Meta’s Trump Calculus and Regime Change at Netflix

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

All right. Let’s just do the intro get out of the way.

Do it.

I’m Kevin Roose. I’m a tech columnist to the “New York Times.”

I’m Casey Newton from Platformer.

And you’re listening to “Hard Fork.” [AIR HORN]

Oh no. What — where did you get that?

I finally got around to programming our soundboard here with a series of sound effects. So for example, if you tell one of your patented Casey jokes, I can just go —

[RIM SHOT]

That is so patronizing.

Or if we’re talking about something sad, I can go —

[TROMBONE PLAYS]

How is our show becoming a 1920s vaudeville act?

Well, the fun thing about this one is you can make it any sound you want. So when we’re talking about some VR thing, I can just go —

The Metaverse.

Or —

I mean, look, I’ve had a bad month.

SPF. An iconic SPF quote.

Oh, Casey, I’m so glad you’re here. I just feel like giving you —

[APPLAUSE] — a little round of applause.

The power imbalance of you being able to press the buttons and me not being able to press the buttons is really starting to bug me.

I really love it. I’m really having a great day. I’m the opposite of —

I mean, I’ve had a bad month.

I’m having a great day.

This has become a Twitch stream from hell.

[TECH MUSIC]

OK, Casey, tell the people what’s on the show today.

This week on the show, what does Donald Trump being allowed back onto Facebook and Instagram mean for the platforms and for our politics, regime change at Netflix, and a video game from the Bored Ape Yacht Club.

All right, Casey, we have got big news. This week, after two years, Meta has decided to reverse its bans on Donald Trump. He will be allowed back on Facebook and Instagram, where he’s been banned since the January 6 riots.

It’s crazy they would do that without even asking us what we thought they should do.

You didn’t get the call?

No. I’ve been waiting.

Well, next time, maybe we’ll get him. So Meta has faced a lot of pressure from both sides, Democrats and Republicans, over this issue since the bans in January of 2021. But on Wednesday, the company announced that it had decided to reverse the bans because it had determined that the risk to public safety had, quote, “sufficiently receded.” The company also added that it would add more guardrails in order to prevent him from breaking its rules in the future.

Nick Clegg, Meta’s Head of Global Affairs said in a statement that, quote, “the public should be able to hear what their politicians are saying, the good, the bad, and the ugly, so that they can make informed choices at the ballot box. But that does not mean there are no limits to what people can say on our platform.”

So this news dropped on Wednesday afternoon and people started reacting all over the place, including Donald Trump himself, who said in a post on Truth Social, quote, “Facebook, which has lost billions of in value since de-platforming your favorite president, me, has just announced that they are reinstating my account. Such a thing should never again happen to a sitting president or anybody else who is not deserving of retribution. Thank you to Truth Social for doing such an incredible job. Your growth is outstanding and future unlimited.”

Yeah. So I love that he says that this should never happen to anyone ever again, unless they deserve it.

Right. So Casey, do we think that he will actually come back to Facebook and Instagram? I mean, Twitter under Elon Musk reinstated Donald Trump’s account, but he has not come back to post on the platform. He’s exclusively posting on Truth Social, where he is contractually obligated to put new posts six hours before they appear anywhere else. So do you think he’s actually going to use his Facebook and Instagram accounts again, or are they just going to sit idle like his Twitter account is?

Well, so earlier this week, “Rolling Stone” reported that Trump is looking to get out of his Truth Social deal, does not want to renew, and has been asking people around him what his first tweet should be when he goes back to the platform. So I think, look, at the end of the day, he’s running for president again. He knows that Twitter was an enormous source of power for him in the run up to both the 2016 and 2020 elections, and he would just be foolish not to use it.

The same is sort of true of Facebook, though for slightly different reasons. I think Twitter was how he controlled the news cycle, and Facebook was a fundraising engine. And so I think the real value to him of being back on Facebook is going to be to go reach out to all of those Trump voters and start getting them to open up their wallets again.

Totally. I mean, that was the secret weapon that Trump had in Facebook. That was where his team would go on and run all of these targeted ads to raise small dollar donations. And so I think this is actually quite a big deal for the 2024 election, not, as you said, because Facebook is where he spends all of his time or Instagram. I don’t see him doing a lot of reels in his future.

But I do think that Facebook, for all of the sort of decline that it’s been in, is still a really powerful fundraising tool. And that’s where Trump really built his war chest, was through Facebook marketing. And so it’s not just that his accounts are coming back, it’s that he’s going to be able to run all of those ads again and use that to raise money for his 2024 campaign. I actually think this is a very meaningful shift in the 2024 campaign.

It is, but it totally depends on how Trump and his team wind up using this account. If you look at how Trump used his Facebook account historically, you’re right, he did post his ads there. But he also cross-posted all of his tweets.

Now, if you assume that Trump is going to start tweeting again and that his tweets look like his Truth Social posts, presumably all of those posts are going to be allowed to be up on Twitter, because I think Elon Musk has made very clear that, for the most part, you can say almost anything that you want to and he’s not going to have his content moderators intervene. But if you look at those same Truth Social posts and you try to hold them to Facebook’s community standards, actually, many of them are violating.

So I think if you’re running the Trump campaign and you have somehow managed to get any sway over him, I think what you say to him is, go tweet whatever you want, but leave the running of the Facebook page to us. And we are just going to strip mine it for as much Boomer money as we can.

Right. We’re going to use Twitter for messaging and Facebook for fundraising. I mean, I think you’re right. I don’t actually go to Truth Social. I frankly can count on one hand the number of times I’ve ever been to that website. But —

Can I tell you a post I did on Truth Social that got a lot of blowback?

Yeah.

