How Roomba got stuck

28:36You can see a trend here. Yeah, so I do want to get to what launched last week, but I think there's one more piece of the transition here. Take me through the Amazon iRobot saga quickly. Yes. So right around the time iRobot was starting to see a drop in revenue, starting to struggle a little bit and see a huge pressure from the Chinese manufacturers and others entering the market. So right after the pandemic, really. Was this right around the time you first had a house full of robot vacuums? I track this by like how many vacuums are in the picture that Jen posts in Slack. And I feel like that was right around the time.

29:20It's like there are just a dozen of these running around Jen's living room. It is. It is. When the robot uprising happens, I am the first to go. A hundred percent. It's been so nice knowing you. But that's absolutely correct. Yeah, there are more robots than people in my house by a long shot. And pets. More robots than people than pets. Although my newest pet actually is starting to enjoy riding on them, which I'm so excited about. Oh, you're... Well, then the one pet's fine. King of the robots. Yes. Then the rest of you are toast. But yeah, so like around 2022, I think is when iRobot actually first saw a decline in revenue and an operating loss.

30:04So this was when things started to go a little south. And I think I don't know exactly what's, you know, the timeline of, you know, how long they'd been in talks. I mean, Amazon and iRobot had always had quite a close relationship. iRobot was one of the first companies to successfully, and it did it very well, implement Alexa voice control. So they'd obviously been sort of partnering for a few years. But I think it was 22 that iRobot was beginning to dip. And I think you can imagine they were like, well, you know, we've had a good run. We've been here almost 30 years. This is the time to kind of, we need not an exit, but at least, you know, we need help to push to the next level.

30:49I think, as I mentioned, the hardware was an issue, like developing and being able to manufacture more impressive hardware. They focused on the software, but they hadn't really pushed on the hardware front. So they needed, I think they needed a cash injection. They'd spent so much time on R &D and a lot of their money went towards R &D. But then you need the money, you need the capital to actually go out and build this type of product. And a natural partner for that is a big multi-billion dollar corporation like Amazon. But then there was an awful lot of concern when Amazon announced it was going to buy iRobot that this would cause, well, there were two big concerns.

31:31There was a privacy concern and there was a regulatory concern around whether this would kind of exterminate the competition. My take is the competition was very well established already. And I don't, I mean, iRobot had seen its share drop from, as we said, like almost 90 % down to that. I think at the point where iRobot, where Amazon was going to buy, it was down to like 33%. So it had taken a big tumble, even though it was still the market leader. It was nowhere near as dominant as it had been before. And all signs were pointing to more competition, not less. Exactly. Yes. I mean, New Robot, so Dreamy had just entered the market in 2022, and that's now one of the top three.

32:15So we've got, well, top four. So you've got Roborock, iRobot, Ecovacs, and Dreamy, and then all the others. So, yeah, it was very much at a sort of tipping point for the company. And Amazon came in with a$1.7 billion deal, which then for the next, I think it was almost two years until it actually fell apart under regulatory scrutiny. And it was the EU specifically that caused the biggest delay in this. And that two years of not knowing where the company was going, I think, really put a toll on production, manufacture. they had to take out a$200 million loan. They were really struggling and without a clear path for the future.

33:03And then when the deal fell apart is when everything kind of fell apart. The company laid off almost half its workforce. The CEO, Colin Angle, he exited left. And then they had a new CEO come in. I think Colin Angle said this when he exited. He said, We need someone here who knows how to turn around the company from a financial perspective. And that is what the new CEO has been doing by stripping back all of their other focus. So they got rid of all of the other elements that they had gone into in terms of the air purifiers. They'd also tried to do a robot lawnmower. They got rid of anything that wasn't focused on cleaning your home.

33:48Cut back on research and development. I mean, it was like they basically gutted the company and just turned it to streamline on creating the core product in the hope, I believe, the understanding to sort of bring its fortunes back. And this is where the new product line has come from. So you've traced two lines that I think are super interesting and exactly land us on this recent announcement. Because on the one hand, you have Roomba, which was sort of it was the thing. and for a bunch of reasons that I think were kind of the company's fault and kind of outside of its control. Like the thing that happens where you get locked up during two years of an acquisition that ultimately falls apart is crushing.

34:29We have seen companies go through it and it is hard. And there is only so much of it that you can actually do anything about. So that's all happening. And meanwhile, at the exact same time, the rest of this market coming out of China and elsewhere is growing faster than ever. Gangbusters, yeah. Going totally wild. Yeah, like you're saying, every time you turn around, there's a new company with a name you've never heard of selling you one of these things. New ideas, new products, the market's growing really fast. And it seems like basically iRobot hires a new CEO who turns around and goes, just make those.

35:00Yeah. And that's where we are. Yeah. He was like, I don't know if he said this, but my impression is, okay, fine. You did great to this point. It's not working anymore. Let's just start from scratch because that's what these new robots look like. And it's like they've thrown away all of the innovation in the hardware that Roomba had worked on over the years. The software, it seems like, is still there, but entirely new hardware. They are using a new manufacturer, too. And, oh, my goodness, these robots look like every other robot out there. It makes it very hard for me to believe that these are original designs.

35:38I mean, when I actually asked iRobot this question, they said, well, they already copied us. that's why we look like them because they copied us originally i'm like yes that was true like five years ago but these new robots that roomba launched this last week have the spinning mop pads they have the auto wash empty dry docks which roomba did not have and that's exactly what you know roborock invented that essentially and the new robe the new roomba docks look a lot like the original Roborock docks. So it's, and I mean, from a business perspective, it's probably the right move. It's what people are asking for.

36:16People want LiDAR. They want suction specs. Like we were talking about when they're looking on Amazon at which robot they're going to buy. That's what they've been trained to look for. But it is, it just feels like this, I mean, robot vacuums have become commodities, right? That's what, that's what's happened. And Roomba It's like, well, we can still salvage some of our business because we have a name that everyone recognizes. And now if we do what everyone else is doing and less expensive, they are coming in significantly lower than the competition right now. But then the competition has arms.

