 I'm just going to take a seat here. I'm sure you won't mind. Hi, I'm Joshua Topolsky, the editor-in-chief of The Verge, which is a website on the Internet that covers technology, science, art and culture. And you guys are currently in our super session, which is called Argue the Future 2, Return of the Future. And I think it's pretty apt because I think there have been a couple of things at this CES that make me feel like the future has come back a little bit. It has returned a little bit. And there's some pretty exciting things going on in technology right now. So we wanted to get a panel of people in this industry together who really know what they're talking about and are doing real things and just chat about where we're going right now, where we are right now, where we're going in the future. So I'd like to bring up the panel and get this conversation underway. The first panelist is our managing editor, Nilay Patel, who is known online as Tornado92. Nilay? Sure, you can applaud. He deserves it. He's earned it. We also have Andy Forsell, who's the SVP of content at Hulu. And strangely, he's never seen snow. It's a weird fact about him. The band snow? No, actual snow. Next up is Eric Chang, the director of photography at Lytro. He is an accomplished underwater photographer, but surprisingly bad at land photography. And finally, last but certainly not least, Walt Mossberg, who you may know from the Wall Street Journal and his site All Things D. And interesting factoid about Walt, he's obsessed with market fresh strawberries. Is that true? Give him a round of applause. So first off, thank you guys for doing this. You're all very busy here, except for Walt. He's taking it easy. But I'm glad to have this group. I think there's some diversity. Though I realize we've got three journalists up against two guys making this stuff. You guys are screwed. And I feel like if you notice us ganging up on anyone, just say stop. Leave it alone. Does anybody have a red card they can hold up in the audience? Yeah, seriously. So the first question I want to ask is about going into the CES, there was a lot of talk about... First off, there's a lot of talk, oh, CES is over. It's not an important show. There's no need for people to do this anymore because everybody's doing their own events. Certainly you guys do your own events. But there's this idea that's kind of starting to float out there that innovation in hardware is done. That we got the iPhone, we got iPads, we got some broadband and HD, and now we're good for a while. And I just want to... I guess, you know, I think, Walt, I want to start with you on this one. Do you think that hardware innovation is... Are we at a plateau right now? Is this... Are we moving to a different stage of technology, the technology industry? It's an interesting question. I think there are like two or three points that come to mind around this topic. First of all, I don't think it's possible anymore to separate hardware and software. I think Steve Ballmer once said to me, Apple is a software company that instantiates its software products in hardware. And I think now Microsoft is instantiating its software products in its own hardware. And I think Google is pretty close to that as well with the Nexus line. They now have a line of Nexus things and they own a hardware company. So that's the first thing. I think even just kind of the premise of, well, software and services are moving but hardware is plateaued, you know, it's all wrapped up. The second thing is the number of... If you look over the last five years at the number of companies that have done truly game changing hardware, not, you know, small iterations, it's not that many companies. And one of them, the one that you mentioned, iPhone and iPad, that's one company. Their great founder has been gone for a little over a year. There's obviously some natural turmoil there. You know, so maybe they're just taking a pause and working on the next thing. How many Apples working on a revolutionizing television story has The Verge run, has all things Deedee, The Wall Street Journal, everybody else run? They are working on it. We all know they're working on it. But we also know that, you know, other companies are working on stuff. So it may seem for a moment like a pause and then in three months we get an invitation from one of these guys to come to an event and, you know, something big happens. I think it's harder to surprise you on hardware. And then, you know, the last thing I would say is that these things have a slow ramp up. So it's, you know, you can crack up, and I certainly have, about the 84 inch, you know, TV that costs as much as a car. But, you know, it usually takes about five CESs for some of these things to come down into the mainstream after they're introduced. Can we still count them by CESs? I don't know. Or do you think that that I mean, I saw Press release saying that they had attracted a record number of exhibitors and floor space and a large, about 150,000 people. So it doesn't sound like they're about to go away, but Right. Well, let's ask these guys, because they're here. I mean, Hulu's here. What are you doing here? I mean, you're not, maybe you're not showing, you know, but you're here in every product or trying to be in every product. So what's, what is this for you? What's happening right now? What are you doing here during this week? Yeah, I think my direct answer to that is probably not super exciting. We're here because we have so many hardware partners and this is a really efficient place to come talk to them. So, you know, we're here really for a ton of B2B conversations because it's a great place to do it. But, but I think that gets back to what Walt was saying is that hardware, software services, what everybody's trying to do, I think we're in a period where, you know, we're still trying to digest all the hardware that's come out, all the capabilities that have increased in software, all the great services. A, how do you make those work together? Apple has one way of doing it. They try to control everything. The rest of the industry is trying to come up with other ways to solve that puzzle that are a little more distributed and that's still in process. So there's catch up going on there. And then B, since a lot of the capabilities that come out of those advances are about consuming media of various types, we're in this period where we're waiting for the business models to catch up on media, whether it's video or print or anything, you know, radio to podcasting. I think we're in a period, as Walt says, it takes five years. It may take ten years for some of that to catch up and it's just business model change that can't happen overnight. I mean, it does, it does feel, and you know, I think Lytro is actually, you guys are kind of a good example of this. You put your, when did your, the Lytro camera, when was it released to the consumer? At the end, at the end of February. End of February. And where did it debut? Yeah, it didn't debut. Well, some said it was released. Yeah, it didn't debut. Well, some say it debuted at Asia D. Thank you. You've got clout, Walt. You've got clout. Is one of the people that say that here today? Yeah, yeah. One and a half. That, but, but your product, it's a brand new product in the market. I mean, there's nothing else like it. You know, I reviewed it. It's got its, it's got some great features. It's got some flaws, which I'm sure you guys are working on. But I don't understand it. I don't think I understand your product yet. I don't think I understand what I can do with it. And I think that's a lot of