I wrote, vaccines are safe and effective. And oh boy, they ratioed the hell out of me over there.

Were you the main character of Truth Social for a day?

I think I was.

So just in the past week on Truth Social, Donald Trump has repeatedly claimed that the 2020 election was rigged and stolen. He’s been attacking Elaine Chao, Mitch McConnell’s wife, with a series of racist names. He has called the FBI the Gestapo, and he has advocated for reporters to be rounded up and jailed.

So any of those types of posts could theoretically get him banned again from Facebook. Meta said in a blog post that Donald Trump is going to be subject to the same community standards as any other Facebook or Instagram user, but that in light of his violations, they’re also going to subject him to heightened rules, him and other public figures whose accounts have been suspended and then reinstated.

So they’re saying that the new rule is that if he posts further violating content, that content will be removed and Donald Trump will be suspended for between one month and two years, depending on the severity of the violation. This looks like a new rule. I have not seen this before.

Yeah. I think that that’s right. And Facebook did say in the run up to this that if they were to bring Trump back, they would introduce a series of escalating penalties. I think it’s difficult to look at Trump’s career over the past eight years and think that he is going to be moderating any of his behavior. But it makes sense that as a social network that is trying to apply one set of consistent rules, you would at least say, well, we’re going to let him try.

But I would also say, they could have made another choice. When you’re running a social platform, it is up to the people running it to decide, well, who do you want to be here? What do you want them to say? And also, what is it within your business interest to let people say?

One of the stories we’ve talked about here a lot over the past few months is how when Elon Musk started letting all of the far-right actors back onto the platform, a very important thing that happened was that they started to lose a huge amount of their advertising revenue. And I will just be very interested to see, what are the knock-on effects of letting Trump come back onto the platform, if indeed he does start posting there the kinds of things that he’s currently posting on Truth Social.

So if it’s not because they think this is going to make them money and it’s not because they have some high-minded commitment to free expression, why did Meta do this?

I think they thought it was in their long-term best interest to give him a second chance. I think that they were so pilloried on the right for removing the president, and they wanted to be able to say to conservative regulators around the world, look, we have acted in good faith here. We laid out what the rules were, and they may not have been clear before. We didn’t have a rule in 2020 that said if you try to overthrow the government you’ll be banned from Facebook, but kind of now we do. And so we’re going to give him a little bit of room to run.

Again, you can look at the Trump post on Truth Social and imagine that he’s probably not going to last too long on Facebook. I do think that, unlike Twitter, Facebook is going to enforce its rules, maybe not as quickly as you would want them to, maybe not in every single case, but I do think that Facebook is going to act here. That does arguably, though, create a really difficult PR headache because you can already think of all the people laughing and saying, well, who could have seen this coming. Oh, well, you’re telling me that Trump violated your policies again?

And it does kind of leave Facebook with its pants down again. But ultimately, I think, if you want to be generous to Facebook, you would say that they are making a principles decision in the face of likely getting egg on their face.

You wrote a couple of weeks ago a newsletter about the possibility that Meta was going to end Donald Trump’s suspension, and you talked about how these protests in Brazil over the Brazilian election might influence their decision. So explain what you wrote and if you’re sort of standing by that in the face of this news.

Yeah. So on January 8, there was a kind of copycat January 6 in Brazil, where supporters of former President Bolsonaro showed up to make clear their displeasure with the fact that their guy had left office. And in Brazil, there is far more aggressive censorship than you would find in the United States.

And the reason I thought all of this was interesting is that here in a country where you had much stronger censorship and where people were being de-platformed in the run up to the transfer of power, you have these riots anyway. And I think it’s important because there is this belief that is unstated but, I believe, present in a lot of coverage of these platforms, Facebook and Twitter in particular, which is that if they would only make the right content moderation decisions, if they would only aggressively eliminate every post that contained hate speech or misinformation, our society would come together again, we would be unified, and we would stop seeing this kind of political violence.

And yet here in Brazil, you have this an example of a country that had taken even more aggressive steps to stop these kind of anti-government agitators than the United States had, and you had the riot anyway. Now, that’s not a case for nihilism. It’s not to say that platforms shouldn’t act. I think there are a lot of good reasons to act. I think you could have made a good case to keep Trump off Facebook forever. But I think we should at least manage our expectations around what we can do with tech policy. And one thing I think you cannot do with tech policy is end fascism.

So I think there’s a couple interesting next questions here. One is, what happens when he inevitably violates some rule? But I think there’s also an interesting question here around how this changes the overall political conversation on Facebook. It’s much harder to find political content on Facebook and Instagram now than it was even just a couple of years ago. So in this new environment, I just don’t know that he’s going to be able to break through in some of the ways that he was when he was on the platform the last time.

It’s such an interesting question because, as somebody who has covered Facebook pretty obsessively for a lot of years now, Facebook as a product right now, it does not feel like it has a heartbeat the way that it did before. And I’m not saying that nobody goes there. Obviously it’s still a massive platform. But at the same time, it does not feel like it was driving the conversation the way that it was in 2016.

But that could cut a couple of ways because it is possible that you put Trump back on there, and it turns out that a lot of the people that are still spending a lot of time on Facebook love seeing him there. And it kind of becomes a phenomenon on Facebook. So I really don’t know how this is going to go on Facebook itself, assuming that he is there and is able to continue to post and kind of does that for a long period of time. But I suspect that, either way, we are going to learn a lot about what Facebook means in 2023 from the fact that Trump is allowed back on there.

Yeah, that’s a really interesting point. I also think there’s this question of what relationship Trump will have if he does come back to these platforms with kind of the right wing media ecosystem that emerged to fill the vacuum that was created when he was kicked off these platforms. I mean, Facebook is still a big platform for people like Ben Shapiro and Dan Bongino, have millions of followers there who are sort of Trump aligned in some ways, but not necessarily the man himself.

