Microsoft beat the FTC, and the Nothing Phone 2 is here

23:52You know, Microsoft's point of view, and I've had Phil Spencer on Decoder, and he has said this out loud. I think he said a trial. I was like, look, the console market is shrinking. We're losing to mobile. So winning this ever smaller slice of pie is not the point. And he has said to me and he said to the court, Call of Duty is not the point of this acquisition. The point of this acquisition in the present is like Candy Crush, the king, which Activision also owns, that makes a ton of money on mobile games. The point of this acquisition is building a library for our cloud gaming future, which, hey, we own Azure.

24:24This is a great business for us to be in. We've got all these ideas about cloud gaming. One day we'll solve the Apple problem and ship an Xbox cloud gaming app on the phone. And so you're like, that's why they're doing it. And so if you're the FTC, I think they kind of got baited by both Microsoft and Sony into endlessly talking about Call of Duty. Because what Sony wants is Call of Duty. So Sony's version of this is we don't care about any of the rest of this. We just want some kind of assurance that we're going to keep getting Call of Duty. Right. That's the only game that Activision makes that Sony gives a shit about.

24:58Right. Apparently, they haven't talked about any others. They don't care about Diablo 4. They don't care about Starfield. All this other stuff Microsoft makes. They have a lot of exclusives. Right. And the numbers we've heard are insane and back that up. The numbers that came up about the huge percentage of people who game who only play Call of Duty and the billions of dollars in revenue that this means to Sony every single year. You can see why. But again, to your point, this actually should not have been a lawsuit about Call of Duty because no one was actually in disagreement about Call of Duty.

25:31If you're saying we're worried about this and your opponent is like, here you go, like over and over again, it's like, here you go. You want it on the switch? What's some no-name third-rate game streaming service? Crackle. We'll put Call of Duty on Crackle. Anything you want. Call of Duty wherever you want it, right? Microsoft's been saying this around the world. And, you know, the court, in its opinion, said this is one of the biggest deals in the world. It deserves scrutiny. It got a lot of scrutiny. This is fine. Guess what? All the scrutiny resulted in Call of Duty. Microsoft was showing up at the table with that deal for everyone.

26:01Can I just read you that chunk of the opinion? Because I actually think it's super interesting. It says, Microsoft's acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off. Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to, for the first time, bring Activision's content to several cloud gaming services. And then it's basically the implication there is like, and we're done here.

26:28And I think you're right. Like that's everyone at Microsoft was up there yelling that this was what they wanted to do through the entire process. Here's a deal that we would like to give you. And the court's like, they're going to give you that deal. That's fine. I just think that there's something in there that's like everyone wants to pile in the FTC for losing this case. And you should. I think they did a bad job. I think they got distracted into this Call of Duty sideshow. Right. And it's because Sony wanted this deal. So like Sony is screaming, like, give us Call of Duty. And the FTC is like, all right, that's our way in.

26:58Like this other big company is mad about it. and we'll find some anti-competitive stuff. And then you've got Sony's own executives and emails in evidence being like, I'm not so worried about this. Whatever. But then you look around the world, right? It's still not done in the UK and the UK is focused on cloud gaming. You look at the EU, which focused on cloud gaming and Call of Duty and got Call of Duty and said, all right, we'll see if the Americans can do this. It's not that the FTC shouldn't have done this scrutiny. Every other big regulatory body applied the same level of scrutiny and is getting various kinds of deals.

27:29I think what people are looking at is the FTC lost this case in court and they've lost some other cases. And you're like, maybe this isn't, maybe they're just always going to lose and they should never try. And I just, that to me is the mistake. And it's a mistake for two reasons. One, the court itself is saying, look at what this scrutiny got you. It got you Call of Duty. If Microsoft wasn't anticipating the scrutiny, they wouldn't have started with, we'll give you Call of Duty. They would have started with, we're going to make Call of Duty exclusive like they did with their other games. So weird, right?

27:59Like that's just a weird thing to be like, if you take away the threat, they'll still behave. I don't believe that. Then there's the second thing, which is like very, very, very wonky. But the Lena Kahn project at the FTC, and Lena Kahn has been on this show before she was the chairperson at the FTC. You can go listen to her. Her project is that the antitrust laws of this country are bad, right? So they were reinterpreted in the 80s by Robert Borg and Ron Reagan and all this stuff, and that we got to a place where we no longer think about competition. We just measure prices. and that has led to all kinds of bad effects.

28:29And I think that is true. It's true for a variety of reasons. And her project is to go get the courts or Congress or someone to reset antitrust law. And there's two ways to do it. One, you create a lot of political capital. You make a lot of angry people so that Congress does something. So Amy Klobuchar and Elizabeth Warren and Ken Buck, who's a Republican, who's on that committee, can pass this antitrust bill that they've had in their back pocket forever, right? Saying, look, this wasn't the right outcome under the existing law. Here's a new law. Or you take it up to the appeals court and say, the way we've been applying this law for ages is inappropriate because of these effects and this thing.

29:07We want you to write a new precedent. And then you take that to the Supreme Court, which I would just point out, this particular Supreme Court is like new precedent. Here you go. They're just into it. So she's just playing a long game. I think she's played the early innings of that long game kind of stupidly. Candidly, I think she has done a bad job with these things. She certainly has not explained that she is playing a long game. And you would think it would help to have some kind of like small wins along the way to prove that like we are stepping in the right direction. And instead, it's just like, I'm going to lose aggressively, and then I'm going to win.

29:38And that gets harder, I think. Could she have ever won this case? Because like even the deal for the Sony deal, that's only 10 years. Call of Duty has been around for what, more than 20? It's been a huge, huge thing for more than 20 years. So nothing's to stop Microsoft 10 years from now from just saying, okay, that's it. Exclusive. Yeah, but we'll all be dead then. There'll be like a new generation of dancing teens on a different platform. Like, whatever. Even that felt kind of anti-competitive to me and the court saying, no, this is fine. Like, was there any hope of winning this case if she'd gone after the other stuff, if she hadn't gone after Call of Duty?

