A (2:31)

And sell it on depop.

B (2:33)

Listed in minutes with no selling fees. And just like that, a guy 500 miles away just paid full price for your closure. And right on cue.

A (2:41)

Hey, still got my hoodie?

B (2:43)

Nope. But I've got tonight's dinner paid for. Start selling on Depop, where taste recognizes taste list. Now with no selling fees, payment processing fees and boosting fees still apply. See website for details.

A (2:57)

What does it really mean to be a neighbor? It's just everyday people. You know, it's just people who are retired. They have a couple hours in the afternoon, so they're gonna do patrols. And it's people who are, you know, real estate agents driving around like, trying to track how ICE is moving and alert neighbors when things are not safe.

B (3:17)

The rise of mutual aid in times of crisis. That's this week on Explain It To Me, new episodes Sundays, wherever you get your podcasts.

A (3:31)

All right, we're back. So over the last couple of years, there has been this slew of lawsuits against AI companies all about the way that they've trained their models. These AI models, these large language models, require just a vast amount of data. And to get all of that data, these companies are going and getting whatever they can, right? There was, there was lots of reporting a couple of years ago about OpenAI essentially transcribing every YouTube video on the planet and then feeding all of that into its models. There's been a lot of talk about books in particular, a lot of authors and publishers suing these companies over the way that they are acquiring and then actually using that data to train their own models. So Will Arimas at the Washington Post wrote a story with a couple of his colleagues about this thing called Project Panama, which was an anthropic project to digitize and use a. Just a unbelievably staggering amount of books to train its models. And it's not the only company doing this, but we have a lot of interesting data, thanks to some newly unsealed documents in these cases. Will and his colleagues went through all of it. And so I'm going to make Will explain to me how this works and why it's become such a big part of our conversation about AI. It's a really fun conversation. Let's get into it. Will Oremus, welcome to the Vergecast.

C (4:40)

Thanks for having me.

A (4:41)

It's snowy, it's icy. You've made it. We're all. We're all. We're. We're. I feel like everyone's Internet is just hanging on by a thread right now.

C (4:47)

I think everyone is just hanging on by a thread, period. I've. That's true. I'm joining you with a little ice rash on my face from a minor sledding incident yesterday. Uh, it's all good. I'm ready to go.

A (4:58)

Yeah. My kids have been home from school all week and I am just very slowly coming outside of my brain and body as the days go on.

C (5:05)

Mine is in the house as we speak. So if you hear any squeals of delight or cries of terror, it's him in the background.

A (5:14)

Don't worry about it. Everything's fine.

C (5:15)

Exactly.

A (5:16)

So you were part of a team that wrote this story for the Washington Post about Anthropic and this big book digitization project they underwent that I think gets at a bunch of the most interesting things going on in AI. There's. There's a piece of this that is like how AI models actually get made that I think people largely don't understand that this, I think, elucidates in a really interesting way. And it also gets to a big galaxy brain theory I have about AI that we're going to talk about at the end. I'm very excited about it.

C (5:44)

I'm looking forward to that.

A (5:45)

Let's just start at the beginning here.

B (5:46)

What.

A (5:47)

What was Project Panama? And why is this something that Anthropic, a while back, threw real resources into?

C (5:55)

Project Panama was something that Anthropic started in late 2023 or early 2024, with the goal to, quote, destructively scan all the books in the world.

A (6:07)

Such a brutal sentence.

C (6:09)

Yeah, it's really unfortunate. It sounds like something a Bond villain would set out to do. They didn't actually want to destroy all the physical books in the world. Just one copy, one copy of each. So what they were trying to do though, is to books and the destructive part comes in with the way that the books were scanned. It's more efficient to slice the spines off and scan them. So you've just got a stack of pages instead of, you know, have you ever tried to spread out a book on a, on a Xerox? It's like a little difficult. So they just cut the spines off. I think there was some indication in the court documents that there would, you know, a recycling truck would come and back up to the warehouse afterwards and get what was left of the books. But the point was that they wanted to digitize all the books. And the reason they wanted to do that is to feed the content of those books into their AI models, which power the popular chatbot.

A (6:57)

Claude so why books? I think a thing you discovered, and a lot of this information we should say came out in court documents based on, I mean, there's just a million lawsuits about all things AI right now. But one of the big ones I think that you got a lot of these documents from is a sort of broad suit from a bunch of publishers and authors saying that their books and works were used illegally in the creation of these models. Is that right? That's where this data comes from?

C (7:23)

Yeah, that's correct. And so you say, you said, why books? And I think the first answer to why books is because everything, right? It wasn't just books. They wanted to, you know, the AI companies wanted to vacuum up everything that's published on the Internet, everything that's published in government records, every, every video, every photo, every piece of art, everything, right? They wanted it all because they're trying to build general super intelligence and they wanted to know everything. But the second answer to why books is because books were specifically seen as a source of really high quality on average. I mean, there's crappy books out there, as we all know, but like, on average, books are high quality content. They've been vetted by someone, someone went to a lot of effort to write them, someone deemed them worthy of publishing. They might be fact checked. They might contain information that you can't get anywhere else, you know, that's not on the open Internet. And so Anthropic, there's some evidence that Anthropic's executives saw books as a way catch up and backing up for a second. I mean, Anthropic is an underdog in this massive AI race to control the future. Of technology with bigger dogs like OpenAI, like Microsoft, like Google, like Meta. And Anthropic saw books as a way to kind of bootstrap their way to the state of the art in terms of the quality of their models.

A (8:46)

Okay, so I do. I find the quality piece of this really interesting because it does seem like if you were to just train a model on, I don't know, YouTube videos, which is a thing that has been talked about a lot, right? If you were just to transcribe and feed every YouTube video in existence into an AI model, it would learn to talk in kind of a very specific way, and it would learn to talk in a very different, very specific way if you just fed it the content of social media posts or blogs or. I'm just thinking about the things that are sort of readily available on the Internet. Like if you just train a model on Tumblr, it would talk like Tumblr. And books, it occurs to me, are if you want something that speaks in coherent sentences, that maybe books are the right place to start with that at the top of it, you have something that is designed to be read and consumed and understood by lots of people that has been through a whole process to make sure that that's okay. So in a way, it seems like it is kind of the pantheon idea of how you want to teach these chatbots to communicate, right?

C (9:53)

Yeah, I think so. And. And you know, to be clear, Anthropic wasn't the only company that thought books were important. But I do wonder if they're the emphasis they put on books. And this is pure speculation on my part. I do wonder if the emphasis they put on books is one reason why a lot of people swear by Claude as the best writer out of the chatbots.

A (10:10)

You know, interesting.

C (10:11)

Who want to use AI for writing often will say, Claude's better than ChatGPT or. Or the other options out there.

A (10:18)

That's a good. That's a good theory. So walk me through the process here. I think one of the things I just kept thinking about reading your story is like, if I'm at the beginning of this journey and I'm like, okay, I want to get a bunch of books into my model, I literally don't know how I would start. So where. How does one. First of all, I think I assume step one is acquire many, many, many, many books and put them all somewhere. How do you do that if you're Anthropic or anyone else?

C (10:44)

Well, I don't know if this is the best time to bring this in but, but the way they actually started was not by acquiring real physical books the way they started, which is the same way that according to court documents, OpenAI is, is alleged to have started, which is by pirating vast libraries of already digitized books. These are called shadow libraries. They're available online in shady, shady corners of the torrent world. And there are allegations in a separate case against OpenAI that one of the OpenAI executives named Ben Mann, back I think back in 2019, like way before the ChatGPT boom, downloaded the entirety of this famous shadow library called Libgen from a torrent site.

A (11:32)

Right. Libgen, I should say, is like, if you imagine what the Pirate Bay is, it's that for books like it literally there's a, there's a pirate ship on the website. Like they're, they're not, it's not unclear what this library is trying to do. Right, right.

C (11:44)

And I mean, the backstory of Libgen in particular is fascinating. We don't need to go too deep into it, but it has its roots in Russian samizdat, you know, when academics were trying to get access to verboten materials to evade censorship. But nowadays it's traded, it's traded around online as this vast, like, probably illegal repository of millions of digitized books. And so OpenAI allegedly downloaded this. And then the guy who allegedly downloaded it at OpenAI was, was one of the people who left OpenAI to co found Anthropic. And so then he gets to Anthropic and he does it again. He downloads all of Libgen again at Anthropic and there's like the court documents, you know, there's screenshots of his browser with this, you know, with the torrent site open and like Libjen partway downloaded. And so that's how they started. It's just straight up piracy. I don't know if they need a legit in there. I think they've like, they're not really contesting it. It was basically straight up piracy.

A (12:41)

It's all over. Like their emails to each other that this is a thing that they're doing. Yes.

C (12:44)

And that is.

A (12:45)

Yes, that is a fairly accurately stipulated part of what happened here. Yes.

C (12:49)

And again, our story is about Anthropic because that's, that's the company where we found newly unsealed court documents that shone a light on this big project Panama to acquire real books and scan them. But once again, I just want to emphasize that like, as far as we know, all of the AI companies were Trying to get their hands on books. And there's evidence that more than one company was downloading these pirated shadow libraries. And not just, not just Anthropic.