36:55But that's a separate thing. And so, yeah, if they're able to turn the company around, perhaps they could go back to this sort of innovation and the spirit of entrepreneurship and really exciting things that the company was able to do over the last 30 years and maybe invent the next great thing. You know, the stair climbing robot vacuum. But the competition is just so fierce. It's really hard to see a strong pathway for them. I think I would like to have seen what happened if Amazon had bought the company. I know there were, and I alluded to this before, significant concerns around things like privacy.

37:35These robot vacuums have cameras in your home. Roombas know everything about your home, how many rooms you have, what furnace you have. And this is probably one reason why Amazon wanted to buy them for that kind of data. but when you take from the smart home perspective when you take that data and pair it with a smart home platform with a voice assistant that's getting smarter such as Alexa and the new Alexa plus you could just see where that symbiosis could have come together and what that's what the smart home needs is context you need to know that I'm standing in the kitchen and I've just dropped a pan of baked beans on the floor and you say, you know, Alexa, clean up the beans.

38:20And it knows that you're in the kitchen because it has all of that context from things like the Roomba, the maps, and then the Roomba just trundles over and sucks up the beans, although it can't do that yet. But that could have been the next innovation, wet vacuuming. So I would love to have seen where it could have gone. There is still a chance that Roomba will get bought by company. That's sort of the next. So the CEO said in the last in the financial reports that they launched last week that the two biggest ways out of their current situation is for lots of people to buy the new robots or for it to get bought.

38:59And I wouldn't be surprised to see a robot manufacturer actually come in and take them. I mean, they did actually used to have a partnership briefly with Ecovacs, so that could be one. Amazon, I mean, Amazon's not going to be allowed to buy it. None of the big smart home companies are going to be allowed to buy it. So their pool has definitely shrunk. And also, you can buy them, basically buy them for parts right now. So probably a really good deal. Well, it's the name, right? It really does feel like everything you just described is that this company has sort of nuked everything about itself that was unique except for the name Roomba.

39:37But at this point, I think you're right that all of this market has become so commoditized. And yet everybody still calls them Roombas, right? Which is very powerful. And so I think the theory you just described, right, where it's like, OK, we're going to come back all the way down to the market and we're just going to make the thing everybody else is making, but we're going to call it Roomba. It might work. Like, I don't I find that argument sort of a bummer. Like, it's not it's not an interesting way to make product, but it might work. Yeah. And I can see how this company would get there. I just think given the history of this company and the things they have been trying to do, that's just sort of unfortunate because and this is the last thing I want to talk about before I let you go.

40:19The thing you just described that this is the centerpiece of the smart home, that this is the thing that gives the context that knows where you are and what is going on. And like, that's how we get to Rosie the robot, right? Like the thing iRobot didn't want to build, it has sort of been building towards for 30 years. Whether it wanted to or not, this is what they're doing, right? And they've talked about wanting to build the operating system for the smart home and be the centerpiece of the thing. The thing that can move around inside of your house is so powerful. Like you and I have talked about this before.

40:53If there is a thing that can reach me physically, that becomes an incredibly powerful addition to my smart home. And so what I wonder is, without iRobot pushing on this in the way that I think the company has sort of uniquely been able to for a really long time, who is? Like, are we just at the point where a robot vacuum is a robot vacuum is a robot vacuum and we're going to just bail on the idea that actually this is the robot that runs your smart home because the Roomba can't do it? Yeah, I mean, so Amazon had started to, Amazon had its robot, the Astro, which was basically this kind of idea.

41:32But if it had been a vacuum, it would have been a much better product. Yeah, it would have done things. Right, because this is the problem. And this goes back to what Colin Angle said when he originally launched the company. It was like, robots need to have a purpose. There's no point if it's just a personality in your home. I mean, we've seen that with all the robotic companies that have gone out of business because they built robots that didn't really do anything, but they look cute or they had a personality. And so, yeah, the kind of the idea of having a robot in your home that is going to be useful.

42:06I'm in two minds. I don't really personally think the full humanoid robot is something anyone really wants. But, you know, and I think it's a long way away as well. And I think we all would like something that can do the function of a Rosie the Robot sooner in our lifetimes, ideally. Yeah.

42:53a multifunctional robot that perhaps whether Colin Angle and iRobot didn't want to develop the Rosie the Robot originally, I think they've definitely built the foundations for it. And it's the intelligence that's important as much as the function. And that, you know, really is where they laid the foundations because the machine learning that these robots, the difference between the one I had in my home in 2003 and the ones I have in my home today is exponential and they are so much smarter and that you can see the long tail of where that could take us could be really exciting and really interesting.

43:31All right, Jen, thank you so much for doing this to me. This was really fun. You're welcome. Thanks. I enjoyed myself. All right, we got to take a break and then we're going to come back and we're going to talk about e-readers. Love talking about e-readers. We'll be right back.

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46:42Welcome back. All right, let's talk e-readers. It's actually kind of an interesting time in the e-reader space right now. You have companies like Bookshop coming out trying to be big competitors to Amazon. Amazon announced a bunch of new Kindles, like the biggest rev in the history of the Kindle line earlier this year. You have companies like Books just out here selling every imaginable screen size of e-ink device. And then you have what happened a couple of weeks ago, which is that Amazon, I don't want to say announced, but sort of quietly intimated that the way it was thinking about ownership of digital goods had changed.

47:21They deleted this tool that would let you easily download your books to put them on a new device. And also, at the same time, changed what happens when you buy a book. Now, instead of, you know, buying a book, it says you're buying a license to this book. And that license can be revoked. The way we think about these devices has changed. And so I wanted to talk to somebody who is living this space all the time to see how it might change. Which led me to Michael Tamblyn, who's the CEO of Kobo, which is one of the longest running and most interesting competitors to the Kindle. There are new Kobos as of last year, I think.