30:16I don't know. I think we just won't know. I think the Call of Duty stuff was just such a distraction. and somehow we ended up talking about it. And I just will point you, Phil Spencer on Decoder is like, this deal is not about Call of Duty. Who wants it? Well, we're going to run Call of Duty in an iFrame on theverge.com, like 10 years. So he'll write that deal with us tomorrow. Fine, as long as you're paying 70 bucks a pop for Call of Duty, it's a great business. They're not going to change it. This thing is about, okay, how do we create a new paradigm for games that ends the console era and creates new market share?

30:50And that's why we ended up talking about like the switch and all this other stuff, right? Like, okay. And maybe they should have a big library of exclusives to do it, but you just see how with every other kind of streaming media, that cycle is bad for consumers. It leads to less choices. It leads to less content and it leads to higher prices. Like just look at the streaming television industry. Not everything is on every service. All the prices are completely insane and the apps are not good. And you're like, is that how you want this to go? Like, shouldn't we make sure there's like a lot of competition here, a lot of like developers across these services.

31:25So they have to compete for our dollars with quality as opposed to competing for dollars with content that comes and goes. That's the thing I'm worried. My question is, why didn't the judge see that? Because they made that case like during the thing. They maybe didn't hammer on it the same as Call of Duty. David's got the opinion. If you look at the opinion where the judge deals with cloud gaming, she's kind of like, I don't know. This seems weird. We're not going to do it. Yeah, that's my thing is like, how could she have won if the judge doesn't even understand cloud gaming, right? Like, if the judge is kind of being a dumbass.

31:54Wait, I realize I've been very strident, but I think if we get to a place where like, how can the American legal system not understand cloud gaming, we might have already lost. Right. That's true. If her strategy is to overturn antitrust law at a higher court, they're going to have to understand cloud gaming, right? Like, they're going to have to understand this stuff. Yeah. If we can't get this judge to understand it, how are we going to get the next judge to understand it? But this is where we come back to. I feel like so many of these fights and trials end up coming down to market size definitions.

32:27And this was the case again, right? They had this giant fight over is Nintendo a genuine competitor to Sony and Microsoft? And is the cloud an actual threat to the console world? And I think in that case, if Sony is in the ear of the FTC, being the one sort of explaining the other side of this fight and Sony is out here saying, yeah, we're not that worried about cloud gaming. It's fine. Then I can see how you would sort of write it off as like a lark that Microsoft is on. And Microsoft has been on many larks that have not worked out. And so I think Microsoft is also sitting there saying cloud gaming is like cool and fine, but we don't really care about it.

33:06Like they spent so much time. They tell investors it's the future. They tell the world it's the future. They talk a ton about it. And then they sit on the stand and say, oh, we've pretty much paused all of our cloud gaming stuff. We don't care about it all that much. Is that like where the screw up happened for Colin? Like, is that where her team screwed up is they didn't try to explain the actual technology stuff? No, I think the screw up happened that Sony basically was like, we're the competitor and we will be harmed. And the judge will understand us, Sony, saying this is anti-competitive. And then they fell down the rabbit hole of Call of Duty.

33:39Okay. Yeah, I think that's right. The one I'll compare to, and this is really interesting, antitrust is broken. So this is so long. Just go with me on this. This is what's a vertical merger, right, where you buy the next company up and down the stack from you. So Microsoft needs games. It buys games. They're not direct competitor. It's a vertical merger. If Microsoft bought Sony, that'd be a horizontal merger, right? They're direct competitors. Vertical mergers, like, never get challenged. There hasn't been one in, like, 40 years. The last one that was challenged was AT &T Time Warner by the Trump administration.

34:07It's the answer to every antitrust trivia question in the best way. It's very good. So this opinion has to cite the most recent precedent. And it just has to continuously cite AT &T and Time Warner as good precedent for allowing vertical mergers. And it's just like, my dude, did that work? Was that a good idea? Is anyone happy about that except for David Zaslav, Zack Snyder? like zach sander got to put out like a weird gray square version the eight people who watched that are probably happy i watched all three hours i thought about watching it again the other day and i sat down and i was like i can't do this like i can't be watching a square movie right now like if there's you know those ai things where it's like we made the thing why it's like just do that for for justice league just please just ai the shit just expand the frame please you let me use my whole tv that's it it's like super didn't work it was a disaster idea that caused thousands of people to lose their jobs because the theory of the merger was bad and yeah you could say maybe the market will start out over time but like the government could have stopped it by saying this will reduce competition which it definitely did we definitely ended up with more consolidation on the other end of that in streaming and we ended up with a less competitive wireless marketplace over time like it's just all that happened like att did not spend money on its network because they were busy spending money on fucking gray justice league why but that's the only other vertical merger case that we have and in that case the the court in 18th time warner is constantly talking about how there's no precedent like this is the first one in 40 years that's weird we should have more of these oh wow so like i would just take a beat like this is a big project to reset how we think about competition in this country.

35:59The beginning of it will be more losing than winning. It's just inevitable. And maybe we need a new law. But you get to the new law by a bunch of senators and congresspeople saying, well, the FTC does not have the tools it needs to create competition. We have to give them some new tools. I guess my concern is we did have some protections for vertical integration. There was the Paramount Consent Decree, which was the 30s, which told like film studios that they couldn't own the theaters. Now they own the theaters again. They're just streaming. And that also in the Trump era got overturned because they were like, no, we don't need this anymore.