A (13:13)

Okay, but you gotta tell me about the physical books. Will. This is the thing I still cannot wrap my head around. I understand downloading lots of things illegal on the Internet. I've done that. We've all done that, right? Like I get, I get how to download things on the Internet.

C (13:24)

I've never done that. You were like, I've never downloaded.

A (13:25)

No, never. That's right. We should be clear. This is not legal advice. But I literally, I just found myself being like, okay, if I, if you just came to me and were like, David, you have unlimited resources. Go get me 100,000 books as fast as you. I straight up would not know where to begin. And one of the things I thought was so funny about this is I think where anthropic began was by hiring the guy who had done it already. Which leads me to believe there is like a how to buy books by the million expert out there in the world who is just running around doing this for people.

C (14:00)

I love these venture backed tech companies. They're like, okay, we need to figure out how to scan a ton of books. Let's go hire the guy who literally oversaw the Google Books project. Like the biggest books project in the scanning project in the history of the world. Let's just go get that guy on the payroll and let him figure it out. So they hired this guy, Tom Turvey. This is why David, this is why they did not hire David Pierce. Because you wouldn't know where to start. But Tom, I would have, I would.

A (14:23)

Have not done a good job. I will say I got to the last round of interviews for that and then they were like, how do you do it? I was like, I don't know. And then that was it, man.

C (14:30)

Next time, next time. So Google Books, by the way, non destructively, as I understand it, non destructively scanned books. They, they use this much slower process involving robots to go through and scan all the pages without breaking the spines. It's kind of like fascinating. I went down many rabbit holes in the course of, of reporting this story and that was one of them. But in this case they didn't feel like they had time for that. There's also a difference between Google Books was scanning books from libraries, right? And so this is going to include rare and valuable books. You don't, I mean if you're a library, you don't really want a company going through and slicing the spines off, all in this case what Anthropic did. There is some evidence that Turvey did a bit of outreach to publishers and authors, like, hey, could we. What would happen if we wanted to license your work, you know, use it to train our AIs? Could we, would you be open to that? And pretty quickly he decides that's not viable, it's going to be too expensive. A lot of authors and publishers aren't open to it. Even if they are like, it's not going to work at the scale and at the speed that Anthropic needs, presumably the scale and the speed they need to compete in this, in this all out race to build super intelligence first. And so instead he turns to these vast used book warehouses, like Better World Books, which I believe has an agreement with the Internet Archive. There's another one called World of Books that I think is based in the uk. I apologize if I'm getting them mixed up, but these are places that actually literally have hundreds of thousands if not millions of books. Mostly not rare or super valuable books, I should say. So destroying them isn't necessarily a tragedy for humanity. And then they're super cheap. He buys them in bulk in giant amounts and then finds these scanning shops that can do it super fast and get, I think at the very least they got, there was one order in the court documents with a vendor who was supposed to supply them something like half a million used books at once.

A (16:29)

Wow, that is nuts. So, okay, let me, let me tell you the picture that's in my head of how this works and you tell me how correct I am. The way that I picture it is. Do you know those money counting machines that you just take a stack of bills and sort of stick it into and it just like through it really fast and sorts them all out for you? I'm imagining that essentially, but for a book. And so you get a thing that slices off the binding. So what you have is just a giant stack of papers. You feed that stack of papers into this machine and it just rapidly slots them through and scans them one by one and out. You have a digitized OCR book.

C (17:03)

That is, that's my understanding as well. And I should say I didn't observe this happening. I'm, you know, we're, I think we're both extrapolating from what was in the, in the court documents and, and the files, but that sounds basically right to me.

A (17:16)

Okay. They called it a hydraulic powered cutting machine, which is another of the extremely good phrases that come up in this, we have, we have shadow libraries, we have destructive scanning and we have hydraulic powered cutting machines. Like there's just. This all feels very low stakes bond villainy. Like you said, there's a lot going on here.

C (17:32)

Right?

A (17:33)

Okay. So then you end up with whatever, some. It seems like somewhere between hundreds of thousands and millions of books worth of stuff that goes into these models at the end of the process.

C (17:43)

Yeah, that's. The exact numbers are still redacted, but we're extrapolating from the fact that some of these orders were for hundreds of thousands of books at a time.

A (17:52)

Okay, got it. And then, you know, fast forward to these models start to ship, people start to use them and people start to find their own work in them. And then you get to these lawsuits. And so my biggest question for you here is we've talked over time about a lot of the different ways that these companies have gone and gotten material. And I think your point about Anthropic's experience of saying we went out and we asked people if we could buy it or license it and found it to not be expedient. But ordinarily what happens is then you don't do the thing. And what they. All of these companies. And like Anthropic is not uniquely guilty of this, all of these companies just did it anyway and it became the thing that happened. And I want to come back to that because I think this gets to the galaxy brain theory I'm going to throw at you in a minute. But is there something different about what happened to and with books than what happened with all of these other sources? We've talked a lot about, you know, source material from all kinds of different stuff on the Internet being fed into these models. And there are a lot of questions about it. But it does feel like the way that books are being both discussed and actually litigated is different. Is it different?

C (19:01)

Yeah, I think it is a little different. And one of the reasons is because so much of what went into these AI models particularly at first was stuff that was just available on the Internet. Right. That was the low hanging fruit. And if your stuff was just available on the Internet, it's not that you couldn't possibly have a case, a copyright case. There have certainly been lawsuits about that stuff. But I think that there's a sense that you have a stronger case if you had something that was supposed to be bought. Like you weren't supposed to be able to just get it for free, and they got it for free somehow anyway, without your permission. That's seen as, I think, a stronger copyright case. And in fact, we can get into this a bit. But in some of the court rulings so far, that in fact has turned out to be the case. The judges in both the Anthropic and the Meta case, albeit for different reasons, both found that there that the actual training of the AI model on the book content was fair use, or at least that the plaintiffs, in Meta's case, at least the plaintiffs had failed to show that it wasn't fair use. So the part that everybody thought that these lawsuits would really revolve around was this unauthorized training. And that's the part that at least two judges so far have been like, actually, that part was, okay. The problem was how you acquired these books in the first place. So I think that is what makes books different is the fact that they're difficult to obtain and that you had to go to these wild lengths to get them in the first place.

A (20:29)

Interesting. As opposed to, you know, there's there, there's a thing that someone wrote that is just at a publicly available link on the Internet that the legal definition notwithstanding, that feels different from a book that you ordinarily would have to go to a store and buy.

C (20:47)

Yeah, exactly. And then there's in between stuff. So, like, one of the most high profile AI copyright cases is New York Times versus OpenAI. And in that case, there's been a lot of discussion about how did OpenAI get around the New York Times paywall. Right. Like, what did they do to circumvent that in order to get access to all the New York Times material?

A (21:05)

Okay, suss out the difference here for me because I could sort of see in the piece, you spent a lot of time reckoning with where we are on the legal spectrum here. Is it illegal to train the model on this information full stop? No, because it is transformative and fair use. And my sense from the reporting I've done and from the story that you wrote, is that there are a lot of people who are like, okay, that is an early decision. That is kind of where the winds are blowing. But this is by no means settled law, is that right?

C (21:34)

That's right, yeah. It's very much still unsettled law. And the two big rulings that we looked at with the book authors are anthropic. And then this other case, Kadri versus Meta, and I think that it was really interesting that the judges in the two cases, even though they both ruled that it was fair use to train the AI models on the book content, they had Totally different reasoning. In fact, the judge in the Meta case who ruled afterwards, criticized the ruling of the judge in the Anthropic case. So the judge in the anthropic case said, when you use books to train an AI model that is, quote, exceedingly transformative, end quote. And transformative is one of the key tests of whether something is fair use. So like, you know, if you copied a million books and then you turned around and sold them for 10 cents apiece, like, that's probably, I'm not a copyright lawyer, that's probably a pretty clear cut copyright violation. But he's saying if you, if you take a million books and then you feed them into this AI model and you put out a chatbot that like answers people's questions and, and doesn't produce entire books verbatim, which, by the way, there's nothing in the record that indicates that Claude would spit out these books verbatim even if you asked it to. That's something different. It doesn't compete with the books. And so that's fair use. In the Meta case, the judge was like, actually, I think you could probably give me lots of good arguments that using books to train AI models is going to end up hurting the market for books. Right? You're going to end up with AI models that can produce a book of their own, even if it's not exactly the same. You're going to end up. And we already have this. I mean, we. There are AI ripoffs of books all over Amazon. I mean, anybody who's published a book lately has probably seen some crappy AI clone of it turn up on Amazon. And the judge in Meta was like, you guys just didn't, you failed to argue that. Like, you didn't bring me the evidence of that, so I can't rule on that. But he left open the possibility that it, it might not be fair use. But in any case, what. Both companies are still, well, what, what anthropic ended up having to settle over rather than go to trial, and what Meta is still facing litigation over is how they acquired the books in the first place.

A (23:39)

And the thing I've never been able to figure out is why that fact doesn't kind of obviate and make irrelevant the other fact. Like, I got this data illegally, now I can legally use it just doesn't, I don't know, I have a hard time following from one to the other. Does that make sense?

