with dollars, we’d like it if you would listen to this sponsor you can hear from right now. Good? Absolutely, I adore this sponsor. Hang tight. [ad] What an incredible sponsor, great taste for them to support you in this podcast. I agree. Right, Golda? We’re leaving that in the podcast. We’re back here with Lyor Cohen. And Peter Kafka. And Peter Kafka. And your entourage here. My clique. Clique. That’s a new term? That’s an old term. Are you surprised that it has taken the music industry to 2018 to have a significant subscription business? I’m not surprised. Good things take time. Yeah. How long did it take for you to figure out that would be a good business, to replace the CD business which went away, then the pay download business which went away? When did it click for you? Listen, just so you understand that even me — and I’m one of the fastest people to try to fix things when things are going well — even me, always has a little shpilkes when there are new models that are cannibalizing models that are paying the bills. I would be a liar to say that I didn’t have shpilkes. But, I understand that media is transforming, and the fact that you could have a smartphone and this could be your record store, your personal record store, is so sexy, and so great, such an incredible value for consumers, that thank God the CD is dead. I’m sure there is some wonderful people who have CD collections, I suggest you throw them out and make some room for some furniture or other things. I don’t think anyone listening to this has a CD collection. But, I just feel like wow, this is such an incredible opportunity for me to engage with music just in my smartphone and it’s just fabulous. I think this is just a really healthy time understanding that old methods that actually paid the bills and paid your employees. You know, when you’re running companies, it’s not just a spreadsheet of people. People have families, and so you’re constantly catching another vine and having to leave and be in one moment of suspension. I was checking my phone because I wanna pull up a quote from one of the articles I was looking at. “All the bad behavior and excess in the music business can be traced to the CD.” What did you mean by that? The CD made mere mortals think they were geniuses. Because it got everyone to re-buy, basically. Yeah, they’re re-buying, and because a lot of these companies were run by foreign multinationals, they didn’t do the due diligence to understand that the tidal wave of cash was repurposing old masters. So you have 15 years, mid ’80s up through 1999. Man, they had private planes that they didn’t turn off just in case they were coming back early or they had football fields for offices. That’s not the music business. The music business is when Ahmet and Jerry opened up their office above Patsy’s. It’s when Chris Blackwell opened up his office at 4th and Broadway. It’s understated, the money went into the recordings and the signings of the artists, not the excesses in behavior. But you rode that up, that was beneficial to you in the first half of your career. Absolutely rode it up. We were hugely beneficial. You actually didn’t do your research because my first bosses were PolyGram. Yeah. PolyGram was owned by Philips. Philips was the people who invented the CD. Yes. Gotcha. That’s when they gave Alain Levy the thumbs-up to go and start buying all of these impresarios and giving them a huge multiple — Jerry Moss and Herb Alpert, A&M, Chris Blackwell and Island, Motown — because they saw that the CD was gonna be a very big boom. They also, behind Alain Levy’s back, sold to Edgar Bronfman, because they realized that was the perfect master, and then the internet ... Yeah, they figured it out a little ahead. So now we fast-forward and now we’re into the streaming business and it seems like we’re replacing a lot of that money that’s gone away on the economics side that works out. What does it mean for an artist who for decades the paradigm was put eight to 10 to 12 songs together, release them every couple years. That’s how you do your work. Now we’re in a world where you do a song at a time, or you tell me. How are artists thinking about putting out music today? Remember that this was a singles business when it started. Someone said, “Hey, if we pour more oil and wax we get a bigger record and we could sell it for more.” I think that artists have an opportunity to be liberated from the album. Certainly there are artists that an album can texture a storytelling that is still gonna be important, but for the most part this is a liberation moment that artist can actually go into a studio tonight and tomorrow put it around the world. I have one idea, this is my idea. Because there was that period where if you had a great single that you would actually try to sort of limit its distribution because you’d want to get people to buy the whole album, and you end up with a lot of consumers who were unhappy buying 15 songs when they wanted one. It’s better for the consumer, you’re saying that ... Not that friendly to consumers right? Yeah, we’re better. Okay, we did ads, we did music, it’s a weird thing to interview a Lyor Cohen, but it is what I expected, too. Tell me, what do you think of the Yankees these days? I’m not a Yankees fan. What do you think of