1 00:00:04,440 --> 00:00:07,840 Speaker 1: Welcome to Text Stuff, a production from I Heart Radio. 2 00:00:11,840 --> 00:00:14,600 Speaker 1: Hey there, and welcome to tech Stuff. I'm your host 3 00:00:14,720 --> 00:00:18,920 Speaker 1: Jonathan Strickland, Diamond executive producer with I Heart Radio. How 4 00:00:19,320 --> 00:00:23,200 Speaker 1: the tech are you? We are continuing our look back 5 00:00:23,280 --> 00:00:26,880 Speaker 1: over some of the biggest text stories of twenty twenty two. 6 00:00:27,240 --> 00:00:30,479 Speaker 1: On Monday, we talked about how governments and regulators around 7 00:00:30,520 --> 00:00:33,040 Speaker 1: the world are starting to push back on big tech. 8 00:00:33,720 --> 00:00:37,080 Speaker 1: Yesterday we talked about the crypto winter and how that 9 00:00:37,200 --> 00:00:39,640 Speaker 1: has affected everything from n f t S to HAVE 10 00:00:39,840 --> 00:00:45,280 Speaker 1: three hype. And today we're primarily almost exclusively going to 11 00:00:45,360 --> 00:00:51,040 Speaker 1: talk about Meta's very bad two. But let's start off 12 00:00:51,040 --> 00:00:55,640 Speaker 1: by talking about where Meta was coming into two, which 13 00:00:55,640 --> 00:00:59,480 Speaker 1: means we got to talk a little bit about now. 14 00:01:00,520 --> 00:01:04,240 Speaker 1: It was in the springtime of one when Apple would 15 00:01:04,240 --> 00:01:08,040 Speaker 1: deliver what would ultimately become a massive blow to Facebook, 16 00:01:08,360 --> 00:01:11,600 Speaker 1: which is what META was called back then, and this 17 00:01:11,720 --> 00:01:15,920 Speaker 1: was in the form of Apple's App Tracking Transparency or 18 00:01:16,040 --> 00:01:21,000 Speaker 1: a t T policy. So before this feature was implemented, 19 00:01:21,319 --> 00:01:26,200 Speaker 1: app developers could potentially gather data about an iOS users 20 00:01:26,240 --> 00:01:30,720 Speaker 1: activity on their phone, all by tracking Apple's I d F, 21 00:01:30,720 --> 00:01:36,360 Speaker 1: a identifier that's an identification that's unique to each iOS user, 22 00:01:36,840 --> 00:01:39,440 Speaker 1: then you could track what they were doing, how they 23 00:01:39,440 --> 00:01:42,160 Speaker 1: were behaving on the phone, and use that information right 24 00:01:42,880 --> 00:01:46,680 Speaker 1: But once the A T T feature went live, iOS 25 00:01:46,720 --> 00:01:50,080 Speaker 1: device owners would get a prompt when they were launching 26 00:01:50,120 --> 00:01:54,480 Speaker 1: an app that was wanting to track their activity, and 27 00:01:54,560 --> 00:01:57,680 Speaker 1: they would be given the option to allow that app 28 00:01:57,760 --> 00:02:01,480 Speaker 1: track them or to opt out. Once folks had the 29 00:02:01,480 --> 00:02:03,760 Speaker 1: option to opt out, a lot of them began to 30 00:02:03,760 --> 00:02:08,640 Speaker 1: take it. By the way, Apple does not necessarily have 31 00:02:08,880 --> 00:02:12,839 Speaker 1: to worry about adhering to this the same way that 32 00:02:13,000 --> 00:02:17,520 Speaker 1: other developers do on iOS devices, which has led a 33 00:02:17,520 --> 00:02:21,600 Speaker 1: lot of companies, including Meta, to accuse Apple of specifically 34 00:02:21,680 --> 00:02:25,840 Speaker 1: launching this feature in order to hurt other companies while 35 00:02:25,919 --> 00:02:31,880 Speaker 1: not suffering itself, But that's a matter for another episode. Anyway, 36 00:02:32,480 --> 00:02:36,679 Speaker 1: Apple's move was a big blow to Facebook because ultimately Facebook, 37 00:02:37,000 --> 00:02:41,639 Speaker 1: the company, relies upon advertising revenue as the prime source 38 00:02:41,680 --> 00:02:45,440 Speaker 1: of revenue for its business, and advertisers would pay top 39 00:02:45,560 --> 00:02:51,720 Speaker 1: dollar to access Facebook's incredibly thorough databases on user activities 40 00:02:51,760 --> 00:02:55,720 Speaker 1: and behaviors and profiles and and such, so that user 41 00:02:55,760 --> 00:02:59,400 Speaker 1: information would provide a chance to target those users for 42 00:02:59,480 --> 00:03:05,320 Speaker 1: ads with incredible precision. But once Apple starts giving iOS 43 00:03:05,440 --> 00:03:09,640 Speaker 1: users a chance to opt out of tracking. That cuts 44 00:03:09,639 --> 00:03:13,400 Speaker 1: off the flow of some of that precious data to Facebook, 45 00:03:13,600 --> 00:03:15,560 Speaker 1: and that would go on to play a big part 46 00:03:15,639 --> 00:03:22,600 Speaker 1: in Meta's financial performance in tw two. Now, I don't 47 00:03:22,600 --> 00:03:25,720 Speaker 1: know about you, but to me, it feels like it 48 00:03:25,800 --> 00:03:29,799 Speaker 1: was an eternity ago when Facebook officially changed its name 49 00:03:29,840 --> 00:03:35,320 Speaker 1: to Meta. But that was actually on October, so a 50 00:03:35,360 --> 00:03:38,400 Speaker 1: little more than a year ago as I record this episode. 51 00:03:39,040 --> 00:03:43,040 Speaker 1: Facebook made that move at a pretty tumultuous time. This 52 00:03:43,040 --> 00:03:48,080 Speaker 1: would be after Francis Hogan, a former Facebook employee, had 53 00:03:48,280 --> 00:03:53,600 Speaker 1: come forward with tons of documents from Facebook. These documents 54 00:03:53,640 --> 00:03:58,040 Speaker 1: showed how internally the company was struggling with problems like 55 00:03:58,200 --> 00:04:05,640 Speaker 1: content moderation and managing misinformation and things like like political manipulation, 56 00:04:05,760 --> 00:04:08,520 Speaker 1: stuff like that. So these documents painted a pretty ugly 57 00:04:08,560 --> 00:04:12,920 Speaker 1: and cynical picture of the company from within, and the 58 00:04:13,000 --> 00:04:16,800 Speaker 1: timing of Facebook's name change left some folks wondering if 59 00:04:16,839 --> 00:04:19,680 Speaker 1: maybe Mark Zuckerberg was trying, at least in part, to 60 00:04:19,880 --> 00:04:24,040 Speaker 1: shrug off some of the dirt being heaped his way 61 00:04:24,360 --> 00:04:29,840 Speaker 1: in the wake of these these revelations. Now, the official 62 00:04:29,920 --> 00:04:33,640 Speaker 1: reasons for the name change, we're really number one to 63 00:04:33,800 --> 00:04:37,600 Speaker 1: distinguish the overall company from one of its products. So, 64 00:04:37,640 --> 00:04:41,640 Speaker 1: in other words, the difference between Facebook the company and 65 00:04:41,680 --> 00:04:45,239 Speaker 1: Facebook the platform. So this way you now have meta 66 00:04:45,400 --> 00:04:49,080 Speaker 1: the company and Facebook the platform, because that's just one 67 00:04:49,200 --> 00:04:53,440 Speaker 1: of the company's products. Right. Two, it was a way 68 00:04:53,480 --> 00:04:58,520 Speaker 1: to indicate the company's new focus towards this idea of 69 00:04:58,920 --> 00:05:02,800 Speaker 1: the metaverse and that being the future of being online 70 00:05:03,320 --> 00:05:08,080 Speaker 1: now towards the end of this metaverse concept was really 71 00:05:08,480 --> 00:05:11,560 Speaker 1: at the height of the hype cycle, despite the fact 72 00:05:12,160 --> 00:05:15,400 Speaker 1: that no one could really define what the metaverse was 73 00:05:15,480 --> 00:05:19,359 Speaker 1: because it has not yet been built. So the general 74 00:05:19,440 --> 00:05:21,960 Speaker 1: feeling was that the metaverse is going to be some 75 00:05:22,000 --> 00:05:26,120 Speaker 1: sort of persistent online construct that people will be able 76 00:05:26,160 --> 00:05:30,320 Speaker 1: to explore. Uh, they'll probably be using virtual reality and 77 00:05:30,640 --> 00:05:34,600 Speaker 1: or augmented reality gear to access it, and that's kind 78 00:05:34,640 --> 00:05:38,080 Speaker 1: of the high level concept. But when it comes down 79 00:05:38,080 --> 00:05:41,560 Speaker 1: to details, everything gets really fuzzy because we're just not 80 00:05:41,800 --> 00:05:44,840 Speaker 1: there yet. In fact, we're not even close, and Mark 81 00:05:44,960 --> 00:05:48,360 Speaker 1: Zuckerberg has said as much repeatedly. It's going to take 82 00:05:48,480 --> 00:05:51,240 Speaker 1: years to get to a destination that will match up 83 00:05:51,240 --> 00:05:53,680 Speaker 1: to the metaverse concept. We've got a lot of like 84 00:05:54,560 --> 00:06:01,080 Speaker 1: metaverse adjacent stuff. People have argued that Fortnite or roadblocks 85 00:06:01,120 --> 00:06:06,599 Speaker 1: represent a kind of proto metaverse, and in a very 86 00:06:06,680 --> 00:06:10,159 Speaker 1: limited way, I suppose that's true, but it's nowhere close 87 00:06:10,200 --> 00:06:12,840 Speaker 1: to the scale of what people are talking about when 88 00:06:12,839 --> 00:06:16,800 Speaker 1: they're really talking about the metaverse. So anyway, this is 89 00:06:16,880 --> 00:06:20,159 Speaker 1: kind of where Meta slash Facebook was when it was 90 00:06:20,320 --> 00:06:24,040 Speaker 1: heading into two. As the company started the year, its 91 00:06:24,040 --> 00:06:28,559 Speaker 1: stock price was around the three dollars a share mark. 92 00:06:29,240 --> 00:06:33,200 Speaker 1: But in February of two, we heard about how the 93 00:06:33,279 --> 00:06:37,560 Speaker 1: final quarter of one had treated Meta and the news 94 00:06:37,680 --> 00:06:42,880 Speaker 1: wasn't good. So this was regarding Meta's financial performance at 95 00:06:42,920 --> 00:06:45,880 Speaker 1: the end of one, but we didn't learn about it 96 00:06:45,960 --> 00:06:49,760 Speaker 1: until February two. So, for one thing, the effects of 97 00:06:49,800 --> 00:06:54,880 Speaker 1: Apple's app tracking transparency policy we're starting to become evident. 