47:58There are some really interesting new ideas about what a reading device should be coming out of the company. They've been selling digital books around the world for forever. I just figured I'd get his read on things. And we started by talking about devices, because one of the things I find odd about e-readers is that they're both wonderful devices and very good at the thing that they do well. But it doesn't seem like they've changed in a sort of meaningful way in a really long time. Like if you look at your phone now and your phone eight years ago, they're very different. And your laptop or your smartwatch or pick another gadget.

48:33E-readers have changed in small ways, but don't feel like they've changed in big ways in a really, really, really, really, really long time. And I just ask Michael why. I think there are a couple of factors. One is just screen innovation is super hard. And screen innovation, especially in this low-power e-paper space that we're in, is even harder, both because of the constraints. Like, you know, the whole idea is you should have a screen that you can charge once, you know, in weeks and it continues to work. And at the same time, unlike, say, OLEDs or LCD panels or anything else, the volumes aren't giant.

49:16So it's not like you're amortizing research out over 400 million screens a year. so so it's like us and our friends in seattle and a few folks in china and like we're the market that are uh that are creating the volume for this so there's a certain incrementality to the innovation that comes from that but then beyond that there was just this slow ramp on getting black and white better so if we look back over the last 10 years you'll see this kind of slow marching forward of we had ian pearl screens and then we had ian carter screens Carder 1 ,100, Carder 1 ,200, like sort of these little steps while they were also working on color.

49:58And so like a lot of the color technology we're seeing in the market now has been in labs and in manufacturing paths now for like four or five years. It's just that they couldn't get that combination of performance and price right. So we had screens that look like the screens that we now have out in the market with like Kobo Libre Color, Kobo Clara Color. Those screens were around three years ago or more, but they were still astronomically expensive. And so until they could get the manufacturing right, and they could get the yields right, and they could get the prices right, we just couldn't offer them at a price that anybody would find really interesting.

50:38But what's kind of cool now is there's a whole bunch of stuff that's just sitting on the horizon that not just from Yink, the manufacturer, but from all of these other companies that have started to work on low power screens. And so you have some contenders now and contenders mean competition, competition means things start to move faster and you can start to get some price pressure. So I think after having, yeah, almost like a decade of very incremental progress, we now start to see a whole, like, we're going to have some really exciting years over the next few years as all of this stuff lands.

51:12So you get that far, then can you get to something that is getting closer to the kinds of refresh rates that you see in LCD panels, for example. And then, like, then you can make the interactions on the screens better than you can make them right now. But it's interesting because I don't ever see us coming to a place where you have like the regular screen panel world and the e-ink or e-paper world converging because the use cases are so different. And not just for, you know, people like you and I who have a Samsung frame and like, you know, like are willing to make certain compromises in our TVs, but the extent to which you want a low power device on one side and you want perfect color fidelity on the other.

52:01Right. Just kind of the technology just diverges as you're trying to solve those two problems. Yeah. And it does seem like part of the I don't know if it's a challenge or not, but sort of the truth of this market is just that everyone decided a while ago to make a certain set of decisions. Like we hit a price point pretty quickly with a lot of this stuff where I think it's like my question to you on the screen stuff is going to be, well, why not just sell one of these awesome color screens that was available in a$600 Kobo? And I assume the response is because absolutely nobody would buy it, which is like fair enough.

52:35That is true. Sure. But I think it's a really interesting piece of this because I think like you look at almost any other category and there's this like massive price banding depending on how new the technology is and how many features you get and how much stuff you get. And the sort of acceptable set of prices in e-readers is so comparatively tiny that I feel like it does force you into kind of strange boxes where you're like, okay, we have to get this sweet spot of technology in order to have it hit this price point. Because if we raise it$100 to do this amazing new thing, nobody will buy it.

53:10There's just no other market really like that. Well, it's true. And I mean, some of that I think we're responsible for. In some ways, when Kobo came in in 2010, we repriced the e-ink market. So we were the first ones to bring in a sub$150 e-reader. Up until then, e-readers were$250,$350,$400. And part of that was just wanting it to be accessible not to this super narrow niche of enthusiasts, but just like, let's make this a general part of the book market. and then even again we were the ones who went okay having done that let's now look at premium e-readers so let's make the screens bigger and let's put waterproofing on them and you know and all that kind of stuff so to walk that price point up again but you're right there is a there's a certain limit that you bump into where you've kind of got like the bottom of the ipad market and the top of the the e-reader market and there's a there's a certain point of friction in there that psychologically people seem to bump into.

54:13And so that in a way becomes like the pricing box that we work in. But there's also something about, I think, selling a single purpose device. We really just do want this to do one thing. And I do think that affects people's mental pricing math a little bit. And you're also selling a small thing. So it's not like we're selling a giant 4K television that's going to cover someone's wall. But we do have some of that same kind of value psychology going on. A person who reads on an e-reader isn't a person who reads one book a year, mostly. They're a person who reads a book every week. And so you are selling to that enthusiast the same way that someone will ditch the earbuds that come with their phone and buy great headphones, you know, because they love listening to music.

55:07So you've got like you've got some of that enthusiast logic going on, but it only allows us to push it so far. So yeah, we work with it. If the goal is you're reading books, and I want to come back to why it's just books, because I don't think it's just books. And I want to convince you that it's not. But if it is just books, how big do you think that is? Like, what does that mean you have to do well? Sure. And just to touch on what you were saying earlier, I also have a theory on why we've ended up with this space being defined the way it is. And it's from some very particular technology choices that got made in about 2010.