So let me ask you, because I’m going to ask you a question that I do not the answer to, which is, how is Ron DeSantis using Facebook and Instagram? Does he have a following there? Is he driving conversations on either of those platforms? Is he raising lots of money?

I have no idea. I have zero clue. Let’s go look up Ron DeSantis on Facebook.

Let’s see if there’s a shirtless Ron DeSelfie.

A Ron DeSelfie. Let’s see if there’s a shirtless Ron DeSelfie on Instagram.

Honored to receive the gold medal from the Union League of Philadelphia. Yeah, it’s just — this is boring stuff. This is standard, glossy marketing. Not a lot of hot takes coming out of the Ron DeSantis Facebook account.

What about Instagram? I mean, that seems to be where the heartbeat of Meta is these days and where people are still going, including younger people. So do you think he’s going to try his hand at some reels or some stories?

Instagram, I think to its credit, feels like a bad place to discuss politics. I don’t want to say there’s no politics on Instagram, and yet I’m struggling to think of a national political story in which Instagram seemed like it was the point of origin.

Totally. I mean, I think that’s sort of my other big question mark around all this is, does it matter? I mean, has the social media ecosystem changed so much in the last two years that what might have seemed like a big deal in 2021 just doesn’t really matter that much in 2023?

I mean, we’ve seen the rise of TikTok and we’ve talked on this very podcast about how the era of big consolidated social media may be ending. So in that sense, maybe it’s not that big a deal that he’s going to be on Facebook and Instagram, even though he’s still got millions of followers there.

Well, and if 2024 turns out to be the TikTok election, guess who doesn’t have an account there.

He doesn’t have TikTok account?

No. I mean, think about it. The Republicans are kind of fenced in, in that respect, because they think that TikTok should be banned. And so I’m very curious to see to what extent they’re going to be willing to let surrogates go speak to that audience if they decide that it’s important to their plans. I guess it’s also true that Joe Biden doesn’t have a TikTok, so those might be [INAUDIBLE].

That we know about that.

That we know about.

He might have an alt.

Do you know, Joe Biden’s secret TikTok account? Get in touch.

But Trump is not banned from TikTok, right? He just hasn’t set up an account. Is he still banned from YouTube?

Yes. And so, interestingly, YouTube, like Facebook, suspended Trump and said, we will reassess this continuously. And when we believe that the risk to public safety recedes, we will consider restoring his account. Now, on YouTube, Trump’s account is still up, he’s just not allowed to posted a video to it. It’s very easy for me to imagine, in the coming weeks, now that Facebook has taken all of the heat for doing this, YouTube is going to say, oh, you know what, we’re actually going to let him post again, too.

And is that the last one? Will he then be back on every platform that he was banned from?

Those are the big three. But I wanted to talk about this idea of the danger to the public having receded. Earlier this month, Naomi Nix at “The Washington Post” wrote a story about a former Georgia election worker named Ruby Freeman, and multiple times, Trump accused her of falsifying ballots in the 2020 election. And her lawyer has said repeatedly, these claims have never been substantiated. And there’s never been any substantiation of claims of widespread voter fraud in that election.

But I bring it up because she was forced from her home. She faced so many waves of harassment that she had to flee. And as much as we like to joke about the fact that no one is on Truth Social, I think it’s important to note that in this case, a real person faced wave after wave of death threats because of Trump using the platform the way he did.

So if you are YouTube and you are gauging the danger to the public of allowing Trump back onto your platform, I hope you talk to Ruby Freeman. And I hope you talk to the other people who have experienced similar waves of harassment.

That’s a great point. I think, obviously, the temperature of the overall political debate has come down, but it’s not a bet that I would make that 2024 will be a calmer year. I think we almost certainly will see more allegations of voter fraud. I think if being suspended did not get Trump to change his ways and start posting in a more responsible, less offensive way, I don’t think the threat of a temporary one – or two-month ban is going to do it either.

Yeah, I think you’re right.

This is an oddball scenario, but is Trump now allowed in the Metaverse? Is he going to be appearing in Horizon Worlds to hold speeches?

Just, like —

A legless Donald Trump just wandering the empty streets of Horizon World, selling commemorative coins?

I feel like I just had a stroke, just visualizing that. But yeah, he’ll be allowed in the Metaverse. And if you see him there, strike up a conversation.

If you see Donald Trump wandering around the Metaverse, please email us, [email protected].

[TECH MUSIC]

When we come back, we’re going to tackle one of the most pressing issues facing America, which is that Casey is having trouble finding something to watch on Netflix.

I’m not alone. There are millions of us.

So Kevin, last night I had my usual experience watching Netflix. Did I tell you about this?

No.

So basically what happens is you open up the Netflix app on your TV, and then you look at the thumbnails. And then they will sort of autoplay 15, 20 seconds, and you say, eh, this seems fine. And then you skip to the next sort of carousel of thumbnails below, and it’s just the same shows presented in a different order. It’s like, What’s Hot, and then Featured, and then For You. It’s just all of the same shows.

And so 20 minutes went by and I thought, I think I’m just going to go read a book. Has this happened to you?

Yeah, all the time. I mean, I am notoriously indecisive, to the point that my spouse will not let me hold the remote and go surfing through Netflix, which I’m going to blame on their content library and not my fear of commitment.

Well, look, here’s the thing. There was a time when opening up Netflix was an event and I felt like I had a stack of shows that I just didn’t have enough time to get through, going all the way back to the days of “Orange Is the New Black,” leading up to the release of the first “Squid Game,” something like that. Lately, it has not felt that way. And as I read the headlines, I have begun to have some concerns for Netflix, which was this pioneer in the streaming movement and now sort of seems like it’s back on its heels.