36:35So it's like the courts seem to be like, yeah, vertical integration, coolest thing in the world. So how do they go through the courts to stop something like Microsoft acquiring Activision or AT &T acquiring Warner Brothers? I just want to be clear. At this point, a workable antitrust law in this country would to just be to make it illegal for AT &T to buy anything or for anyone to buy Time Warner. If that was just the rule, it might be fine. More people would keep their jobs. And that's a way to measure what's a good policy. It's like when you have mergers, people get laid off. It ruins lives.

37:17Maybe some shareholders will make more money. But along the way, a bunch of secretaries, that redundant function, your back offices merge and you lay off your accounting department. Those are destructive actions for thousands of people. If you just banned AT &T from buying stuff, more people would have kept their jobs. That's just a way to measure it. If you could ban anyone from buying Time Warner, AOL might still exist. It's just one of those things. Do you buy the logic that the FTC and even the judge in this case have said, which is basically just that the existence of cases like this and the fact that there is someone paying attention and willing to pick this fight is going to do a lot of the work all by itself?

37:57Yeah. Because before, I think we spent a generation with companies just being like, no, everyone at the FTC is asleep at the wheel. This is a non-issue. We'll get anything through we want to. And now the case for Alina Khan would be at least someone is willing to pick the fight, and that's going to make fewer people want to be on the other side of it. Wait, I have two questions for you. Name one other commissioner of the FTC. No. Okay. I know them all. I don't want to. I don't want to pick favorites. name the previous chair of the ftc right it's tough ronald rick

38:35i don't know it doesn't like she has a reputation and her reputation right is that she thinks big mergers and consolidation are bad maybe she'll win maybe she'll lose but that is like a drastic change and i do i want to be clear two things one i think she did a bad job arguing this case the trial. I think that Call of Duty had fake. She just got lost in it. Two, the more I think about it, it's more like, I don't care if Microsoft owns Activision. Oh, I do. Why? Because vertical, as we saw with streaming, vertical integration is bad. But the actual bad outcome of that when Sony is dominant and Apple is not going to let anyone do cloud gaming anyways.

39:16Because Sony is dominant today and they have Call of Duty today. Is there anything in that decision to stop Microsoft from saying, okay, Diablo 4 no longer works on PS5? Well, so now there's a lot of Phil Spencer running around saying that would be bad. There's all of this. And then on top of it, Microsoft is in third place. So if the market's more competitive, is that bad? I mean, theoretically, that's it. If at any point, this is all dependent on Microsoft being like, yeah, we're just good guys. We're fine with third place because we're keeping an open, like we're altruism. No, I don't think they're fine with third place.

39:53I'm saying if they flip out and they make Call of Duty exclusive and then sales between the Xbox and PS5 even out and the market is more competitive, is that a bad? I don't know the answer to that question. Is the market more competitive if one of the largest gaming console makers in the world owns the majority of the studios? Because Activision Blizzard is just one of many studios they've acquired. They've been on a buying spree. They own most of the big studios. With the exception of things like EA, they own just about everybody after they acquire Activision Blizzard. But even in that case, Sony's still winning.

40:31For now. Well, but I'm sure. But like, okay, so let's say it evens out and Microsoft goes from third to first. That means the market's more competitive. And then they go from third to first and then they say, okay, it's been 10 years. Call of Duty is now exclusive. Diablo 5 or 6 or whatever is now exclusive. If you want to play any of these games, you have to play them on an Xbox. And so now Sony has no leg to stand on because it's been 10 years. They bided their time and they're having a great time. Like we saw this happen over and over with streaming. Streaming was like, yeah, we're going to acquire this stuff.

41:02We're going to do this vertical integration and then we're going to pull the rug out from under people. And because it's financially expedient for us. And I'm just like, I don't trust companies to do what's best for the people. They do what's best for their bottom line. And their bottom line does not always mean what's best for people, right? Yeah, I don't think we're agreeing. I'm just saying that instinct to do what's best for your bottom line is usually tempered by competition in the market. You only have two choices. Like, either I can set prices for every product in America. Vote Patel. I'll be a great benevolent king.

41:36or you can have like actual market competition that people can vote with their dollars. And right now you kind of don't, right? And I think that's the thing that I'm getting at is Microsoft is so far behind that if you want a new console, you kind of end up buying a PS5, right? Because they have exclusives. That's why it's doing better is because it's got all the, it's got Naughty Dog. And now Microsoft owns everybody that's not Naughty Dog. But that's market competition. Like if Sony waits, sits on its ass for 10 years. Yeah. And then Call of Duty goes away And they're like, whoops, Microsoft.

42:07Like, that is their fault. Like, Sony is also a multibillion-dollar self-interest company. And that's all I'm getting at is, like, the harms here are hard to see. And they're definitely more pronounced than cloud gaming. And the FTC kind of blew it. But the bigger project of the FTC is to say, like, any antitrust enforcement is good. And the laws should change. And I think everyone is kind of missing that second turn that they were always walking into a loss. because the law does not support Lena Kahn's theories for how this should work. And again, you can go listen to her on this show before she worked at the FTC talking about her theories.

42:44And it's basically like this kind of consolidation creates a ton of bad outcomes for consumers that aren't just measured in raw prices. So in that case, it's, and we really should take a break here, but in that case, it sounds like what you're saying is it's not so much the loss that's the problem. It's the fact that the FTC allowed itself to fall down this distraction of Call of Duty being the problem that is actually the thing that's going to pull it away from getting to where it was trying to go. Yeah, I think that's right. But at least we get Call of Duty. Call of Duty on the Switch. Yeah.

43:13Hooray. Animated. It's like Call of Duty, but you're Yoshi. It sounds awesome. I think a real problem for me is that I do not play Call of Duty, so it's like whatever. You can have it. Phil, if you're listening, I want to run it on the homepage, okay? We'll sign the deal. 10 years of Call of Duty at TheVerge.com. Love it. All right, we should take a break. We'll be right back.