our industry right now, that we made these things. Well, not me. I don't make anything. But, you know, you guys made these things, and we're trying to figure out what to do with them now. I mean, that, that, even Apple seems to be, in some ways, figuring out, well, we made the iPad, but is this all it can do? Or is this the, you know, the full extent of its ability? I mean, I would argue, I don't know that there has ever been a point in the history of technology where we fully figured something out before something else came along, and we moved on to trying to figure that out. Television. I don't think we fully figured out television. You know what, television was originally, I mean, there's, you know there's a big dispute. Somebody wrote a great book about it. I can't now remember who. Actually, Aaron Sorkin wrote a play about it. That's right. Who invented television? There's a dispute about it. But there was a Russian inventor who was one of the people who was early on it, and he did it purely in his mind as a way to monitor the safety of people down in mines. And, you know, the telephone was originally thought to be something that where people in a town would have one telephone in a small town, and they'd all gather around and listen to opera coming out of the phone. So. Right. That didn't pan out. When Jobs did the iPad, that wasn't the first tablet. We'd gone through a whole, ten years of a failure to do tablets with the tablet PC. He did his thing, and there was lots of people, crowds of criticism, people saying, well, we have smartphones, we have laptops, what is this for? And then how many has he sold? A hundred million of them or something by now? A handful. And people are using them for all kinds of things. And so I think you're absolutely right. People are still trying to digest it, discover it. Yeah. And we, Katie Barrett, my colleague and I walked around the health section. Some of you may have done that. If you haven't, I recommend it. It's really interesting. It's also good exercise to walk around. It's good exercise. There's quite a few of those people with iPads doing things with health over there that probably was not what the guys who designed it, you know, Johnny Ive wasn't sitting around saying, I'm making a medical device. Well, they did show off early on the medical uses of the iPhone. But I mean, I think people have come up with more things for it than were originally anticipated. So Apple seems to be, I do actually bring this back, Andy, to you. You have a content delivery service. It's available on tons of devices. Everything I buy, almost everything has Hulu on it now. I mean, a lot of things have it. You mean Hulu Plus, right? Hulu Plus. Well, Hulu Plus is the... Because Hulu is on everything with a browser. Hulu Plus is the streaming service you pay money for and you get content with commercials, even though you've paid money also. And by the way, Andy, more and more commercials as far as I can tell. Yeah. Right now, it is almost the regular amount of commercials. You're not gonna say a word. No, no, hold on. Just hold on. It's approaching the regular amount of commercials. It really is. What is it? How many commercials in a 22 minute... Our view was always, you gotta go back to the golden age of TV, which was the late 50s, which is about half of where we are in broadcast TV today. So you're saying it's half? Yeah, it's about half. In fact, in January, we just pulled back a little bit, because we had a lot of feedback from people saying, look, we know you gotta make a buck. Good. On Hulu Plus, we're pulling back a little bit. So we're not crazy when we... We have the impression, I haven't timed it, I don't know about you, but I have the impression... No, I agree....that compared to when you first brought it out, there are more commercials in there now. Yeah, and part of that was driven by just the ad sales team's done a great job demonstrating value, and we sold a lot of ads. But at a certain point, you have to say, no, we could make more money, but you should... You gotta think of the user and balance their interests. And so, yeah, you'll see us pull back a little bit there. And the challenge needs to be, make those ads so valuable people may pay more for them, not just add more ads. But Josh was making a point. Right. Well, I mean, this is interesting. The ad conversation is interesting, too. But now there's this specter of... And in fact, Apple is always a specter at CES. They had this little leak in... Well, they didn't have it, but there was a leak in your paper, The Wall Street Journal, and... No, it was reporting. Oh, I mean, it was a... Sources told somebody at The Wall Street Journal, so who knows who they could have been, these sources, that Apple may be making a cheaper iPhone, which they already make. It's called the iPhone 4S and iPhone 4. Anyhow, the point is that... You know it was not that... So we heard the news here and everybody's talking about the news. Not that huge of a story. But now in the TV industry, there's the specter of Apple hanging over. Everybody's saying they've got something coming. They're gonna upend the cable companies. They're gonna change the way we watch television. You guys have been building this thing for years and years. You're on all kinds of devices. Are you spooked? Are you worried? What do you... Do you see this as a threat to your business? The thing that doesn't exist that we don't know anything about? This specter? He does know something about it though. Do you wanna tell us about what you know? Feel free. There's nobody... This is not fair to any other... You guys should just talk. Well, look, to directly answer the one question and to skirt the other one... No, I don't think we feel threatened by it. I think we're excited whenever it's experimentation. As I said, I think business models are catching up. The one thing that I've had to learn in my job is... I'm a software guy. I've now spent five years living on the edge of media. A lot of that time I had to spend learning about 50 years of Hollywood history and why things... The crazy rights landscape, and I will spare you examples, but trust me, they're crazy, about why the show can't be on that screen. And it's amazing. And there's a messiness there that is part of what we've tried to tackle to say, how do you... You can't totally mask that messiness from users, but how do you at least explain part of it to them and do the best you can and helping people understand you're trying to get as much content to them as you can, and over time that will increase. I think the one thing that's helped us a little is Apple hates that kind of messiness. They want to have a world they can control, and I totally get that. But I think they'll do some interesting things, but I think because they hate that messiness, I don't think they're going to change the world overnight. This is a world that can't be changed. I think it's a five-year thing, as Walt said, or even ten years. But I think that's a fabulously important point, at least on television, and maybe on some of the other devices. And maybe it explains a little bit of the hardware sclerosis you were talking about, if that's an appropriate term. Did you just coin that term? I think you did. No, but I mean, if TV and revolutionizing TV... And forget about it being just Apple, because we know it's not just Apple. Intel is in it, Google is in it, everybody's trying to revolutionize TV. It looks to a tech company like low-hanging fruit. It's an important device, it's at the center of the home, and it's poorly designed. And there's got to be... The UI is