Dorsey donates 28% of his wealth to COVID-19, Zoom as the poster child for tech privacy and the video-game industry as Amazon enters the production game

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Hi, everyone.

This is Pivot from the Vox Media Podcast Network.

I'm Kara Swisher.

And I'm Scott Galloway.

And I just want to point out that your recent announcement that UTA has picked you up as a client is clearly just a naked attempt for them to get closer to the dog.

You are being used.

You are being used.

It is unfair.

UTA.

By the way, so you have UTA.

Take cranberry pills to clear that right up.

Listen to me.

Get it?

Get it?

You know, as someone who has had urinary tract infections many times, they don't work.

You have to go right to the antibiotics, just so you know.

Listen to me.

In every single meeting, they didn't mention you once.

No, they did.

They love Pivot.

They think it's.

They did.

They did.

They didn't.

They didn't.

So you're with UTA.

I'm with WME.

I hope that they bring this same sense of, by the way, I don't know how they got you as a client.

You know how they got me as a client?

How?

This guy, David Worshafter, who's a big, you know, is a baller at WME, showed up in my office and took me in and said, we want to represent you.

And I said, I'm not an academic.

I'm not interested in representation.

And he looked at me and he said,

we think you are a genius.

And you know what I said?

You know what I said?

Sign me up.

You're hired.

You're hired.

You, my friend, have clear issues.

That's all it takes to be able to do that.

Get the rest of the world.

Oh, it was so nakedly like pandering and it was so effective i think you're a genius you're so smart he just like donald trump you're like donald trump you need constant praise there's a whole it's so effective the guy literally he just sat down and he goes we think you're a genius

i like the cut of your people are paid to lick you up and down

they are paid i'm like a terror as someone because i'm i dig into the details and i drive oh not me what are you doing genius you're hired what's the i'm a genius you're hired i am like on their asses i like i did due diligence on all of the people who approached me.

So, who's your agent?

Let's do some inside baseball.

I have a lot.

I have several.

I have many.

I have a team.

I have a team.

Yeah, right.

Some for scripted, some for unscripted, some for speaking, some for thought leadership.

I have a thought leadership person.

I've got a social media person.

I got a book agent.

I got, I got a podcast agent.

I got everything.

I got it all.

So an agent, an agent walks into a bar and says, hey, I'm an agent.

And the woman at the bar says, really, who do you represent?

And he says, Kara Swisher.

And the woman says, okay, nice to meet you.

Oh, God.

Thanks.

No, thank you.

That's the worst thing.

That's pretty hard to say.

Honey, we signed Kara Swisher today.

Listen, you know what?

It got a lot of attention.

Just, you know, you'll see.

Just wait till all the other shoes drop.

We turned away Al Pacino, but we've signed up the jungle cat.

Listen, I'm telling you, you have no idea what's about to happen in your world, Scott.

Listen to me.

Listen, I said a month ago that I would never, a couple months ago, that I would never hire an agent.

And now I have.

So I have to say I was, I was greatness is in the agency of others.

I changed my mind.

I needed some help.

So that's what I did.

I reached out for help.

We all need to reach out for help, Scott.

Just so you know, in general.

But anyway, let's move along from this agent thing.

We're going to, we're going to, there's all kinds of things.

We're, we're,

there's so many things.

Like there's the unemployment claims obviously are huge this week because of coronavirus, which we're going to talk about a little bit.

We're going to talk about Zoom a little bit.

We're going to talk about all kinds of things.

But one thing I want to note that women-led countries seem to be flattening the curve better than other countries.

That's one.

I find that sexists.

I'm sure.

I'm in the country.

New Zealand, Germany, they have the most successful, just pointing it out.

Also, some states, the same thing.

Bernie Sanders dropped out of the race.

We have that to discuss.

And also, Gavin Newsom has become really dreamy, you know, in a lot of ways.

I'm surprised you haven't glommed onto him as the next thing, as the next big thing.

So I have a story back in the, what was that, the early 90s, when I started believing I was going to be rich from internet companies I was starting, I thought, well, if I'm going to be wealthy, I'm a white guy and I have outdoor plumbing, which means I should run for office.

So I started going to all these, I joined the Petrero Hill Democratic Club, which by the way, a quick shout out to them.

They're just fucking crazy.

And I don't especially hope any of them are doing really well.

But anyways, quick shout out to the Petrero Hill Democratic Club.

And I started going to, I started meeting with political consultants.

And I thought, I'm going to run for Congress.

And I thought, I know, I'll run for supervisor.

And I met this young, this guy who's like 6'4 and handsome.

And he was also running for supervisor, was supervisor.

And his name was Gavin Newsom.

I introduced myself and I started talking to him.

And I was with my close friend, Lee Lotus, and we walked out of the room.

And I'm like, I have absolutely no chance.

Like, if that guy is the guy, if that's the person who's supervisor in San Francisco, I have no business ever even filling out a registration.

And then he became mayor, obviously.

And then he is big.

I think his breakout moment, though, was actually when he decided to defy federal law and start marrying same-sex people.

You know what?

That was a big moment for him.

I was within that group because they called me and my partner at the time to get married because they wanted more people to come down who were better known and to have pictures and good pictures.

We had a big

agents that are represented by you.

No, there's no agents.

They just called.

And so one of the things that was, you know, we were getting married anyway, but

it was really an interesting time.

And let me just say, Gavin Newson's, you know, everyone has their criticism about various people.

That moment to me was such an important moment from a leadership perspective, political leadership.

He got killed for doing that, like politically.

He was on the upswing.

And a very prominent political person said to me, like, that it was a mistake, what he did, and everything else.