C (23:57)

Yeah. And I did too. I mean, it's completely counterintuitive. I don't know how deep we want to go on this, but the Anthropic ruling, as someone who's not a lawyer, was really counterintuitive to me. So actually, the books that they. That Anthropic scanned, you know, acquired, legally scanned, and then fed into commercially released models of Claude, that was ruled to be fair use. What the judge was not going to let them off the hook for, and what they were going to face trial over, and potentially tens of billions, maybe hundreds of billions in statutory damages had they lost in the worst way possible was the books that they did not use for training commercially released models. Because he's like, if your defense is that this was fair use, that the reason you acquired these books was to do something totally different with them, then the ones that you didn't use, that can't be fair use. It can't be fair use if there was no use. And so what they got in trouble for were the ones they didn't use ironically, and had just stored and decided not to put into their commercially released models. There are other legal experts who think this, this decision was, like, totally weird and backwards, but that was the ruling. And so Anthropic ended up settling with authors in this case for $1.5 billion, which, if you're anthropic, is a lot of money. You know, probably not so much if you're like, if you're meta.

A (25:12)

Right. It is. It is both a lot of money in raw terms and not a lot of money compared to, I think, the. The scale some of the people against this are talking about. I mean, we've been hearing, I think it was Marc Andreessen a while back who was like, if we had to pay a fair price for all of this data, the AI industry would go out of business. And all these people were like, yeah, dude, that's our whole point. That is the thing we're trying to say. We agree on this fact. And so I think, again, all of this is unsettled, but this brings me to the thing that I've been thinking about a lot and a thing I've spent a lot of time reporting on and talking to people about and just trying to figure out is why the reflexive backlash to AI is so intense and where it originates from, and a theory that I've developed, and I'm just curious what you think about this is. I think there is a sort of original sin in the AI community. And I think it lays at the feet of OpenAI for starting the race the way that it did, because. And there's a bunch of this in your story, but OpenAI basically started as this sort of academic research team, building things for academic research purposes, essentially. And they did a bunch of things that in academia are generally done right, like take a bunch of research papers and put them into your AI model. Less problematic when you're doing something to extend research than when you're doing it to try to make billions and billions and billions of dollars. They did this thing, and then as OpenAI became a commercial product, it didn't change the way that it acted to source and train its models. And I think, again, this is just a theory, but I'm. I'm increasingly convinced that I'm right about this, that I think the way. The sort of cavalier way that OpenAI approached building and training its models, and then the fact that it released it and started this war where everyone had to catch up as fast as they possibly could or risk being essentially left behind by this, like, train that was already out of the station. So you get meta having to essentially run the same playbook and take the same shortcuts. You have anthropic, essentially having to run the same playbook and take the same shortcuts. Anthropic. In many ways, it seems like actually tried to do this in a more upstanding way by actually going and buying some books in the world, which is something, right? Like, that adds to the fair use questions, but at least they bought the damn books. That counts for something. And to me, it's just like if you, if you back it all the way up, if they had just come to the end of the, well, we can't do this. This will take a while and cost us a lot of money. And they had decided to take the time and spend the money. I think as a society, we might feel really different about AI.

C (27:45)

I think that's a really compelling theory. I think a lot of people, I think, I think some of the anti AI sentiment does come from this feeling that there was a grand theft at the beginning of it, that, that nobody was asked for permission and they just took everything anyway. And now they're making, you know, they're poised to make billions upon billions of dollars and transform, you know, replace. Put people out of work with a product that was built on the back of those people's labor. I think that's, you know, that's at the root of some of the backlash against AI. I think there's more. There's probably even more to it than that. I should. A couple of quick notes. I think, I think you're Right. I mean, I think there is a way of looking at what Anthropic did where you're like, at least in the scheme of the different tactics that the AI companies took, I mean, Anthropic was doing it like almost relatively the right way. Right. Like they started by pirating stuff and then once Claude was out and commercial, they were like, eh, let's try to find a more legal way to get these books and try to put ourselves on better legal footing. Yeah, there's a, there's a way in which what Anthropic was doing was like trying to do the relatively right thing. But I think there is a sense from the people who created all these works in the first place, the books, the movies, the, the blog posts, that the actual right way would have been to come and ask permission and maybe pay people to license, even if it's a little bit, you know, just pay the fair share. But so far that's not the way the judge's rulings are going.

A (29:12)

So. But, but I want to come back to this sort of what does it look like to be the good guy here? Because I think if I were to be unexpectedly slightly sympathetic to the Anthropic team here, it does seem like there's a lot of stuff in the documents that have been out and there's been a lot of stuff in these trials that has essentially made it seem like the people at these companies, including Anthropic and Meta and others who have felt like they had no choice but to play this game this way. Right. That they looked at it and they said, okay, there is no good guy here. There is only winning and losing, and our opportunity is either to play this game the way that we have to play it, or we lose. But you've been in these documents a lot more than I have. Do you have a sense of if there were folks inside of these companies who identified kind of the white hat way to go about building these things that might have actually worked? Was there an alternative?

C (30:11)

There is relatively little discussion in the documents I saw beyond what I've already described of better and more ethical ways to do this. I think, you know, again, this is not coming directly from the documents. This is an inference. But I think you're right that there's a sense as you read these court files, that it was understood that, you know, we can't afford to lose this race. And, you know, let's, let's try to get legal sign off, let's try to get approval for what we can do, but losing isn't an option.

A (30:43)

Right. I mean, on the meta side. Right. There's some implication that these, these debates went all the way up to Mark Zuckerberg. And he's the one like Mark Zuckerberg has made very clear that he feels it is an existential risk to lose the AI race. So it's not surprising that he would push comes to shove, say essentially by whatever means necessary.

C (31:00)

Yeah. And so what we have there is, we can sort of infer that from a document where there's an internal chat between Facebook employees and one of them says, after prior escalation to MZ being presumably Mark Zuckerberg, you know, Geni has been. Gen AI has been approved to use Libgen, which is again, the shadow library. And so, you know, we'd have to speculate about exactly what Zuckerberg knew. I mean, he said late, he said in a, I believe in a deposition that he didn't know what Libgen didn't. He said, I don't really know what that is, but, you know, you can.

A (31:34)

Make a meal out of what that sentence actually does and doesn't say. You know what I mean?

C (31:37)

Yeah. And these are not direct quotes, by the way. But this is my recollection, my best recollection of what the, what the documents said. And I think one more thing that's noteworthy here is that in, you know, in, in any field, you know, in under capitalism, there are companies racing to try to be the winner. Because, you know, if you're the loser, it doesn't matter what your ethics are if you don't, if your company doesn't exist anymore. Right. But in AI in particular, this industry is so shaped by this idea that we, we have to be first in order to save the world. Like that's the founding principle of OpenAI. Like, we have to be, let's found a company that's going to build AI in an open way to save the world from these hypothetical other companies that would build AI in a closed way. And then it turns out that in a lot of people's view, OpenAI did move to a more closed way. And so you get people splitting off and forming anthropic, for instance, saying like OpenAI has strayed from its principles, we can't trust them to save the world from runaway superintelligence anymore. We've got to do it, we've got to be the saviors. But again, if you don't win the race, you don't get to dictate how the superintelligence turns out. And so it's this sort of moral paradox where everybody's like, the ends justify the means. And so we might have to break some eggs along the way to save. Because the ultimate goal here is to save the world.

A (32:58)

Yeah. And if you believe the stakes are that high, and I think a lot of people in this industry earnestly do, then, yeah, the. The breaking a few eggs along the way is a pretty worthy sacrifice.

C (33:09)

And that's why some critics believe that maybe some regulations would be in order, in order to constrain that race in some way.

A (33:18)

Some critics, some reasonable people, some normal people, some objective journalists.

C (33:24)

David.

A (33:27)

All right, we got to take a break. But, Will, if you ever get your hands on one of these book scanners, I. I demand that you come back and show me how it works. This is the only thing. I feel like I have a pretty decent picture of how this thing works, but I just. I need to know how big the scanner is. Is part of it? Like, is it the size of a room? Is it a thing I could put on my. I just. I need to know everything about how to scan books very quickly.

C (33:46)

I've. Now I have the big Lebowski line in my head. Like, you need. You need a scanner, David. I can get you a scanner. We'll see. You can have me back on if I get you the scanner.

A (33:54)

Deal. All right. Until then, Will, thank you for being here. This was great.

C (33:57)

Thanks me for having.

A (33:58)

We gotta take a break. We'll be right back. Support for the show comes from. BILT Rewards. Renters out there. Listen up. It's about time you earn something back on your biggest monthly expense. I mean, you can earn loyalty points on pretty much anything else these days, so why not on your rent? BILT is the loyalty program for renters that rewards you monthly with points and exclusive benefits in your neighborhood. With bilt, every rent payment earns you points. That can be used towards flights, hotels, Lyft rides, Amazon.com purchases, and so much more. And starting this month, Bilt members can earn points on mortgage payments for the first time. That means you'll be able to get rewarded wherever you live. Plus, using Bilt, unlock's exclusive benefits on more than 45,000 restaurants, fitness studios, pharmacies, and other neighborhood partners. Join the loyalty program for renters@joinbuilt.com verge that's J O I N B I L T.com verge make sure to use our URL so they know we sent you. It's time to level the up.