the Giants these days? Nope. Minnesota Timberwolves. Timberwolves? Yeah. Disappointed, but I kinda think they’re gonna be stuck for a while. I think it’s harder to recruit talent. Let’s change subjects before you get upset with me. I won’t get upset with you. I wanna talk about the Kanye West photo that you were in. You, Lucian Grainge, Kanye West. I’m such a nerd that when I saw that photo, I said, “Oh, that’s interesting that Kanye’s with Lucian and Lyor,” when everyone else said, “Oh, there’s Kanye West wearing a Make America Great Again hat.” How did that photo come about? Kanye said, “Listen Lyor, I’d really love for you to come to the studio and listen to music.” I flew down, listened to his music, I had such a lovely time spending part of the afternoon with him. What did he play for you? The songs that he’s subsequently put out or something else? He played a bunch of music for me. Yeah. Incredible music, and he showed me his facility. It’s a stunning facility of fashion and all the other businesses he’s in. I was so excited about the music, I forgot that I had to go to the bathroom, so I said, “Listen, I really need to go to the restroom.” I got up, went to the restroom, and there in another part of his office was Lucian, and Lucian was waiting, I understand, for well over an hour and I didn’t know. And I said, “Lucian, what’s going on?” Let’s explain. Lucian runs Universal, biggest music company in the world. Lucian is Sir Lucian Grainge. He’s a knight of the royal court. So he’s waiting on you and Kanye. He’s the chairman and CEO of Universal and Kanye is having him wait. I didn’t realize that, and I said, “Lucian.” And I needed to go back to New York, so I said, “Hey Lucian, I’ve had a lovely time, let’s switch places.” And Kanye was going to the restroom at the same time and said, “Hey guys, let’s take a photo.” We took a photo and I’m running through the airport and no less than 50 people commented to me about his hat, Kanye’s comments, etc. People at the airport are coming up to you, or texting you? The airport. They recognize you from the photo? They recognize me from the photo, I’m already recognized, but that time I realized, “Wow, the power.” I had no idea that he was posting it, I had no idea that he was wearing that hat. I had no idea about anything. Listen, I got a lot of bad feedback and it was ... My son was hugely disappointed with me, my mother wouldn’t speak to me for a week. Do you think this episode he’s had where he’s tweeted what he’s tweeted, do you think he recovers from that? Do you think America’s cultural memory is short enough that when he comes back, if the music is good, that he goes back to being Kanye? Or do you think he’s crossed some path? This is how I see it. First of all, I’m disappointed in his views, many of his views. I’m not disappointed about him calling out what’s happening in Chicago, I’m not disappointed about it. But I could say, this is what I want you to understand and many of your listeners to understand. Being an artist is painful oftentimes. Choosing to be an artist and creating art is often done by people that suffer things, feel things in different ways. Don’t enjoy the art and not understand that artists have to go through really difficult moments that are also exacerbated with the social media era. Imagine Vincent Van Gogh having to be living under a magnifying glass of social media. What I’m saying to you is to be an artist is hard, period. To be an artist and there’s a lot of suffering that an artist has to go through. So understand that and understand that these are the things that I think Kanye ... Kanye, I don’t think, has reconciled the pain that he has endured from the loss of his mother. I don’t think that he’s come to grips with it. Do you think he has to participate in social media? Do you think a popular artist has to be in social media? Or is there a way to just put out your work and then go back to doing what you’re doing? I think there is a way of doing it, and I keep encouraging Kanye to lead with the music and to keep the music as part of the front and center of his conversation. He said, “Are you telling me to shut up and dribble?” I said, “No, I have too much respect to say that to you. What I’m saying to you is don’t de-emphasize your music. Your music is the reason why so many people are riding with you, so if you make it a footnote I think that’s problematic.” Talking to a record executive prior to this he said, “Well no, it’s part of the job now, going on Instagram or Facebook.” I don’t believe that for a second. So there is a way to just make music and then ... You just mentioned Childish Gambino, he doesn’t do that. I don’t think so, yeah. He tweets occasionally. A blue moon. Yeah. A blue moon. So there’s a way to do it. Speaking of record executives, this is a discussion we often have when I talk to someone in the music business. What is the point of a music label today? We have YouTube, we have Spotify, all of you guys have amazing distribution services. Why does Kanye or Childish Gambino or anyone like that need to work with a record label? Why don’t they just work directly with you guys? A record label is so necessary. It’s necessary on a whole host of things that would take another podcast to explain. But curation, support, artist