And, and he, and they said, you know, maybe it's America's just not ready for gay marriage.

And I said, it's called leadership, and you should learn how to do it because he does.

And he did it again here in California.

I'm not surprised that he's doing such a good job.

You know, there's a lot of controversy.

He had some personal problems, the drinking problem, and everything else that he's talked about.

But

let's gloss over that.

He was banging his campaign manager.

I know.

I know.

And by the way, by the way, Kiera, that's a moving story.

One quick question.

Did he preside over your divorce?

No.

So inappropriate.

So inappropriate.

No.

Well,

I like your ex.

Me and and your ex boss.

We're having Easter on Sunday.

Lesbians get along.

Don't even try to create problems because we lesbians.

Well, you're talking about you, Hannity, and Lindsey Graham.

You guys are all a thruple now.

He's not a lesbian.

You're all a thrupple.

Oh, man.

He would not survive at a lesbian bar for even five seconds.

Hannity would, of course.

Anyway, listen to me.

We're going to talk.

We're going to move along from my personal life.

Anyway, Gavin Newson's great, and I think a lot of him.

By the way, my brother was an anesthesiologist when he was for his kids, for his wife.

He has like 103 kids.

How's your brother doing?

How is Dr.

Good?

We may have to bring him back to talk about what's happening.

He said the moves by

Governor Newsom and Mayor Breed in San Francisco has created a real flattening of that curve.

And he was really, he just was complimentary.

It looks good, Calfran.

Yeah, because he's like the early, I think Mayor Breed was the earliest mayor to do something about it.

And so he's like, this, it's made the world of difference.

And, you know, of course, that's going to be seized upon.

Like, look, it wasn't that bad.

But these moves early by some of these people, early moves

to let it spread out has been really a life-saving well he had the he had the gangster move from a communication strategy and that is he announced that the california had secured i think 150 million mass and the way 200 million yeah excuse me 200 million but the way he positioned it which was genius and a wonderful positioning was he said we've secured this for california this but more than that we've secured these masks for america right and he said the california economy which i think on its own is the fifth or sixth largest economy in the world

a nation state in the world it has said okay um

we're in this together and we're using our our capital we're using our resourcefulness we're using our kind of culture of innovation to do what the federal government has been unable to do and that is secure protective equipment for america and not create this hunger games ebay like bullshit if you don't like me okay okay desantis in florida you get more ventilators in cuomo because you like me so he's acting yep you know him presidential him him and trump walk into a bar one one acts presidential the other is president you know so he's he's setting himself up really well he's done a fantastic job 100 100 and i would i gladly vote for him he's he'd be amazing it's sort of like the president of new york and the president of california which is interesting uh which is cuomo anyway but let's talk speaking of of great moves uh jack dorsey pledged a billion dollars to fight covet 19 that's the biggest financial contribution we've seen from a tech ceo so far he's obviously not the only one putting out resources mark benioff one of the things he's doing is if you notice notice, he's taking pictures of him delivering a lot of these supplies to healthcare workers.

And one person close to him told me he's doing it just so that it doesn't get seized by the government and it can get directly into the hands of people who need it.

But anyway,

the question is, are we depending too much on the ultra wealthy to get us out of public health crisis?

Even though a lot of this stuff has been amazing, Dorsey announced he's putting 28% of his wealth in the form of shares of his company Square into an LLC called Start Small.

He says the expenditures will be recorded in an open Google document.

The first donation went to America's Food Fund, according to spreadsheet.

Meanwhile, Apple has donated 20 million masks.

Tim Cook said there's a company-wide effort to bring together product designers, engineers, operations, packaging teams, and suppliers to design, produce, and ship face shields for health workers, which will probably be stunningly beautiful.

Bill Gates says his foundation will spend billions to fund the construction of factories.

This is critically important for developing promising vaccines to combat COVID-19.

And Zuckerberg donated $25 million in the effort.

That's a lot less.

So Teddy Schlieffer, a Recode reporter, said these efforts often imbued with unaccountable, untransparent, undemocratic influence.

What does it mean?

And

why does the Square Stock versus Twitter stock Scott?

And, you know, what do you think of this?

Teddy had a great story about that two things can exist at once, that these are good things.

And at the same time, should we be relying on rich people to pull us out of the drink when the government should be doing it?

What do you think?

Yeah, when the rich guy on the blog shows up with the best hose to put out your fire, it doesn't mean it's not saying he's not a wonderful man, but what it says is we need to fund the fire department.

And when you're dependent upon wealthy people with big hoses, I don't know where I got the hose metaphor, but

we're

well, look, billionaires are, a lot of billionaires, and especially around tech leadership, are stepping into the void here.

And whether it's Bill Gates, who's become kind of other than Dr.

Fauci, the voice of sort of credibility and reason here, whether it's Tim Cook and his masks, whether it's Jack Dorsey and kind of post-corona philanthropy, tech billionaires are sort of stepping into this void.

The fear is that that it is this, there's two things here.

There's philanthropy and philanthropy is generosity and giving without any sense or any expectation of anything in return.

And then there's what I would call going in and buying Chanel Rouge Allure Velvet Luminous Matte Lip Color in La Romanesque.

And that's $28.

And it's, you spend some money to make, to make you look better.

And I think a lot of this philanthropy is not philanthropy, it's lipstick.

I think when, I mean, let's think about the scale here.

So one of the wonderful things about this reporting is they've not only reported the number, they've reported the percentage of his wealth.

And any individual who gives 28% of their wealth, which is what Jack Dorsey is doing, should be commended for giving.

Real giving hurts.

You noted that before, the amount that you should give the amount.