55:44So we can come back to that. but like you know what has to be done well with this comes so much to like what is the experience that people want to have when they pick one of these up you know this is the kind of thing we actually do research on and we like bring people together and we interview them and we survey them and you really have like four ish you know kinds of customers you know you have those people who are reading for escape, who are just like, you know, the, you know, fiction or a biography, it's taking me away, it's taking me out of this place and putting me somewhere else. And that requires both an extremely inobtrusive technology sitting behind it, like you just have to get everything out of the way, and an absolute rock solid reliability in the experience itself, because any problem jars you out of that moment.

56:40You go from having a beautiful moment to an annoying moment in an instant. And then you have the people who are reading more for information or for education. And that's a different set of technology problems as well as a different set of interactions. The reason that we started putting styluses in e-readers came from interviews that we were doing nonfiction readers. And we were trying to solve this sales mystery of why are e-books so over-weighted into fiction relative to nonfiction.

57:24Oh, fascinating.

57:45for me to do with an e-book unless we give you some extra tools to do that. So let's make highlighting and notes and all of this stuff become a thing that you can do as easily. Plus, there are some benefits to that. It's not just stuck on the page. You can take it off and do something else with it. So different use cases for different kinds of readers. And there are some, as we dig into that, that also explain places where e-books just haven't become as popular, like reading for children. We thought, okay, color screens, amazing. Finally get children's books. No. And not because they don't look good.

58:23And we also have them on apps. You could read them on an iPad or an Android tablet or whatever. No, because children's books live in the gift economy. And they are what parents give to children. And you want to walk into a child's room and see books all around you as a sign that you are a good parent and they may grow up to be literate one day. And all of that kind of works against the idea of having that be something that you read in digital. And that's okay. And the same with all of those books that are... loved for the object that they are as much as for the content that they have. The books that you have on your coffee table and have on your shelves exist with a whole different set of values behind them in addition to the stuff that's in them.

59:06And it's funny, if you look at a bookstore, you can kind of look at how the books themselves are produced and get a sense of their likelihood of getting consumed in digital. Like, the more cheaply it's put together, like, you know, the romance novel and the, you know, crime thriller that's just got covers wrapped around it, it's all about the story. Those have gone to digital much more quickly than the beautiful book that's about, you know, architecture. And yeah, so different use cases kind of drive you into digital in different ways. And it's also why print has coexisted much more kind of harmoniously with digital than the other big format shifts that we've seen, like with music and with video.

59:50Yeah. Is there a world in which you think digital eventually takes that whole spectrum? I have a two-year-old, and we have 100 million books in his room, and all the ones he likes best are the ones where it's like the train pops up off the thing and he can play with it as he moves. And it's like, I'm never getting that on an e-reader or an iPad or anything. Like, there's no screen that physically can do that thing that turns out to be very important. So is there a spectrum of this where you're like, okay, in this giant sort of sweep of what a book can be, we think digital can do sort of, you know, the middle two-thirds or whatever?

1:00:27Yeah, I think there's a long-term and a mid-term view to it. The long-term view is, do you still believe that 50 years from now, we're going to be cutting down trees and pressing ink into them, and that's going to be the way that we move words around? And I think if you take the timeline out that far, people go, eh, probably not. And so then you're just arguing about where the inflection points are that might kind of tip you over to that. There will definitely always be some physical books that people want to have because they're beautiful and because they say something about who we are and they create an environment that we like.

1:01:04Well, that's the stuff you're talking about where like the object is actually more important than the book, like almost calling it a book. And it's the same with like a lot of coffee table books and stuff, right? Like it's not that's a piece of art as much as it is like a bunch of words in a row on pages. Or the design is a part of the content and the design amplifies the message that the author is trying to send. What was cool about seeing publishing react to digital through the 2010s and into the 2020s was all of a sudden everybody stepped up their game on making books just more beautiful physically.

1:01:39So you didn't have walls of cheap paperbacks anymore. And now even more, you've got the idea of books as collectibles and you've got special editions and all this other stuff. And it's publishers frantically trying to figure out the balance between keeping bookstores alive and relevant while more things go to online and then e-books are in there, like carving out certain segments. So they're doing a delicate dance. And then at the same time, we're trying to say, well, hey, we just put out color screens. All of a sudden, cookbooks look gorgeous on an e-reader. And they do. And so there was a segment where we kind of couldn't really meet the customer where they wanted to be.

1:02:19And now we can. And so all of a sudden, you see more digital cookbooks else happening, which is cool. Yeah, what are you seeing in terms of what color in particular is doing? because I think one thing I've heard from book people over the years is that part of the challenge with e-readers is that they're so customizable in the sense that screens are different and people pick different font sizes and people pick different colors and margins. And so attempting to be sort of opinionated and thoughtful about ebook design was kind of a waste of time. My sense is with color, maybe not with everything, but with some things that would give people a chance to put some more work into how those things look and feel.

1:02:57Are we starting to see that as color grows? Yeah. I mean, at the most basic level, we had publishers who used to take color images out and turn them into black and white and send those to us just to keep file sizes down and everything else. It's like, nope. We would like the whole thing now. Give us that. But it's a little bit of everything. It's suddenly more graphic novel sales, suddenly more cookbook sales, like maybe not the gorgeous coffee table book, but the book that's about knitting patterns or the book that's about mending your own clothes that was like kind of color photo imagery is suddenly more saleable.

1:03:33So like all of those are ticking up. And then there's just something about like you can now see your library in color. And like people, like publishers sweat about covers for a reason. Like they're, you know, they're gorgeous. They should be. And now we can show that to people. And so that all helps as well. And then it's very different from market to market too. So like what we're talking about mostly is what I call kind of like North American publisher behavior. You know, we look at some markets like Japan is not an e-reader market at all. And it's like it's a huge one for us, but it's all happening on smartphones and their colors never been a problem.