B (35:12)

I'm Robin Archdean, and I light fires.

A (35:15)

I'm an executive, founder, best selling author.

B (35:18)

Ultra marathoner, mother proud Latina, and I'm not done yet.

A (35:24)

Announcing Project Swagger, my new weekly podcast, your Transformation Toolkit.

B (35:30)

I'm gonna cut through the noise and.

A (35:31)

Give you actionable takeaways each week in under 30 minutes. Elevate your hustle with routines, strategies and mindset shifts that I have pressure tested. I have burnt down this Beyonce candle like all the way to the bottom.

B (35:44)

We have been trying to manifest.

A (35:45)

Carbs are not the enemy. I probably have a piece of bread or a bagel with me at all times and I am not exaggerating. Tune in on February 24 for episode one, building the skill of Self Talk. This is the foundation. Follow Project Swagger wherever you get your podcasts.

B (36:03)

Let's go.

C (36:06)

Before Minnesota, Illinois basically wrote a playbook.

A (36:09)

On how to fight back against Trump's ICE crackdown.

C (36:12)

Governor J.B. pritzker told everyone in the.

A (36:14)

State to take action when ICE came to town.

C (36:16)

Pull out your phones, film everything.

A (36:19)

They're shooting moms in the face.

C (36:21)

Yeah.

A (36:22)

So peaceful protest seems like the least you could do and what we should be encouraging people to do.

C (36:29)

They've shot somebody here in Chicago five.

A (36:32)

Times for just observing from her car. Illinois created an accountability commission, took ICE agents to court, and when Trump sent.

C (36:40)

In the National Guard, they blocked them.

A (36:42)

From the streets and they won.

C (36:44)

A model for Trump resistance on the.

A (36:46)

State level today explained drops every weekday and now Saturdays too. All right, we're back. So now let's talk about Netflix. We talked last week about Netflix and podcasts, and now I want to talk about kind of the exact opposite end of the spectrum, which is big, huge, splashy movie theater movies from Netflix. Netflix has made a lot of noise about the way that it's going to think about movie theaters and movies as it tries to buy Warner Brothers. This has become a big part of this deal is what will happen to the movie studio and the movie theater movies that Warner Brothers makes. And Netflix says all the things you would expect it to. But the question of what does Netflix want from movie theaters and movies in general, I think is really fascinating and brings up a lot of questions about like, what are movie theaters even for anymore? What does it mean to make a movie theater movie in 2026, if you're Netflix or anybody else? So Julia Alexander, who was our former colleague here at the Verge, she was actually on Decoder last week also talking about Netflix. We're all very good at planning here at the Verge. She's now at Puck writing about all of this stuff there. I asked her to come on the show and just basically explain to me what Netflix is doing, whether we can fix movie theaters and whether any of it even matters. So we had a lot of fun and I think we did fix movie theaters. So let's get into it. Julie Alexander, welcome to the Vergecast.

B (38:10)

So excited to be back after many years away from being on this phone.

A (38:15)

No one ever gets away. This is one of the things Nilaya always says is no one ever actually leaves. And it's I'm very happy to have you back.

B (38:22)

Yeah, I'm excited to be here. It's one of the few podcasts I sincerely listen to. When people say I listen to your podcast, I do actually listen and watch virtual.

A (38:30)

So do you have a lot of thoughts about Brendan Carr? That's actually what we're going to do now?

B (38:34)

Yeah.

D (38:34)

Yeah.

B (38:35)

That's when I'm not texting Eli about the Green Bay Packers. It's just Brendan Carr.

A (38:39)

Perfect. So I brought you here because I want to talk about movies and I want to talk specifically about movie theaters because we're, we're in this interesting moment. You, you spend a lot of time thinking about sort of the, the machinations of the whole media business. And I think a lot has been said about what's happening to movie theaters. Movie theaters have obviously been in kind of a bad way for a minute here. But now with this, with this Netflix Warner Brothers Discovery deal potentially happening, movie theaters are being talked about again. And I think there's the more I think about movie theaters, the more it makes me think about the whole structure of what we consume and how. And so I just want to dig into some pieces of this with you. But my first question for you, as somebody who pays a lot of attention to the business of movies and tv, is do you think Netflix is serious when it says that if it buys Warner Brothers Discovery and takes over one of the biggest studios in Hollywood and would suddenly become, if it wanted to, a huge player in the theater business, do you think it's serious about caring for movie theaters and being a real player in movie theaters?

B (39:41)

This is one of those annoying, weaselly yes. But answers. There's a lot to the Netflixification of theatrical. And the issue is that a lot of what they're saying, as you know and as you've talked about before on the podcast, is, is they're just saying stuff to get this through the regulatory hurdle. So, of course, Ted Sarandos and Greg Peters, co CEOs of Netflix, are gonna come out and say, like, we love theaters. Actually, we've been thinking about theaters forever. Which is what they said on the most recent earnings call. After years of publicly saying that they don't need to be in theaters, that their commitment is to their members, that they can build up just as much anticipation and excitement for film that a theatrical release can do. Now all of a sudden they're saying, actually, we've always loved theaters and we just didn't make it a priority. Cause we were too busy making Boggle or something for our streaming service. So the yes portion is that we have a lot of data that does suggest theatrical movies perform better on streamers. And there's a lot of reasons for this. They spend a ton of money on marketing. So the awareness of these films is higher. We associate. If you look at kind of the qualitative studies being conducted by theatrical exhibitors, of course, but also studios and kind of audience surveyors, the sentiment around theatrical releases, that they are higher quality people will typically go to theaters for IMAX films. So they associate it with this really intense experience that they like.

A (41:07)

That's so interesting, by the way, just to pause on that one thing. I think that perception still being the case, is so fascinating to me. And it makes me think of, you know, all those years ago, you would have straight to DVD movies, and that was the sure kiss of death for a movie being bad. Like, they didn't even put it in theaters, it was so bad. And now, in a time when, in theory, there are lots of good strategic reasons to put a great movie not in movie theaters, it's fascinating to me that people still associate if it's in theaters, there is some assumption of quality that comes with it.

B (41:44)

Yeah. And so that's the positive consumer sentiment on the business side. The reason Netflix always argued against theatrical, and it's the sole argument I get from their point of view, is that you made back your revenue for a movie that you released in theaters. Not. Not in theaters, you might break even, you might make some bit of profit. But it was through what we call Pay one and Pay two windows, which is just where the movie goes after it's on dvd, Blu Ray, which of course, these films make a lot of money on there as well. And then they would go to HBO for nine months. Right. Then it would go to CBS for nine months. And so if Netflix was not gonna do Pay one and Pay two Windows, if it was just gonna go directly to Netflix, then they would lose out on a huge chunk of profit that would then support a 10, 121520 movie slate across the year. The reason why I think they're changing their tune now is their engagement is slowing across the board on their platform. And so if you look at the most recent engagement report Netflix puts out every six months, kind of like, here's what people are watching. 99% of all viewing, there was a 2% increase in engagement year over year. So between the second half of 2025, second half of 2024, but it was only a 1% accretive growth from the half prior. And this was a big half. This had stranger things. This had Wednesday. This had a lot of really big things, NFL games. And they're not really growing that engagement. And so if you look at what people are kind of spending the most time watching, a lot of it is film and a lot of it is licensed film. And so it's those films that have theatrical releases. So I think if you're Netflix, the idea of doing another Harry Potter or a Batman or whatever it is, putting those in theaters, building up that sentiment, building up that fandom and then bringing that to streaming, where it's gonna see that kind of increased growth arguably does help the business. The but is whether or not Netflix commits to releasing 15 movies in theaters, right? Last year, Warner Brothers had 21 or 22% of the total box office share, 25 films released. They were just behind Disney. Is Netflix going to commit to that? That's the big question where we don't really know. We won't know until this deal goes through, if it goes through.

A (43:55)

Okay. Because the flip side would be something like the deal they made with Greta Gerwig for the Narnia movie, right? Which is to say you're making a huge blockbuster movie that deserves to be seen in huge screens. You're also a director with a lot of leverage. And from what I understand, directors with a lot of leverage, by and large, really want their stuff to be shown on large screens in movie theaters. So they gave her an IMAX only, but real run. It's not the nominal, like, it's gonna be in three theaters for three days kind of thing. Netflix always does. It's getting like a real theatrical window, but only on IMAX and for a pretty short amount of time. And Netflix could ostensibly do that two times a year and be like, well, look, we have a theatrical strategy, right?