98 00:06:55,000 --> 00:06:56,800 Speaker 1: Everyone knew that was going to have an effect, but 99 00:06:56,800 --> 00:06:59,880 Speaker 1: now we were starting to see. And the company referenced 100 00:07:00,320 --> 00:07:03,360 Speaker 1: the policy a few times while delivering the earnings results 101 00:07:03,400 --> 00:07:06,120 Speaker 1: to investors, saying, you know, part of this is because 102 00:07:06,200 --> 00:07:10,480 Speaker 1: Apple has fired shots at us. Now. In that same call, 103 00:07:10,880 --> 00:07:15,640 Speaker 1: Cheryl Sandberg, who at the time was Meta's Chief operating 104 00:07:15,720 --> 00:07:19,680 Speaker 1: officer or CEO, acknowledged that the company was going to 105 00:07:19,720 --> 00:07:24,280 Speaker 1: need to make some significant changes to its targeted advertising strategy, 106 00:07:24,320 --> 00:07:30,920 Speaker 1: perhaps shifting two approaches that emphasize aggregate and anonymized data. 107 00:07:31,160 --> 00:07:36,360 Speaker 1: As competitors and regulators alike, we're pushing back against the 108 00:07:36,920 --> 00:07:40,200 Speaker 1: you know, more established method of just scooping up all 109 00:07:40,240 --> 00:07:43,080 Speaker 1: the information you can about every specific person you can. 110 00:07:44,160 --> 00:07:50,360 Speaker 1: So Litling Meta was acknowledging this is an unsustainable approach 111 00:07:50,480 --> 00:07:55,160 Speaker 1: because there's growing resistance around the world and competitors are 112 00:07:55,240 --> 00:07:59,200 Speaker 1: actively taking advantage by throwing monkey wrenches into the works, 113 00:07:59,200 --> 00:08:02,000 Speaker 1: like Apple was. So they're saying, well, we need to 114 00:08:02,120 --> 00:08:06,480 Speaker 1: change our strategy because one, this is not really palatable 115 00:08:06,840 --> 00:08:09,120 Speaker 1: that we're getting into more and more hot water from 116 00:08:09,160 --> 00:08:13,600 Speaker 1: the way we're collecting people's data, and too, companies we 117 00:08:13,640 --> 00:08:17,600 Speaker 1: depend upon to supply us information have gotten wise and 118 00:08:17,640 --> 00:08:21,600 Speaker 1: they're cutting off those avenues. So that's kind of what 119 00:08:21,760 --> 00:08:26,160 Speaker 1: she was indicating. Then there was the matter of Meta's 120 00:08:26,200 --> 00:08:29,880 Speaker 1: commitment to developing the metaverse. Zuckerberg had tried to get 121 00:08:29,880 --> 00:08:32,640 Speaker 1: ahead of this. Towards the end of one he indicated 122 00:08:32,720 --> 00:08:37,160 Speaker 1: that building this vision of the future of the online 123 00:08:37,160 --> 00:08:41,920 Speaker 1: world is going to require massive investments, and that this 124 00:08:41,960 --> 00:08:45,319 Speaker 1: investment was going to eat into profits as a result. 125 00:08:45,400 --> 00:08:49,839 Speaker 1: But I think investors were still taken aback when they 126 00:08:49,880 --> 00:08:54,840 Speaker 1: saw a decline in profits in the Q four results, 127 00:08:55,760 --> 00:08:59,120 Speaker 1: because here's the thing. Investors really like seeing certain numbers 128 00:08:59,160 --> 00:09:03,040 Speaker 1: go up and not go down. So it's not enough 129 00:09:03,080 --> 00:09:05,640 Speaker 1: for your company to make a profit. That's not good enough. 130 00:09:05,679 --> 00:09:08,360 Speaker 1: You've got to make more profit than you did the 131 00:09:08,440 --> 00:09:12,120 Speaker 1: last time you made a profit. Otherwise you're a loser. 132 00:09:12,920 --> 00:09:15,160 Speaker 1: And as I get older, yes, I get more and 133 00:09:15,160 --> 00:09:19,400 Speaker 1: more bitter about our peculiar approach to capitalism. Or maybe 134 00:09:19,600 --> 00:09:21,960 Speaker 1: maybe it's not our peculiar approach. Maybe this is just 135 00:09:22,000 --> 00:09:26,800 Speaker 1: where capitalism ultimately leads. But anyway, I think you know this. 136 00:09:26,800 --> 00:09:30,160 Speaker 1: This belief that it's not enough to profit, you have 137 00:09:30,240 --> 00:09:34,960 Speaker 1: to profit more than you did before is inherently destructive 138 00:09:35,040 --> 00:09:40,120 Speaker 1: over time. Anyway, enough of my soap boxing. The decline 139 00:09:40,160 --> 00:09:43,760 Speaker 1: and profitability sent a couple of messages to investors, and 140 00:09:43,840 --> 00:09:46,280 Speaker 1: one was that meta for at least the near future, 141 00:09:47,280 --> 00:09:50,600 Speaker 1: is itself going to be an investment mode in order 142 00:09:50,640 --> 00:09:54,679 Speaker 1: to make this vision of the metaverse become a reality. 143 00:09:55,280 --> 00:09:57,880 Speaker 1: This is a future that a ton of companies were 144 00:09:57,880 --> 00:10:00,760 Speaker 1: already starting to gloam onto, despite the fact that there's 145 00:10:00,800 --> 00:10:05,000 Speaker 1: not much there there and my own company does this 146 00:10:05,120 --> 00:10:08,439 Speaker 1: at least to an extent, and I do understand it, 147 00:10:08,760 --> 00:10:11,600 Speaker 1: even if I don't fully like get on board with it. 148 00:10:11,679 --> 00:10:15,400 Speaker 1: I understand it if the metaverse ends up being the 149 00:10:15,400 --> 00:10:17,280 Speaker 1: future of the Internet, which is a big if, but 150 00:10:17,440 --> 00:10:20,280 Speaker 1: if it does, then you want to be in on 151 00:10:20,320 --> 00:10:23,760 Speaker 1: the ground floor. Because back when smartphones took off and 152 00:10:23,840 --> 00:10:27,400 Speaker 1: people began to access the Internet more and more using 153 00:10:27,480 --> 00:10:31,880 Speaker 1: smartphones than they were on laptops and desktops, that really 154 00:10:31,920 --> 00:10:34,920 Speaker 1: shook things up because suddenly all these companies realized they 155 00:10:34,960 --> 00:10:39,320 Speaker 1: needed to cater more toward smartphone users than desktop users. 156 00:10:39,920 --> 00:10:42,160 Speaker 1: And this is where we started to see an explosion 157 00:10:42,240 --> 00:10:45,079 Speaker 1: and app development, because everybody had to have their own app, 158 00:10:45,760 --> 00:10:48,880 Speaker 1: even if it didn't make sense. Everyone had to to 159 00:10:49,640 --> 00:10:55,840 Speaker 1: uh to create websites that were mobile friendly because otherwise 160 00:10:55,880 --> 00:10:58,760 Speaker 1: it was a pain in the butt to navigate these 161 00:10:58,800 --> 00:11:01,680 Speaker 1: websites on your smartphone. So a lot of web based 162 00:11:01,720 --> 00:11:04,800 Speaker 1: companies had not anticipated this change, and it meant that 163 00:11:04,840 --> 00:11:07,000 Speaker 1: they were left playing catch up when it happened. So 164 00:11:07,040 --> 00:11:11,200 Speaker 1: I do understand the desire to not let that happen 165 00:11:11,240 --> 00:11:15,280 Speaker 1: again and instead to be a leader in the metaverse 166 00:11:15,320 --> 00:11:18,960 Speaker 1: space rather than too you know, hold back and then 167 00:11:19,000 --> 00:11:20,880 Speaker 1: find out that you're left behind. You have to try 168 00:11:20,920 --> 00:11:25,400 Speaker 1: and regain relevancy later on. The only problem is, I'm 169 00:11:25,440 --> 00:11:29,400 Speaker 1: not really sure that the metaverse is actually the future 170 00:11:29,600 --> 00:11:34,400 Speaker 1: of online That being said, I could just be shortsighted 171 00:11:34,640 --> 00:11:37,920 Speaker 1: and that you know, I'm the one who's totally in 172 00:11:37,960 --> 00:11:40,600 Speaker 1: the wrong here. It's it's fully possible. In fact, it's 173 00:11:40,720 --> 00:11:44,440 Speaker 1: lightly that that's the case. I just it's hard for 174 00:11:44,480 --> 00:11:47,920 Speaker 1: me to see it anyway. Another bit of news that 175 00:11:48,000 --> 00:11:52,119 Speaker 1: shed some light on Zuckerberg's hard push for the metaverse 176 00:11:52,679 --> 00:11:56,439 Speaker 1: was that, for the first time in its eighteen years 177 00:11:56,679 --> 00:12:02,520 Speaker 1: as a platform, Facebook posted a loss of active users 178 00:12:02,679 --> 00:12:05,560 Speaker 1: quartered a quarter. At the end of one the number 179 00:12:05,600 --> 00:12:08,720 Speaker 1: of active users on Facebook was down by about half 180 00:12:08,760 --> 00:12:12,080 Speaker 1: a million people, a lot of them in places like 181 00:12:12,160 --> 00:12:17,240 Speaker 1: Africa and India. Now, keep in mind, Facebook still had 182 00:12:17,280 --> 00:12:21,440 Speaker 1: more than one point nine billion active users, but there 183 00:12:21,520 --> 00:12:25,920 Speaker 1: was a concern that this drop might indicate the beginning 184 00:12:25,920 --> 00:12:30,960 Speaker 1: of a slide for Facebook. And I I'm sure several 185 00:12:31,040 --> 00:12:32,720 Speaker 1: of you out there are saying the same thing I 186 00:12:32,720 --> 00:12:35,320 Speaker 1: said when I first read this, is that one point 187 00:12:35,360 --> 00:12:38,280 Speaker 1: of data is not a trend. Yes, you know, it's 188 00:12:38,320 --> 00:12:42,240 Speaker 1: not good to have lost a half million users over 189 00:12:42,320 --> 00:12:46,040 Speaker 1: the course of a quarter, but you can't be certain 190 00:12:46,120 --> 00:12:49,880 Speaker 1: that this is the start of something from one point 191 00:12:49,880 --> 00:12:53,839 Speaker 1: of data. However, that doesn't stop investors from doing just that, 192 00:12:54,880 --> 00:12:59,240 Speaker 1: So it's also no secret. In fact, it's a it's 193 00:12:59,320 --> 00:13:03,720 Speaker 1: it's a Joe, it's a meme that Facebook's demographic is 194 00:13:03,800 --> 