1:04:12And it doesn't change at all. Right. And I think the smartphone thing is really interesting to me because one of the main reasons I hear from people that the people who are mad that e-book readers aren't better. I would say overwhelmingly what they say is because all the companies that make them are bookstores first and device makers second. And I think to a large extent, I think that's that's I don't know if that's true for you. I don't know if you feel that way, but I think like Amazon, I know, feels that way. I can tell you with great confidence. Amazon cares a lot more about selling books than selling Kindles.

1:04:43and uh then and i think especially when you're starting to think about okay how does this experience work on smartphones how does it work on the web reader you get to the point where it's like okay we actually can't just be focused on the one thing in part because customers want it to be lots of different places and in part because that's not what our business is is it is it possible to have your cake and eat it too in that sense like can you be a great hardware business that is also mostly a really good bookstore? Or do you end up having to choose one or the other? No, you totally can't. That's the part that I don't think I get.

1:05:20In some ways, we treat them as two different things, or at least we treat them as two different objectives. We have a lot of people who buy a Kobo e-reader who never buy anything from us at all. They hook it up to a public library. They bring their own books along. They muck around on the internet. They find things that they probably should have bought. Like, we know all of these things happen. Purely, legally, and correctly, with no problems, always the right way. Public domain. Exactly. Jane Eyre and Sherlock Holmes. Everybody's just reading Frankenstein. Yeah, exactly. Everyone is reading Pride and Prejudice all day long.

1:05:55And they have their own special version that they bring to us. And so those people bought an e-reader. They shelled out their cash, and that's the way they're engaging with us. And we need them to be happy, even though they never hit the store at all. And then at the same time, we are a bookstore and we do sell the content. And whether that's the actual e-commerce experience itself or running Kobo Plus, the subscription service, or running Kobo Writing Life, like our self-publishing program, like all of that stuff has to work together to make a really great store because that's just another part of the flywheel that we're trying to keep spinning.

1:06:35And they need to work together really well too. So that's why we don't just treat it as, you know, kind of a dumb hardware platform. Like we want to thoughtfully integrate those two things together. Sure. But like the thing Amazon always says, right, is like we don't make money when you buy our gadgets. We make money when you use them. And in the Kindle's case. Oh, they totally make money when they buy their gadgets. They absolutely do. Fair enough. But I think that seems to be at least sort of philosophically the way that they think about it, right? They're like, they are more interested in giving you a thing that you will buy books on than in giving you a thing to happily read things that didn't come from Amazon.

1:07:13Which is objectively true given all of their product decisions that we should talk about. Is that not the case for you? How do you design a business around this so that that's not the case, so that you don't have to force me to buy 10 books before this thing makes sense for you as a business? Well, part of it is just the economics of e-readers themselves. Unlike laptop screens or smartphone screens or anything else, they're expensive to make. Those e-ink panels are not cheap and make the margins on e-readers relatively thin. And one of the reasons that we weren't just trying to drive them down to become commodity hardware, like, you know, kind of the race to the$99 e-reader and below, and thought that there was room for a premium segment, like, let's make a great 7-inch e-reader, let's make a great 8-inch e-reader, was to create some more pricing headroom so that the e-readers themselves could be valuable objects and could be interesting objects.

1:08:16Because if you can bring the price up a little bit, you can experiment with materials and you can, you know, kind of change the screen, like the screen technology that you're using. All of that to say, then you can start to have like a spectrum of e-readers at different price points and have them stand on their own from an economics perspective so that you're not trying to make, you know, these kind of like one way doors where, okay, you've bought our thing. Now you have to buy all of your content from us too. And so the content should be our ability to sell books well should be able to stand on its own in terms of how we make money and the margins that we have on it.

1:08:56And our ability to make hardware should be able to stand on its own, knowing that some people are going to buy hardware and never buy books from us. And that should be okay. So we shouldn't be trying to structure this as a roach motel. And you should be able to kind of engage with it the ways that you want to. And maybe your e-reader is something that you're using to do documents from work. And maybe you're using it as something to buy books from us or to hook up a subscription. Or you're a public library fan and you want to use Libby. And we're good with that, too. Yeah, and I think that explanation makes total sense to me, even though I have a Books Palma sitting here I would very much like to talk to you about.

1:09:35But I think, to me, the both biggest opportunity and maybe most interesting challenge here is that kind of getting stuff into and off of a device like this problem. Because I think, especially like you talked about the people who read nonfiction and that they just interact with this information differently. one of those things is like I hear over and over from people who are like I I use whatever app just because it syncs to my notion like you're just saying right and and then I can I can search for all of my stuff or I get I don't know spaced repetition flashcards sent to my email every week or like whatever people have these sort of wild information collection systems and they want their long-form reading to be part of it and by and large these devices are the most disconnected from the rest of that.

1:10:25Yeah, and that's like one of the reasons that we put stuff like Dropbox support on there is like, let's look at popular file systems that people already use that synchronize well, that have things like, you know, the ability to email into a directory. Like all of that stuff is there. Sure, yeah. So that A, we're not rolling our own because nobody wants another one of these. Like everybody has eight already. And then the question is, how much farther do you have to go? Like, is it, okay, we also should do Box or we also should do, you know, OneDrive or whatever the other ones that people want? Well, that is the problem, right?

1:10:59There is an infinite well of those things. There are infinite wells. Yeah. And so at a certain point, you have to saw it off. And then similarly, in terms of the material itself, you've done a whole series on note-taking solutions and knowledge management systems. And everybody wants their thing to go directly into that thing. And I understand why. As a Notion user, I love these things to just be piped in. But can we get them out in standardized formats? Can we get them out in ways that are kind of easy to manage and manipulate? And so whether that means that you are then kicking them into the knowledge management system you have, feeding them into an LLM or doing whatever else you're doing with them, let's make sure that the inputs and outputs are relatively clean and easy so that you can get stuff out.