Let's talk about this.

When Jeff Bezos

gives a million dollars to defend wildlife post-the wildfires in Australia, it's the equivalent of the average household giving approximately somewhere between two and six dollars to that effort.

When you tip tip somebody and when you go to the olive garden and you have a nice dinner as one does at the olive garden with you and your family and you say you spent a hundred bucks and you're feeling like a baller and you give a 20 tip that's 20 bucks that's the equivalent of jeff bezos giving uh say that family has a million dollars in assets they're four times as wealthy as the average household that's the equivalent of jeff bezos to leaving a three million dollar tip so when When individuals, we need to start reporting what percentage of their wealth because we think, well, isn't that wonderful?

But the bottom line is, if you're putting out a press release to give the equivalent of $6 away of your household total net worth, does it really warrant a press release?

I would love to see a certain IRS metric that says, just as we evaluate different types of income, let's evaluate different types of philanthropy.

And if it's less than 0.1% of your net income and you're putting out press releases, it shouldn't be tax deductible.

So

there's philanthropy and then there's lipstick.

And in this instance, I think, Mr.

Dorsey, this is clearly philanthropy.

Anyone who gives away 28%.

What a a lot of these tech people are doing, though, when they give away 0.01% of their net worth, it's not philanthropy, it's lipstick.

Well, it's also one of the things that Teddy pointed out, I think this line was really.

great.

He goes, but two things can be true at once.

Tech billionaires can be doing good while simultaneously revealing their power and entrenching it for the long haul.

As the government struggles and safety net crumbles, tech billionaires are reaching their apex of their influence, influence that may not recede once so easily when we do manage to survive this pandemic, which I think was a really good point.

It's like you think about Rockefeller during the Great Depression or Carnegie and others.

This is not something new, by the way.

These just happen to be the people with the money.

And Teddy also wrote a follow-up story about the 10 other tech titans with the power to

shape this response: Jack Dorsey being one of them, Bill Gates, you had mentioned, but also Larry Ellison, who's been sort of wandering around the White House in some way inside of Trump's brain, Mark Benioff,

Lorraine Powell Jobs, Larry Page and Sergey Brin, Jeff Bezos, Steve Bommer, Michael Dell, Eric Schmidt, Schmidt, Dustin Moscovitz, who was a Facebook executive.

So they do have enormous resources.

And so the question is how to put them to use without giving them enormous power.

And I think that's hard in our country.

Yeah, but on an individual level, it's wonderful.

Taken as a trend, it's dangerous because what you have here, let's look at Jack Dorsey.

Again, we numbers, numbers are

informative, but they're not, they don't,

it's hard to get a sense of proportion around a number.

And just, again, let's go back to proportions.

Jack Dorsey has donated $1 billion for aid post-Corona, and that's wonderful.

Okay, so if every individual, if every employee at Pinterest, they have 2,000 people, if every employee at SNAP, they have 2,800, if either of those terms, if every employee gave $1 billion to try and restart the economy, it would still not be as great

as the bailout, as the rescue package.

Governments have to be funded well enough such that they can make these sort of tectonic moves.

No amount of billion-dollar donations is going to help us around income inequality or climate change or

figuring out a way

to fund the agencies we need to ensure this pandemic, this type of pandemic, doesn't relapse.

So it's, to a certain extent, it's a bit of cold comfort.

And it also, when we're dependent upon guys in a midlife crisis instead of NASA to put us on Mars, when we get hope from these weird projects from eccentric billionaires saying they're going to cure death, it's again a very dangerous reflection that we're no longer hand in hand.

We're finding idols and individuals and we're being atomized by each other, such that

we're trying to find idols as opposed to a comedy of man and joining hands around what is the greatest organization in the history of mankind.

And that's

the U.S.

government.

And we keep defunding the U.S.

government.

Well, it's interesting you know

jana uh garden talks about this all the time that we should just tax them but what's interesting what you said there was a in teddy's story he quoted david callahan who's a who has a newsletter called inside philanthropy and he's prominent uh he he writes a lot about the subject.

If anyone can afford to give more in response to the pandemic, it's the richest of the rich with far greater assets than private foundations.

In recent years, though, giving by billionaire donors has amounted to only a tiny sliver of their wealth, and many billionaires barely give at all.

There are no signs that this crisis will change that so it i think i like i said there can to be two things at once these things that mark is doing what mark benioff is doing or jack is doing are are very important signs that that that that they do this but you're right the government really is the is the is the biggest gangster among these people although this this is unprecedented this is like 10 rockefellers like essentially how given the numbers their wealth is unprecedented it's not it's just i mean okay so uh let's talk about dorsey a a billion dollars 28 of his net worth that's a one there's just no getting around it this is wonderful this this this is a testament to his character and his code as a person let's just full stop now but when you're worth four billion dollars giving away a billion it's just not going to impact your lifestyle i'm not going to say it's not giving but he's not doing anything that's going to get in the way of his of his jet or his lifestyle he don't need it you're saying he don't need it it just doesn't in any way impact his lifestyle where when the average household in the u.s the average white household is worth $220,000.

The average black or Latino household is worth about 50 or 60 grand.

When they give 100 bucks, it changes the way they live their lives.

So philanthropy comes in different shades.

The other thing is, is that these tech billionaires, it's never, they want something in return.

So the Twitter TPR folks have been hard at work talking about, you know, putting out tons of press releases.

I think anytime you put a press release out for your philanthropy, it should immediately not become tax deductible.

And there's all of a sudden, I'm getting a bunch.

People are tweeting at me because I've been saying that we shouldn't have a part-time CEO moving to Africa, that Jack should step down.