development, capital. I think that having a great support system, great manager, great label allows an artist that’s already in a challenging industry to focus on their craft. It’s like when you watch the Warriors play, Steph Curry is not sitting underneath the basket trying to get rebounds. Everybody is playing their position; that makes that team a successful team. I think that if you take a look at the history of successful artists, they’re really dope. They have great managers and awesome labels. I think that ecosystem is really important. When I interview you and I wanna run a photo of you next to the interview, I go and there’s a great picture of you flipping the camera off, you’re standing next to Chance the Rapper. Chance the Rapper doesn’t have a label, he works directly with YouTube. Seems like it works for him, seems like we could have lots more of those deals. Just so you understand, when Chance won that award he said, “Being independent is not being alone.” I loved that. I thought that was a beautiful statement. But you could create your own support system. It’s different than working with a label. Sure. Everybody’s got ... that’s what’s so great about this era. We’re entering the golden era of the business. It will not get activated until the impresario comes back. What do I mean by an impresario? It’s the unemployable. Right now, the infrastructure of the label community is run primarily by career employee. There are the Ahmet Erteguns, the Chris Blackwells, the Russell Simmonses, the Rick Rubins, the Jerry Mosses, and Herb Alperts that are out there. That are now gonna team with Capital, that are going to help shape the golden era of the business. They are not entering the business, and that will be a beautiful time for the industry in general. You need those guys in the labels? Or you just need them in the business? No, in the business. You think they’re out there, but they’re coming up. Yeah, they’re gonna team ... Capital now is not scared about investing in recorded music. This is ... you look at the Goldman Sachs or the Morgan Stanley reports. This industry is about to go off the hizzy. Now, maybe you could just tell your listener what that means, “off the hizzy.” It’s like going off the chain but even better, right? Yeah. One of the first times I interviewed you, you said “getting some dap,” which I always enjoyed learning about. You’ve been in this business since the early ’80s? Yes sir. You’re older now. Do you ever worry that it is gonna be harder for you to understand the next wave of artists, the next form of art? Please, please. That’s a no. Hell no. Okay. When I brought Ahmet Ertegun back to Atlantic when he was 79 years old, he could out-sign any of my young A&R people. That’s why I did it. I think, you know we’re not supposed to dunk, we’re supposed to listen, as long as you stay curious and open, you could be a great record man. You said something else that sparked me one of the first times we talked. Seems like hip-hop doesn’t really age well. Someone who was big in the early ’80s isn’t gonna make it, and you said, “No, no, no. Jay-Z.” I said that? Yeah. Wow, I’m such a clairvoyant, aren’t I. Listen, this was 2002ish. Wow, that wasn’t a heavy lift, let’s try another proclamation. So, when I see you in 10 years, we could ... Who of the existing superstar firmament is gonna be a big deal in 10 years? Who’s gonna continue to be a big deal in 10 years? I think the curiosity. I like seeing curiosity, and remember, the point guards that we remember are the ones that use both hands. Right? Mm-hmm. They could go both ways. You’re bobbing and weaving while you’re talking. I like it. Yeah, so I think ... Gimme a name. I think Kendrick is someone that I believe ... you have to not be frightened, too. It’s about your ability to take risks. You see, I believe a huge artist is like a tour guide to their audience. If you keep taking them to Rome, they’re gonna fire you. So you have to show them different ... they are relying on you to take them somewhere, to give them other experiences. If you’re just a rapper that doesn’t grow, doesn’t try new experience, meet new people, bring more to the subject matter, then they’re gonna fire you. Do you have that edge, do you say, “The YouTube stuff’s cool ...” I stay curious. “But I’d like to get back into bringing artists back to the ... I like to find cool people and expose them to the world.” Yes. That’s what you’re doing now? That’s my love, that’s what I love doing. Do you think you’d go back to doing that sort of thing? Of course. Of course. As a full time job, you’re gonna do that someday. 100 percent. 100 percent. So this is a temporary gig for you? That’s accurate. There, did we just break news? Mm-hmm. Or no? I mean, everything’s temporary. That’s very wise, should we leave it there? Absolutely. Lyor Cohen. Peter Kafka. Tell your friends. Tell a dozen of your friends. Golda. If you don’t have a dozen friends, find a dozen friends. Thank you, Peter, for your time. Thank you. I appreciate it so much, YouTube Music. Do we get it free, by the way? Can you get YouTube music for free? Excuse me, excuse me. Can we stop with the free? Is there a limited-time promotional offer for YouTube Music? T. Jay Fowler: Yes. Yes. There’s T. Jay. Okay, thank you Lyor. Thank you.