1:11:50And that's, you know, we've kind of been nudging around this at different times, but getting things out is an important part of this. We would like you not, we don't want you to have your stuff trapped inside. Well, and to that point, this is a bit of a diversion, but I know it's a thing you've been thinking about and talking about. There's been, I would say, a kerfuffle in the e-book reading world over the last couple of weeks, which is not a thing that happens often. So it's very exciting when there's ebook kerfuffles, like it's good stuff. Where I think because of this Amazon announcement of they were shutting down the download and transfer thing where you can get your books easily off of your Kindle onto another device, that's all very messy.

1:12:31But I think it has changed a lot of people's ideas about what it means to have stuff on a device like this. There is this feeling of like, okay, my e-reader is a thing filled with my books. And I think a couple of times over the years, Kindle owners in particular have been reminded that that is not actually the case. and now there I think when you when you go to buy a book on Amazon it's like it says you're buying a license to a book not the book itself and like we talk a lot about digital goods at the verge and the idea of like what what are they what do you own what are you buying what what if this matters we got weird in the NFTs for a minute it was a whole thing but I do think like this question of people's information on a Kobo device and in the Kobo ecosystem, what is your responsibility to all of that stuff?

1:13:22Whether it's books that I'm buying or PDFs that I'm adding, like how are users supposed to understand what all of that means inside of Kobo's universe? It's one of those places that I'm like, I'm kind of proud we've been able to stick to our guns over the years because from the very beginning, as we were first framing out what Kobo was going to do, we thought you should be able to read your books on any device. We'd like it to be ours or we'd like it to be in our app, but it doesn't have to be. You should be able to buy something and take it somewhere else if you want to. And you're right, that question of licensing versus owning is a whole other can of worms.

1:14:06Publishers only let us sell licenses mostly, and some let us sell without DRM. Some, especially in the EU, like use watermarks that are embedded, but leave the files on DRM. So it's always really hard to say you own your e-books the way you own your paper books. But we can do the next best thing, which is to say you can take them with you. You can download them. You can put them on a USB key. You can bury them in a mineshaft or hide them in a hollow tree. We still have to protect them with DRM because the publishers want us to do that. But lots of other e-readers support DRM. You can take it and read it on one of those.

1:14:46And I think that's good for us because it makes us compete on the experience. You have to want to stay. and we have to earn your time and your attention and your next e-reader to replace the one that you bought eight years ago. And that keeps us honest. And it does, I think, give a certain sense of security to the person who's buying an e-book, which does already feel less tangible than a physical book. Is that a hard line to hold over time? We haven't found it to be. We had to fight hard for it at the very beginning, but i think publishers feel both sides of the pressure on that one being it's better not to lock people into ecosystems and at the same time we really want to make sure that our intellectual property is protected and not fire hosed around the internet and sure and i get both of those but for us the and especially as ebooks were just getting started that notion of you know how do we create a sense of safety around these very intangible objects is really important.

1:15:57Like there are standard DRM solutions. This is a solved problem. And you have them like fairly well standardized across markets and countries. Like none of that is actually an issue. It's like some people really want you to stay on one platform and never go anywhere again. And some people, some people. Yeah. Where do those people live? They're more West Coast based, I find. And I don't know if there's something about proximity to the heirs of the Pacific that make that happen. There's a big needle somewhere in the city, I think. Yeah, I forget. But it is one of those, like you talk about things that kind of stifle e-book innovation.

1:16:34You've got those certain platform dependencies that like that's the thing that makes this hard. It's not the screen. It's not the technology to a certain degree. it's people wanting to keep things inside certain walled gardens right okay so to that end i have two more things i want to talk to you about then i'm gonna let you go okay uh number one is the funniest thing about kobo to me is that you are in every single ebook reader buying guide under the same heading which is the best non-amazon ebook reader i mean everywhere you look on the internet yeah there is the best kindle and there's the best not kindle uh does that drive you crazy How do you feel about that designation that like in a real way you do kind of exist in opposition to Amazon?

1:17:18Is that frustrating? In so many ways, in every way. And so what's been great to see is how that those lists have evolved because it used to be, you know, best e-readers. And they would always put the Kindle one at the top because that was the most popular one. and then they put us below. And now they just have two categories, best Kindles and best other e-readers of which we are the best ones on those. And I think we see perception on that shifting a bit of, well, maybe I don't want that. Maybe I do want the alternative one. And especially as controversies like the ones we've seen over the last few weeks have come up, it makes more people look at that second column, which is fantastic for us.

1:18:07But the other thing that's interesting about that is that that's really only a U.S. and U.K. phenomenon. That's fair, yeah. And it's like some of that comes back to just where our friends in Seattle are dominant. Like they run the e-book show in exactly two markets, US and the UK. And then in every other territory, there is at least one local retailer who's doing as well in e-books as they are. Like they're toe-to-toe, comparable market shares. And almost all of those are being powered by us. so you have this really interesting case of there's kind of one world in inside that bubble and one world outside of it where we're all just like fighting away all day long and those lists look very different when you when you come outside of the bubble which is awesome all right last thing and then i'm gonna let you go uh i would like to read you a threads post that you did last august i'm ready i'm terrified but i'm somebody somebody posted uh as per the latest Despergecast, which I believe this was me ranting about how bad the Kindle is at allowing you to send web articles to the Kindle.

1:19:17All I want on earth, Michael, is just a good way to take all of the stuff I want to read on the internet and put it on my e-reader. This doesn't seem like a hard problem, and yet no one has done this for me in a way that is any good at all. So this person posted, as per the latest Despergecast, will Kobo make a good reading app a la Readwise for all types of files and CC'd you and you responded working on it. Yes. Do tell. So we have two parts. We have one, which is the integration, which we have with Pocket today, which does a really good job of the web clipping side of it. And so you can take all of that stuff that you've, you know, the long, you know, the long read article that you don't want to read on your phone and throw it over to your reader that way.