00:13:06,760 Speaker 1: aging that the company is having a real hard time 195 00:13:07,200 --> 00:13:12,320 Speaker 1: attracting younger people to its platforms, particularly Facebook, because who 196 00:13:12,360 --> 00:13:15,880 Speaker 1: the heck wants to join a social network when they're 197 00:13:15,880 --> 00:13:19,080 Speaker 1: a kid that their parents are already on or maybe 198 00:13:19,200 --> 00:13:23,040 Speaker 1: even their grandparents are on it. That's not really cool 199 00:13:23,080 --> 00:13:25,640 Speaker 1: if you're a kid, right, you don't want to be 200 00:13:25,800 --> 00:13:30,120 Speaker 1: where all the old people are. Meta needed to get 201 00:13:30,640 --> 00:13:35,440 Speaker 1: young blood hooked on its platforms, which is one of 202 00:13:35,480 --> 00:13:38,440 Speaker 1: the reasons I think that Instagram really started to launch 203 00:13:38,520 --> 00:13:44,080 Speaker 1: features that appeared to mimic what TikTok was doing, so 204 00:13:44,640 --> 00:13:47,920 Speaker 1: you could see the metaverse as another way to try 205 00:13:47,960 --> 00:13:51,840 Speaker 1: and scoop up the next generation of users. So it 206 00:13:51,920 --> 00:13:55,080 Speaker 1: might be a hard sell to get the younger folks 207 00:13:55,080 --> 00:13:57,960 Speaker 1: of today on Facebook. That's gonna be hard to do 208 00:13:58,040 --> 00:14:02,080 Speaker 1: because Facebook is just not cool. Instagram might be a 209 00:14:02,160 --> 00:14:05,760 Speaker 1: little more successful, but it looks like it's following the 210 00:14:05,800 --> 00:14:10,160 Speaker 1: same trends as Facebook. At a one point, Meta was 211 00:14:10,200 --> 00:14:14,839 Speaker 1: developing and Instagram specifically for younger users, but in the 212 00:14:14,840 --> 00:14:19,560 Speaker 1: wake of those whistleblower events and at the end of 213 00:14:19,600 --> 00:14:22,320 Speaker 1: the company had to backtrack on that because they have 214 00:14:22,440 --> 00:14:25,400 Speaker 1: a pretty terrible record when it comes to things like 215 00:14:25,800 --> 00:14:30,560 Speaker 1: content moderation and user privacy and safety, and when it 216 00:14:30,600 --> 00:14:35,280 Speaker 1: comes to kids, people take that stuff seriously. So Meta's 217 00:14:35,440 --> 00:14:40,400 Speaker 1: plan to try and tap into that young customer market 218 00:14:41,240 --> 00:14:45,040 Speaker 1: was waylaid quite a bit, and it was through all 219 00:14:45,120 --> 00:14:48,520 Speaker 1: fault of its own. So you have to then go 220 00:14:48,600 --> 00:14:51,360 Speaker 1: out there and invent the next big thing to get 221 00:14:51,360 --> 00:14:54,400 Speaker 1: ahead of it, right, Like the ship has already sailed 222 00:14:54,720 --> 00:14:58,800 Speaker 1: on TikTok unless TikTok gets banned in the United States, 223 00:14:58,800 --> 00:15:03,280 Speaker 1: which will talk talk about in another episode. But unless 224 00:15:03,280 --> 00:15:07,960 Speaker 1: that happens, then the only course open to Meta is 225 00:15:08,000 --> 00:15:11,320 Speaker 1: to invent the next big thing. So the metaverse might 226 00:15:11,320 --> 00:15:15,480 Speaker 1: well be Mark Zuckerberg's Hail Mary pass to keep his 227 00:15:15,560 --> 00:15:19,000 Speaker 1: company relevant over the long run. All right, We've got 228 00:15:19,040 --> 00:15:21,600 Speaker 1: a lot more to say about Meta in two, but 229 00:15:21,640 --> 00:15:23,920 Speaker 1: before we get to that, let's take a quick break. 230 00:15:34,360 --> 00:15:38,400 Speaker 1: We're back. So while Zuckerberg is trying to create this metaverse. 231 00:15:38,440 --> 00:15:42,080 Speaker 1: That dedication is costing a lot of money, and the 232 00:15:42,080 --> 00:15:45,240 Speaker 1: company also has showed its hand when it updated its 233 00:15:45,240 --> 00:15:49,480 Speaker 1: revenue projections for the first quarter of twenty two. Wall 234 00:15:49,560 --> 00:15:53,920 Speaker 1: Street had previously predicted revenue of around thirty billion dollars 235 00:15:54,200 --> 00:15:58,880 Speaker 1: for Q one two of of Meta, but Meta's projections 236 00:15:58,880 --> 00:16:01,400 Speaker 1: fell short. It was more like twenty seven to twenty 237 00:16:01,520 --> 00:16:05,960 Speaker 1: nine billion. So this was also a message sent to 238 00:16:05,960 --> 00:16:08,640 Speaker 1: investors of things are not going to be quite as 239 00:16:09,240 --> 00:16:14,040 Speaker 1: positive as you might have previously thought. The decrease in profits, 240 00:16:14,120 --> 00:16:17,040 Speaker 1: the increase in expenditures, the loss of half a million 241 00:16:17,120 --> 00:16:21,520 Speaker 1: Facebook users collectively, all this news gave investors bad mojo, 242 00:16:21,920 --> 00:16:25,200 Speaker 1: and in aftermarket trading in the wake of this earnings call, 243 00:16:25,600 --> 00:16:29,000 Speaker 1: Meta's stock prices dropped from around three twenty three dollars 244 00:16:29,000 --> 00:16:32,160 Speaker 1: a share to two hundred fifty two dollars a share. 245 00:16:33,120 --> 00:16:36,920 Speaker 1: That's a huge drop and things would not really improve 246 00:16:37,040 --> 00:16:40,200 Speaker 1: over the course of the year. As I record this episode, 247 00:16:40,240 --> 00:16:43,600 Speaker 1: Meta stock is at around a hundred seventeen dollars a year. 248 00:16:43,680 --> 00:16:46,040 Speaker 1: In fact, it dropped below a hundred seventeen at one 249 00:16:46,040 --> 00:16:49,400 Speaker 1: point while I was writing this. So yeah, if you 250 00:16:49,440 --> 00:16:51,960 Speaker 1: started off in the three thirties and now you're down 251 00:16:51,960 --> 00:16:55,040 Speaker 1: to one seventeen. Things have not gone well, but it 252 00:16:55,120 --> 00:16:58,520 Speaker 1: has been a more gradual decline through two. We saw 253 00:16:58,520 --> 00:17:01,440 Speaker 1: that sharp drop in February after the Q one earnings 254 00:17:01,440 --> 00:17:05,040 Speaker 1: call or Q four nings called excuse me. But since 255 00:17:05,080 --> 00:17:08,520 Speaker 1: then it's been more of a gradual decline. And there 256 00:17:08,640 --> 00:17:12,119 Speaker 1: was one point in November where the stock price actually 257 00:17:12,119 --> 00:17:16,440 Speaker 1: dipped below ninety dollars. So it's not as bad as 258 00:17:16,480 --> 00:17:20,560 Speaker 1: it was back in November, which I guess is saying something. Now, 259 00:17:20,600 --> 00:17:24,000 Speaker 1: one thing that Meta could not have predicted. You cannot 260 00:17:24,040 --> 00:17:26,639 Speaker 1: blame the company for this, but it is something that 261 00:17:26,760 --> 00:17:30,200 Speaker 1: very much has had an impact on the company. Happened 262 00:17:30,800 --> 00:17:36,640 Speaker 1: in late February two. That's when Russia invaded Ukraine. Now 263 00:17:36,680 --> 00:17:40,720 Speaker 1: I'm sure that I'll at least mention this war in 264 00:17:40,920 --> 00:17:43,560 Speaker 1: other episodes in this series as we look back at 265 00:17:43,560 --> 00:17:49,000 Speaker 1: the tech news of two. Now, in March two, Russia's 266 00:17:49,119 --> 00:17:54,160 Speaker 1: federal regulator Roscom Natzer, which I'm sure I mispronouncing, shut 267 00:17:54,200 --> 00:17:58,640 Speaker 1: down access to Facebook within Russia. So this was part 268 00:17:58,680 --> 00:18:02,520 Speaker 1: of Russia, or at least the government of Russia, attempting 269 00:18:02,560 --> 00:18:06,480 Speaker 1: to control the narrative with regards to the war in Ukraine, 270 00:18:06,480 --> 00:18:09,400 Speaker 1: which the Russian government was insisting was just a quote 271 00:18:09,480 --> 00:18:14,560 Speaker 1: unquote special military operation at the time. They would then 272 00:18:14,600 --> 00:18:19,720 Speaker 1: go on to subsequently block Instagram in Russia, which was 273 00:18:19,880 --> 00:18:24,560 Speaker 1: yet another blow to Meta. Russian representatives called Facebook and 274 00:18:24,640 --> 00:18:31,040 Speaker 1: Instagram extremist, which the company appealed in June of two. 275 00:18:32,000 --> 00:18:35,720 Speaker 1: It lost that appeal. That is not really a surprise 276 00:18:35,800 --> 00:18:40,040 Speaker 1: because the Russian court system typically sides with government prosecutors 277 00:18:40,080 --> 00:18:43,840 Speaker 1: in court cases. Big shock there, and Meta missed a 278 00:18:43,880 --> 00:18:48,119 Speaker 1: subsequent deadline in November to appeal the ban a second time. 279 00:18:49,000 --> 00:18:52,160 Speaker 1: As a little side note, Russian reps said that Russians 280 00:18:52,160 --> 00:18:55,800 Speaker 1: who accessed the platforms by relying on tools like virtual 281 00:18:55,840 --> 00:19:00,480 Speaker 1: private networks or VPNs would not be punished for doing that. However, 282 00:19:01,000 --> 00:19:04,840 Speaker 1: Russia had also already restricted the use of several popular 283 00:19:05,000 --> 00:19:11,000 Speaker 1: VPNs within the country, and in two even Kaspersky, which 284 00:19:11,080 --> 00:19:14,880 Speaker 1: itself is a Russian company, announced that it was going 285 00:19:14,920 --> 00:19:18,440 Speaker 1: to end its VPN service within Russia. It would honor 286 00:19:18,480 --> 00:19:22,800 Speaker 1: any existing subscriptions until they expire or until the end 287 00:19:22,840 --> 00:19:26,879 Speaker 1: of three So yeah, you know, Russia's really cracking down 288 00:19:27,359 --> 00:19:33,480 Speaker 1: on people having a way of accessing or expressing information 289 00:19:33,560 --> 00:19:42,800 Speaker 1: that might contradict the government narrative around Russia's invasion of Ukraine. Anyway, 290 00:19:43,000 --> 00:19:46,800 Speaker 1: the laws of the Russian market obviously would impact Meta's revenue, 291 00:19:46,960 --> 00:19:49,600 Speaker 1: and of course that wasn't the only aspect of Russia's 292 00:19:49,640 --> 00:19:53,120 Speaker 1: war with Ukraine that would have an impact on the company. 