bad, the software is bad, and the integration with the wider internet world is bad, so it's low-hanging fruit. What's the obstacle? What is causing this pause? Why is this the third CES, or at least the second, with the rumor of Apple hanging over it? I think it has to do with exactly what you just said. It has to do with this crazy rights landscape, and how you can't really do this correctly without getting deals and rights and bundles or whatever you have to get from the people that own Hulu, the people that own the Wall Street Journal is one company, News Corp, but also everybody else. Well, so... Don't you agree? Am I nuts, or...? No, I think that's a long-term problem to unwind all that. Now, what's going on in parallel, that will progress, and Apple will do part of it, and we'll help with part of it. Netflix, paying money for things will help, but that money solves... You guys voting with your clicks and making it worthwhile will help us solve that problem, but it will take a while, because it involves Dick Wolf sued NBC, and suddenly that means... There's just crazy messiness in the whole game. In parallel, there's an alternate thing going on with YouTube and other content being created all over and shown on people's own websites. You guys create a lot of content and are, in fact, competing in certain ways. Dee certainly does that. And there's a parallel movement to say, let's reinvent it. Let's do new content that has no strings attached. And I think that's fascinating, because you have both progressing. I think media loves to show a conflict story and say, who's going to kill whom? I don't think it's going to be that exciting. I think cable's going to still be around in 10 years. It will be different. It will be more consumer-friendly, because you all have voted with your dollars and your clicks to force them to do that. It will have helped in a certain way. And then in parallel, there's going to be a whole world that develops that's not rights-constrained. And that's what Netflix is doing. They're going to make their own shows. They can show them anywhere in the world. And so I think that's fascinating. We have two parallel things going on. And it would be easy to say it's a race. I don't think it's that dramatic. But it's all good for viewers. So what I find interesting about the old content that you're... That looks one way. We know what TV looks like. There are sitcoms. You know what TV sitcoms look like. And then I think about the content we make. And we make it differently, because we're making it online. Our means of production are slightly different. And our audience is different. Slightly cheaper. And then I think about Eric's company. And you make a product that only makes sense if you look at it on a computer. You have to interact with a Lytro photo. So I think, well, we're changing our content and how we think about making video, because our tools and our distribution are slightly different. Then I think about what photographers might do with Lytro cameras, but they're only forced to be online. Do you think photography is going to change because it only can happen on a computer? Is there a future for your product outside of the computer and the Internet? Yeah, absolutely. There is a future for it. And in fact, most existing photographers only think in terms of existing photography. The first thing they ask is, well, how big can I make a print? And I ask, well, when's the last time you made a print? And they think, I can't remember. And so in fact, they're consuming pictures online constantly. I mean, if you leave someone alone for 30 seconds, what are they gonna do? They're gonna pull out their phone and look at a picture. So it's very natural for us to go straight to the Web and to allow interaction with all of these devices, which are fundamentally interactive in the way that you handle them. And so that's why we decided to do that first. Having said that, light field photography is fundamental tech, and you still can get a two-dimensional picture out of it for print or a 3D picture for some other kind of print, which is on the fringes right now of CES, those very small booths we haven't seen yet. Those are launching here. Yeah. So I think this kind of multidimensional photography, you can output whatever you'd like from it. And while the first camera is a consumer camera with fairly low-resolution 2D output, you can imagine that scaling up with Moore's Law. I mean, we've just tied photography to computing, and once that happens, we all know what happens. So we were talking about this a little bit before we went on. Video, video with light field. I know we're verging into a light field conversation here, and I do want to get back to the TV, and I will in a second, but what are the possibilities of doing video? What would that require to do video you can refocus in real time? Well, it's fundamentally compatible. Every frame we take is one frame, so you just string them together and you get video. So we have proofs of concept, time lapse, basically. So what it requires is high-resolution capture, raw capture, and we know that already is here. It's just in the very high end. And I think what's missing, which is very interesting for this conversation, is that we consume very passively. We consume video material very passively now. And there have been attempts for many, many years to bring interactivity into video. You see these little pop-ups, and you're like, how do I get this thing out of the way? But interactivity doesn't need to be an overlay. It can be a very intrinsic part of that experience. It can be. Now, content creators may not like that. They like to lock everything in and say, this is what I made. I'm an artist. But in fact, when we have kids playing with these things, they want to try to interact with every picture. The kids of our employees try to interact with every picture they see. Of course, you can refocus a picture, and of course, you can change the perspective. They don't have the same hang-ups we do. I think it's interesting that you're talking about the idea that, just the very idea, if you did, if there was this video content, it would be as flat as anything on a regular television, standard television. Our old technology wouldn't really be able to replicate what you're creating with the tool. It has to be on the web, or it has to be on an interactive surface like an iPad or an iPhone. I think that's telling about this TV industry changing. That's where we are going, is the second screen experience and, obviously, innovations like this. You said when we were talking before that you don't have cable, right? I do not. You don't subscribe to cable. You haven't for how long? I haven't for about eight years or so. So what spurred—look, obviously, you're deeply immersed in the world of technology. How did you end up not having cable? I'm kind of curious to know this story. I was out of town a lot, but also I wanted something like Hulu. I hated having this expensive thing that I paid for every month that fed me ads. I had a TiVo, so I would record things and watch them. There were starting to be—not eight years ago, but more and more every year—there were more ways to get content where I could pay a little bit or sometimes too much. I got really annoyed because I tried to buy the wire. It was twice as expensive to buy it on iTunes than it was for me to order it, the whole series, and have it shipped to my house. It was literally twice the cost. That's still true. That really was annoying. I think it's still more expensive to buy on iTunes. The first thing I did was rip it so I could watch it