1:20:03Super simple. Is that is that a good enough answer to that problem for you? I think it's 75 % of that answer. The other use cases that say, like kind of live around Readwise as an example, we have an integration with Readwise, so we can do some of that stuff. And then the rest is PDF management, which we keep taking these big jumps on in terms of how we manage and take care of them. Now we allow you to write on your PDFs and annotate them the same way that we do with an ebook. So that's all getting better. And then, like, I think the last things that we can keep working on are just, like, how do we make that as fluid and as clean as possible?

1:20:45Because right now it's spread across a couple of experiences. It's not kind of like, you know, all exactly to one place. We have to use a part of it. So, like, we do have to use a different renderer for a PDF than we use for, like, a web page, for example. So all of that stuff is sort of in the mix, but we get the question and we understand the desire of, can't I just have all of my reading in this one calm, beautiful place where alerts aren't going off and notifications aren't coming up? You can read on a smartphone today. So you can get all of your Kobo books on a smartphone right now. So the portal to reading through that multifunction device exists today.

1:21:27And that's a signal. That tells us something. When somebody buys an e-reader, they are stepping back from what, in almost 100 % of cases, is the device they already own. And so then at that point, you've got the question of what are the other layers of experience you can add to that that will actually augment and enhance that experience as opposed to taking people closer to the thing that they're trying to escape from. And so we have audiobooks in the e-reader experience because we feel that those are just two kinds of reading and they should be kept close together. But we've specifically and deliberately said no to a lot of other stuff that could wrap around that, both because they already have a home on your phone that's very well served or the kind of interaction that you would do with them is one that's just not well suited to the hardware environment of an e-reader.

1:22:20but mostly because we are trying to get people that escape and we do want them to step away from it and when they do they tend to read more which is the thing that we like as people who also sell books so like that's where the the two sides of the ecosystem do come together is that when we do put an e-reader in someone's hand they like they buy more books and their reading time is longer than a comparable customer holding a phone in their hand who has access to our store And so giving people that little bit of haven of attention is just good for someone's reading life. And we think that's, you know, for all kinds of reasons, also just a good thing in the world in general.

1:22:58Like, we need more little pockets of non-distraction, I think. It's always a good thing. All right, we got to take one more break, and then we're going to come back, and we're going to take a question from the VorgeCast hotline. We'll be right back.

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1:24:43All right, we're back. Let's get to the hotline. As always, you can email verdcast at theverge.com with your questions. You can call 866-VERGE-11 with your questions. We truly, truly love hearing from you. We have a couple that are sparking bigger stories. I think you're going to hear one of those in the next couple of weeks. Super fun. We've really enjoyed hearing from you. And especially right now where it feels like so many things in tech and in the news and everything else are just kind of up in the air. It's been really fun to just hear you think through stuff. So keep sending us questions.

1:25:12Keep sending us thoughts. We love hearing from you. Today, we have a question about televisions. Hey, Verge Gas. This is Andrew calling from Southern California. I've got a question about TVs. I know there's been a lot of recent discussion that a lot of TV brands are making less quality TVs that are designed only to serve you ads and not necessarily to be good presentation machines. But I'm in the market for a new one. I currently have an eight-year-old Vizio M50. It's a full array LED, but it's got a dimming zone that's about to die. And I'm looking for something new. I was going to see if you guys could recommend me some sort of TV or where I should start doing research.

1:26:01I don't really have a budget, but I guess it's really I want something that's high quality, but not necessarily top of the line. I can't really afford an A95 like Neelai, even though I would love to have one. But basically, I use an Apple TV, pass through a soundbar, top box. So I don't really need something with a crazy good OS. Sometimes I'll play video games on an Xbox Series X, and I'm really starting to get into 4K Blu-rays, and eventually I want to buy my own standalone player. So really, I was just going to see if you guys could recommend me anything or any sort of technologies I should look for in a good quality TV.

1:26:39Thanks. Chris Welch is here. Hello, Chris. Hello, it's good to be here. As you know, I am woefully unqualified to be the person to answer this question. uh nila just makes fun of me for this crappy roku tcl that sits behind me that i hate slightly more every single day um but i really like this question because it's it's like it's two questions right it's like i uh i want a nice tv but i don't want to spend several paychecks on a television but it's also like if i just want to buy a pretty good tv where do i start so i want to i want to end with like a specific a recommendation as we can give our friend andrew here but let's start kind of bigger picture?

1:27:17If you're just like in the market for a pretty good TV right now, where would you start? First of all, shout out to Vizio. You know, sad fall from grace, but they used to make great TV. So Andrew, he did good choice back in the day. But now it's time for an upgrade. And there are two brands that kind of live in this zone. They are Hisense and TCL, the leading mini LED TV makers. We always talk about mini LED being a, being like a great value for what you pay. You can get like a 65 inch model for like under$1 ,000 right now from either company with fantastic picture, great contrasts, all the specs you want, 4K, HDR, super bright picture, and it's a great value for the money.

1:27:54They both ship with the Google TV OS, which is fine, I think. It's probably my favorite onboard TV OS. But if you're using your Apple TV 4K, you can always just go right to that input and totally ignore it. And so, yeah, I think Hisense and TCL are kind of, this is their lane, this is where they live, this is where they dominate. And so, yeah, that's where i would steer you totally yeah and i think the uh buy a tv and then buy a separate box and plug it straight into the like go straight to that um input when you do it is 100 the right move like even sometimes there are certain tvs like sony tvs like their apps on sony tvs like use like special processing for like picture performance and enhancement like you don't get that same processing if you use like an external box so if you have a sony tv that's like very specific but uh uh so that's one reason to like use the onboard apps and most of them are pretty similar to like what your streaming gadgets can do these days but they're more up to date on the streaming boxes and stuff like that and you can also just ignore all the ads if you've got a roku tv or you know these ones from google that also do like full screen ads i got a full screen starbucks ad the other day on my google tv so you know they're they're out there it's rough out there yeah i do feel like i am i am increasingly being radicalized against roku's operating system uh but that's for another day we'll come back to that sure um yeah so is is mini led the one like if If you're just recommending a TV to most people, is a mini LED TV the place to be?