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45:33Okay, we're back. David is just waving his computer around in the studio. What is happening there, man? The thing that happened about 20 minutes ago on this podcast is I spilled one whole Pomplamoose LaCroix just all over my computer. Turn it upside down. I did for a while. It was the key is to just make a tent and put it on the floor. And then that makes everything better. Luckily, Liam, our producer, brought me what I would say is several rolls of paper towels that I have now used. Put it in some rice. Liam, get a bag of rice. A really big bag of rice. The most astounding part is it seems fine.

46:10I think the software updated it at one point. But now I'm just, I'm back. If it suddenly lights on fire while we're sitting here, that's why. And I will probably have to leave briefly. But I'm somehow. It's going to make for great TV. Listen, did I almost burn down the building when I tried to poke a battery for a video at the Wall Street Journal? Yes, I did. And this can be round two. Going to make a gif of it. Pranz, I have a stat for you. Okay. Hit me with it. The average Blockbuster store had between 8 ,000 and 10 ,000 videos in it. Some of them had 7 ,000 videos. Netflix, 3 ,600 movies. So in moving to the streaming area, the amount of choice on the platforms has dwindled.

46:56Shrink. Yep. Which is the opposite of what people think. I bet if you gave those two numbers to a person and was like, which is which, I bet almost everyone would say Netflix is the bigger number. Yep. But then you ask them to go find a movie they remember from their childhood on Netflix. Exactly. And they'll be like, oh, this is garbage. Yeah. I'm just saying, pump up the volume. Not available on any streaming service. Let's make it happen. It was definitely in Blockbuster. You had that ready. You did not just look that up. I want everyone to know, Neil, I did not just Google to confirm that.

47:23That is a fact he knew before this podcast began. I think he just knows it at all times. Like if it does appear. All right. That's my stat for you. But to Alex's point, like you move to the streaming world and your choice gets lessened. Like that's a real stat about Blockbuster, which I think is fascinating. All right. Let's talk about a gadget. There's a bunch of gadgets to talk about. There's a new foldable from Honor. There's some iMac rumors. I think we should start with the Nothing Phone 2. Is it in parentheses? In my head, it's in parentheses because whenever I get a new iPhone, it's always like iPhone 4.

47:55And that's how it shows up on all the Bluetooths, you know? And this is the Nothing Phone 2. It is in parentheses. Our style guide says that it is not in parentheses. And I love our style guide for that. But if you ask nothing, it is in parentheses. This thing is like a Vibes phone. It's like the first true Vibes phone. Yeah, I think that's exactly right. It's like, I don't know, the Nothing Phone one was like cool because it was new, right? And I like, I root for every company that wants to make phones because we need more good phones in the world that are not made by Apple or Samsung. And like we've been talking about, competition is a good thing.

48:31And if someone could figure out how to sell phones that isn't Samsung or Apple, that would be terrific. But it was like it was a new phone, right? Like it had some weird performance stuff. The camera wasn't amazing. The battery life was kind of meh. like it felt like a first phone and this one alison johnson reviewed it for us and basically came out of it saying like look it's a very good phone uh it has a bunch of big ideas that either work for your brain or they don't it's big on like we want to give you tools to help you use your phone a little bit less and one of those tools is making all the icons look the same which is weird it's like what if it was harder to find the instagram app like i'm not so that's the thing right like how you respond to that idea it's good it's aesthetically pleasing Oh, it's beautiful.

49:14The home screen of the nothing phone is one of the best looking home screens I've ever seen. Gorgeous. It has the glyph thing on the back. So if you put it down on the table face down, it has these lights that show up that will do some new stuff. It has the little charging indicator. So like the light at the bottom will fill up as it charges. It has a new countdown thing that if you have a timer on, it'll actually sort of decrease the light as the timer counts down. There are these nifty things like do any of these add up to like a transformational idea about smartphones? Like, no, but there's some cool ideas here.

49:42And I think that's what you mean, Nila, by calling this a vibes phone, right? Like if the things about it make you feel something, awesome. You're going to love this phone and be super happy because it does all the phone things pretty well, unlike the phone one. But it's still like, is this the future of smartphones? Like there's really nothing here that screams yes. We've just come to a place with smartphones where that question is kind of like saying like, is this the future of shoes? It's like, it's just like, doesn't, what are you talking about? Like, because of the platform split, you're kind of always like, will the nothing phone to capture share from the iPhone?

50:16It's like, that doesn't matter. Like, if you're in the Android ecosystem, you now get to pick from, like, a bunch of different vibes, right? You can pick a Galaxy Fold and, like, run Subway servers next to TikTok, next to Discord, and, like, just fully live in that zone, which is crazy. or you can like get this phone which is like very chill and has lights on the back i think it's just like a neat place for phones to be in at least on the android side of the equation where you can you can almost buy a mood or buy a style and yeah and it's only because this one has a reasonably good camera and like it does phone things well whereas i think on the on the iphone side of the house it's kind of like boy that camera bump got even bigger you know it's like and that's fine that's fine but it's just at least on the android side of the equation you can you You can now kind of pick a style, which is interesting.

51:09And it hasn't always been the case. Yeah. So I just like a few hours ago sat in this studio wearing this shirt and talked to Carl Paye, the CEO of nothing. That's going to be on next Wednesday show. But one of the things he kept saying that I thought was really interesting is kind of to your point, Eli, that like we're sort of at a point now where like if you just want a phone, this is especially true in the US. If you want a phone and you have no follow up questions, the answer is an iPhone, right? It is the phonest of phones at this point. And Samsung is kind of there on the Android side, but it has some weird, bad ideas and some wacky ideas and some good ideas.