They replaced their CEO, and they seem like they might be in a little trouble. So I want to know what is happening here. And to do that, I wanted to talk to Lucas Shaw. He’s a reporter at “Bloomberg.” He writes a great newsletter called “Screentime.” And whenever I want to understand anything that is happening in streaming, I read Lucas, and we actually have Lucas here right now. Lucas, thank you for coming to “Hard Fork.”

Thank you for having me. And I must be the only person who doesn’t have that experience or that feeling that there’s nothing to watch. I think it’s because I’m too close to the industry, where I know that there are three new shows coming out every single day. And so I have a list of about 50 shows that I have not watched.

So does that mean that you have the sense that Netflix, at least from a content perspective, is kind of as good as it’s ever been, and that if you had enough time, you would be able to sort of fill your days with really good stuff?

Well, so I should clarify that that doesn’t just apply to Netflix shows. That’s across the industry. But I do think that the sense that the quality of the programming on Netflix has gone way down is a little bit of a misconception.

Now, there’s obviously some truth to it because when Netflix first started, it basically got to license everything from everyone. So you can offer the entire entertainment business’s output on one service, it’s pretty great. But it’s gone through this transition where it started off mostly speaking to the HBO audience, if you will, people who live on the coasts, people who are of a certain means. They have a certain kind of sensibility and they want to watch “Orange Is the New Black.”

It’s now more like a broadcast network. Or if you talk to the executives at the company, it’s trying to replicate the whole cable bundle. And I have friends who are well-educated, smart people, like highbrow programming, but they also love trashy reality. And guess what. Netflix can offer you both of those things. It doesn’t have as many of the highbrow shows as it used to, no question. But it’s got a lot of different things people want.

So one of the truisms in the entertainment industry is that content is king, and I wonder how true we think that is right now. Is the winning streaming service the one that has all of the best, most talked about shows? Or have we learned that it’s more complicated than that?

Oh, I guess I’d answer that question with a question. What do you think throughout the last 10 or 15 or 20 years was the most watched linear TV network?

CBS?

Correct. Would you say that CBS has the most critically acclaimed, social media buzzy shows in the world?

No, it has “The Big Bang Theory.”

Yeah, and seven different versions of something called “NCIS.”

Right. So quality, of course, matters somewhat. Like, HBO’S business is predicated on quality, and HBO is a very — was, at least, a very profitable business. But the most watched networks are not necessarily those that produce the shows that critics love or that people talk about on social media. They produce the shows that people just want to put on in the background or watch while they’re folding laundry, or whatever the hell it is.

I don’t think Netflix would necessarily like people to describe them that way, but they have a lot of programming that fits that hole, too, that’s what you’d watch on HGTV or what you’d watch on Bravo or anything like that. Netflix just has a bigger audience. And most people are not that discriminating.

So let’s take a step back here and really get into the Netflix business for a minute, because between 2021 and 2022, the company’s stock lost roughly 2/3 of its value. It has since recovered some of that, but it’s also been reporting slower and slower subscriber growth. So Lucas, how would you characterize the situation that Netflix is in right now?

It’s at this inflection point or moment of transition for the company where, for 5 to 7 years, it just consistently grew 25 million customers a year. 2020 was sort of the end of that, where the pandemic sets in. Anybody who didn’t have Netflix but wanted Netflix signs up for it. It posts the best year in company history.

Its stock is trading near all-time highs. All of a sudden, it’s as valuable as Disney. And then in 2021, that all comes crashing down. The growth starts to slow.

The executives at first think, well, this is just hangover from the pandemic. We’ve got to work through this. And by the end of 2021, they realize, oh crap, we’ve entered this new phase. We’re not able to grow like we once were. What are we going to do?

And that leads to them doing a bunch of things that they said they would never do, like introducing advertising and cracking down on password sharing. And it raised on Wall Street’s mind some of the most serious doubts it had had about streaming, because for years at that point, investors had been telling all the biggest entertainment companies, you should do what Netflix is doing, because the cable bundle is falling apart. Streaming is the future. You need to do that. Spend as much money as you can. It doesn’t matter if you lose it, just stream, stream, stream. And then Netflix slowing down made them go, huh. Maybe some of these companies can’t just fix all their problems by building a streaming service.

I’m curious, though, some of those break glass in case of emergency measures, like cracking down on password sharing, introducing an ad tier, they sort of went from inconceivable to in the product, in what felt like a very short time. Were you taken aback at all by the speed with which the company sort of decided, one, that it was going to do those, and two, actually executed?

The initial decisions were at the time very surprising, but with the benefit now of hindsight, not so much. It was sort of obvious at a certain point that Netflix would want to introduce advertising. Every great media business, especially in entertainment, has tended to have two revenue streams. You sell subscriptions, then you sell advertising. Why not? Do both.

But both advertising and cracking down on password sharing were just things that the executives who lead the company would say again and again, not interested, not interested, not interested. The speed with which they then executed it or rolled it out I guess surprised me less, just because one of the strengths of Netflix in its time has been it moves very quickly and it is very focused. And that’s one of Reed Hastings’ strengths as an executive, is he would just decide, this is what we need to accomplish and we’re going to put all our resources into it. It’s not like a lot of these other big tech companies that are trying 15 different projects at the same time.

I want to just take a beat on the password sharing thing that you mentioned because this is something that I think a lot of people have questions about. So —

Why, Kevin? Are you borrowing your Netflix password from someone?

No, I actually I have and pay for my own Netflix account. I do borrow other passwords for other streaming services that will remain unnamed. Shout out to my former colleague, who I actually will also not name, whose parents’ HBO Max password I’ve been using.