B (44:34)

Yeah, they're gonna go beyond the one week release to get them into Oscar contention. I mean, you have theater owners and exhibitor owners coming out and making that exact point. David, like they've said Netflix, if you're committed this, do it with your movies now. You have big movies coming out. Put them in theaters, give them 45 day wide releases. Ted and Greg over at Netflix argue they don't have the department and manpower and expertise to do this, which is ostensibly true. These are significant parts of these studios is kind of figuring out the theatrical releases, the exhibitor relationships, the tracking of it all to see if you should go 45 days, 30 days, 17 days, which is what Universal has done since 2020, when they kind of really started taking advantage of the fact that they could collapse the theatrical window a little bit and go straight to VOD and streaming. But, you know, I don't know if Netflix sees the importance of doing this for films that are much trickier. And I think this is where you get someone like David Ellison, who's the CEO of Paramount, who's obviously also in this argument and argues that Paramount is much more committed to the theatrical release than Netflix ever will be. You look at the films that Warner Brothers had last year that did really, really well. One battle after another. Sinners. These were original risks. These were risky bets that they went out at Warner Brothers and said, we think these are gonna be really great and we're gonna go with it. Would Netflix do the same thing? I don't know. And I think that's where you get a lot of this trepidation from the industry, which is that the supply of films have steadily decreased. So if you look at the overall box office revenue, especially domestic, you know, we're up 800% compared to 2020, but only 30% compared to 2021. We saw just about 5% increase in overall box office revenue. And we're seeing that kind of collapse in the overall revenue compared to the 1990s and the early 2000s and even the early 2010s, but you're also seeing the supply greatly diminish. So the exhibitors, to your point, David, as we're going to get into about like, what could save movie theaters, are basically saying to companies like Netflix, if you're not going to give us movies to put into theaters, we cannot rely on having two or three mega hits to keep us paying our property tax every single month of the year.

A (46:47)

Do you think it's possible that Netflix is looking at that graph of basically supply is going down, the money is not what it once was, the pay one, pay two window is gone. This whole kind of theatrical pipeline doesn't exist the way that it used to, and basically just say, we don't have A grand thesis against movie theaters. We just don't think it. It's worth the time and energy and maybe not be entirely wrong.

B (47:15)

It is the proverbial chicken and egg question in this industry. It is fair, right? And actually, there was a really interesting study conducted last year by Civic Science, and they asked people about 2,000 theater goers for the survey. Why don't you go to see more movies? Right? And we know that the average moviegoer now sees less movies per month than they have since, like, the early 1990s. Like, we're at that level. And the answer kind of surprised me because it wasn't cost. Cost was second, and it was close. But the first one was just the type of movies that were there, they weren't interested in. And I think if you're Netflix. To your point exactly, that is far more jarring. Cause it's not even like, okay, we put more movies in theaters and more people will go. It is. Well, the type of movies that people want are extremely expensive to make. They're like Christopher Nolan movies. The type of movies that we thought people were interested in are no longer guaranteed bets. And you could have a whole conversation about Marvel and DC and kind of this idea of, like, if you spent $500 million on a film, you're going to reap it at 1.1 billion, and, like, that's just not true anymore. And so this question for Netflix is, how much are we going to invest in a 12 to 15 film slate if one to two films are going to perform? And historically, that's always been the case. Like, film's a really rough business to be in because you're kind of hoping you've got one or two mega hits that pay off for the other ones that might break even or might not perform as well. But now, because they have the streaming component and they're investing in that, and as they're watching, ways to introduce new formats to compete with YouTube and Instagram. And now they've got that concern playing at them, too. The question of, do we invest in a space that is slowly decaying without proof that putting more films in theaters will help with that decay? I mean, you can see why it's a bit of a coin toss, it.

A (49:07)

Seems to me, and you've written about kind of all sides of this, that one of two things is gonna happen. And I have a hard time handicapping which one it's gonna be. On one side, we develop what I would call a theater movie that becomes. We lean even harder into this very specific sort of eventized kind of movie that right now it's like James Cameron and Christopher Nolan and a couple of other people maybe, who are consistently making these things that feel and are so big that people kind of intuitively understand I need to see this with the biggest screen and the biggest speakers and the most experience possible. Either we need to make a much bigger industry out of that, which strikes me as dangerous and maybe impossible for all the reasons you just described that like you, you miss it once and your company's out of business, or there's a Future where like YouTube shorts and TikTok start playing on movie theater screens. And that actually, that strikes me as not crazy. You've written a bunch about how these things have come to televisions and become a real part of people's media consumption. Is it that outrageous to think that movie theaters might start to figure out ways to integrate this kind of short form content? And Alamo Drafthouse, instead of playing a marathon of Indiana Jones movies, is playing a marathon of TikToks. It sounds awful, but totally plausible.

B (50:32)

I think it absolutely could exist. The question is, are people willing to go for that type of experience? And what we do know from some of the data around alternative screenings in theaters is that it's really based on fandom. So if you look at what performs exceptionally well for limited runs or for the kind of screens that they're allocated, anime films do exceptionally well. Like it brings people out, they go out. Alamo is now owned or majority owned, I can't remember which one by Sony, which also owns Funimation, which owns PlayStation. So there is like that group where they can kind of experiment with this. But something like Demon Slayer does huge in theaters. If you look at what does exceptionally well in terms of an experience that people want to have together. Horror. Horror always overperforms it. Over the amount of money that they spend on those films, they get far more revenue on average than any other genre. And so this idea of turning movie theaters into a colloquial hangout place, for lack of a better term, where you're partnering fandom with a type of experience that elevates a movie theater into something that becomes a communal event, fodder for your own TikTok or Instagram. I often talk about the social long tail capital of a theatrical experience like Barbenheimer. Like, you buy the shirt, you go with your friends, you take the selfie, you watch the movie, people record parts of the screen. And we can get into the cell phone debate. But that idea of like, I'm going to Spend my money on this and I'm going to get this long tail social capital reward. That is a component where this comes into play. And if you combine that with fandom, you can start to fill in the gaps that the major studios are not going to be able to because they're pulling back and making. Yeah. The Christopher Nolan, the Greta Gerwig, the James Cameron movie, and that's. They're making more of those. So you need to fill the gap that. For the 5 million to $10 million movie. And that does not necessarily need to be a movie. It just needs to be something that will get people into a shared space and pay 20 bucks.

A (52:31)

Yeah. I feel like the, the thesis there spiritually is not that different from a sports bar. Right, right. Like it's. It is, it's a sports bar where everybody is quieter, I guess. But the, but the, the idea behind why it's worth going to this thing as opposed to being home is not very different.

B (52:46)

Different, exactly.

A (52:48)

Yeah.

B (52:49)

And we know, I mean, God, you and I spent a lot of time on the Internet. The amount of stories that we've read about the rise in isolation and kind of social alienation and the links to depression and all that stuff is also tied, as we all know, to this lack of shared third spaces. And the movie theater used to be that to some extent, like the theaters I grew up with when I was in the suburbs had DDR. Right. You'd go and you'd hang out and there was the arcade and then you might watch a movie. But even if weren't, you were spending money at the theater so the exhibitors could pay the property tax, they could pay the employees. Like they could have that be a system. They were less reliant on the films themselves, although obviously that is where they. The reason people go and then spend a hundred bucks on popcorn. So if you can find a way to replicate that, I think this is partially why I'm in favor. And I really. I realize it's controversial of having designated phone. Okay. Screenings, like it has to be designated. It can't just be in a screening with people who do not want a phone by any means. And I get how distracting that is. But the experiences I go when I watch horror movies. It's a lot of teenagers, as it always is. It's a lot of teenagers who are having fun or yelling, who are like, whatever. And they're on their phones, but they're paying for the movie. They're going out. They're like having a good time with it. That creates intimate Memories that then spurs on the next time you want to go to the theater. You've got this great memory and you kind of build off that. If the goal is to convince more people that they should go watch Hamnet in theaters because Chloe Zhao is a great director and they like. They're just not going to. Because they can either watch it on whatever streaming service it comes to in three weeks or they'll have it on plex through some server. Like, they don't need to go and you don't need to try and convince them to go for that movie. You do need to provide an alternative that people are going, oh, that is worth, in my opinion, the $30. Because the films themselves, even though we might disagree with this take, as we can see in the data, people just don't associate the value of that film to $30 anymore. They're just saying, well, I can get it on my streamer that I already pay $15 for.

A (54:57)

Yeah, I think I agree about the phone thing. I like the idea of it being a specific type of theater that you go into. Because we've seen. I forget who it was, but one of the chains at one point did. They had a sort of. It was like a smoking section of the theater, basically. But it was. That was where you were allowed to have your screens on. I don't like that. But I think you see these every once in a while. Where musicals will have the sing alongs or kids movies will have kid friendly ones that are. It's designed to be loud and chaotic and you go knowing what it's going to be and to participate. I think that should be ubiquitous and everywhere. And that's the sort of thing to me that is like, okay, what we have to offer is something more than just watching the movie. Right. And in some ways that's a very comfy chair is actually a thing. Like, one thing I really like is the theaters with a really great recliner. Good food is one of those things. Alamo is very good at that. That somebody comes and brings you a nice dinner while you eat is a victory. But again, you have to have this additional experience on top of it for me. And the number of movies that do that by themselves is vanishingly small. Right. I think everybody thought that was gonna be 3D. That was like, you have to go see the 3D movie because it's in 3D. You get a new experience. And most people were just like, this does nothing for me. I'm good. But maybe the big theater for. I remember seeing Dunkirk was a good Example of like that movie hits different in a theater than it does anywhere else. And so I'm glad I saw that in theaters for that reason. Most movies are not like that. And I think realistically for most people, for most movies, you just need to find a way to have some other thing that you can offer that isn't just you have to leave your house and pay $30 to see it in a slightly comfier chair on a slightly larger screen. That's a really high bar. And again, for Hamnet, I don't know what that thing is. And I don't want to stop making movies like Hamnet because we can't make them sing alongs. But that's where this gets really tricky to me.