51:47But Android is the place where there should be lots of different ideas about what a smartphone can be and do and how it can work. And we're finally, it seems like, sort of turning into that era. And you mentioned the Honor phone, the foldable thing is starting to happen, and the tech is getting better really fast. The flip phones are starting to be competitive. It's like there are finally a bunch of different kinds of phones you can buy in the Android ecosystem. My issue with the nothing phone, too, is it doesn't push on any of those ideas far enough to really feel big. Can anyone push on those ideas?

52:21Like one of the reasons Samsung and Apple have become such so big is because they were the ones that had the resource to do things like make the camera not garbage. Right. And nobody else had the, like, you need a lot of really good engineers to do that, and nobody else could afford that. So, like, it seems like most of the big kind of ways to make the phones interesting are expensive, and nothing is like, okay, well, we're just going to go for the interesting cosmetic stuff because that's a ring light on the back of your phone. It probably costs them five bucks to stick it in there. Right. It's like a thing they can do instead of pouring$10 billion into camera R &D.

52:56Yeah. Right. But like all things, even camera R &D got commoditized. Right. You can. Right. Like this phone, I think, is an example of it. Per Allison's review, like it's fine. It's fine. Yeah. In a way that I think when we were sort of on the cusp of computational photography, like you needed the money and now you're like, or I can just buy it off the shelf because it's a commodity. Yeah, and that's even true. The Nothing Phone has the Snapdragon 8 Plus Gen 1, which is technically a last year chip, but it's a very good chip. It does all the things you would need a smartphone chip to do. It's pretty efficient.

53:30It's pretty fast. That stuff just is widely available now, to your point, which is really cool. But the weird central tension of all of that is that all this stuff is so commoditized, but there are so many people in the market that it can still be hard to get in. Because even though everyone is out here building better cameras than ever that you can buy, there's so much more competition to buy those cameras that small companies have a hard time getting to these new supposedly commoditized things. Because like Foxconn is just tapped making all the phones for all the other companies making phones.

54:05and so it's just it's a weird thing where it's like the the stuff is all there it's more accessible to more people than ever and yet it's still kind of on the other side of the wall unless you're a really big company yeah which is i think how you end up with we're still we're still here talking about apple samsung and nothing like yeah you know i mean like nothing is connected too much like they have the ability to capture some of the resources in big companies just because the way because carl pay basically it's so cool i mean like it has led lights in the back i want it The aesthetic, like honestly, the home screen is so, so, so good looking.

54:38They're doing this monochrome thing with the like old timey pixelated text. It just it just looks so good and it makes me so happy. And it's like the first Android phone where they're like, what if we actually gave like one whole shit about what it looked like when you turned it on? And I don't feel like there's any other Android manufacturer out there doing that. And it makes me happy that nothing is doing that. Yeah. You know what it kind of looks like? It kind of looks like the books Palma that was also announced this week. the six inch Android e-ink phone. I knew it was coming. It's not even on the list and I knew it was coming.

55:11Yeah, I was sneaking it in. I was waiting for the right moment and the nothing phone gave it to me. But yeah, this thing is, I think this thing is gorgeous for the same reason that I want the other one is like something about that just monochrome sleek design. I'm like, yeah, all right. I don't need colors. I got a TV for colors. That's fine. Threads doesn't have colors. It's great. I got a TV for colors is a stance I would really like you to keep on this show for a very long time. I'm going to see how long I can make that one last. All the colors I need in life are satisfied by my television is an Alex Kranz belief that I feel like you should carry on for a long time.

55:47It's true. My gadget that I was inevitably going to sneak into this conversation is that Telly has started shipping the free TV. Yes. It's real. Did you guys think it was real? I knew. It's not a hard product to ship. It's a TV if you ship it to you for free. they didn't have to turn on stripe they were just like here you go how much are they spending on the tvs like or on the shipping of the tvs because anytime i had to review a tv that was always an affair oh yeah an expensive one for whatever the company shipping it to be what they had to capitulate did you read this they had to capitulate because it you know it doesn't have any streaming software built into it it just has intrusive advertising software so they're just like screw here's a google tv dongle like in the box i mean everything about this is great i cannot wait for people to get it i hope it's just rattling around in there like it's not even its own package it's like taped on the side it's sad to me that the internet's like tearing itself apart right now like i'm very happy about it for some reasons but like that reddit is in turmoil and like no one twitter and threads like there's a version of the internet where immediately disassembling this thing and figuring out how it worked would have been all we all did together for a minute you know and like i just can't wait for people to get this thing if you get one please email us we want to know oh yeah if you have a telly i am not allowing one in my home but if you get one you know let me know let me know on the side securely from an honest account about how you yeah call the hotline and tell us about your telly and we we can change your voice and play it on the podcast if that's what you want i am desperate to know more about this thing i think I continue to think it's actually an extremely good idea.

57:28I think it's going to work. I think it's going to be very successful. I also think it is hilarious nonsense in the best possible way. Do we know what panels they're using? Like where they're sourcing them? It's a free television, Alex. It has all the colors I need. I need to know how to tailor it. Yeah. I mean, the whole thing is very, very good. Other gadgets. There's a rumor that Apple's going to do a 32-inch iMac. Yes. I'll buy this thing in a heartbeat. I am so close to always buying a Mac mini like every time there's one on sale and there's one on sale lately all the time especially the M1 which is all that I need because all I would I run one app to podcast I have one and it's wonderful I'm always so close to buying one but then I gotta buy a display and then you know you end up in that display thing where I buy a cheap one but then I'm me and I can't buy a cheap one and like crap I'm not gonna buy a studio you spend so much money it's great yeah just monitors that's the other place I get my color

58:24you're like i'm very this is you should start like a wellness trend just have color on your tvs and your mom anything bigger than 27 inches can i have color you can have color on it anything smaller no you should black and white ipad like a chroma diet like that's like the tiktok trend a chroma fest gwyneth paltrow just trademarked that while you were talking no goop don't steal her idea goop don't steal i'm watching you gwyneth the the 32 inch iMac i think is super exciting i think it's if we get a 32 inch iMac before we get a 27 inch iMac i'm going to be furious because the 27 inch iMac is a perfect product and the fact that it doesn't exist is so stupid and bad and a 24 inch iMac is a dumb idea but a 27 inch iMac is an amazing idea but i also think there was this rumor i don't know if we've heard about it since like january but there was this rumor at the beginning of the year that apple is starting to think about smart display stuff.