The number of low-level crimes that are being confessed to on this show.

But starting soon, I guess, that’s going to go away and these freeloaders will be kicked off and they’ll have to buy their own accounts. Is that the idea?

Yeah. Netflix claims that there are more than 100 million people using their service that don’t pay for it and should be. Now, how they determine who is someone who is sort of a just password sharer and an illegal one is really unclear to me.

Do you think that will lead to those 100 million people buying their own subscriptions? Or will they just stop watching Netflix?

I think what’ll happen is that over the next several months, maybe into next year, they’re going to start sending people reminders, basically saying, is this really your Netflix? I think you should be paying for your own. And at a certain point, if the person doesn’t do it, they will get it shut off.

And their hope, obviously, is that they can convert all of those people into paying. I think that’s pretty unlikely. But if they can even get 20 percent of them, that’s a pretty meaningful number of new subscribers for a company that just posted its worst year of growth in 11 years.

I’d like to see them actually knock on people’s doors at 3:00 AM, just be like, hey, we heard you’re sharing your password with your parents. So let’s talk about Reed Hastings. He led this company for 25 years, and then this month he announces that he is stepping down. What did you make of that decision, and what do you think brought it about?

I was not in the least surprised. You talk to people at the company, and it became clear that he had started to pull back a little bit. A couple of years ago, he teased succession by naming Ted Sarandos, who’s sort of their grand poobah in Hollywood, as his co-CEO. He promoted this guy, Greg Peters, who was the Chief Product Officer to Chief Operating Officer, so setting these two up as the clear successors to him.

There was a little bit of surprise that he named them co-CEOs, but look, Reed Hastings is 62. He’s got a bunch of other interests. He wants to go and do something else, and he picked the time right after they delivered some really good numbers because he obviously couldn’t leave last year when the company felt like it was in constant crisis.

So with these two new CEOs in charge, anything else we should expect them to change, besides trying to kind of shore up some of this what, frankly, just seems like low hanging fruit to me, turn more of your non-subscribers into subscribers? What else do they want to do with this company?

I would not expect any dramatic changes in the short-term because, look, their advertising service is brand new, and so they have to take it from something now that’s got, at most, a couple of million users into something that has tens of millions of users and generates billions of dollars. They’ve never done advertising before, so they’re building a whole advertising team in house using these two executives from Snap, Jeremy Gorman and Peter Naylor.

The password sharing thing hasn’t even really started yet. They’ve been testing it in Latin America, so that’s a big priority for this year, next year. And then their sort of pie in the sky initiative is gaming. They’ve been buying up a bunch of gaming studios. I think they released something like 30 to 40 games last year, mostly really free mobile games that don’t require a ton of attention.

There’s been some talk about going into PC gaming. I don’t think they’re going to try to make games for your Xbox or anything.

I played a trivia game on Netflix with my family over the holidays. It was delightful.

Was it actually good?

Yeah, it was fine.

Part of me feels like, instead of making 40 games last year, why not try to make one good one? It just seems like a quality control issue to me, but I don’t know.

Wow, what a critic.

Well, it’s sort of the Netflix thing. I mean, I think of it in the sports documentary space. They have this big success with the Formula One show, “Drive To Survive,” and now they’re making a sports documentary set in basically every sport you could ever find. And some of them will be good and some of them won’t.

But getting back to the quality issue, Netflix always has this thing. You guys know this from reporting on these different tech companies or kind of tech/media companies. You watch one video on YouTube, and it feeds you a million things that are like it, right?

Netflix has sort of taken that model for entertainment. And I’m not sure it totally works, but it seems to be working well enough for them.

I want to talk about some of the challenges that are facing these other streaming services because all of these pressures that Netflix is under, it is maybe even more true of a Peacock or a Paramount+, some of these other folks. So Lucas, when you sort of zoom out, as somebody who does subscribe to most of these services to watch one show and then I never remember to cancel them, what is actually going to become of this sort of wider landscape? And what are you seeing there?

The anticipation is that there will be a lot of consolidation. I mean, there already has been some in that Disney bought entertainment assets from Fox, Rupert Murdoch basically kind of cashing out on everything he’d built in entertainment. Viacom and CBS, which used to be separate, came back together under Shari Redstone.

But there’s an expectation that there will be more because you look, you have a bunch of these smaller companies, let’s say, like an AMC Networks, that had a brief moment in the sun with “Breaking Bad” and “The Walking Dead” and “Mad Men,” and it’s now got a bunch of cable networks that are declining and no real credible alternative on the streaming front. You have companies like Paramount, again, very dependent still on the kind of traditional cable networks, which are in decline. They’ve built a streaming service that has 50 million subscribers or so, but it doesn’t make money and it’s not quite at the level of competing with the big ones. And so some of those are expected to combine in some way.

Comcast, which owns NBCUniversal and has Peacock, Peacock, sort of the butt of all jokes in entertainment, because it’s the streaming service that it seems like almost nobody watches. But Comcast, as a larger company, is a massive company, biggest internet and TV provider in the country, so there’s an assumption that it will want to stay in entertainment or spin out or do something. And that’s honestly where Netflix kind of comes back in. A lot of people wonder, will Netflix want to swallow up one of these other companies, merge with, get bought by? Because if it hits a ceiling in streaming, it is a little bit limited in being sort of a one-business business.

Netflix executives for now say that they’re not interested in buying a library, which might help with your endless scroll problem. They’re not interested in merging or selling. But I think we’ll see what happens sort of on the other side of this macroeconomic wonkiness because nobody wants to sell or merge or do anything when their stock price is in the toilet.

Right.

