 Daily Tech News show is made possible by its listeners. Thanks to all of you, including Logan Larson, Mike Aikens, and Norm Physikus. Coming up on DTNS, will Apple lose its credibility by selling ads? Channel stores are the next big thing for cord cutting. And do we want AI to be more open? This is the Daily Tech News for Monday, August 15th, 2022 in Los Angeles. I'm Tom Merritt. And from Studio Red, but I'm Sarah Lane. And I'm the show's producer, Roger Chang. Joining us from the Addition newsletter, Charlotte Henry, welcome back. Hello, thank you for having me. Yes, you had to put up with me last week, and now I'm back again. I was going to say, you should be welcoming us back because you have hosted this show more recently than we have. I was, and it was great. It was, listen, I nearly didn't give you the keys back. That's what I'm going to say. Appreciate it, appreciate it. Let's start with a few tech things you should know. Meta and DoorDash confirmed they tested delivering purchases from Facebook Marketplace and several U.S. cities over recent months. The Wall Street Journal sources say deliveries would be made within 48 hours with items that can fit in a car trunk and sent up to 15 minutes away. In other delivery news, Uber Eats partnered with Office Depot for on-demand office and school supplies deliveries from 900 locations across the U.S. Uber One subscribers get free delivery and 5% discount on orders over $15. So, but don't eat them again. Especially if you're ordering toner. Intel updated a support page to state that Xe graphics on 12th-jam processors and Arc GPUs no longer support the DirectX 9 graphics API. Older games that run solely on DirectX 9 will still work through emulation through Microsoft's D3D9 on 12 interface on Windows 10 and 11. Older hardware will, of course, still support DirectX 9. The cyberspace administration of China published a list of 30 algorithms used by many of the country's most popular apps, including Taobao, WeChat, Maytuan, and Bydance's Daoyin. This gives each algorithm a classification number and also a brief description. In March, China passed new regulations requiring algorithm recommendation services to disclose algorithms that are used in apps. According to documents submitted by Microsoft to Brazil's National Competition Regulator, Sony sold more than twice as many PS4s as Microsoft sold Xbox One. This is Microsoft having to report this to the Brazilian regulator. Microsoft stopped reporting Xbox One sales in 2016 in its financial reports for that year. So this is our first insight into how well or not well the Xbox One sold. Lifetime PS4 sales sit at about 117.2 million as of March, meaning Microsoft sold less than 58.5 million units. Snap announced that its Snapchat Plus service is off to a respectable start, gathering over 1 million subscribers since launching in late June. Snap isn't just talking about subscriber growth, though, for the new subscription. It's also adding new features. Its new summer drop added a new few novel features for subscribers, including new app icons, more bitmoji backgrounds to choose from, a post view emoji that people will see after your Snap is viewed. But it seems the feature getting the most attention is called priority story replies. This will make subscriber responses, so if you're paying, more visible while interacting with verified Snap stars accounts, many of them being celebrities. That's why people want to pay four bucks so that Kim Kardashian will not hurt anymore, I guess, I don't know. Yeah, I mean, you know, whatever celeb is on there, best of luck. Alright, let's talk about one of the reasons companies like Snap are looking to subscriptions for revenue. It comes down to the alleged financial impact of Apple's app tracking transparency or ATT feature on ad businesses. You've probably heard the screams of Facebook about this from wherever you live, but Facebook and Snap both have blamed downturns in their ad revenue on this in part. Anyway, this comes as Apple itself reportedly looks to be interested in expanding its own ad business into a larger source of revenue for itself. The company recently announced that new ad units in iOS 16 will let advertisers place ads on the today tab in the app store and at the bottom of product pages for other apps. But Sarah, it looks like Apple has plans even beyond that. Indeed. So Bloomberg's Mark Gurman, who knows a lot about Apple stuff reports that Todd Teresa, who is the VP in charge of Apple's ad group wants to grow its revenue from the $4 billion a year. It is bringing in now to double digits. So that would be at least 150% of a markup for the company. Right now, Apple puts ads in its news and stock apps. You might have seen them before. The app store also has ads and in TV plus for Friday night baseball ads and news are split with publishers. It's not clear though how much everybody gets. Gurman suspects that to hit Teresa's desired revenue growth, Apple plans to expand ads to search results in maps. Also storefronts in Apple books, Apple podcasts. And there's always the option of an ad supported Apple TV plus tier. Gurman also noted that Apple's ads use data from all of Apple's services and your Apple account. Now you can opt out of that kind of personalization in iOS. If you do that, Apple can still identify your carrier, the device type, like, you know, is it an iPhone 17, iPhone 16, whatever. And what you read to determine which ads to serve. In other words, if you reading the Maps app, it knows you're