And people are tweeting at me saying, how do you feel now?

And I'm like, I feel exactly the fucking same.

Giving.

Giving a billion dollars.

No wonder.

Of course you feel the same.

Giving a billion dollars to post-Corona aid is a wonderful thing.

But Mother Teresa shouldn't be the co-CEO of Twitter either.

It has nothing to do with being a good fiduciary for shareholder value.

It doesn't any way make him a better product manager that's going to figure out a way to monetize the 28%

incremental increase in traffic that they've I do like that you stick by your your well everyone is tweeting at me saying well what do you think now should you step down as CEO and I'm like absolutely Lulu what does this have to do with any doubling down but

you see my point this has nothing to do with your ability to serve as a good fiduciary for twitter sharing

who have been repeatedly kicked in the nuts for the last five years right every other College does have a halo of character certainly does that's the problem it has that's the problem yeah is all of a sudden he no longer is subject to the same scrutiny as every other CEO because, unlike most CEOs,

he has a billion dollars to give away.

So you want to like him.

So these guys wrap themselves in a philanthropic title.

I think the question is, are these donations the new tax?

Like instead of taxing them, this is how they're taxed.

Yeah, but it's not a tax because they get to put their names on shit and they get to decide what they get to do.

That's it's not.

I mean, a tax, the very definition of tax is that you are redistributing income and you don't get to decide where it goes.

If it goes to the Sixth Fleet in the Gulf and you're against wars in the Middle East,

too damn bad.

You have signed up.

You have joined hands with the other 350 million Americans and elect somebody different.

To a certain extent, this type of philanthropy is bypassing our democracy and our elections and our ability to make big decisions because now these guys who make these, and they are guys, let's be honest, they're all dudes, other than Lauren Powell Jobs buying the Atlantic.

It's basically dudes.

So essentially, these guys are doing an unrun around the government, around public policy, around foreign policy.

So every individual effort is a good thing.

On the whole, this reflects an underlying situation.

I like this analysis.

I'm going to put out one thing, though, I do think in some cases when the government doesn't act, I do like that Bill Gates is building these factories because the government's not doing it.

Like, you know, and maybe he'll make money.

You know, I think we need to have them built now instead of arguing about it.

And so I'm fine with this foundation spending billions of dollars to fund the construction of these factories.

Like again, but you're right.

You're sort of giving in to like, now he's a different case.

He's all his money is going away.

It's getting given away.

And it's an interesting thing that he's doing.

I think he really genuinely is engaged on this topic and has been for many years on the pandemic issues and vaccines and healthcare.

But in that case, what do you do?

Like the government isn't building these factories or isn't thinking ahead, and he is.

So

it's, again, it's a very, as Teddy said, you can think two opposing thoughts in your head at the very same time.

Yeah, but

the thought I think that we need to be left with is

do we want to be dependent upon the generosity of tech billionaires or do we want to employ the same standards and a progressive tax structure where

billionaires in the 60s paid 40% of their taxes in the 70s they paid 60%.

Now they pay 21%.

And do we want to create the void that they need to step into or do we want to close the void and decide that it's NASA, it's the CDC CDC that put people on Mars and that are our front lines of defense against these pandemics?

Because if you want to talk about a good ROI,

the CDC gets about $11 billion.

Well, what if we had taxed big tech an incremental 10% and then taken 10% of that and funded the CDC to the tune of 50 or $100 billion?

Would we be talking about 50 to 80% of people going ventilators die?

Would we be talking about the fact that despite the fact we had more heads up here, that we have handled this the worst?

And everybody wants a fucking Hallmark Channel movie about our unique American exceptionalism and how we've inspired by how people are responding.

There's just no getting around this.

We fucked up big time here.

Yep.

And if we had not made proactive, you know, if we had made more forward-leaning investments, if we had been less narcissistic, if we hadn't defunded the CDC, less people would be dead.

And we have to face those hard truths.

And that all goes back to the system where we've decided the new idols and the new kind of arbiters of truth and vision moving forward are tech billionaires or people who divide us like the current president.

And that shit has just got to stop, Gary.

It's got to stop.

All right.

I like this whole thing.

I think you should run for supervisor in San Francisco now.

I feel like

this is Gavin Newsom.

He's moved on to bigger things.

You can get in there.

You can get in.

I don't see anyone quite as handsome with him on the supervisor thing.

I don't recall, but actually, I don't recall.

I used to be harder with the lieutenant governor and business?

I like your thinking.

I agree with you, but it's going to be harder for you and I to attack, to not attack, to criticize technology.

Oh, we'll try.

They're on a redemption tour.

They're going for the redemption tour, and that's what they, of course, that's what they're doing.

Anyway, we're going to take a quick break.

We'll be back with one more big story and listen to that.

I think similar to that silent retreat when he gives a billion dollars away, he should keep it to himself and not put out press releases.

All right, we'll be right back.

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Okay, Scott, we're back.

I want to do some quick updates about what's going on with Zoom's privacy issues.

We've been contacted by the company that they were, they thought we did not understand them properly, but it has, we're going to have hopefully the CEO on Recode Decode and other, we're going to talk about it more because a lot of people are still using this and there's still these privacy issues.

But Zoom brought on Alex Stamo, someone I know very well.

He's the former chief of security for Facebook.

He previously worked for Yahoo as an advisor to improve their privacy and security.

They've added, they've quickly added some stuff to the app for sure about around security.

It's very prominently placed.

Alex Thamos left Facebook in 2018 over the company's response to the troubles around the data security and election interference.

Tuesday's show, we talked about the University of Toronto's research.

They found that many of their videos have problems with all kinds of issues of security and everything else, and that they had some servers in China.