on my iPad. That's fine. It's a coffee pot. I don't think you can get the wire on iTunes. You can't get the wire on iTunes. That's right. But that's part of that whole rights thing. I'm not trying to open a books conversation, but it's a similar thing. It doesn't seem logical to people that bits should cost as much as atoms. That has a lot to do with—I'm not saying that Google and Amazon and Apple are innocent. They have a part in it, but a lot of it is the media companies and the structures that go back way beyond when any of this stuff was invented. Eric, how much do you think you spend on replacements for that a month? Roughly? It's probably $20 or something like that. Wow. I spend probably $50 or $60. I think you're in—there's probably not a huge minority, but there's a segment that's like that where you successfully cut costs and also get the media you need. I think a lot of people that have tried it end up spending $60, $70, $80 that they normally spend, but it feels better to them. It's a different way. Well, you're not buying a bunch of packs. You're buying a whole lot. You don't feel like you're paying for the 700 ESPN channels that you all watch. That's my thought about cable. I'm not hugely negative on cable. I actually have two cable subscriptions. I'm sort of in the middle. Two. You have to, right? Two. Just because you can? Yeah. Well, that sucks. Sunday Ticket is a prime example of what sucks. It's also a prime example of why Hulu can't do what cable does because they have these deals with the NFL. Look, I live out of market for the football team that I want to watch. I live in New York. I watch Packers. I can't get DirecTV. I live in an apartment building in New York City. There is a product. I'm waving the money in the air, and the right structure is preventing me from having it. That legacy deal. So why don't you buy a Slingbox? Yeah, put it somewhere else. Fly to Racine. Right. Pay the five bucks a month for the extra— You know, I have a Slingbox in Racine. Wait a minute. Pay the five bucks a month for the extra cable box in one of your relatives' houses. I'm telling you that I do this. They don't even have to attach it to a TV. He's doing this. And what Walt is saying, what I actually do, I think for a consumer is insane. Yes. Because what I have done is—and there's demand for it, that a company could productize it—I have created my own cloud television redistribution system. Does that sound like something any normal human being should do? Can you offer subscriptions to that? I'm just saying, I'm a Red Sox fan. When the Red Sox were in one of their World Series years, it happened to be one of those years when MLB and Comcast or somebody were having a fight about, you know, this periodically happens. And I said to my brother exactly what I just said to you. I said, I'm coming to your house, bring in a Slingbox. I'll pay for your extra cable box. I'm going to use your internet without telling you from time to time. I'll pay for that. Put it in a closet. No, it's great. You don't even have to connect it to a TV. And you have completely sized that. And just I'll deal with it. But here's the question. Do you think—so I understand why you don't like that and you want to get a Sunday ticket. Totally get it as a consumer. You should be steamed about that. But do you go another step and say, well, they must be stupid? Like, do you think they're missing an opportunity? Do you think it's bad business? I think not capitalizing on what is obvious demand is bad business. But I think if the NFL and DirectTV were here and spoke candidly, I think they'd say, look, we've done all that math. Even if they're X number of you and we're wildly ambitious and aggressive about what we would pick up. I mean, it's just like HBO going a la carte. It's a similar discussion. I think it's good business. I hate to say it as a consumer. They sell it in Europe? But it is good business. Yeah, but here, it is worth it to DirectTV to have that exclusive. And they massively overpay for that content. And it's horrible as a consumer. But the byproduct is you can't get it. So is DirectTV overpaying, efficient in the market? Is that what you want? I think they're overpaying versus—well, if I'm the NFL, that's what I want. And you can't ask the NFL to do something. I mean, we can't ask the NFL to take less money just to be nice. So I think that's the trick. I think over time—I mean, HBO is the same exact question. Many people would love to get HBO a la carte. They don't have HBO today. Many people inside HBO would love in their— I don't see how that math works, though. I mean, I really don't. You think there are enough people that they should be able to outbid Direct, essentially, to change the business model? No, I don't think—I mean, what are we talking about? How much per month for HBO? Do you know? Oh, I'm sorry. The math on HBO? The math on the a la carte, yeah. That it would be more profitable than what they're doing right now. Yeah, but again, I think HBO, one way to look at it is they get paid a premium by big cable because big cable like DirecTV is willing to pay a premium for the NFL to be able to use that to get people to buy lots more than just the NFL. People use HBO the same way. And it sucks for consumers, but I think it's probably a sound business decision. So then we look at that and say, boy, what's the answer? Because you want to please users. You want to get content to users. And that's where I think some of that parallel development's going to occur where, all right, you've got to start Greenfield in some cases. So we're all immersed in this world. We know everything about it. We're voracious, I'm sure, watchers of content. And we read all the news. Average consumers, to me, it doesn't seem like they're that mad. You're mad, but you're a very special guy. I'm an angry person. You're very unique. It seems like TV is better than ever. I mean, I watch, I can't, I don't think I can count how many shows I DVR now because there's so much good stuff on. I agree. And, I mean, really good stuff. This is the golden age of TV. Yes. I mean, shows like War Walk Empire, it's like watching a 12-hour, $200 million, down abbey. Incredible content, great comedy, great news, well, some okay news. Not great news. Okay news content. The best news is on. I was actually thinking of the Daily Show. It's the golden age of TV drama, I should say. Well, drama, and I think there's some decent sitcoms and, you know. But the point is, the average, and also TV looks better than it has ever looked before. There are more channels than ever. Do consumers, are consumers actually, I know we talk about cord cutters and that's a thing, and I think you talked to Ari Emanuel and he said there aren't cord cutters and you said that. No, but here's the, if I could just anticipate what I think you're in for. Sure, go for it. I think, I think there are cord cutters. Here's one. I think there are fewer of them than we might have expected four or five years ago. Because the cable companies have been good at holding on to what they have. Yeah, they've been good at holding on to it and I think this whole rights world that Danny was talking about has hurt the efforts to do better, more integrated, over the top services that make the TV more attractive and easier to use and all that kind of stuff. But I think there's something that, this is what I was talking to Ari Emanuel about or trying to talk to him about, which was, do you guys know who Ari Emanuel is, right? He's like the super. He's Ari Gold from Entourage. He's Ari Gold from Entourage. He's the super agent in Hollywood