And do you think this consolidation that you’re predicting, is that going to result in lower prices for the consumer? Because one thing that I a lot of people feel is like I used to pay $120 a month for a cable subscription. And then I cut the cord, and for a while it was cheaper because I was paying for cable, internet, plus Netflix, and maybe one other service, Hulu or something, maybe spending $50 a month. But then you add Peacock, then you add Paramount+, then you add Disney+, then you add ESPN+ if you’re a sports fan, and all of a sudden you’re spending way more on streaming services every month than you would have spent on the old cable bundle.

So is this consolidation going to bring that cost down? Will there be someone who comes along and re-bundles a bunch of streaming services and offers it for a cheaper price? Or do you think that the price that I and other people are paying for these services is just going to continue to rise?

I think it’ll keep going up. There’s just —

Come on. It’s crazy. I mean, before you answer that question, it’s crazy to me that you could have 50 million subscribers to something and still be losing money. Is this business as bad as that fact makes it seem?

Well, you have to think about how much they’re spending on producing original programming, plus licensing from others and from themselves. A lot of these businesses used to be built on a model where they would have a studio, and that studio would sell some to the TV networks or streaming services within your own company, but it also made a lot of money selling outside of the company. And a lot of these media companies stopped selling outside because they got burned by Netflix, where they licensed Netflix all these popular shows. Netflix builds a big business that makes them look bad. It leads to the downfall of cable, which was their cash cow. And all of a sudden, they’re going, crap, maybe we shouldn’t be licensing all of our movies that we put in theaters to show on Netflix after that.

But then instead of making hundreds of millions of dollars a year selling that stuff out to Netflix, or what used to be HBO, you’re paying yourself. So there’s no profit in it. And so you need it to get really big to make money from it. And I think we’re going to enter this period where you’ll see media companies keep the crown jewels for their own services, but will license out more regularly things to other people, which will only make it more confusing to know where things are.

As for the pricing of it all, we’re already seeing the prices go up because these companies are under pressure. So HBO Max just got more expensive. When it combines with Discovery+, it’s going to be probably $20 a month. Netflix has been raising prices for pretty much every 18 months for the last eight or nine years. Disney+, or Disney with its three services — Disney+, Hulu, ESPN+— just instituted a big price increase. And if there’s more consolidation, I would assume they’ll say, well, you’re getting more than you used to. That’s the whole Netflix argument. Well, we only raise prices when we deliver more value to our customers.

We sort of started this conversation talking about all the challenges that Netflix has. But I wonder if there’s a chance that as some of these businesses consolidate, or frankly, maybe even close down, in that world, is Netflix able to once again begin licensing that content at pretty attractive prices in ways that bring in more subscribers and winds up kind of winning in the end? How likely do you think that scenario is?

Well, it’s worth remembering that even though a lot of these other companies stopped licensing as much, they still license plenty. So “Abbott Elementary,” a very popular show on the ABC TV network, you can also watch on Hulu, is produced by Warner Brothers, which is part of Warner Brothers Discovery. “The Crown,” which is one of Netflix’s hit shows, is produced by Sony. There’s a bunch of that exchange.

But there is an expectation that as these companies need to think more about profits and get a little bit less dogmatic about keeping everything in-house that there will be titles available on the marketplace, and Netflix will continue to be able to both produce their own and license from others. I don’t think they’ll be able to take a popular show that was on Disney+ and five years later, it’s available on Netflix. But I do think that some of that more traditional structure of the business will work.

And then the other question for Netflix that they have said no to, but is, will there come a point at which they want to buy one of those companies? There are a lot of people who feel like when their stock was trading at $600 a share, $700 a share, they should have bought a company like Paramount, which has a gorgeous lot in Los Angeles and a very large library. And sure, it has cable networks they don’t want, but they could figure out what to do with that.

Well, it’s a fascinating set of things to think about. I think really my only last question, Lucas, is what you think I should watch on a streaming service tonight?

Have you seen “Bad Sisters?”

I. Haven’t this is on Apple TV+, right?

Yeah. It’s good.

Yeah?

Did you ever watch the Amazon show, “Catastrophe?”

Yeah, that was great.

The same creator, Sharon Horgan.

I don’t have Apple TV+. Can I borrow your password, Casey?

All right.

Lucas, thank you so much.

Thank you, Lucas.

Yeah. Thanks for having me.

[TECH MUSIC]

Coming up after the break, Kevin makes me play a video game.

Casey, I want to take you in a time machine.

Strap me in.

All right, we are going back to the year 2022.

I remember this year.

It’s a very small time machine. It’s not very good.

It was the year that the “Hard Fork” program was created, if I remember right.

Yes, and some other things, too, one of which was the popularization of something called the Bored Ape Yacht Club.

Yeah.

Tell me what you remember from the year 2022 about the Bored Ape Yacht Club.

I remember people saying that it was the new Disney, that it was the start of a world where you are going to be able to own the intellectual property that served as the foundation of your favorite movies and TV shows. And perhaps more than anything else, I remember the iconic performance of Eminem and Snoop Dogg at the VMAs, where somehow the Bored Apes made an extremely weed-heavy appearance.

Right. So the Bored Ape Yacht Club is an NFT club. This was part of the big last crypto boom, and the Bored Apes were these JPEGs, these images, these cartoon apes that were turned into NFTs. There were 10,000 of them, and they were sold. And they became a total cultural phenomenon.

Celebrities were buying these. Like, Jimmy Fallon and Steph Curry and Gwyneth Paltrow all had Bored Apes. There’s this iconic, awkward interview between Paris Hilton and Jimmy Fallon on “The Tonight Show” where they’re discussing their Bored Apes.