293 00:19:53,200 --> 00:19:55,639 Speaker 1: As you might suspect, Facebook would have to deal with 294 00:19:55,760 --> 00:20:00,280 Speaker 1: various misinformation campaigns aimed at spreading false news about the 295 00:20:00,359 --> 00:20:05,280 Speaker 1: ongoing war. In September of two, Meta announced it had 296 00:20:05,280 --> 00:20:09,680 Speaker 1: shut down two networks of fake accounts designed to spread misinformation. 297 00:20:10,119 --> 00:20:12,800 Speaker 1: One of them, the smaller of the two, originated in 298 00:20:12,960 --> 00:20:17,359 Speaker 1: China and the other in Russia. The Chinese network, like 299 00:20:17,359 --> 00:20:20,639 Speaker 1: I said, was relatively small and it was mostly aimed 300 00:20:20,680 --> 00:20:25,920 Speaker 1: at influencing mid term elections, which had really no measurable impact. 301 00:20:25,960 --> 00:20:29,920 Speaker 1: I think the Russian campaign was far larger, and Meta 302 00:20:30,000 --> 00:20:32,159 Speaker 1: said that the campaign had spent more than a hundred 303 00:20:32,200 --> 00:20:36,880 Speaker 1: thousand bucks on ads both on Facebook and on Instagram 304 00:20:36,920 --> 00:20:40,080 Speaker 1: in an effort to push pro Kremlin stories regarding the 305 00:20:40,080 --> 00:20:44,840 Speaker 1: war in Ukraine. So they shut those down. So again, 306 00:20:45,119 --> 00:20:48,480 Speaker 1: that war continues to have an impact on Meta, as 307 00:20:48,480 --> 00:20:53,959 Speaker 1: well as numerous other tech companies. Now, moving on with 308 00:20:54,080 --> 00:20:58,520 Speaker 1: Meta's very bad year. It's earnings call in Q one 309 00:20:59,119 --> 00:21:03,600 Speaker 1: met the adjusted projections Meta had made because the company 310 00:21:03,640 --> 00:21:06,760 Speaker 1: brought in twenty seven point nine billion dollars in revenue, 311 00:21:07,200 --> 00:21:09,639 Speaker 1: so it sort of hit the middle of the range 312 00:21:09,680 --> 00:21:13,119 Speaker 1: it had predicted. It said twenty nine it got twenty 313 00:21:13,119 --> 00:21:17,320 Speaker 1: seven point nine. Ad revenues were slightly down, but the 314 00:21:17,359 --> 00:21:20,280 Speaker 1: company did say that more users had joined across all 315 00:21:20,320 --> 00:21:24,040 Speaker 1: platforms owned by the company, so it was not showing 316 00:21:24,119 --> 00:21:28,240 Speaker 1: a continued loss of Facebook users, so again there was 317 00:21:28,240 --> 00:21:34,439 Speaker 1: no trend there. However, in July, the company reported a 318 00:21:34,560 --> 00:21:37,840 Speaker 1: decline in revenue. It was just a one percent drop 319 00:21:38,280 --> 00:21:41,440 Speaker 1: year over year of a decline in revenue, but that 320 00:21:41,480 --> 00:21:45,240 Speaker 1: was the first time Meta had ever posted a drop 321 00:21:45,359 --> 00:21:49,080 Speaker 1: in revenue since it had become a publicly traded company. 322 00:21:49,560 --> 00:21:53,760 Speaker 1: Profits were down significantly more than one percent. It was 323 00:21:53,880 --> 00:21:57,560 Speaker 1: backed down by thirty six percent year over year. But again, 324 00:21:57,600 --> 00:22:01,639 Speaker 1: this is understandable when you start thinking about the ongoing 325 00:22:01,760 --> 00:22:06,119 Speaker 1: huge expense of trying to make the metaverse happen, which is, 326 00:22:06,359 --> 00:22:09,240 Speaker 1: you know, kind of giving me mean girls vibes. Stop 327 00:22:09,280 --> 00:22:12,359 Speaker 1: trying to make the metaverse happen. It's not going to happen. 328 00:22:13,440 --> 00:22:15,920 Speaker 1: Note I do not actually know if the metaverse will 329 00:22:15,960 --> 00:22:19,120 Speaker 1: in fact not happen. It probably will, and I'll probably 330 00:22:19,160 --> 00:22:23,280 Speaker 1: be salty about it. Now. By this point in the year, 331 00:22:24,200 --> 00:22:28,080 Speaker 1: the world in general was gearing up for economic uncertainty 332 00:22:28,200 --> 00:22:32,080 Speaker 1: like that. There had been talk about this since the spring, right. 333 00:22:32,200 --> 00:22:35,840 Speaker 1: There have been various people in finance and business who 334 00:22:35,840 --> 00:22:40,879 Speaker 1: were starting to recognize troubling signs ahead. And whether you 335 00:22:40,920 --> 00:22:42,879 Speaker 1: wanted to call it a recession or not is up 336 00:22:42,920 --> 00:22:45,359 Speaker 1: to you. At this point, I don't even understand what 337 00:22:45,480 --> 00:22:49,520 Speaker 1: the qualifications are to call something a recession. But by 338 00:22:49,560 --> 00:22:52,240 Speaker 1: the middle of spring and then into the summer, it 339 00:22:52,320 --> 00:22:55,040 Speaker 1: was more and more obvious that economic belts were going 340 00:22:55,080 --> 00:22:57,280 Speaker 1: to have to start tightening, and it would be no 341 00:22:57,440 --> 00:23:01,719 Speaker 1: different for tech companies in general and Meta in particular. 342 00:23:02,960 --> 00:23:06,440 Speaker 1: In the summer, The Verge published a piece that cited 343 00:23:06,520 --> 00:23:11,760 Speaker 1: a recording of Mark Zuckerberg saying, quote, realistically, there are 344 00:23:11,800 --> 00:23:14,800 Speaker 1: probably a bunch of people at the company who shouldn't 345 00:23:14,960 --> 00:23:20,560 Speaker 1: be here end quote, suggesting that maybe Meta was overstaffed, 346 00:23:20,600 --> 00:23:23,240 Speaker 1: that they had more employees than they had work to do, 347 00:23:23,640 --> 00:23:27,080 Speaker 1: and thus we're being inefficient. Around this time, we were 348 00:23:27,080 --> 00:23:31,000 Speaker 1: starting to hear the about tech companies at least easing 349 00:23:31,040 --> 00:23:34,439 Speaker 1: off the gas pedal. When it comes to staffing. It 350 00:23:34,440 --> 00:23:37,359 Speaker 1: wouldn't be much longer before we started hearing about hiring 351 00:23:37,480 --> 00:23:41,879 Speaker 1: freezes at Meta and at other companies. We started hearing 352 00:23:41,920 --> 00:23:46,760 Speaker 1: about Meta in particular, but other companies to increasing employee 353 00:23:46,800 --> 00:23:49,440 Speaker 1: standards in an effort to kind of downsize and only 354 00:23:49,560 --> 00:23:53,119 Speaker 1: keep the best workers. And then eventually we started hearing 355 00:23:53,119 --> 00:23:56,560 Speaker 1: about layoffs. Now, again, this is not a problem that 356 00:23:56,640 --> 00:24:00,760 Speaker 1: was unique to Meta in two. A lot of companies 357 00:24:01,040 --> 00:24:04,280 Speaker 1: in the tech space and outside of it we're going 358 00:24:04,600 --> 00:24:08,880 Speaker 1: through similar stages. But Meta, being a huge company, had 359 00:24:09,000 --> 00:24:12,080 Speaker 1: a lot of folks on the payroll, and in November, 360 00:24:13,440 --> 00:24:18,119 Speaker 1: Zuckerberg laid out his plan to reduce headcount by which 361 00:24:18,160 --> 00:24:22,919 Speaker 1: translates to more than eleven thousand employees. That is a 362 00:24:23,000 --> 00:24:27,320 Speaker 1: lot of people. Now, one person who left Meta did 363 00:24:27,359 --> 00:24:30,560 Speaker 1: so back in June, and in this case, it wasn't 364 00:24:30,560 --> 00:24:33,880 Speaker 1: that she was laid off, she chose to resign. That 365 00:24:33,960 --> 00:24:39,600 Speaker 1: person was Cheryl Sandberg, the former chief operating Officer or CEOO. 366 00:24:39,920 --> 00:24:45,280 Speaker 1: She had worked at Meta slash Facebook for fourteen years. 367 00:24:45,320 --> 00:24:50,480 Speaker 1: She was instrumental in how the company grew and developed 368 00:24:50,560 --> 00:24:53,040 Speaker 1: over those fourteen years. But according to the rumor mill. 369 00:24:53,960 --> 00:24:56,280 Speaker 1: Things had been taking kind of a bad turn for 370 00:24:56,400 --> 00:24:58,840 Speaker 1: Sandberg over the last couple of years. There were stories 371 00:24:58,880 --> 00:25:02,760 Speaker 1: that she and Mark Zuckerberg were increasingly at odds over 372 00:25:02,840 --> 00:25:06,720 Speaker 1: company strategy and that the teams that she was managing 373 00:25:07,640 --> 00:25:11,439 Speaker 1: we're being shifted around or reduced in size, so she 374 00:25:11,600 --> 00:25:13,560 Speaker 1: was given less and less to do. It kind of 375 00:25:13,600 --> 00:25:17,560 Speaker 1: reminds me actually of what happened to Steve Jobs in 376 00:25:17,600 --> 00:25:21,760 Speaker 1: the eighties when they brought in a new CEO. Steve 377 00:25:21,840 --> 00:25:25,080 Speaker 1: Jobs was kind of moved off to the side of Apple, 378 00:25:25,600 --> 00:25:29,080 Speaker 1: and depending upon which version of the story you hear, 379 00:25:29,680 --> 00:25:34,359 Speaker 1: he either left in protest or was effectively fired. But 380 00:25:34,440 --> 00:25:38,800 Speaker 1: either way, he had already been given the message loud 381 00:25:38,840 --> 00:25:40,919 Speaker 1: and clear that the company didn't want him or the 382 00:25:40,920 --> 00:25:43,960 Speaker 1: new leadership of the company did not want him. Now. 383 00:25:44,000 --> 00:25:48,280 Speaker 1: Sandbird's reputation, as I said, was tightly tied to Facebook's 384 00:25:48,440 --> 00:25:52,240 Speaker 1: enormous growth over the last fourteen years. Like this is 385 00:25:52,280 --> 00:25:55,240 Speaker 1: a company that at at certain points is boasted at 386 00:25:55,280 --> 00:25:59,560 Speaker 1: having over two billion users for just one of its platforms, 387 00:25:59,760 --> 00:26:03,520 Speaker 1: that being Facebook. Her focus on ad revenue, likewise, had 388 00:26:03,560 --> 00:26:07,160 Speaker 1: become a core Facebook feature. But this focus on growth 389 00:26:07,320 --> 00:26:09,560 Speaker 1: was kind of a double edged sword. You know, some 390 00:26:09,600 --> 00:26:12,600 Speaker 1: people saw it as a huge positive because for a 391 00:26:12,720 --> 00:26:15,720 Speaker 1: long time it was netting investors lots and lots of 392 00:26:15,760 --> 00:26:19,520 Speaker 1: returns on their investment, at least until things started to 393 00:26:19,560 --> 00:26:24,520 Speaker 1: turn against the company. But others saw her as valuing 394 00:26:24,600 --> 00:26:28,560 Speaker 1: growth over everything else and that this in turn would 395 00:26:28,560 --> 00:26:31,320 Speaker 1: set up Meta slash Facebook for some of the big 396 00:26:31,359 --> 00:26:35,639 Speaker 1: problems that it faces today regarding issues like content moderation 397 00:26:36,200 --> 00:26:42,080 Speaker 1: and you know, regulatory agencies butting in on Meta's operations. 