D (56:51)

Yeah.

B (56:51)

And I think that gets into the studios component. So we were just talking about having a tiktokathon that does not help the studios. Right. The studio are still not making the money off that. If anything, it's helping. Now their competitors who are coming for all of these other screens that the studios have kind of always commandeered, like the movie theaters and TV screens. But I think if you look at what the studios have to contend with, they know that a Nolan movie, a James Cameron movie is going to do exceptionally well on imax. The problem is that IMAX makes up like less than 1 or 2% of total screens domestically and internationally, and they have huge percentage of viewership on those screens for select movies. So if you look at Oppenheimer, Dunkirk would have been a good one. If you look obviously at Avatar, any type of new Star wars, any type of new Marvel, those films are always going to do exceptionally well on IMAX. But if you, if they only command 1 to 2% the screens, you're not going to make as much money off it just through lack. Just, just through the scarcity problem of it.

A (57:52)

All. Right. And there's more. There's actually like heated competition for IMAX screens, right? Yes. That. My, my impression is there are more movies wanting to be on IMAX screens than there are IMAX screens to show those movies.

B (58:03)

That's precisely right. And it's because they're making movies in part that perform well on imax. So if you think to your point, everyone's trying to make these big movies, they want the IMAX experience because they know that, I don't know Dune 3. A lot of people are going to want to go watch that on imax. Well, if there's only a limited amount and you're getting in close to the release date for another Avatar or another Star wars or another Marvel movie. Now you've got studios competing and they're paying for it, right? And so this idea of like, okay, well now we're still losing money on this potential bet. This is where people often say that studios need to recreate the $10 million movie where the potential upside is much higher than any potential loss. My argument is that they should lean far more into the nostalgia side of the event driven thing. And I'll give you an example. This was not the nostalgic part of it, but the last movie I saw before COVID hit was a Alamo Rowdy screening of Cats, Tom Hooper's Cats. And it was the greatest experience of my life. Like I'm married. It was the greatest experience of my life. And that type of situation happens a lot with nostalgic films. Mean Girls every Christmas. Nightmare Before Christmas does exceptionally well in theaters. People go back out to it. If the new fresh films are something people watch at home on their own, they watch, I don't know, 6 Underground's the Netflix movie I always think about or Red Notice. And they're watching that on Netflix, what's really gonna get them out to theaters is that experience with their friends. It's that kind of Barbenheimer moment where they can post about on Instagram where they can have this memory, they can go to dinner before or after. And the incentive is like, everyone already has this shared experience of seeing this film and loving this film. And there's that fandom intertw with that community and social driven aspect. And the reprints of these movies are not that costly. And so if, and if studios just reprinted a lot of these films that have, they would have to do analysis on this, the sentiment analysis. But where there's like, oh, people would go to theaters to watch, I don't know, the original Freaky Friday or Mama Mia or whatever it is, because they love that experience and they love the movies. You could again fill out the exhibitor calendar, which may help the exhibitor pay bills, which may in turn bring down the price of movies, which is the other, you know, the second biggest reason that people cited in that civic science study for not going. So if you can get people to go for a movie they like and they may already just like it, and this is just a reason to go and experience it again. If you can get the average cost of a ticket to come down, then you might be able to produce more of these bigger movies, even if they don't have the IMAX screens to then get people back back into seeing these. These kind of explosive blockbusters.

A (60:51)

I love that. So instead of thinking about, you know, much has been made of the death of the $40 million movie, right? That kind of sweet spot, middle. That most movies used to be, that doesn't really exist anymore. That maybe the. The sort of theatrical future of those movies is not that they start in theaters and we hope that they work, but that they start somewhere else. And the ones that do work then get to have a life in theaters. The theater becomes kind of a lagging indicator of popularity, not the very first place that they land. That's a really fun way to think about it.

B (61:23)

Yeah. And it's just about filling the gap. It's funny if you think about it from the streaming side. What that strategy is is basically like having Friends allowed us to pay for. I was gonna say heated rivalry, but that was easy. Like the new Game of Thrones, right? Like, oh, we have friends. That's fine. People are not going to cancel their streaming service. So the lifetime value of a customer, which is a boring equation you try to figure out to look at the health of a streaming company, is much higher. And so friends allows us to go and do the new thing. It's the same equation you could bring to the theatrical component. The idea of just re releasing. Why am I thinking of John Carter? That would not work. If you just rerelease that. I know. I was like, oh, my God. If you just re release though a Toy Story or whatever it is something that people would. Something or a cult classic that people.

A (62:13)

Would go, you know what I've been thinking about is the Devil Wears Prada because the Devil wears Prada 2 is coming out. The Devil Wears Prada is having sort of a weird nostalgic return. Anyway, that to me, is a movie I think you could plug back into theaters tomorrow and it would work 100%.

B (62:25)

That's a much better one than John Carter. Yeah, listen to him. Not me. Sorry, Disney. But that idea of like, it's just enough to pad it to then let you do the other thing, which is what the 30, $40 million movie doesn't always allow for because of the marketing, because of the cast. You get into all these other expenses, and then you have to license the film out. This way. You don't have to license a film out. You're not reliant on a pay one, pay two window. It's just something that you're going to release in order to generate some additional income to pay for the other big things you want to do.

A (62:57)

I Like that. So let me. Let me throw one more thing at you before I let you go here, which is, I'm sure you've seen all this stuff around Matt Damon and Ben Affleck on Joe Rogan talking about the future of everything. Matt Damon, by the way, one of the people who has bemoaned the death of the $40 million movie. I think it was on Hot Ones years ago that he gave this beautiful speech about how movies make money. It's very good. I'll link it in the show notes. But talking about this same kind of thing, making the rip for Netflix, they were on Joe Rogan talking about this movie. And I'm just going to read you a quote, and then I'm going to connect this back to what we've been talking about, and I want to know what you think he said. The standard way to make an action movie that we learned was you usually have three sets of set pieces. One in the first act, one in the second, one in the third, and the big one with all the explosions, and you spend most of your money on that one in the third act. That's your kind of finale. Now Netflix is like, can we get a big one in the first five minutes? We want people to stay tuned in. Then he said that Netflix was telling them that it wouldn't be terrible if you reiterated the plot three or four times in the dialogue, because people are on their phones while they're watching you talk about chicken and egg problems. And this, to me, for Netflix in particular, feels like maybe the worst possible sort of death spiral of movies. Where Netflix is. Is sort of deliberately and loudly making movies that are not really designed to be watched. And frankly, a lot of the movies that end up on Netflix bear that out. How do you square that with. We're gonna. What we actually need to do is go all the way the other way and make movies that are extremely designed to be watched, because that's the only thing that is going to bring people to movie theater. Theaters, like Netflix is just so rapidly running away from the thing that would work that we've been talking about in order to make the reality of the Netflix experience work for people. Is it even possible to square those things?

B (64:43)

I've been thinking about this a lot, and I've been thinking about one person in particular, and it's on the TV side, but I think you could also apply it to Mike DeLuca and Pam over on the Warner Brothers film side. I've been thinking about Casey Bloys, who's the head of hbo. And if you're Netflix and you acquire hbo, you talk about how important it is to have hbo. Do you let Casey do what Casey does? Something like the Chair company might get produced at Netflix because they did. I think you should leave. Also might not. HBO famously made kind of big shows for a small audience. It was never going to be cbs. It was never going to be Big Bang Theory. And that was okay because people would pay the $15 a month. And they said, great, this is what I want, and I love it, and I'll pay the price increase, and that's okay. And I keep thinking about, if Netflix buys hbo, do they let Casey be Casey, or does Casey have to start making Netflix shows? Does Casey have to focus more on doing a Green Lanterns spinoff that feels like Stranger Things? Because that's what the Netflix audience wants. And on the film side of the equation, it's the same thing is, do you have Pam and Mike come in and say, we're gonna let you do what you do? Clearly it worked with sinners. Clearly it worked with one battle after another. You guys seem to have an idea. There's. There are films that will play well on here. Minecraft's a great example of what this can be. But in order to have the type of movies that make people really excited about movies, you have to let movie executives work with movie directors and film writers and just say, like, this is what we're gonna do. And my hope is that these. The arrogance of Ted and Greg do not outweigh the concern they have about ruining the product they're buying. And I think that's probably true. I think if they end up really acquiring Warner Brothers Discovery, this goes through. The regulatory hurdles are figured out. If they keep movies in theaters and if they keep making the type of movies that Warner Brothers has made for a hundred years, 100 years plus, it will be reliant on them not trying to netflixify an experience that Netflix has never had ownership of. And I think they understand that and will step aside at least for the first few years, to just let that continue happening.

A (67:04)

So any. Any other thoughts? Any other. I asked you to come and fix movie theaters with me. Any other big ideas you want to throw out before we get out of here?