Zoom reached out to us and emailed to clarify a few things in their opinion in the blog blog post they responded on the ramp up in china we added server capacity and deployed it quickly starting in china when the outbreak began in that process we failed to fully implement our usual geofencing best practices we have since corrected this and on the washington post story about meetings being recorded zoom meetings are only recorded at the host choice either locally or on the host machine or in the zoom cloud so they're they're they're they're moving this ceo eric yon is moving and and they're trying to do things but you know people are still worried uh brian chen wrote a great story in the uh new york times a lot of people feel that uh you know about these issues and and how you shouldn't use zoom um and was recommending web uh web ex and some others microsoft teams face time and things like that um but you know i think they're trying this is a company that's trying hard to fix things but sort of got caught sort of flat-footed and some of their weaknesses have been shown rather quickly through the heavy usage what do you what do you think of these responses thought i think they've gotten mostly right he's acknowledged the problem he the top guy is taking responsibility.

And I think they're attempting to overcorrect.

But back to the notion of a single data point reflects a more dangerous trend.

And that is

they've said publicly, there's just no way we could have anticipated this happening.

We didn't see this coming.

But they see their earnings calls coming.

They see their 13, they see their defiling companies so they can sell stock.

They see every increase in daily active users coming and they put out press releases.

Anything that might involve them getting liquidity and getting money into their hands and getting any sort of transfer of wealth from shareholders into their pockets, they see that shit coming for miles.

But anything that might do damage to the Commonwealth of privacy, they don't see coming.

And the reason they don't see it coming is that our government has failed.

In the sense that, and by the way, I'm not suggesting Zoom should be the poster child here, it should be Facebook.

But when they don't see the GRU coming,

they should be fined not $5 billion, but 1%, 5%, 10%, 30% of the market capitalization.

And then all of a sudden, they're going to start to see this shit.

They're going to start to anticipate it.

Because right now, the incentives aren't to anticipate it.

The incentives are to ignore it.

The incentives are to

turn away from it and hope that, I mean, even in their mission, it says they're trying to provide frictionless communication.

And no one raised their hand and said, all right, that's a great tagline.

That's going to get us a greater multiple on revenues.

But are there downsides to the term in the gestalt of frictionless and technology?

Haven't we seen that frictionless equals security risks?

And they're saying, well, but we don't get paid for that kind of, we don't get paid for that kind of consternation.

And what we need to do is start paying them to have that kind of forward-looking

insecurity or fears.

And the way we pay them for it is we need to begin bitch-slapping the shit out of companies that

don't forward-look into this type of friction or this type of

risk they're presenting when they don't put in place certain security measures.

So we need to start paying the people who do pay attention by finding the shit out of the companies that don't.

And I hate to say Zoom should be a poster child here.

It should have been Facebook, but somebody's got to step in and make it worthwhile to make the investments to ensure that a fifth grade class doesn't get bombed by pornographers that start saying aggressive, violent things.

And it's also not just that.

that.

It's that these, these, these technologies, my son was telling me about like other kids in his class gave the links, you know, it's giving out the someone's like, oh, it's just stupid people giving out links, but it's, it's designed to not protect, like it should, it should know that people might do that, for example.

And my son was telling kids put, gave other kids from other schools and they came in and they made up all kinds of names.

One of, you know, like

like Mo Lester, like that kind of things.

Like they signed in with those names and they all had a big old laugh about it.

Or there was a couple of, you know, those dumb names that you make up and things like that.

And

so, you know, they should anticipate human behavior in the design of their, whatever they're making.

And that's one.

Two, when things like this happen, and I do think they've responded pretty well.

Zoom has done a good job.

And I think it's been not victimy.

It's been very much, we made a mistake.

They're not, you know, that one quote about them, like, this is what happened in China.

But in the first place, when they did it, they should have thought about it.

Like, that's, that's the anticipation of conquest is and what they're trying to do is, is protect frictionless more than anything.

And that's the problem is that they want to protect the one thing that's the selling point, which is that it's easy to use.

And easy to use often means insecure and not private.

So I would argue that Eric Yuan deciding to hire Alex Damos is a really strong move.

It's probably more optics.

I don't know.

I mean, I don't, you know, it's.

No, Alex gets in there.

You know, what if Alex leaves?

Alex has been known to leave.

He left Yahoo when Ber Samer wasn't doing enough around it.

So

it's a dangerous move to hire Alex and then do nothing.

That's a good point.

That's a really good point.

Yeah.

You don't, you're that.

That's, I hadn't considered that.

Um, that when you hire Alex Deimos, it means you're serious.

It means that, you know, shit's about to get real around that stuff.

Cause if it doesn't, you're right, he'll embarrass the company.

Yeah,

he's willing to do that.

I mean, well done.

You should get representation.

Did you see that my upward, my upward trajectory to the top echelons of media.

That's really what you're jealous of.

I don't want to be in it.

You're on a rocket ship to several conferences that will be canceled in the fall.

No, they're not.

You know what?

We're coming back, says Bill Barr, the epidemiologist expert who's running the Justice Department.

What an oaf he continues to be.

Anyway, listener mail.

Well, let's move on to listener mail, roll tape.

You've got, you've got.

I can't believe I'm going to be a mailman.

You've got mail.

Hey, Kara and Scott.

This is Stephanie from Wellesley, Massachusetts, and I have a question about the video gaming industry.

Global revenues were almost $138 billion in 2018, and that is way more than the worldwide movie and music industries combined.

So why is it that we never hear about what is happening in gaming from mainstream media?

Are we so PC that we can't admit to playing Candy Crush on our phones?