59:21And like you look at like standby and the lock screen widgets and there's like this thing starting to happen where Apple is like, what can your screens be when you're not using them? And I think the idea of like Apple basically doing that with my computer monitor is very exciting to me. Like make that the hub of all of my stuff because it's a big screen that just sits on my desk and I'm near it all the time. Like I love that. I assume this thing will cost$67 ,000 and I will not buy it. What if it's the iMac Pro? Remember, like if we get that again, that's the 32 inch. You want a big screen? It can't be cheap.

1:00:00That's very, see, this is the problem. It's like, I want to buy just an M1 Mac and like a beautiful display that's not expensive or isn't a panel from 1985, which is the current studio display. Can I interest you in the Spectre 4K monitor that I bought that just randomly turns off three times a day for no reason? See, I can't live that life, man. I'm too old now. I refuse. I got gray hair and the beard. Only the finest of displays. When I break my chroma fast, David. I only chroma between noon and 8 p.m. I do a 16.8 chroma fast. HDR is a treat. All right, all this color has exhausted me. I got to take a chroma fast when we're back.

1:00:40By the way, did you know when I was in high school, I stage managed over 70 productions of Joseph and the amazing Titan College Dreamcoat. What? 100 % true. We'll be right back, everybody.

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1:03:15All right, we're back. I have so many questions. Yeah, we've got something to talk. No lightning round. We're just going to talk about Joseph. All right. I'm just going to tell this one. There's so many stories embedded in this. So I was like a theater tech nerd kid. This should be very obvious to everyone. Super off-brand for Neelah, yeah. And so it's like summer in Wisconsin in the 90s. My theater nerd friends and I all just descend on the Racine Theater Guild, which is mounting a production of Joseph Mason's iconography. This is true, happening. I don't know how to describe all the things that happened there.

1:03:50But rest assured, there's a scene in this Andrew Lloyd Webber musical where Joseph and his brothers have to destroy a goat. Are you aware of this? This is a real thing that happens in the show. And they're seeing Theater Guild as theater in the round. So there's Voms down the side of the stage. So to get the goat on the stage, you couldn't build the normal things that you would build. So I took a remote-controlled truck and disassembled it and built a goat on top of it. And we had a remote-controlled goat. This is like one of my highlight of my youth. That's legitimately like peak Neelai. Would it like drive in?

1:04:22Yeah, it would like speed up the side of the stage. And then they would like rip its legs off and like, you know, he would sing about how sad he was or whatever. And then we would drive the disembodied goat down. I think one time in the men of these many shows, because we're like teenagers, we were like, go out and party after every single one of these things. I forgot to plug the, you know, the old school RC battery back in its charger. So this thing didn't come back down off the stage. It just went. And yeah, that thing just got kicked. Just straight up dance kicked on stage.

1:04:57This really feels like the adult version of Neelai needs to disassemble his Ford Raptor and turn it into a robot goat. That's your weekend plan. I hadn't thought about that until Kronfa Fast. I'm going to cry. All right. It's a lightning round. Yeah. Prans, you should start, because as we've been talking, there has been massive news in the world of entertainment. Yes, as we were talking, SAG declared that starting Friday at midnight, they're on strike. So they are officially, if you're listening to this, SAG is on strike. They're picketing. This is the first time both SAG and the Writers Guild, the WGA, were both on strike since 1960.

1:05:40Yeah. So it's been a while. Like, WGA goes on strike at the drop of a hat. Love him for it. but SAG usually doesn't. We should note a series of escalating disclosures here. I know. I wanted to see how far I could get before you interrupted. Well, I think once you get to WGA strikes the drop of hat, I think we have to disclose our newsroom, wonderful people unionized with WGA. They're great. We love them. I'm a member. Yeah. Kranz is in it. Great. We're fine. But we should disclose that. We make television shows with Netflix and HBO. I'm the executive producer of a Netflix show. And then Comcast, which runs NBC as an investor in the company, all of them are on one side of the table or the other.

1:06:21None of them are making anything as you're listening because all the actors and the writers are on strike. Well, and this is also happening as there was this big deadline story in which a bunch of unnamed studio executives basically said, not even basically, said in as many words, we are just going to wait out the writers until they lose their homes. And then they're going to have to come back to the table and we're going to win. is incredibly stupid and there was apparently some back room this is not like a dumb thing an executive said off the top of their head there was some like back room strategizing among studio executives apparently who decided to say all this stuff to a reporter who was going to put it into a story as if it was like a negotiating move and instead i think it is uh to the extent that you can move things even more against a bunch of billionaires who are mad at writers for wanting to have homes.

1:07:18It has shifted it even further against the billionaires who don't want writers to have homes. It's really something. Yeah, it backfired terrifically. There are rumors that there's like recording of the video call of all the producers arguing about the deadline story after it went up, which if you have that, hit me up. I would love to see it. Kranz posted the phrase, and I quote, this is my pee pee tape. I must see it. Lots of our chest, everyone. And we're done. I think that's the fastest segue from Andrew Lloyd Webber to pee pee tape in media history. That's a PhD thesis for you. Breaking records here on the first guest.