398 00:26:42,160 --> 00:26:46,040 Speaker 1: So it goes both ways, and Sandberg was leaving the 399 00:26:46,080 --> 00:26:48,560 Speaker 1: company just as the business world was really starting to 400 00:26:48,600 --> 00:26:51,600 Speaker 1: get a bit concerned about where things were headed economically. 401 00:26:52,480 --> 00:26:55,480 Speaker 1: One thing that anyone in the ad business can tell 402 00:26:55,560 --> 00:26:59,880 Speaker 1: you is that when things start getting tight, marketing budgets 403 00:27:00,440 --> 00:27:04,280 Speaker 1: frequently are one of the earliest ones to get scaled back, 404 00:27:04,920 --> 00:27:08,960 Speaker 1: and they typically get smaller until things improve. And for 405 00:27:09,000 --> 00:27:11,800 Speaker 1: a company like Meta, ad revenues are the chief source 406 00:27:11,840 --> 00:27:15,320 Speaker 1: of income. So the company was already struggling because of 407 00:27:15,359 --> 00:27:18,480 Speaker 1: the blow that was dealt by Apple. It was having 408 00:27:18,480 --> 00:27:22,480 Speaker 1: the issues because of these increased expenditures in developing the metaverse, 409 00:27:23,000 --> 00:27:27,080 Speaker 1: and now it was looking at the potential of advertising 410 00:27:27,080 --> 00:27:33,480 Speaker 1: companies decreasing their marketing budgets, which means fewer customers for Facebook. Remember, 411 00:27:33,680 --> 00:27:38,400 Speaker 1: like Facebook and Instagram, we aren't the customers, We're the product. 412 00:27:38,960 --> 00:27:43,359 Speaker 1: The customers are advertisers, and what they're buying is access 413 00:27:43,600 --> 00:27:48,920 Speaker 1: to us. So that's when I talked about Facebook having 414 00:27:48,960 --> 00:27:52,040 Speaker 1: fewer customers, it's because all these companies are cutting back 415 00:27:52,040 --> 00:27:56,480 Speaker 1: on their advertising budgets. Meanwhile, Meta was also facing a 416 00:27:56,560 --> 00:28:00,960 Speaker 1: lawsuit from the US Federal Trade Commission, or FTC, accusing 417 00:28:00,960 --> 00:28:04,959 Speaker 1: the company of practicing a buy or barry approach to competition, 418 00:28:05,359 --> 00:28:08,800 Speaker 1: which means that they were saying Meta's approach to competition 419 00:28:08,880 --> 00:28:13,120 Speaker 1: is to either buy up a rising competitor before it's 420 00:28:13,119 --> 00:28:17,760 Speaker 1: a real threat, or attempting to squish a competitor out 421 00:28:17,760 --> 00:28:22,320 Speaker 1: of existence, maybe by mimicking the competitor's own products. And 422 00:28:22,359 --> 00:28:25,639 Speaker 1: I think that's pretty darn fair to say that Meta 423 00:28:25,680 --> 00:28:29,480 Speaker 1: has been doing that for like all of its existence, 424 00:28:29,480 --> 00:28:32,960 Speaker 1: pretty much. The FTC would also get involved in an 425 00:28:33,000 --> 00:28:36,200 Speaker 1: effort to try and block Meta from acquiring a VR 426 00:28:36,320 --> 00:28:40,000 Speaker 1: company called Within Unlimited Incorporated. I talked about a little 427 00:28:40,000 --> 00:28:43,240 Speaker 1: bit on Monday, uh That company makes a VR fitness 428 00:28:43,240 --> 00:28:47,520 Speaker 1: app called Supernatural. That particular story is still unfolding as 429 00:28:47,560 --> 00:28:52,120 Speaker 1: we end out two. So uh, still no word yet 430 00:28:52,200 --> 00:28:55,840 Speaker 1: on whether or not the FTC's lawsuit to block that 431 00:28:55,880 --> 00:29:01,040 Speaker 1: acquisition will actually be successful. Uh. The FTC has refined 432 00:29:01,440 --> 00:29:05,400 Speaker 1: its lawsuit to make it a little more specific, but yeah, 433 00:29:05,520 --> 00:29:09,880 Speaker 1: we still haven't got to the end of that story yet. Okay, 434 00:29:09,880 --> 00:29:12,680 Speaker 1: but let's talk about VR for a little bit. With 435 00:29:12,720 --> 00:29:17,000 Speaker 1: regard to meta so VR or virtual reality, it's been 436 00:29:17,040 --> 00:29:20,920 Speaker 1: a developing technology since the late nineteen eighties, at least 437 00:29:20,960 --> 00:29:23,400 Speaker 1: at least as far as the general public has been 438 00:29:23,440 --> 00:29:26,520 Speaker 1: aware of it. There was a brief hype cycle around 439 00:29:26,600 --> 00:29:30,480 Speaker 1: VR in the nineties, but that deflated pretty rapidly once 440 00:29:30,480 --> 00:29:33,320 Speaker 1: people saw the limitations of the technology at that time. 441 00:29:34,200 --> 00:29:37,320 Speaker 1: So back then, your typical VR headset was massive, and 442 00:29:37,360 --> 00:29:40,440 Speaker 1: it was heavy, and it had to be suspended from 443 00:29:40,480 --> 00:29:43,680 Speaker 1: like a frame by cables in order to support the 444 00:29:43,680 --> 00:29:45,320 Speaker 1: weight because it would be too heavy for someone to 445 00:29:45,400 --> 00:29:48,520 Speaker 1: just wear for any length of time. Graphics were really 446 00:29:48,520 --> 00:29:51,080 Speaker 1: primitive because we just didn't have the processing power to 447 00:29:51,120 --> 00:29:55,360 Speaker 1: handle something more sophisticated, and folks got disenchanted with what 448 00:29:55,600 --> 00:30:00,760 Speaker 1: VR was compared to what it was promised to be. Thus, 449 00:30:00,800 --> 00:30:03,720 Speaker 1: interest faded in VR in the nineties, and as a result, 450 00:30:04,080 --> 00:30:06,640 Speaker 1: the people who had been working on the technology to 451 00:30:06,760 --> 00:30:09,960 Speaker 1: turn VR into our r by what which I mean, 452 00:30:10,040 --> 00:30:14,400 Speaker 1: to make VR a real reality found themselves either with 453 00:30:14,560 --> 00:30:18,160 Speaker 1: reduced budgets or completely out of a job. And it 454 00:30:18,200 --> 00:30:22,440 Speaker 1: took years before folks in general were ready to entertain 455 00:30:22,560 --> 00:30:27,960 Speaker 1: the idea of VR. Again. Development didn't stop, but it 456 00:30:28,000 --> 00:30:32,360 Speaker 1: was severely hampered. Then you get eventually to the arrival 457 00:30:32,480 --> 00:30:36,440 Speaker 1: of the Oculus VR headset, and things began to change. Uh. 458 00:30:36,640 --> 00:30:41,680 Speaker 1: The Oculus was relatively lightweight compared to earlier VR headsets. 459 00:30:42,000 --> 00:30:45,760 Speaker 1: Processing capabilities were much better because you could pair the 460 00:30:45,800 --> 00:30:50,800 Speaker 1: Oculus with a significantly powerful computer and thus take advantage 461 00:30:50,800 --> 00:30:54,080 Speaker 1: of that computer's abilities, and the headset would just act 462 00:30:54,080 --> 00:30:58,200 Speaker 1: as kind of an interactive display um. And then it 463 00:30:58,280 --> 00:31:01,160 Speaker 1: looked like VR might actually stand chance of catching on 464 00:31:01,240 --> 00:31:04,800 Speaker 1: at least a little bit. Meta, which at the time 465 00:31:04,880 --> 00:31:09,760 Speaker 1: was just Facebook, purchased Oculus in two thousand fourteen. Uh, 466 00:31:09,920 --> 00:31:12,760 Speaker 1: that story is complicated in its own right. It doesn't 467 00:31:12,800 --> 00:31:15,200 Speaker 1: really matter for our episode here, so we're gonna skip 468 00:31:15,240 --> 00:31:19,320 Speaker 1: ahead of bit. In October twenty twenty, Meta would release 469 00:31:19,360 --> 00:31:23,240 Speaker 1: a pair of headsets called the Oculus Quest two as 470 00:31:23,280 --> 00:31:25,240 Speaker 1: you might guess this was a follow up to an 471 00:31:25,240 --> 00:31:31,000 Speaker 1: earlier Oculus quest. When Facebook rebranded into Meta In the 472 00:31:31,080 --> 00:31:33,880 Speaker 1: Quest To also got a rebrand, it dropped the word 473 00:31:33,920 --> 00:31:39,160 Speaker 1: Oculus entirely. Now it's the Meta Quest too. Well. When 474 00:31:39,160 --> 00:31:42,960 Speaker 1: the company launched those headsets back in there was a 475 00:31:43,000 --> 00:31:46,080 Speaker 1: sixty four gigabyte version which sold for two hundred nine 476 00:31:46,120 --> 00:31:49,160 Speaker 1: dollars and a two hundred fifty six gigabyte version for 477 00:31:49,240 --> 00:31:54,360 Speaker 1: three dollars. And on Facebook phased out the sixty four 478 00:31:54,400 --> 00:31:57,560 Speaker 1: gigabyte model, replaced it with a hundred twenty eight gigabyte model, 479 00:31:57,880 --> 00:32:02,400 Speaker 1: but kept the price point at to Now skip ahead 480 00:32:02,400 --> 00:32:05,800 Speaker 1: again to this year two. Over the summer, mark Zuckerberg 481 00:32:05,800 --> 00:32:08,920 Speaker 1: announced that the company was going to increase the price 482 00:32:09,440 --> 00:32:13,360 Speaker 1: of the two Oculus two models by one dollars each. 483 00:32:14,000 --> 00:32:18,840 Speaker 1: Nothing else changed, so the headsets didn't get more features, 484 00:32:19,120 --> 00:32:23,120 Speaker 1: they didn't become more powerful, they didn't introduce models with 485 00:32:23,640 --> 00:32:28,400 Speaker 1: more storage, They did not provide more immersive experiences. Someone 486 00:32:28,440 --> 00:32:32,760 Speaker 1: who bought a base Oculus well in this case Meta 487 00:32:33,080 --> 00:32:37,400 Speaker 1: Quest Too, at the end of July would pay to it. 488 00:32:37,760 --> 00:32:40,280 Speaker 1: Someone who bought one in the beginning of August would 489 00:32:40,280 --> 00:32:43,720 Speaker 1: buy it for three and there would be no difference 490 00:32:43,760 --> 00:32:47,880 Speaker 1: between the two headsets besides that price tag. Uh And 491 00:32:47,920 --> 00:32:49,800 Speaker 1: obviously if you were to buy a two D fifty 492 00:32:49,840 --> 00:32:52,080 Speaker 1: six gig by version then it would set you back four. 493 00:32:53,800 --> 00:32:56,840 Speaker 1: Zuckerberg tweeted that this was done quote in order to 494 00:32:56,880 --> 00:33:00,520 Speaker 1: continue investing in moving the VR industry for for the 495 00:33:00,600 --> 00:33:06,160 Speaker 1: long term end quote. We'll talk more about that strategy 496 00:33:06,280 --> 00:33:19,360 Speaker 1: after we come back from this quick break. Okay, So 497 00:33:19,440 --> 00:33:24,360 Speaker 1: this past year, Meta increases the cost of the Meta 498 00:33:24,480 --> 00:33:27,880 Speaker 1: quest to headset. It is not often that a company 499 00:33:27,920 --> 00:33:31,800 Speaker 1: will actually boost the price of a tech product, particularly 500 00:33:31,800 --> 00:33:36,400 Speaker 1: a tech product that's debuted nearly two years earlier. And 501 00:33:36,560 --> 00:33:40,040 Speaker 1: just as a side observation, any version of the metaverse 502 00:33:40,120 --> 00:33:44,840 Speaker 1: that is going to feature VR exclusively or extensively is 503 00:33:44,880 --> 00:33:46,960 Speaker 1: also going to have to solve the problem of making 504 00:33:47,040 --> 00:33:51,800 Speaker 1: VR equipment accessible and affordable and attainable. So one of 505 00:33:51,840 --> 00:33:56,760 Speaker 1: the big advantages Facebook and Instagram and WhatsApp have is 506 00:33:56,800 --> 00:34:01,440 Speaker 1: that these are all products that are accessible on mobile devices, 507 00:34:01,440 --> 00:34:05,480 Speaker 1: and these devices aren't necessarily super expensive. Some of them are, 508 00:34:05,680 --> 00:34:08,080 Speaker 1: but some of them aren't. You don't have to get 509 00:34:08,080 --> 00:34:10,480 Speaker 1: a flagship phone model if you don't want to. But 510 00:34:10,560 --> 00:34:12,560 Speaker 1: I bet you can run Facebook on it if it's 511 00:34:12,560 --> 00:34:18,520 Speaker 1: a smartphone. So these are affordable portable devices, and most importantly, 512 00:34:18,560 --> 00:34:20,480 Speaker 1: in my opinion, you don't have to wear them on 513 00:34:20,520 --> 00:34:24,120 Speaker 1: your face if you don't want to. VR is a 514 00:34:24,120 --> 00:34:28,040 Speaker 1: tougher cell. It's harder to see the value of VR 515 00:34:28,200 --> 00:34:30,880 Speaker 1: unless you try it out for yourself, and in the 516 00:34:30,920 --> 00:34:33,839 Speaker 1: process of trying it out, you might encounter issues like 517 00:34:34,320 --> 00:34:37,200 Speaker 1: motion sickness. Some people are more prone to it than others. 518 00:34:37,280 --> 00:34:40,560 Speaker 1: I am extremely prone to It didn't used to be, 519 00:34:40,640 --> 00:34:44,839 Speaker 1: but as I get older, I fall victim to motion 520 00:34:44,840 --> 00:34:49,040 Speaker 1: sickness more and more frequently. So I think there's always 521 00:34:49,040 --> 00:34:52,640 Speaker 1: going to be a smaller market for VR, and probably 522 00:34:52,760 --> 00:34:57,160 Speaker 1: a R two at least in headset formats. It is 523 00:34:57,280 --> 00:35:00,960 Speaker 1: an expensive peripheral. It has lim it in use cases, 524 00:35:01,239 --> 00:35:05,279 Speaker 1: so making it more expensive is a tough measure. It's 525 00:35:05,320 --> 00:35:08,280 Speaker 1: a and it's it's a hard thing to tell potential customers, 526 00:35:08,360 --> 00:35:11,400 Speaker 1: right like people who might have been looking into VR, 527 00:35:11,640 --> 00:35:14,640 Speaker 1: and you tell them, oh, well, this thing now costs 528 00:35:14,680 --> 00:35:16,840 Speaker 1: a hundred dollars more than it used to, but it 529 00:35:16,880 --> 00:35:19,640 Speaker 1: doesn't do anything more than it did before we hiked 530 00:35:19,719 --> 00:35:24,719 Speaker 1: up the price. That doesn't necessarily go over well, but 531 00:35:24,800 --> 00:35:28,640 Speaker 1: we're not done yet. Meta also introduced a new VR 532 00:35:28,719 --> 00:35:33,160 Speaker 1: headset model this past year, the Quest Pro. Zuckerberg unveiled 533 00:35:33,160 --> 00:35:36,480 Speaker 1: this in October two, and this headset is meant to 534 00:35:36,480 --> 00:35:39,920 Speaker 1: show off how VR headsets could potentially be used in 535 00:35:40,000 --> 00:35:44,840 Speaker 1: settings outside of your typical VR experience and VR games. 536 00:35:45,520 --> 00:35:49,520 Speaker 1: It's meant, in part to open business owners eyes to 537 00:35:49,560 --> 00:35:54,240 Speaker 1: the potential use of VR in professional settings. This headset 538 00:35:54,320 --> 00:35:59,680 Speaker 1: costs a hefty five hundred dollars, but again, Meta has 539 00:35:59,719 --> 00:36:04,000 Speaker 1: been positioning it more as a professional tool, not something 540 00:36:04,000 --> 00:36:08,600 Speaker 1: that's meant to attract gamers and hobbyists. Now, some early 541 00:36:08,680 --> 00:36:12,359 Speaker 1: reviews of the Quest Pro, we're pretty quit critical of it, 542 00:36:12,560 --> 00:36:17,160 Speaker 1: um not really praising it so much, And in a 543 00:36:17,239 --> 00:36:21,080 Speaker 1: curious move, Mark Zuckerberg and met us seemed to kind 544 00:36:21,120 --> 00:36:24,760 Speaker 1: of acknowledge that the Quest Pro isn't, you know, really 545 00:36:24,880 --> 00:36:29,880 Speaker 1: very good yet. Instead, the messaging is more like the 546 00:36:30,000 --> 00:36:33,560 Speaker 1: Quest Pro is an early model and that something a 547 00:36:33,600 --> 00:36:37,799 Speaker 1: bit more practical will have to wait for a few 548 00:36:37,800 --> 00:36:41,680 Speaker 1: iterations down the road, like maybe the Quest four or 549 00:36:41,719 --> 00:36:45,000 Speaker 1: the Quest five, Which I mean, that's that's a weird 550 00:36:45,120 --> 00:36:48,120 Speaker 1: message to send out to potential customers, right, I mean, 551 00:36:48,160 --> 00:36:51,000 Speaker 1: it could be the truth, which you know, great for 552 00:36:51,040 --> 00:36:54,279 Speaker 1: them being transparent about it, but it's weird to tell people, hey, yeah, 553 00:36:54,320 --> 00:36:57,560 Speaker 1: this one kind of stinks, but it's putting us on 554 00:36:57,560 --> 00:37:00,359 Speaker 1: the path to where we want to be, and hey, 555 00:37:00,400 --> 00:37:03,920 Speaker 1: you want to buy one for smack a ruse? Now. 556 00:37:03,960 --> 00:37:08,120 Speaker 1: The Virgins review of the Quest Pro was fairly critical. 557 00:37:08,640 --> 00:37:12,600 Speaker 1: Addie Robertson doesn't mince words and says, quote, the problem 558 00:37:12,760 --> 00:37:17,160 Speaker 1: is the Quest Pro isn't very good. It's device seemingly 559 00:37:17,280 --> 00:37:22,440 Speaker 1: launched without plan or purpose, highlighting vrs persistent drawbacks, without 560 00:37:22,520 --> 00:37:25,879 Speaker 1: making good use of its strengths, and topped off with 561 00:37:25,960 --> 00:37:31,360 Speaker 1: some irredeemably bad software. Yikes. And y'all, if I'm honest, 562 00:37:32,040 --> 00:37:34,680 Speaker 1: it's really hard to convince me that VR has a 563 00:37:34,760 --> 00:37:39,520 Speaker 1: real place in most business settings. I can definitely see 564 00:37:39,560 --> 00:37:43,640 Speaker 1: it for some use cases. For example, if you wanted 565 00:37:43,680 --> 00:37:48,200 Speaker 1: to show off a three dimensional virtual model of a product, 566 00:37:48,680 --> 00:37:52,200 Speaker 1: VR or a R could come in really handy. If 567 00:37:52,239 --> 00:37:55,359 Speaker 1: you could make real time tweaks and changes to this 568 00:37:55,400 --> 00:37:58,040 Speaker 1: model while people are looking at it and giving you feedback, 569 00:37:58,600 --> 00:38:01,400 Speaker 1: that could be really valuable. It potentially speed up the 570 00:38:01,440 --> 00:38:05,399 Speaker 1: design process considerably. It would be even faster than three 571 00:38:05,520 --> 00:38:09,680 Speaker 1: D printing, which has revolutionized the speed of developing new 572 00:38:09,719 --> 00:38:13,880 Speaker 1: products in lots of different industries, but for any businesses 573 00:38:13,960 --> 00:38:18,359 Speaker 1: that aren't in product design, it's harder to sell the 574 00:38:18,400 --> 00:38:22,239 Speaker 1: idea of VR to me, Like, I don't really like 575 00:38:22,400 --> 00:38:24,520 Speaker 1: the idea of having to put on a VR headset 576 00:38:24,560 --> 00:38:27,640 Speaker 1: in order to attend a virtual meeting. I mean, I 577 00:38:27,719 --> 00:38:30,400 Speaker 1: don't even like