And how or will the video industry change in a post-COVID-19 world?

Thanks so much.

Love your show.

Yeah, Wellesley Mass, I love that place.

Thank you so much, Stephanie.

Listen, there's a huge New York Times story today about gamers who play where other gamers watch and how big their business has gotten.

I do think the mainstream media industry does cover gamers.

And I think there's probably almost no impact except that people are going to be using games more.

This is an industry that is sort of home, stay at home and play on your video game.

So I suspect it's going to do well and even better

going forward.

Scott, do you have a different point of view?

Well, she's right in the sense that relative to the size of the industry, I think the total U.S.

domestic box office take, so think of all movie theaters, is something like, I think it's five or seven billion dollars.

It's just not.

And then this industry is 130.

I think radio is 20 or 25 billion or music and radio 17.

And then video games are 130.

So it's a staggering industry.

I think there's a generation that people who control the editorial desks are just aren't into video games.

So

she's absolutely right.

It doesn't get the coverage it deserves.

I was offered a chance to buy the local team in Florida.

There's now video game teams.

There's leagues forming.

They're fascinating.

You could buy a team, just to give you a sense of the industry.

You could buy a team two years ago for about 5 million bucks.

Now they're about 50 or 60 million.

Some Korean guy stepped in and bought a bunch of teams.

But when you think about it, it's incredibly well positioned.

You know, there's just some industries that are going to do really well during or come out of Corona with additional win behind their backs because

you can't go see a basketball game, but you can watch a video competition online.

Right.

So it just strikes me that the industry only comes out of the stronger, the players, whether it's Activision or

Microsoft that benefits from video games.

But are your kids, you have two teenage boys.

Are your kids gamers?

They are.

They are.

They haven't been playing as much because they're back on online school and stuff like that.

But yes, absolutely.

They are.

And they play it.

I think not quite as much as they used to, which is interesting.

But still, it's an important part of their entertainment diet.

Now, just so you, some context, Amazon, of course, acquired Twitch, the video gaming streaming platform that helps them cultivate a massive gaming community.

And that there's a lot of competition, people watching things.

And Twitch usage has been up 31%.

The numbers of hours daily watched on Twitch rose by 10 million.

Amazon is going to produce its own video games, it just announced, and they're making a cloud game streaming service, Project Tempo, that will make it possible for gamers to play across mobile phones, laptops, desktops without gaming hardware.

And don't forget, last year, Google launched its own cloud gaming platform called Stadia.

So there's a lot going on, obviously.

And obviously the players that know the business know the business.

Yeah, but the thing you said that really stuck out.

there was that Amazon is now going into video games because these some of these games cost hundreds of millions of dollars to I mean the whenever you sit sit down and actually watch these games,

if you're not a gamer and I'm not, it is breathtaking the lifelike graphics, how robust the animation and the processing power.

I mean, the genius and the resources that go into these games is staggering.

And now a lot of video games require a greater investment than the initial work that inspired it, whether it's the initial Harry Potter film at X budget, the video games that follow on it or Star Wars is a multiple of that.

And

what you said that I found that's super interesting was that there are very few companies that can go private label or vertical and use their Rails to encourage people to buy their video games and make the, have the capital to make the requisite investment.

And the only one I can think of is the one you just mentioned, which is Amazon.

And I wonder if Apple's going to get into the business because before you know it, Amazon will do what they've done in media, and that is they can spend $5 billion to produce what it would take HBO a billion dollars to produce in terms of content because they don't have those cultures, but it doesn't matter because they can then turn on their algorithms across their platform and

start putting their own video games, their own private label ahead of the video games produced by third parties.

Further evidence of abuse of monopoly power, owning the rails and why and that's what I'm going to ask.

I mean, look, is Bobby Kodak, who runs who I know very well, who runs Activision, going to start realizing he's got to get some political heft around Amazon getting in here.

Would you invest in those companies?

You know, because Activision makes games essentially and then there's a whole genre of business of people watching people play games or how to play games and then there's a whole other genre of serving up these games in some way so would you would you where would you invest in the video game industry right now uh so look these are incredible businesses they're well managed it has the wind at its back but hands down the only video game company you should invest in is amazon because amazon

you always want to invest you always want to go with the unregulated monopoly.

And because Amazon has cheaper cash, this is where Amazon is.

Amazon is worth a trillion dollars.

We need to get to $2 trillion in five years.

All right.

How are we going to do that?

Well, maybe the economy grows 2% to 3%.

Maybe now it's going to go grow negative 2%, which means we've got to take a trillion dollars from somewhere else.

Trillion dollars is a lot of market capitalization to grab from other people.

We have soaked, we, the Amazon vampire, have drained the blood of the corpus of retail.

Unless we're going to go after Walmart, which we probably can't do, we have to find new industries to disrupt or simply put, kick the shit out of.

So, but we just don't want to kick the shit out of any industry because some industries just aren't big enough.

We need to find big, big pools of money.

We need to go after industries that are huge.

So,

the biggest industry in the world, the U.S.

healthcare, and they're going after that.

But what they've also identified is that $130 billion global video game industry and said, well, what if we started producing games?

Because

we can foist a shittier game on Amazon Prime members where we control 78% of U.S.

households and one-third of all clicks online come through our algorithms.

We can begin foisting on the public our shittier content at a higher price and it doesn't matter because we'll start giving the Microsoft scratch.

It's the old Microsoft.

That's right.

And that's why we stepped in in 99.

The DOJ got off their asses and stepped in.

So DOJ.

So sure here, I do think.

I'm going to push back a little bit.