and we had him at our conference and Josh asked him a good question but he yelled at Josh instead of answering the question. It's very, it's very upsetting. But anyway, the point is. It's terrific, I thought. The point is, there's something called cable nevers. Right. And this is the most dangerous thing if I'm Brian Roberts. Brian Roberts being the head of Comcast. I have two sons who are, one's married, one's not. They're both around 30. One's 33, one's 30. So my youngest son would go without food before he wouldn't have internet, right? He has to have internet. But he would never go without anything to buy a cable subscription. He doesn't have a cable subscription. He doesn't have a cable subscription. He never will. And he never will. My oldest son who's married has a very basic cable subscription. They're trying to save up to buy a house, which as you know is difficult. They happen to live in Boston. It's an expensive market. He hasn't said this to me but if I had to guess, if they had to cut stuff back to afford the house, the cable would be one of the first things that would go. Because they both have iPads and smartphones and good laptops. I think one year for their birthdays I got them Apple TVs. Not that expensive a gift. So they have that. Only expensive to use. They can watch Hulu Plus for, what is this, eight bucks a month? This must be music to your ears. Are you loving this? Because this is your audience of the guys who don't get cable. I don't know the numbers. Andy might, but I'd love to hear it. I don't know the numbers but there are these people that are cable nevers. I think it's even worse than that because we did a long thread on our forums of how do you watch TV. We did this week of TV stories. We said how do you watch TV? We asked our readers. Not one person answered I just have a cable box. Not one person said It's the verge audience. But that's fine. The smartest group of people in the world. Our audience is carrying this industry forward. What's the answer in Ohio, Illinois? That is my question. The answer there. You're pulling all kinds of personal data out for me right now. Let's see what you're doing. Ohio, Illinois is where my wife is from. It's a very small town. It's 450 people. They don't have cable. They can't have cable because the pipes run underground. They might have a satellite that they pay nothing for because they want to get national channels but as soon as they get the internet, they're on the internet. I'm just not sure. I'm saying the cable industry can't say this is the one thing you need to get content. Apple can say that with the iPad because when you load it up with apps and to people it's Ivan, I don't watch TV, I use my iPad. All the apps on the iPad qualify as one product. Or if you're a verge reader, you say in our forums, I have 50 boxes under my TV and the most important one of them is not the cable box. They will argue whether it's the Roku box they use Netflix on or the Apple TV box they buy movies on but they will never say my most important box is my cable DVR. You've also forgotten something else that's really important and that's AirPlay. There may be a generic term for it. I'm not sure what it is. It's called wireless. There's a bunch of mirror casts. I understand. Wireless video? It's called wireless beaming from other devices. Sure. I think Apple's is the most evolved and probably the most used AirPlay but it might be exceeded by this time next year by something else. Mirror cast is the industry standard to do the same thing. You guys probably all know what we're talking about. You're sitting there with your smartphone or your iPad or that MacBook Air you have right there and there's just a little button. You hit it and boom, whatever's on your screen, it could be internal to the app or the program if they've built that in if that's allowed. They even do multi-screen stuff. I don't think you guys have that, right? You don't have that AirPlay button on your iOS app, right? They're not allowed. Because you're not allowed to be, you're not, some of your agreements. You can't put Hulu on a TV. Don't let them put them on the screen, on the big screen. For Hulu Plus you can do it. Yeah, for Hulu Plus. Wait a second. You do have an AirPlay? We're on living room boxes as well. That's why. The point is either the button is in the app, in the scrubber bar, in the control bar in the app or now in the Mac and the iPad it mirrors the whole screen. If you happen to be watching something where they really didn't want you to put it on the TV screen where if you plugged it in with an HDMI cable it would not work, you can just make it full screen. Full screen in AirPlay. Press that button that's always in the menu bar and there it is. You haven't had to string a wire. You haven't had to get off your chair and plug anything in. You haven't had to dedicate a computer. But people aren't, there's only a few million Apple TVs and most people aren't. But Samsung has the same thing. There's WiDi which was an Intel thing that Toshiba and some others have in their machines. The problem there is getting a standard and getting a brand that people understand but it's coming. I think AirPlay, if I had to guess and it would be a pure guess, tell me if you think I'm nuts, there's been a big expansion to sale of those Apple TVs. It's still a small business form but I think it's doubled or more than doubled. I think AirPlay is responsible for a lot of that. Even if you're not watching the content on the thing, you're sitting there with another screen and now you can just beam it to the TV. Well, but it doesn't, AirPlay doesn't solve all the confusion about... It's just another reason why I don't need the cable, why the cable isn't essential. Right. I think that cord never is combined with even the people who buy the cable thinking to themselves, this is secondary to what I see on the internet or I get distributed online. That is the biggest danger for the cable industry. I think that's why they're going to be pushed to make it. Luckily... Do you see that? Do you see more deal flow because they know? That would be my instance. I guess I'd say I think the cable side and Intel are having to pay more close attention to consumers than ever before and that's a good thing. I mean, their UIs are slowly getting better, too slow, but slowly. They're better. If you look three or four years ago, they're wildly better. It's still not enough. I think they're worried about that and I think they know they're going to have to do some repackaging. But they look at multi-channel subs and they've hung in around 100 million homes and it wavers a little bit but it hasn't dropped. So they're all looking at the cord never. They're all doing a bunch of research but so far it hasn't hit the bottom line and I don't think they're going to anticipate that and start doing things differently. So I think it's going to be slow. It's also lucky that they happen to control all of the internet service where they also have their television service. So in the worst case scenario, they lose that. There's not a horrible worst case scenario. We're still going to pay them. We're all going to pay them more for broadband. Right. No, that's the thing. And that actually brings me to something I wanted to talk about and then we'll probably get to a quick Q&A with you guys. But 4K TV is everywhere at this show. Everybody's talking about 4K television. Why are you laughing? I'm laughing because we have a bet. I think I'm right and I think you're wrong. We're betting $4,000. $4,096. No, 4K TV is everywhere at this show. Wait a minute. What's