B (67:10)

Something that I think about a lot is. It's a Nilai quote. Cause of course it is. And he was giving an interview kind of about the state of media, and he was like, not all websites are going to exist forever. Not all companies are going to exist forever. Like, companies come and companies go And I've been thinking a lot about the impact of generative AI on content and what we're seeing happening in this kind of moment of great restructuring and great change in consumer behavior and stuff that you guys talk about in the pod all the time and think about. And will movie theaters be something that survives or will it give way to a new form of entertainment that is consumed communally and en masse that we haven't encountered yet? I don't know. But I think it's worth protecting for as long as we can protect it. So if that means that we're all watching, like, reruns of movies that we love watching at home, but we're watching with our friends at 10 o' clock in the morning instead before brunch, we should probably be doing that much, much more.

A (68:01)

Yeah. It just seems to me that if I get out of having little kids who go to bed really early and go back to seeing movie theaters, there is a strong chance I'm gonna be seeing very different things in movie theaters than the last generation of my movie theater experience. Yeah, I think that's okay. Christopher Nolan will still be there. You know what I mean? As long as Christopher Nolan's still there doing stuff, it's fine. I'll be there every 18 months for whatever weird thing Christopher Nolan is up to.

B (68:27)

Same brother.

A (68:28)

Same. All right, we gotta take a break. Julia, thank you for doing this. This is super fun.

B (68:32)

Thank you for having me.

A (68:33)

We'll be right back. Residence day savings are happening now at the Home Depot with up to 40% off select appliances.

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D (70:09)

Always happy to be able to help with some smart home conundrums.

A (70:13)

It remains true that like 60% of the Vergecast hotline is people with mysterious problems with their smart home. So, so here we are. So this week, actually this question we got last week happens to be perfect timing because you, I believe, are in the middle of testing a bunch of the new IKEA smart home gadgets, right?

D (70:31)

All of them.

A (70:32)

Yeah, you got a bucket of them.

D (70:33)

Buckets of them here. Yes, all the unpronounceable, very inexpensive matter over thread IKEA devices. So Kajplatz to Belrizas and Deligirs. It's, it's very exciting. Yes.

A (70:46)

So you just, you just named the reason. We have both been very excited about it. Right. It's matter over thread. It's Ikea, which, which tends to be very accessible to lots of people for lots of reasons. And it's cheap like that. To me, the thing I think you and I have spent the most time talking about is like, dear God, when is any of this going to be affordable to regular people and ikea? I think a lot of this got announced last fall and it's been shipping recently. And I think this is like my hope was this was going to be a moment. So let me just read you this question and then we're going to get into it. This comes from Mike and it says after you excitedly talked about the Bill Raza buttons from Ikea, I ordered five of them to control my home lights. As a parent of young children, whenever we have someone baby it they can't navigate our smart lights with our Google home hub, finally with Gemini, invariably this leads to everything offline and I spend 10 minutes walking around manually turning everything back on, slash resetting things just so they function again. I just want to say, by the way, normally when people send us long emails, I don't read the whole thing. But this is so perfectly relatable to everyone's smart home experience that I just. I'm just going to read the whole thing, Zenny says. Imagine my excitement when my Ikea package arrived yesterday, immediately turning into dismay as I realized the Bill Raisa buttons simply won't work with Google. They were immediately detected by my Pixel 10, but are just dumb devices that report back their battery life. As I searched through Google Help thread after Reddit post on this, my dismay turned to outright anger that people have been waiting wanting basic buttons to work with Google Home for years. I even turned on Public Preview and tried writing scripts, but alas, no function seems to exist to actually control the buttons. Is this really the case? What do I do? Do I need to buy a hub to talk to my Google Home? Hub feels like Smart Home Hell Gen twohey if Smart Home Hell is the name of your podcast, you realize this, right? When we do this, it's gonna be called Smart Home Hell. So there's a, there's a specific question in here that I think you have a clear answer to, and then I want to talk about your IKEA experience more broadly. But the, the buttons thing, if I understand, is not specifically an IKEA problem.

D (72:36)

Oh, that is not an IKEA problem. That is a big old Google problem and has been since Matter launched. I'm very sorry, Mike, that I didn't make this clearer. I have mentioned this in, in many of my articles about Ikea, but I'm really sorry that you didn't know that Google Home does not support buttons in Matter, and this has been the case since Matter launched. And why it's the case is still a mystery. I have asked Google directly numerous times, even on stage twice at CES panels, and the answer at the time last year was we. You know, if you're familiar, Google Home has gone through a huge, huge restructuring over the last 18 months and just I guess three or four months ago they announced, you know, the new platform is completely finished and so things like specific device types were sort of pushed a little bit off. They said, you know, we needed to get our platform firm and foundation sorted before we devoted resources to adding newer device types. They do. They, they have the small, the slimmest support for matter devices. Of all of the platforms, the least devices work on Google Home than they do on all the others. And just for people that aren't familiar, Matter, which is the new smart home standard that uses Thread and WI fi, doesn't require a platform to support every device type. So, you know, a platform could choose to just support light bulbs and not support light switches. They can do that. Which is. It makes sense to some extent. But it's also one of the reasons that matter has become so frustrating, because you buy something that's matter enabled and you know, everyone, myself included, has said the benefit of matter is it works with everything, with a few asterisks. And this has been one of the large asterisks that I, that we've been talking about. The problem is no one really cared that much about buttons before ikea released a $6 button. Interesting, because before. There are some great buttons out there. I've reviewed a number. So the wemo, the Belkin wemo scene controller is a button. That one, unfortunately wemo's just actually last week went completely dead. But you can still use it because it's matter over thread. Philips Hue tap dial is a button. There's a few, a number of companies that have buttons that you can buy. Not very well known ones, but basically a button is a remote control control. So it's a wireless switch that you can stick on a wall. And this is probably why Mike wanted it, so that he would stop people from turning his lights on and off manually. You use a button, you stick it on the wall, you press it just like a light switch and it turns your lights on and off without breaking your smart home and leaving you in smart home hell.

A (75:24)

I bought a bunch of these. I bought a bunch of Philips Hue buttons for my Hue lights for that exact problem. And they now sit next to the switch and I put tape over the switch. Oh no, don't touch the switch, only touch the buttons.

D (75:35)

Tape. David, listen, I'm not.

A (75:38)

Someday when I'm feeling ambitious, I'll like take off the wall plate and put one of the blank ones over. But until then, like a little piece of blue painter's tape really does the job.

D (75:46)

It's true. It doesn't look great, but it does the job. Yes. So Philips Hue dimmer switches, they call them. They call them switches. This is another reason this space is confusing, because every company has a slightly different name for it. But yeah, the Hue buttons that have the kind of brightness bulb at the top and on and off, those, those remote controls are buttons. Lutron, Caseta, they're Pico remotes. That's a button. And none of those are supported in any way in Google Home. Google Home just supports switches, which is an on off state. But it doesn't support what in matter is called a generic switch, which is essentially a wireless remote control. It just doesn't. So I'm very sorry.

A (76:27)

The more you explain this, the angrier this explanation is making me.

D (76:31)

I'm very sorry, Mike, but it's not going to work.

A (76:33)

Work.

D (76:34)

And actually at CES this year I went, I hosted another panel with the. With the head of ikea's Smart Home, David Granoth, and one of the Google Home leads, Matt Van der Stay, along with a couple other people from Amazon and Samsung and Acara. And the first question was basically I said to the IKEA gentleman, David Granite, I said, what's one of the biggest frustrations you've had implementing matter across your product line? And it was just teeing them up to say Google Home doesn't support buttons because it is a huge problem. He didn't take the bait, sadly, but he did bring up the issue that there isn't support for certain device types across all platforms. And then I said to Matt Van Derstay, such as buttons on Google Home, Matt, why do we not have buttons on Google Home? Same answer. We're working on it. It's still not there. But David Granoth made the point, which I think is very true, is that once he said, and you know, once Google, he thinks Google will start to support buttons once these hundreds and thousands of remotes are in people's homes, because it's mass adoption. Right. Once there are people out there saying, why Google? Why can I not use my $6 button to control my laptop lights? More and more people like Mike complaining will hopefully kick Google in the butt to get this moving. Because it can't be that complicated. I mean, it really. You wouldn't think so.

A (78:08)

Yeah. Leaving aside the fact that you just described, like the fundamental chicken and egg problem with the Smart home, which is that nobody will do it until everybody has it, but nobody's going to buy it until it works. Tell me more about your IKEA experience in general, because I have. I bought three of these buttons when they first came out. Yeah. So far I have set up one. I had a very specific routine I wanted to do, which is I have this light behind me connected to a smart switch, and I have a light here with a Philips Hue bulb in it that I want to glow purple. It does. The purple light against the wall, it looks nice when I'm recording stuff. And I just wanted a thing that I can press one button and this light will turn on and turn purple and this light will turn on.

D (78:43)

This is the perfect button.

A (78:45)

Uncomplicated.

C (78:46)

Yeah.