And this Bored Ape Yacht Club became kind of a crypto social club. They would host parties. They would come out with lines of merchandise. They raised $450 million venture capital round, led by Andreessen Horowitz.

Wow.

This Bored Ape named Jenkins the Valet actually signed with CAA, the big Hollywood talent agency.

Well, the ape didn’t sign with CAA.

The ape signed with CAA.

How can an ape sign with CAA?

Well, I don’t the mechanics of the contract.

All right.

But by the way, these Bored Apes, some of them were selling for millions of dollars apiece. So people were paying through the nose to join this social club. And the idea was that it was going to expand into all kinds of Bored Ape restaurants, concerts that you could only attend if you had a Bored Ape in your crypto wallet.

Right.

But amid all of this hype and frenzy, the crypto market crashed. The whole bottom of the industry fell out. And you might ask, well, what happened to the Bored Ape Yacht Club? Did it go away?

I was just about to ask.

And the answer that I have for you is, no, they did not go away. In fact, they’ve been making something. It’s a video game.

That’s great, because I love video games.

So I thought we should talk about this game, and then actually that you should try to play it, not because I think it’s going to be a mind-blowingly awesome video game in its own right, but because I think it’s a really good way to assess the state of the high-end NFT media market a year after the crash.

So I thought, let’s check in. Let’s just see what the Bored Ape Yacht Club has been up to and maybe get a sense of what it’s like to be a crypto true believer in 2023.

All right.

So technically this game is only for people who own Bored Apes or Mutant Apes, which is a spin-off NFT collection. But I did manage to wrangle access to it. And so I want to show it to you. But first, I want to watch the trailer for this video game together.

All right.

So let’s see.

So the Bored Apes live in a swamp. I guess. I’m not sure about their habitat.

Oh my God.

So this video game is called “Dookey Dash.” Essentially, the premise of the game is that there is a key that will unlock something that has ended up lodged in the rectum of someone named Jimmy.

Who is an ape.

Jimmy’s a. Monkey and we’re going to go to retrieve said key by swimming through the sewers, up through the toilet, into Jimmy’s butthole.

The only way that any of this makes sense is if the majority of the Bored Ape Yacht Club owners are in eighth grade.

And I doubt they are because many of them are millionaires.

I mean, OK, let’s keep going.

So before I let you play this game, I want to just tell you what lengths I had to go through to get access to this game, because it was not a simple thing. So in order to play this game, you have to get something called a Sewer Pass. And to get a Sewer Pass, you have to own a Bored Ape or a Mutant Ape and have it in your crypto wallet.

And is a Sewer Pass just a second NFT, basically?

Yeah, it’s an NFT. And you can buy and sell them on the open market. So actually, Sewer Passes right now, some of them are selling for thousands of dollars because people want to play this video game.

Although, as always with crypto, you sort of don’t know how many people actually want to play the video game and how much of it is just wash trading.

Right. So I poked around a little bit on Twitter. I did find some Bored Apes. Some of them volunteered to lend me their Sewer Passes.

But then it got complicated, and they were asking me to connect my crypto wallet. And these were anonymous people with monkey pictures on Twitter, and I was pretty sure they were going to end up stealing all the contents of every bank account that I own. So I ended up just going to Yuga Labs, the company behind the Bored Ape Yacht Club, which lent me a Sewer Pass for the express purpose of testing out this game.

Amazing.

So I’m going to pull up the website here, “Dookey Dash.” You do have to connect your crypto wallet in order to play.

Because they need to verify that you have the Sewer Pass.

Right. So the high score on this game, whoever gets the highest score in the time that this game is active, will get some kind of special NFT that could be worth millions of dollars, or could be worth nothing. But people are taking this very seriously. There are all kinds of YouTube videos out there where people are giving tutorials about how to play “Dookey Dash.” I actually saw one with a guy who had hired a professional gamer to play “Dookey Dash” under his Sewer Pass so that if he got the highest score, he would get the special NFT prize.

Once again, we just come back to this idea in crypto that everything is just about cashing out as soon as you can. It’s just about — this might take the shape of a game. But the real reason that it’s interesting is that, well, maybe there’s a few hundred thousand dollars for you at the end.

Such a skeptic, spoken like a man who’s never played “Dookey Dash.” So I just want you to come around to my side of the table here.

Oh, we’re having technical difficulties here.

So I’m looking at a black screen, and there’s an animated J and an M, which I guess stands for Jimmy the Monkey. And it says, Press to Start.

[VIDEO GAME MUSIC]

All right, so I’ve clicked. And I’m now looking at the “Dookey Dash” logo. I’m agreeing to the terms of service and privacy policy, which I’m glad I’m doing on your laptop, because I assume this is downloading malware.

And now it says Connect Your Wallet. So we’ll do that. And have you done this yet?

Yeah, yeah. Let’s do MetaMask.

MetaMask is a crypto wallet.

And my seed phrase is — no, I’m just kidding.

I will avert my eyes as you type your seed phrase into your MetaMask wallet. Already this is significantly more complicated than just playing any game on your phone.

I’m sick of your skepticism, Casey. I want you to approach this with an open mind.

All right.

No, that’s not the right password.

This is another fun moment in the crypto journey, is when you can’t actually remember your password to connect your wallet you get your Sewer Pass.

Oh, what is going on?

God damn it.

That’s great. Now, in just three more failed password attempts, Kevin will be locked out of his bank accounts forever. So hold a good thought.

OK. I think we’re good. OK. Whew. We’re in.

All right. Choose the Sewer Pass you want to play with. We have one Sewer Pass, which we will validate.

There was an animation of a butthole closing. That is not a joke. And the butthole is open. And I’m now going to get some explanations.