this bet? I want to know if I can get in on it. My bet is within three years, 4K TVs will be mainstream. It'll be the high-end product Best Buy that most people want to buy. Three years. And you are saying that? I think it's going to be a little bit longer than that. I'm on your side. I think that we're not even... So I talked to the CEO of Sony, Kaz Hirai, and he said, well, we have to figure out how we get the stuff on the TVs. The industry needs to come together on a standard. Maybe we'll do discs, maybe we won't. Right now they're sending servers to people preloaded with content because the files are so huge. You can't stream them. You can't put them on a disc. And there's nothing to play them on anyhow. So I think we're more than... Sony has a... If you go to the Sony booth, my favorite product, CS, in the Sony booth, I'm such a gadget nerd. It's a non-functional prototype of a 4K player, which means it's literally a circle with a light in it. And my inner gadget nerd is like, that's awesome. It's totally meaningless. It doesn't have any guts or anything. I saw behind it, there's a PC behind it that's actually doing the work. So 4K, everybody's pushing. And I don't know, there is a part of me that feels just a little bit... We've been burned by things before, like 3D. We actually wrote, a writer of ours, Vlad Salva, wrote an article that said it's official, 3D is dead. I think this CS proves that 3D is not an issue anymore, that nobody cares about it. Does that bother you, that the focus on 3D is gone? Because the Light Show has some faint 3D capabilities. Yeah, well, we're not relying on stereo displays for 3D. Because we have 3D content that can be expressed in different ways, like perspective shift. And this 4K discussion is interesting because when HD TVs came out and started to become mainstream, how many people were out there actually watching HD content? Most people thought it was HD. It probably wasn't your website, but which site had the retina versus iPad 2 comparison? They walked into the Apple store and showed people the old iPads and said, check out this retina display. And everyone said, wow, it's so much better. And that could happen with 4K TVs. It took so long for content to make 2K or HD. It's gonna take a lot longer for it to make HD. This is what I was getting at, is that everybody's talking about 4K. And then the president of Sony says, we don't know how you're gonna get it. But we want to do it. We're gonna be the first guys to do it. But we have to figure it out. And the industry has to figure it out. I think it's difficult to invest in 4K content and 4K distribution when there's no 4K television. Well, I think chicken and egg. Right, but I think- I don't know this, but what's Blu-ray? What's Blu-ray in equivalent? It's 1080. You mean the resolution? Yeah, so it's 1080. So it's 1K, right? It's 2K. Right. So the only effective delivery mechanism for that video today is a Blu-ray disc. How is 4K gonna become huge? Well, Apple TV does. Yeah, Apple TV, PS3, Xbox, I'll do 1080. No, they all do 1080. They do 1080, but not as heavy as what's on a Blu-ray. I mean, it's not as good. Right, I agree with you, it's not as good. It's digitally compressed with the resolution. I'll tell you what I think. I think there will be big changes in tele- we've been talking about some changes in television habits, video, let's call it video viewing habits. I'm not even sure the word television is gonna last another 20 years. Video viewing habits from whatever source. I think making the TV, the hardware, the software better and different and more smoothly integrated, just so I don't have to change inputs between being able to watch Hulu Plus and being able to watch CBS or Boardwalk Empire or something through cable, if I do have cable. I mean, those things are gonna be much bigger deals in the next three years. People will lose resolution to get that. That's right. No, that's right. They're doing it on your side. Can I just- They do it on the web. What you just said is really, really important. We haven't talked about it, but we all know or I think a lot of people know that one of the trends that it's not too evident here, maybe it is and I just haven't seen it, I think a niche trend this year is there's a push to do much more expensive audio, basically iPods that are $700. Right. And the Neil Young project and there's another one. Come on. We can- The point is these people are audiophiles or they're recording artists and they really feel like- They're specialists. They really feel like the world decided, just as you just said, to go for a better interface and more convenience and give up the quality on the music. Right. And they did and it was hugely successful. I mean, Steve Jobs at one of his appearances at my conference said he thought it was, it amazed him that people were willing to give up on the quality of the music to get the ability to put it in your pocket. Well, this goes for the photography too, actually. So if you... I don't care what company it is. I don't care if it's Google, I don't care if it's Intel, I don't care if it's Apple, I don't care if it's a company we haven't named is able somehow to get some rights deals done, enough to make some amount of critical mass and do a TV that is just really different than other TVs in its... the way you use it, the fact that you don't have to switch inputs, whatever all that. That will be... I'm saying I think that will be more important over the next three years than adding, doubling the resolution of Blu-ray so it's 4K. Right. That's what I think. So here's my counter-argument to that. Right. TV is changing, but what we're seeing out there, just more resolution isn't going to be the biggest deal. But here's my counter-argument to that. I don't think... I think as people buy the 4K... I think you... it's a chicken and egg problem, but one of them is actually more important than the other. And I think having the sets in people's homes is what creates demand for the content. And I think the broadcasters, the cable companies, they're not set up. They're not set up to deliver this content. So as people get the televisions, which the curve of those prices is going to plummet, right? So as people get the 4K televisions, they will create demand for the content, and the online services that can provide that content faster than the cable companies will begin to seriously challenge cable. Well, this... And this is where I was going... And that will drive... And then your broadband prices are going to... But this is where I was going... Well, that's... And Casari, this is where I was actually going with this, said we wanted to drive, and you were talking about this, we wanted to drive the expansion of broadband because we think digital delivery is ultimately where the 4K content comes from. And so you've got these Samsung, Sony, LG, Panasonic, everybody, right? All of those companies are doing 4K this year. And they're all saying, this is where television is headed. And as a result, what's going to happen is we have to find... You know, there are countries, Asia and Europe, that have different broadband problems than we have here in America, but it has to drive up the pipe, right? You have to have a fatter pipe to get this stuff. And then does that create... I guess where I was going is, does that create an opportunity to completely disrupt the industry that we have now? Because if the cable companies aren't there to meet it, and it ends up that Hulu is there, is there a way to... What is the lecture look like on a 4K TV? I imagine that those photos look even more beautiful, and