having my camera or my microphone on 578 00:38:30,480 --> 00:38:33,839 Speaker 1: for most virtual meetings unless I'm presenting something or I'm 579 00:38:33,840 --> 00:38:38,640 Speaker 1: asking a question. And it's super hard to imagine VR 580 00:38:38,760 --> 00:38:41,719 Speaker 1: helping out when I don't know, when you're talking about 581 00:38:41,760 --> 00:38:45,319 Speaker 1: a spreadsheet or a power point presentation. I'm not sure 582 00:38:45,360 --> 00:38:48,600 Speaker 1: there's any added value to what you could already do 583 00:38:48,719 --> 00:38:53,000 Speaker 1: with just various virtual meeting software suites that work on 584 00:38:53,080 --> 00:38:59,080 Speaker 1: regular old computer screens. Now, I assume Meta's goal was 585 00:38:59,160 --> 00:39:01,680 Speaker 1: to start getting businesses on board with the idea of 586 00:39:01,680 --> 00:39:06,120 Speaker 1: adopting metaverse technologies and concepts. I'm not sure the company 587 00:39:06,120 --> 00:39:10,200 Speaker 1: has been successful in doing that. Perhaps it's just too 588 00:39:10,239 --> 00:39:14,200 Speaker 1: early to kind of make Meta's sales pitch for VR, 589 00:39:14,640 --> 00:39:18,360 Speaker 1: And with that comes a danger that going so hard, 590 00:39:18,640 --> 00:39:22,040 Speaker 1: so early and so publicly, that Meta could be shooting 591 00:39:22,040 --> 00:39:24,759 Speaker 1: itself in the foot, because again, We've seen it happen 592 00:39:24,800 --> 00:39:29,719 Speaker 1: in the nineties when people got unenthusiastic about VR because 593 00:39:29,719 --> 00:39:32,800 Speaker 1: they saw the limitations. If you push VR too hard 594 00:39:32,880 --> 00:39:36,520 Speaker 1: before it's capable of doing the things you wanted to do, 595 00:39:36,560 --> 00:39:39,440 Speaker 1: you run the danger of repeating that all over again. 596 00:39:40,239 --> 00:39:42,440 Speaker 1: All right, So to put a pin on where META 597 00:39:42,680 --> 00:39:44,839 Speaker 1: is so far, I figured we can look at it 598 00:39:44,880 --> 00:39:49,960 Speaker 1: this way. At one point in two Mark Zuckerberg's personal 599 00:39:50,000 --> 00:39:55,600 Speaker 1: net worth fell one hundred four billion dollars from where 600 00:39:55,600 --> 00:39:58,239 Speaker 1: he started out at the beginning of the year. He 601 00:39:58,280 --> 00:40:01,040 Speaker 1: went from being the third well beiest person in the 602 00:40:01,080 --> 00:40:04,600 Speaker 1: world to the twenty nine. But I mean he's still 603 00:40:04,600 --> 00:40:08,000 Speaker 1: made the cut, right I didn't, But yeah, that's still 604 00:40:08,120 --> 00:40:11,920 Speaker 1: that is a massive drop. Now. To be clear, since 605 00:40:11,960 --> 00:40:15,719 Speaker 1: that time, Meta has rallied a little bit, because it 606 00:40:15,800 --> 00:40:18,720 Speaker 1: was at its lowest when it dropped below ninety dollars 607 00:40:18,719 --> 00:40:21,080 Speaker 1: a share, and a lot of Zuckerberg's wealth is tied 608 00:40:21,160 --> 00:40:24,919 Speaker 1: up in shares of his company. But since then we're now, 609 00:40:25,040 --> 00:40:27,399 Speaker 1: like I said, around a hundred seventeen dollars, So it's 610 00:40:27,440 --> 00:40:30,000 Speaker 1: a little better than what it was at its lowest. 611 00:40:30,920 --> 00:40:33,840 Speaker 1: And I'm not sure where Mark Zuckerberg ranks in the 612 00:40:33,920 --> 00:40:38,439 Speaker 1: list at this point. Plus you know, we have other complications, 613 00:40:38,480 --> 00:40:41,600 Speaker 1: right because Elon Musk was the wealthiest person in the world, 614 00:40:42,160 --> 00:40:44,640 Speaker 1: but his values kind of taken a nose dive because 615 00:40:44,680 --> 00:40:47,759 Speaker 1: Tesla shares have been dropping and I don't know, maybe 616 00:40:47,800 --> 00:40:51,320 Speaker 1: we're gonna see is a race to the billionaire bottom 617 00:40:51,560 --> 00:40:56,120 Speaker 1: and I will spring for popcorn if that happens. Before 618 00:40:56,120 --> 00:40:58,239 Speaker 1: I wrap up this episode, I want to talk just 619 00:40:58,360 --> 00:41:00,840 Speaker 1: for a short bit about a one of other companies 620 00:41:00,880 --> 00:41:04,919 Speaker 1: that had a rough time in and a really big 621 00:41:04,920 --> 00:41:08,000 Speaker 1: one in that category is Netflix. And you could argue 622 00:41:08,280 --> 00:41:12,319 Speaker 1: that Netflix's struggles have had a massive ripple effect on 623 00:41:13,080 --> 00:41:18,560 Speaker 1: streaming in general. So we go back to April of 624 00:41:18,640 --> 00:41:22,320 Speaker 1: this year. Netflix holds an earnings call, and the company 625 00:41:22,400 --> 00:41:25,480 Speaker 1: reveals that for the first time in its history, it 626 00:41:25,560 --> 00:41:29,440 Speaker 1: had lost more subscribers over the previous quarter than it 627 00:41:29,560 --> 00:41:34,120 Speaker 1: had added. There were two hundred thousand fewer Netflix subscribers, 628 00:41:34,200 --> 00:41:38,360 Speaker 1: and boy howdy, did that set off an investor panic. 629 00:41:38,800 --> 00:41:42,200 Speaker 1: The company's stock price, which had been at around six 630 00:41:42,280 --> 00:41:46,240 Speaker 1: hundred dollars a share at the beginning of two dropped 631 00:41:46,280 --> 00:41:48,799 Speaker 1: down to around two hundred dollars a share in the 632 00:41:48,800 --> 00:41:52,680 Speaker 1: wake of that earnings call. So Netflix's value took an 633 00:41:52,920 --> 00:41:57,840 Speaker 1: enormous hit over the last year. The company had a 634 00:41:57,920 --> 00:42:00,440 Speaker 1: load point of a hundred sixty two dollars or share, 635 00:42:00,560 --> 00:42:02,920 Speaker 1: so that's where it kind of bottomed out. It has 636 00:42:02,960 --> 00:42:05,799 Speaker 1: since recovered quite a bit. It's now just a little 637 00:42:05,840 --> 00:42:09,480 Speaker 1: bit below three a share, still not where it was 638 00:42:09,520 --> 00:42:11,440 Speaker 1: at the beginning of this year, but at least it 639 00:42:11,440 --> 00:42:14,719 Speaker 1: looks as though it's pulling out of a nose dive. Now. 640 00:42:14,800 --> 00:42:18,440 Speaker 1: Netflix's investors were showing a lot of concern and you 641 00:42:18,480 --> 00:42:21,240 Speaker 1: can kind of understand why when you start to really 642 00:42:21,320 --> 00:42:27,200 Speaker 1: critically think about the streaming content business. So to attract subscribers, 643 00:42:27,680 --> 00:42:31,960 Speaker 1: you need content, right, you need good content. Netflix initially 644 00:42:31,960 --> 00:42:35,800 Speaker 1: built up its domination in the space largely by featuring 645 00:42:35,840 --> 00:42:39,960 Speaker 1: content that was created by other studios, but gradually the 646 00:42:40,040 --> 00:42:43,280 Speaker 1: power players in the entertainment industry started to get worried 647 00:42:43,320 --> 00:42:47,560 Speaker 1: about Netflix and started with whole deals of some of 648 00:42:47,719 --> 00:42:52,600 Speaker 1: its most popular i p So Netflix is finding it 649 00:42:52,640 --> 00:42:55,440 Speaker 1: more and more challenging to land contracts that give it 650 00:42:55,520 --> 00:42:59,040 Speaker 1: access to the types of stuff people actually want to see. 651 00:42:59,239 --> 00:43:02,000 Speaker 1: So then Netflix starts to make its own content, and 652 00:43:02,040 --> 00:43:06,160 Speaker 1: it starts making some premium, prestige content and of course 653 00:43:06,200 --> 00:43:09,719 Speaker 1: this started several years ago, but now people know about it. 654 00:43:09,760 --> 00:43:13,880 Speaker 1: People know that Netflix makes tons of content of its own, 655 00:43:14,480 --> 00:43:17,279 Speaker 1: and it really became a production company, not just a 656 00:43:17,280 --> 00:43:23,160 Speaker 1: distribution company. Well, here's the thing, producing good stuff, or 657 00:43:23,160 --> 00:43:27,359 Speaker 1: at least good looking stuff. The content itself might not 658 00:43:27,400 --> 00:43:31,880 Speaker 1: be good, but it's expensive. Netflix produced a lot of it. 659 00:43:32,080 --> 00:43:34,720 Speaker 1: So there have been some questions about whether the amount 660 00:43:34,800 --> 00:43:39,880 Speaker 1: of money Netflix has spent on producing content makes sense. 661 00:43:40,160 --> 00:43:45,280 Speaker 1: Because if your business strategy revolves mostly around adding more subscribers, 662 00:43:45,880 --> 00:43:48,719 Speaker 1: you eventually hit a point where you really aren't going 663 00:43:48,760 --> 00:43:52,239 Speaker 1: to be adding many more folks because you're meeting market saturation. 664 00:43:52,880 --> 00:43:57,520 Speaker 1: The cable companies ran into this problem decades ago. Streaming 665 00:43:57,520 --> 00:44:00,640 Speaker 1: services are running into it now. And of course there's 666 00:44:00,680 --> 00:44:03,920 Speaker 1: also way more competition in the space, right because now 667 00:44:04,440 --> 00:44:08,839 Speaker 1: everybody has a streaming service. So Netflix, in the wake 668 00:44:08,880 --> 00:44:12,720 Speaker 1: of this, starts to cut costs. Entire departments were gutted. 