in the Maps app stuff like that. Charlotte, I'm sure no one will have a problem with Apple cracking down on ad tracking from everyone else while adding more ads to their apps, right? No. Only a cynic would say that Apple took a giant whack out of some of their biggest rivals and then has looked to, you know, as Sarah said, it could be anything like nearly treble what they want to get from ads. Of course, no one would take a cynical view on that and nor would I because you guys have known me long enough to know that I'm not cynical at all. But it's this is a really big deal because Apple has put so much of its credibility of its sales pitch almost around privacy around that you're in its environment and therefore people are not hoovering up your data. Now I think most people understand that Apple gets some of your data like I don't think you'll be a surprise to many people that if you have an iPhone, Apple knows what kind of iPhone you have. I mean, just look in the, you know, some of the store app in your phone, it knows exactly what you're looking for and lots of ways that's to the benefit. But I've always felt that Apple has sold itself as a premium product and one of the premium elements of it is you pay a higher price, but you don't get inundated with ads. Now, I personally, in lots of instances, don't have a problem with ads. I'm happy for them to be on podcasts, including my own. I'm happy for them to pop up in web pages when I'm reading them if it's done, you know, neatly and cleanly and doesn't interfere too much when I've used some of the Apple services you listed and where there are already ads. It doesn't particularly, you know, it's not particularly to the detriment of my experience with those services. But I think Apple will tread a fine line because Apple users, I think, will, if they suddenly find themselves inundated with ads, will become really unhappy about it very quickly. You know, I think back to, gosh, this is only a couple of weeks ago when talking about Meta CEO Mark Zuckerberg saying, you know, Apple and Meta are really going to go head to head going forward. I mean, the ads business, it's obviously complicated between the two companies, but that kind of stuck with me when I... Relationship status, it's complicated. It is. It is very complicated. But it kind of stuck with me when I read this story, like, okay, so what exactly is Apple going for here that other companies aren't already doing? So maybe that's like an optimistic way to say, Apple's just playing the game, right? But it's also Apple and the company has taken so many hard lines against, this is what we don't do that other companies do in the past. And is that going to, I don't know, scare away some Apple faithful folks who don't appreciate this? I suspect the answer to that is no, just because what's the alternative? Yeah, you're in the ecosystem. I saw a hacker news thread yesterday, maybe day before yesterday, asking like, what are my good Linux based phone alternatives to Apple? Now that there, you know, it was a little bit of that early backlash of like, I don't care that it's first party ads. I don't care that it's no different than the ads it already has and they're only putting it on their own services. I don't like ads and I don't like Apple expanding them. What can I do? And the answer was, well, not much. There aren't a lot of other places you can go. Well, what do you, I don't like ads or data or a company collecting my data? What are you going to do by your Android phone? Yeah, because Apple isn't increasing the data collection and Apple isn't selling your data to anyone. And that's the case they're going to make is, look, these are first party ads. Well, we have been blocking his third party ads where they where the data is shared outside of Meta's ecosystem outside of Snap's ecosystem. And Apple isn't doing that yet, but this is a slope that they are tiptoeing down, which might turn out to be slippery. Yeah. And I keep going back to this. They've made such a big part of their whole marketing effort and sales pitch privacy. You know, some really quite punchy ads that we've all seen about, you know, about privacy. Yeah, you know, iPhone, that's privacy, that's iPhone, and, you know, the padlock closing and all of that. You know, we've all joked, haven't we, after different Apple keynotes where basically they won't, every section starts with the word privacy in some form or another. Yeah. Yeah. No, it doesn't matter if they have to make the subtle argument about, yeah, but this is an increased data collection. This isn't privacy because the marketing message was not as subtle as that. And I think they will get some backlash, but I think you're right, Charlotte, because there aren't many alternatives. It's still, for most people, going to be the best of a lot of options. Good or bad. Well, another fun news item that is getting some backlash and also a lot of curiosity is text to image AI engine. So we're now familiar with the popularity of Dolly Mini. It's now called Crayon. Over the summer it was launched and the slow invite only, and by the way I'm still waiting for my invite, opening of Open AI's own Dolly 2 itself into public testing. But a text to image engine that will probably get a lot of more media eyeballs is new. This is TikTok's new AI green screen. I might say, what in the heck is that? It lets users generate a text to image prompt to use as a background on their video. So for anybody who's not familiar with green screen, it's