1:07:57Call Dr. Guinness. I don't know if there's a Dr. Guinness. I don't know how any of that works. But yeah, this thing is popping off. And it didn't help that Bob Iger today said that the writers were hurting the industry. I think that probably only added fuel to the fire. Fran Drescher spoke. She's the president of SAG, the nanny. Yeah, yeah, yeah. That's her. She's the president of SAG. She had a very fiery speech saying that basically they're ruining lives. They're getting rid of residuals. That's the big thing here. That's like the big fight with both the WGA and SAG is they want residuals. If they make product, they want to make money from that years down the line because that's how most of them support themselves, especially like people who maybe have big careers in their 30s and then nothing in their 40s because people start hiring them for a wide variety of reasons, usually due to ageism.

1:08:51So they really want these residuals. And the companies are like, well, no, because we're doing streaming now. We don't make enough money to pay you residuals. but i bob eiger make 27 million dollars a year and i think you guys need to get back to work just a terrifically tone deaf move on his part that was a real bummer so i encourage everyone to go watch this like it was on cnbc it's the sun valley it's an incredible setting to be like this strike is disturbing and it should stop right he's at sun values because this is where all the billionaires go to make mogul deals where they buy each other's companies right like the next turn he's gonna be like and we're consolidating all the studios even like who knows right but the occasion of it is that he just signed a new two-year contract like he's never leaving disney no they're like the last thing that they're gonna do at bob eiger is instead of the animatronic spider-man they're just gonna yeet him into the sun at that exhibit and that's how he's gonna go out right like it's he's he's just in the company and he said two things originally one he said the strike is disturbing like the actors and the writers are not paying attention to the economic reality of this industry which is fascinating and you can feel any way you want about that like on some level there isn't a grain of truth in there which is these companies do not make as much money selling seinfeld 60 billion times over and over again in different territories around the world like that's the economics of that are not happening should they still make it more equitable they should and like somewhere in there is probably the right icon but nobody And then he said, oh, I might sell ESPN and ABC.

1:10:25Like linear television is like on its way out for us and we might have to do something else. And that is like, that's the end of Disney as we know it. ESPN funded everything. Like the cable fees for ESPN funded the acquisition of Marvel and Lucasfilm and all this stuff. And that engine is gone is basically what he's saying. And I think that is utterly fascinating. Well, and not only that, ESPN was the shining star of the cable business for decades. A big part of the reason that the cable business has started to go away comes back to what people say about ESPN, which is, I don't want to pay these massive carriage fees for sports because I don't watch sports.

1:11:05And my cable bill includes$7 a month for ESPN because ESPN has to pay billions of dollars to the NBA in order to get games. So they're charging the cable providers who are charging me, and I don't watch sports. And so like that is the single cleanest example of why unbundling is useful. And it has just it's destroying ESPN as it happens. Like ESPN spent so much money because it could pass those fees on to so many people. And it is now, I think, very much an open question of does that business continue to exist if you have to just charge directly the people who watch the sports? Where are the sports?

1:11:41Are they still on ESPN? Yeah, they're on Reddit.

1:11:47Like, it's just, it's so true for so many people that it's so complicated to watch sports that pirating the streams are right, it is easier. Oh, yeah. And sports is a disaster, and this will take a long time to play out because they sell these rights like a decade at a time. And so it's going to get real weird. But also the thing that happened is companies like Disney signed decade-long deals thinking that cable was going to very slowly and carefully decline and streaming was going to grow and the money was going to offset and everybody was going to get rich. and now what it looks like is all the numbers are down big really fast and so Iger saying like we need a strategic partner for ESPN was so like Disney other than money Disney doesn't need anything in terms of like how to do content and so the fact that even Disney can't figure this out is fascinating you also just stole my lightning round thing which is the ESPN thing so that's fine so I I'm I'm done that's you I've got another one I got the google thing in you for your lightning around.

1:12:42No, I don't even want to. I'm just mad about ESPN now. David, there's a big future of sports media piece to be written because it is just a total chaos zone right now. Yeah. And even stuff like Twitter and Instagram threats, that's where the center of gravity in sports has been for a while. Here's a story I want. I'm desperate for this. Do you know when, if you're a sports fan, you see this happen every season, high school students get recruited by a college and they say they're going to commit to some college, right? This like happens in every sport. And they all put up like Instagram templates where they've written a bunch of copy and they have a bunch of photos.

1:13:21I just want to know who designs the templates. Who's doing it? Who's opening Canva and listening to some 17 year old talk about how Jesus is in their heart. And they were always meant to play for ASU. Like, who is it? Let me know. Like, I just want to talk to you i have all the jerseys yeah done it's it's amazing right and it's like where that's a whole economy of creators and creatives and agencies and that exists because of instagram not because of espn and so like you just see like even that part of it is shifting i just think it's like there's a whole thing to be written about how all of it is shifting but then the actual part of it where you like sit down and watch the games is so hard that it's easier to open reddit and just find them yeah and it's going to cascade through everything else because sports have been the richest thing in TV on all sides for a really long time.

1:14:08Yeah, we'll talk about that more. Neelai, what's your lightning round? Even if everyone saw this coming a mile away, it's Sarah Silverman is suing OpenAI in Meta for copyright infringement. Oh, weird. Neelai wants to talk about legal things? What? I love it. How does this relate to Joseph and the Technicolor Dreamcoat, would you say? Well, so Sarah Silverman has a coat of many colors, and those colors are a number of legal theories about AI. You know, a real problem being authorized is I'm tweeting out lawsuits again, and people are like, yeah, this is what we came here for. And it's like, this is not the feedback loop America needs.

1:14:40More lawsuits. No, no, no, no, no. This is what I was trying to get away from. Easy dopamine hit by saying, I hate this judge. Like, stop it. Bad. But I'll do it anyway because I'm addicted to it. Anyway, Sarah Silverman, there's a law firm, basically, that is organizing itself around suing the AI companies. So they had a couple other offers. They had a couple other children's book authors, and now they filed the second one, Sarah Silverman, some other authors. And they're basically saying, look, you can ask these tools to summarize these books. And then they do it. At some point, that means you have made a copy of this book, and that copy was unauthorized.