All right. I am going to be hurtling through a tunnel looking for a key. Use your trackpad and mouse.

It’s like, if you’ve played “Temple Run,” it’s basically just “Temple Run.”

Yes. All right, so I’m sort of moving — I’m moving my finger on the trackpad to try to dodge obstacles as we go through this tunnel.

And I just hit some sort of sewer grate. Is there a way to duck?

Just move. It’s three-dimensional, so you can go up and down.

Oh. Got it.

And then if you click —

I see.

— it gives you a little boost.

You can click what? Oh. Oh, OK. All right, I successfully ducked under a sewer grate.

And now let’s see if I can boost through some wooden boards here.

I did. I boosted through some boards.

I boosted through one set of boards directly into another set of boards, and it was game over.

All right. So you got total score of 931. Yuga Labs told me that the highest score of anyone who’s played this game is 600,000, roughly, so you’ve got a little ways to go. But I have faith in you. You want to try again?

Yeah, let me try again. So.

Oh my God. All right. So I’ve just died for the fourth time. And I have to say, my interest in this game is now completely spent.

But for reasons I think it makes sense to talk about quickly, I think one reason why people are down on crypto in general is that there is a sense that when you financialized everything, when everything is about money from start to finish, you really kind of take the heart out of it. And the crypto people love to talk about this stuff in terms of democratization and expanding access to things, and what if we all owned a piece of every Disney character, that sort of thing.

But then you play a game like “Dookey Dash,” and you see what it really is, which is kind of a rip off of something from Web2 World, sort of larded up with financial tools, and now it will be primarily of interest to people who hope they can make a lot of money off of it.

Right. I mean, this is a video game that I think it’s fair to say is underwhelming. It’s not all that fun to play, and yet it’s getting all of this play because people are interested in making money through it. So it’s like the actual video game is almost an afterthought.

I’m surprised that they pandered as hard toward middle-schoolers as they did. It feels like a 40-year-old’s idea of what a 13-year-old would love. But that’s so strange to me, given that I don’t think that it’s really the Generation Alpha crowd that is going to be interested in this stuff.

Totally. I mean, I just love Marc Andreessen, the famous co-founder of this venture capital firm Andreessen Horowitz, very influential person in the tech industry, came out with this blog post a few years ago. It was called, “It’s Time To Build,” basically making the case that our society had become obsessed with these frivolous, small innovations, and that we collectively just needed to start thinking bigger and investing in infrastructure and building new hospitals and schools and next-generation biotech labs, no more frivolous things.

And then his firm goes and leads a $450 million round in the parent company of the Bored Ape Yacht Club. And they take that money and use it to try to build out this NFT media empire, including the video game “Dookey Dash.” So when Andreessen Horowitz says, it’s time to build, I guess what they’re thinking about in part is a video game where you travel through a sewer to get to Jimmy’s butthole.

Right. Or it’s just time to build like financial engineering products wearing the disguise of a media company.

Right. I mean, when I saw the trailer for “Dookey Dash” going around, it felt like an artifact from a different era of the tech industry, which wasn’t long ago. I mean, this was literally less than a year ago. Bored Ape Yacht Club was valued at billions of dollars by investors. People were seriously, seriously talking about it as the future of media and entertainment. And it just now feels like it’s from another universe to me.

Yeah. I mean, before we started the show, the two of us did watch the performance at the VMAs of Eminem and Snoop Dogg, and the whole thing was just a brand activation for the Bored Apes. And there was this sort of cartoon animations.

And it was very similar to “Dookey Dash,” where it’s like, young people seem like they like weed. Let’s put a lot of weed in here. But I think the teens have pretty much seen through this, and it doesn’t feel like this is where culture is happening. And where culture is actually happening is on TikTok, and so they’re going to spend their time there.

Right. There was this whole effort to kind of bring crypto to the mainstream. There was an effort to tell stories about crypto being used in the developing world as sort of an instrument of financial liberation, and it was sort of this effort to get away from the image that crypto had at the time, which was the crypto bro. And so part of how you could have done that is through these sort of NFT franchises, which actually were quite popular in their heyday. I mean, some crypto stuff was all smoke and mirrors from the get go.

I did go to NFT conferences and meetups. There was real energy there in the culture, but it’s just so sad that the way that they chose to use that influence was to make video games like “Dookey Dash.”

Yeah. I mean, it’s just sort of so scatological and feels almost aggressively putting. One thing I’ll say is, this game is very silly and we’re having fun talking about it. It can be a good idea in tech to do silly things.

It can also be a good idea in tech to do things that look stupid to a lot of people. One of the most famous things that looked stupid to a lot of people was Airbnb. What, strangers are going to stay in my house? No one would ever agree to that. Now it’s a massive, multibillion dollar public company.

So I’m sort of all in favor of people trying to do very silly things. But if it’s just kind of — if the silliness is just a thin veneer over something deeply cynical, then I think you’re probably not going to have a lot of success.

Or maybe you’re wrong and “Dookey Dash” becomes a trillion-dollar franchise and the Bored Ape Yacht Club acquires Netflix out of bankruptcy.

I would not even bet a borrowed Sewer Pass that that is going to happen.

[TECH MUSIC]

“Hard Fork” is produced by Davis Land. We were edited this week by Shreeya Sinha and Paula Szuchman. This episode was fact checked by Caitlin Love.

Today’s show was engineered by Alyssa Moxley. Original music by Dan Powell, Elisheba Ittoop, Marion Lozano, and Rowan Niemisto. Special thanks to Hannah Ingber, Nell Gallogly, Kate LoPresti, and Jeffrey Miranda. You can email us at [email protected].

That’s all for this week. We’ll see you next time.

[AIR HORN]

God, why didn’t I see that coming.