A (78:46)

This is. This. It's all it is, is it's an Alexa routine and I want this thing to initiate an Alexa routine routine every time I press the button. Oh my God. The amount of work that it took to even get that set up. Like in theory, the routine works fine. I can go on my phone and hit the routine and it works every time. But the button it was trying to connect to my Echo Dot Max, which I bought again specifically for this purpose, which should work, but was wacky and all the thread stuff was weird. It also turns out that my EERO routers are a thread network. So I eventually just bailed on the Amazon one and now I'm using the EERO router router, the Eros thread network and that all kind of works. So in theory, all of this was set up and yet I press the button after I set it all up and it works one time and then never again. And this is, this is, this is the Ikea Bill Reza experience that I'm having so far. And based on your reaction when I sent you this question this morning, I am not the only one having this problem.

D (79:41)

You're not. And so you mentioned Alexa, that this is something I should say. Google Home does not support buttons, but all the other platforms do. So if so, Mike, you have to switch platforms. Sorry, but yes you can, but also not that sorry.

A (79:55)

Like Google Home sucks.

D (79:57)

Yeah, you can use buttons in theory in, in Amazon, Alexa, in Apple Home, SmartThings Home Assistant and yes, I have. So I had the same issue with the Billraiser and also with the bucket of other smart IKEA smart home devices I have here that I'm trying to connect sometimes. I. Well, I had the initial issue of actually just getting them paired in to the platforms and I, as part of testing I will try pairing to different platforms. I tried pairing to the DeHub, which is IKEA's hub. I tried Home Assistant and Alexa and Google. Well, I didn't try Google Home because I knew that wasn't going to work and Apple Home and I had very mixed results. I did eventually get it going through Home Assistant and it was, and it was working fine. But then I had the same issue of it disconnecting. And then I also connected it through Alexa and for some reason when it went through the steps, it gave me the option to add in my Thread Network key. Did you get that option when you went in? Okay, that popped up.

A (81:00)

The thing asking for my thread Network password and Jen, the amount of time I spent looking for my Thread Network key, I never found it.

D (81:07)

That is an issue.

A (81:07)

It might be a thing that exists. But the I literally, I was probably spent hours in the Alexa app on Reddit everywhere looking for this mythical key. And all of the Amazon forum responses are just like it'll automatically connect. And all the people are like, that's the problem is it didn't Amazon. So it's doing this is always very cathartic because you understand that lots of people are having this same problem.

D (81:29)

Same problem.

A (81:30)

But it is, it's this very basic like when it works it is like three taps and it feels like incredible.

D (81:36)

Yeah.

A (81:37)

And you're like, I just, I took this thing, it's. It found the thing. I pressed the button at the time it told me to and everything is connected and it's great. And when it breaks it is immediately.

D (81:43)

Impossible because it's obtuse. And this has been the problem with Thread since day one. They were trying to make it just work, but they didn't really take into account when it doesn't just work that you then can't just fix it. So and so in the last in thread 1.4 spec, they did say they were going to release sort of the tools to create more easier troubleshooting. But it's on a company or an app to now create that. It's not something the thread group's going to pass out to everyone. So no one's really come up with a good solution I think again, what's so interesting here about Ikea is this is the first big mass market manufacturer to really go all in on a thread matter over thread product. So I think this is going to start kickstart a lot lot of solutions to some of these problems. The biggest problem that you are probably having here is that Amazon thread networks do not connect to other thread networks. So this is an issue about thread border routers. They have to connect. You don't have to have an Amazon thread border router in order to connect a thread device to your Amazon system. You just need a thread border router of any type. So I connected mine through my, my home, Apple home thread network which has lots of different thread border routers from different companies on. And then I have a separate Amazon Alexa and a separate EERO thread network because neither of those will connect to my main thread network because Amazon still doesn't support merging thread networks.

A (83:13)

So the fact that I have Amazon and Eero is actually not. It's not a solution to a problem, it's actually the problem. What I have is two sort of.

D (83:21)

Overlapping thread networks and they should be able to work together, especially Amazon And Eero, but they still haven't implemented. Implemented that. And then. Yeah, and so what happened to me when I set mine up the first time is it tried to connect to my Amazon thread network, which I wouldn't need a network key for. So that was fine. And then when I started using it, it had connected to my Echo Pop, which is not a thread device. I was like, so I was like, no wonder you're not working because you're. So then I managed to connect it to my Apple home thread network but I had to use Claude code to find my, my thread network key because yes, it's not easy. So yeah, in trying to make it simple it's become almost impossible. But to be fair, most people don't have multiple thread networks. As long as you have one thread border outer, you should be fine. So what the issue seems to be here is, and this is we are not alone. I have seen a number of people online and I've spoken to a few people who have been having issues connecting these new IKEA devices, not, not just the button, but other ones even to IKEA's own hub. So there seems to be some kind of, not everyone because some people have had no problems, but a number of issues with this connectivity. And I think it goes to the point that I just made that this is the first mass market manufacturer to put out in bulk a lot of thread devices at once. Because you know, if you're buying smart locks or if you're buying smart light bulbs from Philips, huge. Those are big companies, but they're not big. IKEA big. So there's a huge, I think there may, I don't know, I'm trying to dig into it to find out exactly what's gone on here. But if you are having issues with setting up any of your remotes or any of your IKEA devices, stay tuned because I'm hoping to write something about it this week. But the good news is IKEA has a great return policy so I would return it and get a new one and hopefully that one will work.

A (85:15)

Yeah, so is your sense. And again, we'll, we'll, we can come back to this after you've really sort of finished reporting this out. But is your sense that this is like normal first generation product problems? This is, and we've seen IKEA go through this a few times right when it was first doing speakers, they weren't great and they have progressively gotten better. IKEA iterates very well as a company.

D (85:35)

Yeah.

A (85:36)

And, and it does seem to be sincerely committed to this thing. So I actually have a fair amount of faith that IKEA will figure this out over time. Time. But what I can't figure out is is there something wrong with IKEA's sort of initial implementation of this idea or are we exposing something broken about the system? And it sounds like what you're describing is a little bit of both.

D (85:55)

So there's the two issues here. There's the initial pairing, which has been more of my issue, and then there's your issue, which is the Thread network. And so the initial pairing I would, I'm my guess here is that's Ikea's problem and it is something that they should be able to fix and hopefully with firmware, so not necessarily requiring new devices. But I don't know. But your issue with the Thread network is the system and that is, you know, I've reported about this a lot that thread in general, when you get devices on Thread, normally they're pretty rock solid, but you've obviously been having that issue. I think this, this one could be an Amazon issue with their Thread network because I had the similar, similar weird experience with Amazon. But the Thread network in general and matter over thread is still relatively untested in large implementations. So, yeah, I think it's a combination. You know, it's new technology, it's coming to mass, mass scale and we're going to start to see the hiccups and the bloopers and the problems. Hopefully this will make people pay attention and fix them. But right now it's frustrating for everyone who was very excited about about $6 buttons to control their smart home, which I am, I'm still excited. And the pricing is one of the big benefits here. I'm not, I'm not, I don't want to be all doom and gloom. I do think this will be resolved, but I think it's important that we know, bring to light all of these issues. So hopefully it can get resolved because IKEA has a second wave of products coming out in April. So this was their first wave with the buttons and a couple other devices like the humidity, temperature sensor, indoor air quality monitors, and then their smart bulbs and a few other devices are coming out in April. So yeah, I think we're just going to have to wait and see if there's a fix in the works here. But in the meantime, Mike, I don't think there's a fix for you anytime soon. Sorry, this was a long answer to your question. Google Home, I mean, they've said they will support buttons, but right now I'M afraid you're out of luck.

A (87:58)

Your long term strategy is get Gen to keep bullying Google executives into supporting recording buttons, which good news. This is what we're here for.

D (88:06)

That's what we're here for.

A (88:09)

All right, Jen, thank you, Mike. I'm sorry we couldn't be more helpful, but come back to us when it works out. Thanks, Jen.

D (88:16)

You're welcome.

A (88:18)

All right, that's it for the show. Thank you to Julia and to Will and to Jen for being here. Thank you to everybody who calls the hotline. As always, it's 866-Verge11, and vergecast to the verge.com thank you also to everybody who sent us notes about last week's show. We've heard from a lot of people, people with thoughts about our coverage on Minneapolis and Tim Cook and all of the stuff going on in the world. There's a lot more happening right now. Those stories continue. We're still talking about how to cover some of the stuff in the Epstein files. More on that later this week. There's a lot going on and we're gonna, we're gonna keep doing our best and I'm very grateful to everybody who reaches out with thoughts and feelings and appreciating what we're trying to do here. It means a lot to us that y' all are on this ride with us. Keep calling the hotline. 866 verge 1 1. It's the Slack channel at the Verge that everybody wants to be in. So keep calling the hotline. Keep telling us how you're feeling. Also, everybody who reached out with vibe coding projects. I got like a hundred emails from people who have vibe coded. Weird stuff. Keep those coming. I'm working on some fun stuff. I want to know every weird thing that you have built with Claude code or Cortex or any of these other tools. Keep them all coming. Until then, we're going to get out of here. The Verge cast is a Verge production and part of the Vox Media podcast network. The show is produced by Eric Gomez, Brandon Keefer and Travis Larchuk. We will be back on Friday again to talk about all of the news, hopefully most of it. Gadgets. We'll see you then.

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