1:29:18That's where I would start. Unless you want to pay quite a bit more for an OLED from LG or Samsung, then I would certainly say stick with a mini. Okay. Mini LED for what you're getting for the value. So, yeah. So, I would say Hisense has the U8N. That's their flagship mini LED TV. TCL has the QM8. they both have eight in the name so it's very confusing for some reason and then Sony also has a pretty good mini LED called the Bravia 7 which is like their kind of mid-tier model not quite as many zones the other ones but it's like a great performing set for what you're paying for it so those would be my models I'd recommend but like even like their lower ones like if you step down from there like they still have great pictures especially if it's like a five-year-old Vizio or like a ten-year-old Vizio you're gonna have like a huge jump up and like overall you know quality and performance and HDR is just, yeah, it's good.

1:30:16It's good. Especially, you know, the 4Ki Blu-ray discs, good choice there. I hope that's still around in a few years, you know, it seems like physical media is having a tough go, but I respect the endeavor. So yeah. Okay. So I feel like I was thinking about this, listening to this question that like, I have a very clear sense of what to tell people to spend money on sort of as you want to upgrade, right like you have the the the sort of base i know the i know the screen size i want i know i want it to be mini led right like great those are two good decisions to make very quickly then it's like do i how do i sort of slowly step up what is worth paying a little bit more for what is just nonsense that you don't care about do you have a sort of rubric in your head of like how to sort of move up the the spec line of tvs it's really just brightness it's all brightness wars these days when it comes to TCL, Hisense, Sony, and even OLEDs.

1:31:08Year after year, it's just getting brighter and brighter and brighter. It's like, do you want like an eye-searing brightness level? Then you would buy the UM8 Hisense. Like those top tier models, they're too bright for some rooms. Like my living room, it's kind of absurd. But if you want like the most impactful HDR, that's why you buy those TVs. Plus blooming, these have like so many zones in their TVs now. It's like how they control those like dimming zones and like try and cut down on blooming effect where you have like a halo around text or captions and stuff like that that's something to look out for as you're shopping so like all these top tier TVs all have great algorithms that kind of like cut down on blooming and other like bad side effects of having so many dimming zones there in the sets okay what do you what do you think is the right sort of starting budget for people i feel like generally speaking if you if all you have is 300 to spend on a tv buy a 300 tv right Like, that's fine.

1:31:58But if you're, where do you feel like the very good televisions range starts? So I'd say like$1 ,000 is a pretty good sweet spot right now as far as, uh, that can get you a 65 inch model from the ones I talked about. If you want bigger, uh, you know, these companies all make bigger sets. I'm happy with a super modest 65 incher, but I know the trend is going towards bigger and bigger and bigger sizes. So that'll cost you, you know, 2000 more if you want like a 75 inch or bigger. but if you want just like a nice very bright 65 inch TV you can spend like 900 bucks or a thousand bucks and be very very happy for many many years to come okay well this is good Andrew I hope that helps now I have a question for you specifically about me and my own television needs so as you can see behind me I have a very bright window and the very bright window stares directly at my television and so what happens is anytime it is not like pitch black outside.

1:32:56There's just a third of my screen that is just glared to death. I have just come to accept this as like the price of the layout of this room behind me. But this TV is, I don't know, it was crappy five years ago when I bought it and now it's this. Can I, if I spend$1 ,000 on a TV right now, can I solve at least enough of my glare problem that I can see things on the TV because it'll be bright enough and better? I'd say so. Yeah, for sure. If you want like a true solution, you could buy like one of Samsung's OLED TVs because they have like a matte coating on them now. Sheer brightness can help, obviously.

1:33:31But as far as like the actual coating on the display, Samsung's OLEDs have like an anti-glare etched glass type thing. And also that's going to come to this year's LCD sets. So those shouldn't be quite as expensive. Probably not like a thousand dollars cheap, but better. So I would say try those if you want. But Tizen OS is kind of like a headache. Yeah. It's not my favorite. So that's where you go with the Apple TV or some other box to plug in. But that would do a great job. But kind of, yeah, that window spot is rough. So I feel for you. It's tough, man. And it really, I was trying to watch The Gorge, that Apple TV movie, the other day down here.

1:34:08And like a solid third of that movie is basically in pitch darkness. Yeah. And I couldn't see it. I literally had to stop the movie because I was like, I can't. It's all happening in that like bottom third of the screen that I just can't see. I had to pause the movie and I was like, it's probably time for a new television. Can't you use some curtains or some like smart home sliding something over? Something to cover that up during movie time? The actual answer is curtains, but the much more fun technology answer is buy a needlessly expensive television. So I'm going to do that instead. That's why we're here.

1:34:37Yeah. All right, Chris, thank you very much. Andrew, I hope that helps. Let us know what you end up getting and we'll tell you if you made a good decision or not. Thanks, Chris. Thank you. all right that's it for the verticast this week thank you to everybody who's on the show and thank you as always for listening as always there's lots more on everything we talked about all of gen's robot vacuum coverage we have kobo coverage on the site we have coverage of all the amazon stuff we'll put a lot of stuff in the show notes but you know keep it locked on the website things going on right now and if you have thoughts questions feelings or other robot vacuum features you'd like to see you can always email verticast at the first.com or call the hotline 866 Verge 1-1.

1:35:17We really, really, really, really love hearing from you. This show is produced by Eric Gomez, Brandon Kiefer, and Will Poore. The Verge Cast is a Verge production and part of the Vox Media Podcast Network. Neil and I will be back on Friday to talk about all of the news, whatever Brendan Carr is up to this week. Lots more gadgets. AirPods Max happened. We're going to talk about those, and lots more. We'll see you then. Rock and roll.

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