669 00:44:12,880 --> 00:44:15,040 Speaker 1: Just take a look at the number of animated projects 670 00:44:15,040 --> 00:44:17,719 Speaker 1: that got the acts at Netflix over the last year. 671 00:44:18,160 --> 00:44:21,839 Speaker 1: The company also laid off employees. It announced plans for 672 00:44:21,920 --> 00:44:25,360 Speaker 1: a couple of new types of subscriptions, one that lets 673 00:44:25,440 --> 00:44:29,720 Speaker 1: existing accounts add additional households for a few dollars extra 674 00:44:29,800 --> 00:44:32,960 Speaker 1: per month, and this was an effort to crack down 675 00:44:33,000 --> 00:44:35,719 Speaker 1: on people who are sharing their Netflix log in credentials 676 00:44:35,960 --> 00:44:39,359 Speaker 1: with friends and family who you know aren't actually part 677 00:44:39,360 --> 00:44:42,719 Speaker 1: of the same household. The company also announced plans for 678 00:44:42,760 --> 00:44:45,400 Speaker 1: an ad supported tier of service that would have a 679 00:44:45,440 --> 00:44:48,920 Speaker 1: reduced subscription costs, so people who either didn't want to 680 00:44:49,040 --> 00:44:52,480 Speaker 1: or couldn't afford the full subscription cost could go at 681 00:44:52,480 --> 00:44:57,160 Speaker 1: a lower tier UH and just endure ads and not 682 00:44:57,560 --> 00:45:00,520 Speaker 1: have access to all the content that's otherwise is available 683 00:45:00,520 --> 00:45:04,880 Speaker 1: on Netflix. Now, over the course of two Netflix was 684 00:45:04,920 --> 00:45:09,400 Speaker 1: actually able to reverse the trend of losing subscribers, and 685 00:45:09,440 --> 00:45:12,399 Speaker 1: it was kind of a trend for Netflix because by 686 00:45:12,480 --> 00:45:15,880 Speaker 1: the second quarter they were down almost a million, but 687 00:45:16,200 --> 00:45:19,080 Speaker 1: they were able to reverse that over the last half 688 00:45:19,120 --> 00:45:22,440 Speaker 1: of the year, and they even beat out projections in 689 00:45:22,440 --> 00:45:26,080 Speaker 1: the process. They added more people than they even predicted. 690 00:45:27,239 --> 00:45:30,520 Speaker 1: Right now, for Netflix, things are in a better place 691 00:45:30,560 --> 00:45:33,880 Speaker 1: than they were in April after that earnings call. But 692 00:45:34,560 --> 00:45:37,600 Speaker 1: across streaming in general, we're seeing companies struggle with this 693 00:45:37,719 --> 00:45:42,239 Speaker 1: problem of how do you produce content that attracts customers 694 00:45:42,400 --> 00:45:46,680 Speaker 1: and keeps the existing ones happy while you also are 695 00:45:46,719 --> 00:45:48,960 Speaker 1: able to do it in a way that makes a profit. 696 00:45:49,520 --> 00:45:53,200 Speaker 1: And it's complicated, and it's made more complicated because it's 697 00:45:53,200 --> 00:45:57,719 Speaker 1: harder to ascribe numbers to this stuff. Did someone subscribe 698 00:45:57,840 --> 00:46:00,479 Speaker 1: to your service just to access a spece civic piece 699 00:46:00,480 --> 00:46:04,320 Speaker 1: of content or did they happen to access that specific 700 00:46:04,360 --> 00:46:07,280 Speaker 1: piece of content because they already subscribed to your service. 701 00:46:07,880 --> 00:46:10,480 Speaker 1: This isn't like the movies, where box office is a 702 00:46:10,480 --> 00:46:13,440 Speaker 1: pretty decent indication about whether a film is resonating with 703 00:46:13,480 --> 00:46:17,400 Speaker 1: audiences or not. We've also seen another company struggle with 704 00:46:17,440 --> 00:46:19,880 Speaker 1: this over the second half of two will close out 705 00:46:19,920 --> 00:46:24,000 Speaker 1: with this. That would be Warner Brothers Discovery UM. Warner 706 00:46:24,000 --> 00:46:27,080 Speaker 1: Brothers Discovery was not struggling with any problems in the 707 00:46:27,120 --> 00:46:30,200 Speaker 1: first half of two because it didn't exist yet a 708 00:46:30,360 --> 00:46:34,000 Speaker 1: T and T spun off. Warner Media and Discovery merged 709 00:46:34,040 --> 00:46:37,319 Speaker 1: with Warner Media in April of this year and thus 710 00:46:37,360 --> 00:46:40,120 Speaker 1: formed Warner Brothers Discovery. Of course, we knew this was 711 00:46:40,120 --> 00:46:42,920 Speaker 1: going to happen because it was announced last year, but 712 00:46:43,000 --> 00:46:46,239 Speaker 1: it was this year when it finally concluded and David Zaslov, 713 00:46:46,320 --> 00:46:48,680 Speaker 1: the head of Discovery, became the head of the newly 714 00:46:48,840 --> 00:46:54,520 Speaker 1: merged company and started making some serious changes now, y'all. 715 00:46:54,600 --> 00:46:57,560 Speaker 1: At one point, when I was recording Tech Stuff back 716 00:46:57,560 --> 00:47:00,600 Speaker 1: in the day, it was part of Discovery COMMU Dications. 717 00:47:00,640 --> 00:47:05,120 Speaker 1: Discovery Communications was daddy to Tech Stuff and to all 718 00:47:05,160 --> 00:47:08,120 Speaker 1: the other how Stuff Works podcasts back in the day, 719 00:47:08,880 --> 00:47:11,799 Speaker 1: and it was led by Mr David Zaslov at the time. 720 00:47:11,840 --> 00:47:14,279 Speaker 1: And I'm pretty comfortable saying that nothing he has done 721 00:47:14,320 --> 00:47:17,359 Speaker 1: since taking charge of Order Brothers Discovery has surprised me. 722 00:47:18,000 --> 00:47:22,000 Speaker 1: That includes him, uh acting the Batgirl film which was 723 00:47:22,080 --> 00:47:25,840 Speaker 1: almost finished and then writing it off for tax purposes 724 00:47:25,880 --> 00:47:29,440 Speaker 1: didn't surprise me even in the slightest. Didn't even surprise 725 00:47:29,440 --> 00:47:32,560 Speaker 1: me when he started doing things like having Westworld pulled 726 00:47:32,640 --> 00:47:36,160 Speaker 1: off of HBO Max not just canceled, but pulled from 727 00:47:36,239 --> 00:47:39,279 Speaker 1: the service. Uh, didn't surprise me when he shook up 728 00:47:39,320 --> 00:47:42,640 Speaker 1: the leadership over at d C. He still has to 729 00:47:42,640 --> 00:47:45,200 Speaker 1: cut billions of dollars of debt from this merged company, 730 00:47:45,239 --> 00:47:47,560 Speaker 1: So nothing he's gonna do is really gonna surprise me. 731 00:47:47,880 --> 00:47:51,200 Speaker 1: We are not all the wood's by far with the 732 00:47:51,280 --> 00:47:54,680 Speaker 1: changes for Warner Brothers Discovery, but zas Love has said 733 00:47:54,680 --> 00:47:56,759 Speaker 1: the streaming business is a tough one. He's coming at 734 00:47:56,800 --> 00:48:00,200 Speaker 1: it from the cable business, which similarly has become really 735 00:48:00,280 --> 00:48:05,200 Speaker 1: tough as it's hit saturation. So to make financial sense 736 00:48:05,320 --> 00:48:09,040 Speaker 1: out of streaming is challenging, and changes have to happen. 737 00:48:09,120 --> 00:48:11,880 Speaker 1: You can't just go on producing super high end content 738 00:48:11,960 --> 00:48:15,239 Speaker 1: for streaming without some other way to monetize it, or 739 00:48:15,280 --> 00:48:17,600 Speaker 1: else you'll eventually go out of business. And I think 740 00:48:17,600 --> 00:48:20,000 Speaker 1: he's right. I think zas Love is on the right 741 00:48:20,360 --> 00:48:23,600 Speaker 1: path here in the sense that you've got to figure 742 00:48:23,600 --> 00:48:27,239 Speaker 1: out a way to make this make financial sense, or 743 00:48:27,280 --> 00:48:31,359 Speaker 1: else you'll ultimately produce yourself out of business. You'll you'll 744 00:48:31,360 --> 00:48:34,960 Speaker 1: spend too much money, you'll overextend yourself, and you'll collapse. 745 00:48:35,880 --> 00:48:39,520 Speaker 1: I do think zas Love is taking a much more 746 00:48:39,640 --> 00:48:43,600 Speaker 1: brutal approach than what I or a lot of other 747 00:48:43,600 --> 00:48:47,520 Speaker 1: folks would like to see, especially fans and creators. But 748 00:48:47,600 --> 00:48:49,640 Speaker 1: I do think this reckoning was a long time coming. 749 00:48:49,719 --> 00:48:52,000 Speaker 1: It was just a matter of when and who was 750 00:48:52,040 --> 00:48:54,000 Speaker 1: going to launch it, and we're starting to see it 751 00:48:54,000 --> 00:48:58,160 Speaker 1: play out across other streaming services as well. Anyway, I'm 752 00:48:58,160 --> 00:49:00,719 Speaker 1: sure we'll talk more about Warner Brothers disc coovery in 753 00:49:01,760 --> 00:49:05,200 Speaker 1: as well as other streaming companies and how they navigate 754 00:49:05,239 --> 00:49:10,520 Speaker 1: waters moving forward. But really, I think Netflix is bad. 755 00:49:10,600 --> 00:49:16,000 Speaker 1: April of two was kind of the the bit that 756 00:49:16,120 --> 00:49:19,920 Speaker 1: got the snowball rolling down the hill. Okay, that's it 757 00:49:20,360 --> 00:49:23,560 Speaker 1: for this episode. We will continue our look back on 758 00:49:23,640 --> 00:49:26,960 Speaker 1: two in the next one. Hope you're all well. Please 759 00:49:26,960 --> 00:49:29,319 Speaker 1: reach out if you have suggestions for topics you would 760 00:49:29,360 --> 00:49:32,080 Speaker 1: like me to cover. Things to look forward to in three. 761 00:49:32,560 --> 00:49:34,600 Speaker 1: You can do that on the I heart Radio app. 762 00:49:34,920 --> 00:49:37,240 Speaker 1: Just download the app. It's free to use, free to download. 763 00:49:37,320 --> 00:49:39,840 Speaker 1: Navigate the Tech Stuff use that little microphone icon. You 764 00:49:39,840 --> 00:49:41,880 Speaker 1: can leave me a voice message up to thirty seconds 765 00:49:41,880 --> 00:49:44,640 Speaker 1: in length, or reach out to me on Twitter. The 766 00:49:44,680 --> 00:49:47,680 Speaker 1: handle for the show is tech Stuff H s W 767 00:49:48,440 --> 00:49:56,320 Speaker 1: and I'll talk to you again really soon. Tech Stuff 768 00:49:56,400 --> 00:49:59,719 Speaker 1: is an I Heart Radio production. For more podcasts from 769 00:49:59,719 --> 00:50:03,520 Speaker 1: I Heart Radio, visit the i heart Radio app, Apple Podcasts, 770 00:50:03,640 --> 00:50:09,719 Speaker 1: or wherever you listen to your favorite shows. H