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Plus, behind the secret partnership that set Trump on a course of confronting Iran and currying favor with Russia; Streisand signs with Netflix; and the pain and joy of the side hustle. Donald Trump and Kim Jong-un made history just by shaking hands. In a carefully choreographed encounter, the brash, impulsive leaders of two countries that have technically been at war for the past 70 years strode toward each other, arms extended, in the red-carpeted reception area of a Singapore hotel — the first time a sitting American president and North Korean leader have ever met. Keep up with live updates here; here’s how the summit was playing on North Korean media. Meanwhile, here are the nine steps necessary to really disarm North Korea. [Mark Landler / The New York Times] [Want to get the Recode Daily in your inbox? Subscribe here.] Whatever happens today with the AT&T and Time Warner merger decision, the media landscape is in for a seismic change. If a federal judge approves that acquisition deal, Comcast will formalize its offer to acquire most of 21st Century Fox on Wednesday. Again, we ask: If everyone who’s in the media business wants out, why does anyone want to buy? [Peter Kafka / Recode] After a year at Uber, high-profile executive Bozoma Saint John has left the company to be chief marketing officer for Endeavor, one of the world’s leading talent agencies. Saint John was brought into Uber by board member Arianna Huffington, but was never made head of marketing there; instead, she was in charge of its brand efforts. Her departure underscores the now near-absence of women at the top echelons of Uber management; the company is still looking for a CMO, a CFO and a head of product. [Kara Swisher / Recode] Advertisers spent $314 million on podcast ads in the U.S. last year — which is peanuts compared to things advertisers care about, like a $68.5 billion spend on TV, $22.8 billion on internet search ads and $11.9 billion on internet video ads. But one of the reasons podcasts are fun to listen to is because the podcast ad business is so tiny. [Peter Kafka / Recode] Barbara Streisand is the latest star to sign a big deal with Netflix, licensing six vintage TV specials from the 1960s to 2001 to the streaming giant, along with an expanded version of her 1976 remake of “A Star Is Born” (yet another remake, starring Bradley Cooper and Lady Gaga, hits screens in October). [Cynthia Littleton / Variety] Top stories from Recode Catch up with the Diversity in Tech panel at Code 2018. Watch the full video and/or read the transcript of this wide-ranging but focused discussion. This is cool The pain and joy of the side hustle.

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posted 6 days ago on re/code
Even if a judge rules that the pipe guys can’t buy, the media guys want to sell. Here’s a map my colleague Rani Molla and I made earlier this year, showing who owns pretty much everything in the video and TV world, and who’s about to get into that world. People really like it, and we’re pretty proud of it. Go take one more look at it now: Got it? Good. Because it’s about to become a relic. Today, as you have most likely read, we should get a ruling from a federal judge who is reviewing the AT&T/Time Warner deal, which the Trump administration has sued to stop. If deal goes through, as you have also likely read, it will trigger a new round of deal-making. Comcast, most notably, has literally put out a press release saying it intends to make a new bid on the 21st Century Fox assets that Disney is already trying to buy. But even if Judge Richard Leon blocks AT&T/Time Warner — either completely, or by attaching conditions AT&T says it can’t live with, like requiring it to sell DirecTV or Turner, which includes CNN — this map is still going to undergo a significant overhaul over the first year. A ruling that prevents a giant distributor from buying a giant content company may keep a bunch of would-be buyers like Comcast, Verizon and tech companies like Amazon on the sidelines for a bit. But even if the pipe guys aren’t buying, the media guys are still selling. If they can’t sell to a pipe guy, they’ll sell to each other. Fox and Disney, for instance, have argued that their deal doesn’t have regulatory problems. And while there are plenty of strong arguments against that assertion — like, say, the problems you create when a single studio owns around 50 percent of the movie market, or when the biggest sports programmer buys even more sports programming — there are people who seem to think that’s true. One important person in that category: Makan Delrahim, the U.S. Department of Justice’s antitrust boss, who’s the one suing AT&T to stop the Time Warner deal. Asked last week about Disney/Fox, Delrahim seemed to wave that one through. “They had good advice and carved out surgically ... a transaction that might be doable,” he said. (We should also note that Donald Trump also blessed the deal, with less nuance, when it was first announced last year.) And there are more deals to come: Just about every blue dot on that map is basically in play, one way or another. CBS boss Les Moonves and his boss, Shari Redstone, are in a brutal fight right now, but both of them agree that both CBS and Viacom, the other media property Redstone owns, need new owners. And the people who run Lionsgate, AMC and the other smallish media companies get pinged by bankers on a regular basis. It’s just a matter of when, whom and what price. Again: If everyone who’s in the media business wants out, why does anyone want to buy? I put that question to a would-be buyer and a would-be seller last month at the Code Conference, when I interviewed AT&T CEO Randall Stephenson and 21st Century Fox CEO James Murdoch. You can read, or watch, their answers for yourself.

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