the internet is rich in- But you've got to make a device that can take photos, that can utilize... That wouldn't be hard for you, probably, to make a 4K device. Yeah, it'll get upscaled, and if the- How large would a 4K Lytro be? Just show me. Would it be like this? Because it has to be actually physically larger, right? It doesn't. It needs more rays or pixels in the underlying sensor, and they can be more densely packed. And you could do that right now? We could do that. It's a cost issue. How expensive would it be? A 4K Lytro output, full output, in video? Yeah. No, no, no. 4K still. You mean just to be a ballpark? It'd be really expensive. It'd be tens of thousands of dollars in the high end. Just to get a few more thousand pixels? A few more thousand output pixels. What, was it $10 a pixel? Well, what is it now? What is it now? You know what? It sounds so cheap, the way you put it. Just more pixels. You ought to start paying your employees in pixels, because they're worth more than dollars. That would be very affordable. Yeah. Very affordable. I don't think so. Well, all right. Maybe not on not easy, he's bad. Josh, people have been throwing away pixels forever. They throw them away. You take a 20 megapixel thing and you look at it on this 1080p display. Yeah, that's what I'm saying. They don't care. To Walt's point. They don't care. And it looks better when it goes 4K because the display is around the same size and the pixels are much more dense. But it's just good enough. That's what it is. That's why people started buying netbooks a few years ago. Remember the netbook? Right, but if you want to bring this all the way back to Apple and all the phones we're seeing here, people want the pixels back. And they drove two huge adoption curves by saying the screen is better. Every phone here is five inches in 1080p. But most people will wait until, they'd love to have them back, but they'll wait until it's reasonably priced. Plenty of people, they sold a ton of pre-retina screens and then the next thing that they could advertise around, and it was an engineering achievement, I don't take it away from them, but was the retina screen. It wasn't like there was a huge, a lot of people that bought those retinas had already bought the non-retina ones. They just went and bought it. They just wanted to throw money away. Well it does. But if you look at the retina MacBook, that is, to me, that is the silliest product. I don't want it there. I think my screen has enough pixels and I use them in a different way. When I look at my iPad, I'm consuming content. I want it to be very beautiful. You feel like you want them, but you don't necessarily feel like you need them. If you'd like to save an extra hundred bucks, it doesn't feel like that big of a deal to go get the iPad 2 instead of the new, what is it, the fourth generation. For a lot of people, and I suspect, I don't know the sales numbers, they don't share those exact numbers, but I'll bet they sold a lot of iPad 2s. I bet they sold a lot of iPad 2s. And I'll bet they sold a lot of iPad Minis, which has the same resolution as the iPad 2. Exactly. Just the way iTunes sells a lot of lower quality MP3s and people are taking a lot of lower quality pictures and watching compressed. This panel has gotten extremely depressing. No, I think what it is is that... We should turn it over to them. I think, well we're going to in just a second. But I do think that the average consumer, people aren't specialists. They just want the content. Exactly. They just want the stuff. I mean, I'm a Phil Steam, but I'm happy to watch Hulu Plus on the iPad Mini. I'm happy to watch it. It looks fine. It looks great to me. Sometimes I say, or the Galaxy, the Nexus 7. I say to myself, I'm holding this thing and this really looks like good video. Now I know that on the bigger, heavier one with the retina, it looks better. And I have that one, but I grab the Nexus 7 because it's just a little lighter and easier to carry around. I'm still happy to watch Hulu on it. I want to do, we only have a few minutes. I want to do some Q&A for the panel here. If you've got a question, any question at all, raise your hand and someone will find you with a microphone. Someone has to focus us. We've got a couple here. Yeah, we are all over the place there. I think we'll get to you guys in a second. We've got a few runners kind of floating around. Yeah, there's a gentleman over here in the blue shirt and you've got somebody over there. Whoever gets to somebody first with a microphone. Whoever's happy. Yes. Sorry, we'll try to get to you guys. Hello. You started to drift a little bit from the topic, which was the future, revisited. Did we? We might have digressed. I wanted to revisit the topic of the future revisited and get to the overall trend that I heard a couple of times before on panels with the user interface revolution and the convertible idea that there's a collapsing of the gadgets into one convertible tablet-like thing. I thought you said no, but what about that? Is that really a big deal, gesture and touch? What's the question? What about the user interfaces? What about the future of how that's going to impact the industry? Software and user interfaces are increasingly important because you touch everything now. This is my opinion. Don't you think we're beginning to see, I think we went from obviously from DOS to GUI and then I think the importance of multi-touch regardless of who has the patents and who invented it, it's kind of boring, but the importance of it is it's kind of Don't mention patents right now. We'll be here all day. Direct manipulation, multi-touch. Now we have gesture and perceptual and things that are controlled by eye tracking. That's all in the wind. But we have started on the next wave of user interface and that's hugely important. Obviously if you only have a screen, you better be sure, you better be damn sure that you know how to get somebody to use that thing because you can do whatever you want with it. It's not like, hey, I'm constrained by a QWERTY keyboard and you can only do so many things with the QWERTY keyboard. User interface is massively important, but we're just at the beginning of it. You look at the user interface of the iPad that is essentially the same, I would say vastly unchanged from the original iPhone, which is now six years old. Let me ask you this and I think this goes to what both of these guys do. The user interface of the iPad is nothing. It's almost a completely blank slate. Apple provides you with some native widgets. They spend a lot of time and money on that, nothing. Well, sure, but what they really provided was a great touch layer. You build your own interface that is optimized for content discovery that has nothing to do with what Apple provides. You build your own interface for viewing interactive photos that kind of has nothing to do with what Apple provides. I think the best apps on iOS right now are Google's apps, which don't look anything like what Apple provides. But at a high level, yeah, but that interface is changing rapidly. But at a high level, you've got to have that, you have to have the basic. It's still touch. The UI has to be there. It's touch. But that's still touch. It's touch in a blank slate. We still understand various conventions, so Google Maps, and I agree with you. I mean, I actually think the new Google iOS maps, and so do the people at Google, has left ahead now in UI. Walt and I were in a car last night. We tried to use Siri to get to the next hotel. Siri completely failed out, and we both switched to Google Maps. Part of that