I think gaming, I think the like Spotify is better than, of course, they're getting like as the big players move in, they're going to do a product that's going to be competitive.

But in this area, it does matter a lot of who has the best designers and the best creativity.

I don't think you can just voice crappy shows on people the same way.

You can't voice crappy games.

I think these gamers are quite discerning.

And, you know, my kids know a lot.

They're like, no, that's bad this way.

They're very, I don't think they would take

bad games just to play games.

I just don't.

I think there's a little bit of creativity that does reign here.

But, you know, it'd be really interesting to have Bobby Kodak on to talk about this because I think that you know, Amazon's coming for him and others because they're just in the creative business.

And eventually, you know, they own Twitch.

That also creates excitement around games because people watch people play games and things like that.

So it's,

it is a question when they're buying every piece of the system.

They're buying the watching of the games.

They're buying the distribution of the games, the selling of the games, and now they're going to make the games.

So you're right.

I mean,

that is the financial play here, even if it's pretty frightening for a lot of these companies.

You're absolutely right.

So the community won't accept a bad game, but

I put forward the wrong, I looked at this through the wrong Rubik.

So let me ask it a different way.

Would the gaming community take 80% of the best game for free with their Prime membership?

Would the gaming community take take a game that's 80% as good as the best game for free that's also, by the way, incredibly easy to play and download because they already have interface with Amazon across all these, and they already have our credit card.

And maybe we can even order it with voice.

Maybe we come home and your Amazon, your Alexa says, try the latest Star Wars game or NBA game or whatever it is from Amazon Games.

Say, tell me more.

Say, start Amazon Games right now.

They just...

The example I use is the morning show.

And that is Apple took Game of Thrones-like budget to produce Murphy Brown.

Any other entertainment firm, traditional entertainment firm, that would be written up in variety as one of the biggest disasters in the history of media.

They would say, okay, these guys spent $130 million per episode for Rhys Witherspoon to reanimate Rhys Witherspoon as a plucky young reporter and Jennifer Aniston and Stephen Carl.

And by the way, they're all great in it.

It's a good show.

It's not a great show.

It's a good show.

But Heaven's Gate was a good movie, but it wasn't worth $200 million.

It was a disaster.

And so

from any other media company, this would have been a disaster.

You're not allowed.

But because it's from Apple and all they need to do is sell a few more phones, and because a billion dollars is a rounding error, they can come in and produce ridiculously non-economic content, which puts incredible pressure on an entire industry that hires caterers, gaffers, creative directors, showrunners.

And that is the definition of anti-competitive behavior.

Anyway, so I, yeah, the video game industry, they should be

rightfully terrified that Amazon is getting into this business.

And they should be contacting their lobbyists and saying, hey, are you going to let, are you going to let what happened to retail happen to this industry?

Because we employ a lot of people and we employ a lot of people that if the gaming industry goes away to Amazon, you're literally going to have millions of kids not moving out of their parents' basement.

It's like, okay, he dropped out of college and he's in our basement, but he got a job with some gaming company.

Whenever Amazon moves in, it destroys jobs.

Yeah, it's interesting.

One of the things that's that it also is, it's also more in their in their wheelhouse.

It's game, it's, it's, it's software.

It's software making, software distributing, and so, and technology.

Of all the industries, gaming is most, you know, it's, it's closer to tech than any other.

And you're right.

So Stephanie from Wellesley, Massachusetts, we, this was a great question.

I am going to have Bobby Kodak on Rico Deco to talk about this because I think it's a great question.

All right, Scott, we're going to take one more break.

We'll be back for predictions.

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Okay, Scott, we're back.

Last week, you made the incredible prediction that universities wouldn't be reopening for the fall semester, which I told my son, and he was beside himself.

Do you have another prediction this week?

My prediction is more boring, but I think more important, and that is you're about to see a concerted, multi-prong attack on the World Health Organization from the current administration.

And that is, they realize how badly they fucked up.

They realize there are more people who will never get off a ventilator.

They realize there's more fear.

There's more panic.

There's more economic

destruction because of their incompetence and their inability to

invest and their inability to lead.

So the American brand comes out of this as incompetently or dangerously incompetent.

When I say dangerous, I mean more people are, we now have more infections than China, Italy, and and Spain combined.

Anyway, so they need, they need to blame somebody.

And Donald Trump is the master of the pivot to blame.

And his new target is going to be the World Health Organization.

And you already see evidence of this.

He's already starting.

Oh, yeah, but it's just starting.

It's going to get worse.

And the big winner here is the virus because

a key to any war is atomizing and dividing your enemies.

The reason World War II, the turning point in World War II wasn't D-Day.

It wasn't the Battle of Bulge.

It wasn't even dropping the atomic bomb on Hiroshima Nagasaki.

The key turning point in World War II, where it would have turned out much differently, was

when the Germans and the Russians split apart and declared, and Hitler and Germany declared war on Russia.

And the virus, President Trump is playing into the virus, our enemy's hands right now by

instead of figuring out a way to grab hands and unify through global institutions that can serve to connect us and have a unified treaty treaty and a unified front against this enemy, he's dividing us and he's complaining about

the same playbook.

Yeah, he's

over again.

But it is literally playing into the hands of this enemy.

The enemy wants this shit.

The enemy, the virus wants us to be divided.

And the few things we do have infrastructure and systems and structures in place to try and fight this thing on a global level.

And one of those, one of those infrastructures and systems and organizations is the World Health Organization, which, by the way, we gave $58 million to.

Too bad we didn't give them $58 billion, right?

This was a huge opportunity missed in terms of giving the World Health Organization more legitimacy and more funding.

And what is he going to do now?