1:15:17And that's the whole argument. It's a pretty good argument. Like, as far as legal, it's not like out on a ledge, right? It's saying, hey, did you have permission to make this copy of this book? Because usually you don't. Isn't that like basically exactly what worked for the record companies against all the free pirating websites? Was it was like, we can worry about all the big picture stuff, but you're taking our thing and you're putting it over here and that's not allowed? No, it's slightly different. Like Sarah Jong and I could probably do like two hours of our chest on that. They had to invent all these theories about how they were enabling users to do copier infringement.

1:15:53Okay. Right. So like Napster wasn't doing any infringement on its own. Like I was sending a file from my computer to your computer and that was unauthorized. But Napster created a business that let us do that. And they knew that. So they just had to like invent a bunch of legal theories about contributory copy or whatever. So this one's even more straightforward. This is just straight up. Like, did you make a copy of this book? Did you have permission to make a copy of this book? If you did not have permission, is it fair use for you to have made a copy of this book, ingest it into your servers, and then deliver what is obviously a derivative work of this book, which is a summary of the book.

1:16:29Wouldn't that have ramifications for everything computers do? Yes, without question. All computers do is make copies, right? Fundamentally, and copyright law is very backwards in this way because I think I've said this many times in the show. It's hard for people in the computer era to wrap their heads around the basic of copyright law, which is that it regulates the act of making copies. So if I make a copy of something that implicates copyright law, if you don't make a copy, then there's nothing, whatever. So like you reading the book, you have not made a copy of the book. You reading a book, perfectly memorizing it, and then writing it all down is an unauthorized copy of the book.

1:17:12Can you do that? Most people cannot do that. Computers can do that. at rapid scale so like there's a just a decade of law like furious law google books like go look at that case like ferocious lawsuit about the existence of google books amazon remember they had a kindle and the kindle had text-to-speech built into it ferocious lawsuit from the authors guild about whether that was copyright infringement that makes no sense to me like just right like it's text it's on my computer i can hit a button it should read it to me they're like no that's derivative work we make a lot of money doing audiobooks you can't have it like we're not letting you make that copy and they they won essentially they got a settlement on amazon so like there's just this thing where it's like it's the simplest thing and like the hardest thing in any conversation is to keep people focused on the simplest thing which is did you make a copy of the book like everyone spins off into like the philosophy of it's like no no did they make a copy of the book?

1:18:08Did they have permission to make that copy of the book? The answer is like, obviously no. And I think these lawsuits are just going to escalate because copyright law is like not ready for this problem. Well, that's exciting. Yeah, I'm thrilled. And then just to bring this all the way back around, the FTC is also now investigating OpenAI for the way that it has gotten some of that data to train its models. And it just feels like Sam Altman was out here a while ago being like please regulate us we love regulation and like boy is he about to get what he asked for yeah but he's like he's like regulate some like mythical problem he's like make it illegal for the ai to launch nuclear weapons yeah fine okay good the part where it's like the ai has hoovered up all the data in the world without permission and hasn't returned any of that value to any of the people who made the starting works that is a decade of litigation like straight up a decade of lawsuits to come, which is great because we have a website and we like writing about lawsuits and the people on threads are like super into it when I tweet about the lawsuit.

1:19:11So off we go. I think what we're going to do is we're going to have one VergeCast episode a year that's just 19 hours long and it's just all of Nila's thoughts about copyright law. It's like a honeypot VergeCast episode. Right. And we never even publish it. It's just on the intranet. It's going to be great. I think people have been, we've been threatening that one. I keep threatening an hour long about metadata on decoder. it's all coming. That's what we're here for. Absolutely. We're the people who do holiday spectaculars. Very few other publications at our scale or sustained success. People are like, why is the purchase of sustained success?

1:19:46I'm like, hour-long HDMI podcasts. Yeah. Get into it. We were asked the other day if that's a thing we intend to keep doing and we said absolutely. You are damn right. That is a thing we intend to keep doing. Without question. I will die before I don't do a holiday spectacular. That's how much I look like. All right, I was going to end on another Joseph and the Amazing Technicolor Dreamcoat joke, but I actually don't remember any of the words. David, you're a musical theater nerd. I have never seen Joseph and the Amazing Technicolor Dreamcoat. I could sing you several songs from Jesus Christ Superstar, which feels like it's in Buffalo.

1:20:15This is the most Andrew Lloyd Webber that has ever been on the show. I think it's time to stop. It has been wonderful. I love you, the VergeCast audience. As David said, Carl Paye on the show next week, right? Yeah, we got some fun stuff coming up next week. But yeah, that's going to be a good one. All right, that's it. I gotta take it Chroma fast that's the Vergecast rock and roll

1:20:38and that's a wrap for Vergecast this week we'd love to hear from you shoot us an email at vergecast at theverge.com the Vergecast is a production of the Verge and the Vox Media Podcast Network the show is produced by me Liam James and our senior audio director Andrew Marino our editorial director is Brooke Minters that's it we'll see you next week

1:21:11Support for this show comes from S.C. Johnson. We've all been there. Choosing not to wear your new white shoes because there's a 10 % chance of rain. Bending awkwardly over the tiny coffee table to enjoy a sip of your latte. Not ordering the red sauce. Those feelings of dread are what we call stain-ziety. But now you can break free from your stain-ziety with Shout's Triple Acting Spray that has stain-fighting ingredients to remove a huge variety of stains so you can live in the moment and clean up later. Just breathe and shout with Shout Triple Acting Spray. Learn more at shoutitout.com.

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