might have been the network here, but you're right. You're absolutely right. But what's cool about the Google Maps thing? It swipes, you know, this swipes up, this swipes over to turn on traffic. Those kinds of gestures. Those are Android innovations, by the way. Those are Android motifs. Whatever, but they're touch gesture innovations. And I think, I don't know for sure, but I mean, I think he was talking about the future is really, I think, kind of this perceptual, natural gesture recognition stuff. And it's around, it's around the floor. You'll see it. Let me ask you this. You've got a product that not, when people get a light trail, not only do they have to understand how to use it, they have to understand what is going on. Because unless you kind of know what's going on, you can't get the most out of it. So when you design the interface for the tablet, for touch, versus the interface for the desktop, how do you kind of, how do you teach the user what's going on? Because that's, you have the biggest interface challenge of all, I think. And your interface is extremely vague and bizarre. I mean, to try to use one, there's a bunch of hidden menus. I'm not saying it's bad. It's just vague and bizarre. It makes sense in touch. Because in touch, you know, you touch something that's blurry and it refocuses and you drag around and the perspective changes. And in fact, you can just tilt the device and the accelerometer will trigger the perspective shift to move as well. So we're starting to see some ways to get passive interactivity in Lightfield, which is something we always thought about. But with a computer, it's just the tools, the standard interfaces aren't there. So if you can just move the device and the picture changes, then suddenly it's interactive without you having to actually do anything. Let's try to get, there's a, I think somebody has a microphone. Did we take the microphone away? All right. Okay. And by the way, I do think we talked about the future. I just want to say that what we were talking about, we kind of veered into the future of content and content delivery. But that was. Just a quick, easy question about 3D. How can you say it's dead or gone if there's like 30 movies coming out and some of the biggest movies out were 3D this recently? I think it'll be a difficult animal to kill. Here's how I know 3D is dead. It's on the ground, I think. I just don't think that people. It's on the ground. I think it's been wrestled to the ground. And blood. The death blow has to happen. Here's what I think. I think 3D was a gimmick for the most part. I think in the living room, it is, I consider it to be a complete failure. Anybody who sits in their house with glasses on, there's one person right there. I think he just wants a microphone. Oh, you want a microphone? Does anybody here sit in their living room and watch 3D? There's one person. Okay. So like three. And also this gentleman. Oh, you do. In the theater. Okay, but in the theater. No, in the theater. I think in the theater, it'll still be. There will be the right movies and the wrong movies. I want to come to his defense. I think he was talking about televisions in your home. Yeah, yeah. I was talking about the home 3D movement that's been pushed on us a lot. I've covered Sony's keynote for what, five years? I've had to wear 3D glasses for four of those five years. It's true. We have pictures of him in 3D glasses for many key. I mean, Howard Stringer wandered around the stage looking lost in 3D glasses for like an hour. Which is what will happen when you have them on. And it's just over. And I think you'll see fewer and fewer films, actually. I think that if you look at how much content is coming out, they're really going to zero in on the avatars, the spectacles. And those are going to be few and far between. And I think that'll drive box office. People are going to want to go to the theater to get the 3D experience. Actually, a couple of years ago, and I think you were there and maybe some of the rest of you. I like how you said this was a question. We had James Cameron at our conference, who arguably has done the best job of it. And he predicted there would be a whole bunch of crap movies in 3D that would do it badly. And it would eventually. You said James Cameron? Yeah. By the way, he was a genius. The guy's a genius. But he was right. Yeah. You had a bunch of horror movies, Texas Chainsaw Massacre 3D. Maybe that was successful. Yeah. But I'm certainly not in any, don't know anything about theatrical stuff. And that's a different category. But it's certainly true that this show was full of 3D TVs. And I really, it's not now. Yeah. It's not. I saw one 3D TV here. Visio has a totally glasses-free. It's got this crazy Dolby technology. It looks really cool. And they're like, it's three years out. I think our original headline for that story was 3D won, 3D is dead. Because every TV can do, probably everybody's TV here is capable of 3D because they could build it in cheaply enough. But nobody is really using it or making content for it. Anybody else? I think we can probably get one more question in. We've got this gentleman here, which he had his hand up a while ago. I'm just enjoying this. The mic is coming over. I like your argument. Oh, hi, George. There's the mic. Here we go. All right. Okay. Basically, I happen to be a professional inventor, and I've invented stuff for Hollywood. The thrust for the 4K and the 8K and the 16 and the zillion K is that they had to throw stuff on a very large screen, 60 feet, 30 feet, and so on. And they're trying to replace the film. Film has a wonderful quality and very good resolution. And the digital stuff was barely coming up and so on. There's a phrase in inventing, it's good enough is best. Sorry, I don't mean to rush you along, but we're almost done. Anyway, so this all came out of the theatrical stuff and then has kind of bumped itself down into the normal house. That's not a question. That's not a question. It's a statement. It's a good point, but not a question. Did you just inflect at the end? It sounds like it. It did. It went up a little bit towards a question. Thank you. You know, we have 30 seconds left. Do you want to try to get one more in 30 seconds or? Yeah. If anybody is. She's got it. Okay. You found somebody who's, just give that mic to any human here. Even if they don't have their hand up. All these people have questions. Here we go. So with the advent of contextual awareness and a lot of the sensors that aren't being utilized right now, for instance, Samsung has the barometric sensor and that kind of stuff. How soon do you think you'll see those things come to light in the future and consumers actually start to adopt those kinds of things? Yeah. I think that just, and we're going to have to end it here, but in the next few years it could be an explosion. They already are, right? The Fitbit and the Nike Fuelband. Consumers, for whatever reason, they want to know what's going on with their bodies with data. And the more you can, and the future is integrated. Qualcomm has an initiative to create the tricorder. They're actually trying to give somebody millions of dollars to build a real Star Trek tricorder. I think sensors are huge. And you all use them every day that you don't even think about them in your phones. And those are the first group that came out. Now we're kind of in the second wave of sensors and we'll be in the third wave maybe in another year or two. So they're huge. Unfortunately, we've got to wrap up. I want to thank the panel. Thank you guys so much. Thank you for joining us. Appreciate it.