He's going to basically say, all right, let's further divide us.

Let's further emasculate and neuter our response as an army.

This is just, it's a terrible move.

It reflects the narcissism, the ignorance, and the incompetence

of this administration and unfortunately, more generally, of our society right now.

But the World Health Organization is about to come.

I have an idea.

Why doesn't some billionaire give the World Health Organization a pile of money?

There you go.

Like, hello.

You know, just like if Bill Gates stepped up and said, here's $500 million.

Trump is wrong.

That would be like beautiful.

Yeah.

I hear you.

That's, but that, I mean, it's sad that that's where we are.

Yeah.

It's sad that that's where we are.

Anyways, World Health Organization is about to take a bunch of ridiculous incoming fire that damage collateral damages all of us the blame game like they he blamed the governors he blamed his blame game is really in lost its mind like in terms of how he finds blame but you know what he's probably i i i used to think this was going to end his presidency i don't know we were talking a little bit about the sanders dropping out you know what the trump as bad as he looks right now he looks stronger than biden who's just hiding in his basement's basement talking to his grandkids through a window i've been polling my conservative uh relatives and they're not happy with trump yeah it's it's not, it's not, but here's the thing.

Think about Biden right now.

Where is Joe?

He's in a hiding in a baseball.

It's like so early.

I don't agree with you.

We're going to talk about this next.

We'll talk political next, but I think it's very early and we got plenty of time for, and if he picks up.

Bernie's out.

What do you think about Bernie being out?

I'm fine.

We didn't even talk about it.

We didn't even talk about it.

We'll talk about it Monday.

How about that?

We'll talk about it Monday.

We didn't talk about Stakehams and I love Stakehams.

Can I just say I want to marry Stakehams?

Cause I love, they're the smartest Twitter account on Twitter right now in terms of deal talking.

You should read the stake'ems accounts because they're very, they talk about these things too, Scott.

You're so cocky now that you have UTA representation

telling me what to do.

Telling me what to do.

Just go, trust me, go read Stakehams.

I do read Stakeham.

My, my favorite account is the Twitter feed of the voice of God.

I think that one is hilarious.

I forget the comedian that does that, but that's really good.

That one is good too.

Yeah.

Okay, I'll go look at Stake'em.

Go, I'm telling you, you'll like it.

I want to talk, I want your questions about how they're handling their brand.

I think they're doing a beautiful job, but I am not an expert like you are.

And by the way, Scott, did I tell you you're a genius?

You're hired.

Season three, pivot.

Season three, pivot.

It was so

it was just so funny because I remember sitting there thinking, this is so nakedly sycophantic and it is so effective.

It is so effective.

Effective.

You are hired, my brother.

You are hired.

Let me just say, Scott, your amazing head of hair is so attractive to me.

Like, I don't know what.

Josh, Levy and David Worshafter.

Greatness is in the agency of others, wonderful people creatively trying to figure out a way to get to spread a little dog around the world.

Spread a little dog.

You're like a low-rent Trump.

Anyway,

he's lifting his leg and he's spraying.

He's a big week for religious gatherings, obviously.

I know you're an atheist.

Do you have any creative ways you've been staying teleconnected with your community?

Anything, anything?

This is the season of kindness.

I've been screaming at everyone.

It's my neighbors.

I've been eavesdropping on all the arguments to make me feel better about myself.

Okay, that's nothing.

I don't have a hallmark moment.

I don't, I don't.

I know we're all looking for those right now so we can wallpaper over the fact that we have fucked this up so royally, but no, no hallmark moments today.

I see where you are.

I see where you are.

I'm going to leave you there down in the hole.

How about you?

What have you been doing?

Me?

You've been zooming with your baby what have you been doing yes we zoom the baby's honestly there's no way bringing me down like every morning i get up i'm like oh god here we are still and then the baby smiles and i'm like okay yeah like it's just i was lucky like she's having her best pandemic life ever it's just like is she just literally it's hard living her best corona corona because literally lucky is good lucky is really good she was starting to spout some of this new spox stuff that was going on like bring back not not bring back the economy she doesn't think that she's really interesting she's like we should stay, you know, shuttered.

She's not going with the Fox line.

Oh, that'll take three weeks for them to convince her of it.

But

she was doing the line of

that maybe

it's safer and it's not yet.

And so that was it.

She hasn't fallen for the hydro hydrochloric.

Does she believe, like most Fox viewers, that Jesus is coming back and he's going to turn water into

hydrochloroquine?

He's going to turn water into hydrochloroquine.

Wine?

Get it?

No.

Get it?

No.

Yeah, no.

She told me for the first time she thought trump wasn't going to win which is she was saying he was going to win it was interesting and she had a whole bunch she had a whole theory she she she this has not made her amused by him in any way so we'll see we'll see you know obviously the the numbers are interesting men support him more than women women do not by a large amount um so it'll be interesting to see if he can get all these sort of uh

his base to really uh support him and maybe he can we'll see anyway don't forget if you have a story in the news you want to hear our opinion just like Stephanie from Wellesley, that was a great question.

Email us at pivot at Voxmedia.com to be featured on the show.

Scott, please read us out.

Today's episode was produced by Rebecca Sinanis.

Our executive producer is Erica Anderson.

Special thanks to Drew Burroughs and Rebecca Castro.

If you like what you heard, please subscribe.

We'll be back at the beginning of next week for a breakdown of all things tech and business.

We're getting through this.

Thank you, Stable Genius.

Thank you, Stable Genius.

Smell me.

Smell the deal.

You are so handsome.

You are so handsome.

It's just, I don't know how you're doing.

Season three of Pivot.

It's on.

It's on.

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