whatever might be behind me in my view right now. I could put a, you know, I don't know, like a farmland or, you know, maybe I'm in space or that's the whole idea of having a green screen. So it lets users generate a text to image prompt to use as a background on their video. The engine behind it generates relatively abstract and swirling images, especially if you're trying to be incendiary and, you know, trying to fool it into, you know, doing some kind of crazy, rather than more complex or photorealistic outputs from Dolly 2 itself. Yeah, that's not meant to be a replacement for Dolly 2, even though people are like, ooh, TikTok adding AI. It's just meant to be a fun background generator. It totally is, yeah. Whereas generally speaking, the better the text to image model, the more limited its availability. So that's a really bad one available to everyone on TikTok. However, a startup called Stability AI wants to change that. It collaborated with a media creation company called Runway ML, some folks at Heidelberg University, the research groups of Luther AI and Leon to develop and release a photorealistic open source text to image AI system called Stable Diffusion. Now, so far, they've only released it to a thousand AI researchers, pretty standard practice for that kind of tech. The engine can run on consumer GPUs, though, with about five gigabytes of VRAM producing a 512 by 512 pixel image. So you might say, okay, Tom, well, why are we bringing it up if it's limited to just a thousand AI specialists? I mean, how many of those would be in our audience? Maybe some of you, but not that many. Stability AI plans for a full public launch in the coming weeks, both as a cloud service with tunable filters, as well as a local model. So anybody with a few hundred dollars to throw it a mid-range GPU like Nvidia's GTX 1660 could be able to run that on their own machine. It also comes with a permissive license that lets you use content for any purposes, including commercial purposes that might be attractive to some folks. So first of all, how good is this model if they're okay releasing it to the public? Because we already said that is ripe with issues. And second, how will they prevent misuse? Well, the model seems pretty solid. Scientist from Ludwig Maximilian University, Munich, used a cluster of 4,000 Nvidia A100 GPUs running on AWS to train it. They trained stable diffusion over the course of a month using a subset of the dataset Leon 5B. Leon 5B is an open source 250 terabyte dataset. It has 5.6 billion images scraped from the internet. Leon itself stands for large scale artificial intelligence open network. It's an open dataset. But because it's scraped from the internet, you may be like, okay, what's in there? Stable diffusion trained on a subset called Leon aesthetics. That contains 2 billion AI filtered images ranked as particularly beautiful by testers of stable diffusion. So AI ranked it and then actual humans went in and ranked it some more. The big defense against misuse is that dataset filtering. They're like, we're training it on really good data. The terms of service also prohibit the usual list of misuses, but there is no policy against images with public figures. That makes it different from crayon. And finally, if this is all open for me to run on my own computer locally, which it is, how is the stability AI going to make money? Well, once they've weathered the backlash over misuse, if that's even possible, the company does plan to monetize all of this by training private models for customers. Also saying it has other AI models in the works for generating audio, music and video. So this is sort of a first step. Yeah, so get people to use it and get it to be popular and well-known and then companies will come to you and say, hey, can you help us tailor it to do? And then you say, indeed, I can. What exactly are you looking for? Step three, profit. Charlotte, do you think there's a chance that they will be able to navigate the backlash better than other attempts to do this in public? Will they be able to learn from previous mistakes? I mean, any sensible business should do that. I just always get very twitchy in this idea of mass video and being linked with AI, because frankly, I appreciate all the things you're saying, this is not going to turn up on my TikTok tomorrow. I'm not going to see creators using these tools on my TikTok tomorrow and not be able to tell what's real and what's green screen. At the moment, it's fairly obvious what is, but you know, when you start putting this kind of technology into the world en masse, it's, you know, the possibility of deep fakes of people misusing it becomes quite severe. And that really is what worries me and they're going to have to set out quite clear guidelines to make sure that doesn't happen, because you can see kind of situations where people put up a video and claim to be in one spot and they're not. And it's very hard to tell the difference. It's already not that difficult to make deep fake video stuff like this is only moving to make it easier. I'm not some Luddite that doesn't want us to make this kind of progress, but you've got to balance it very carefully. Well, even something, okay, so over the weekend, one of our patrons said, hey, anybody want me to make a dolly image? And I said, yes, could you please make a Brontosaurus eating brunch at a posh place and possibly munching on some kale? I'm paraphrasing a little bit. And, and they sent some amazing results, amazing results. Wow, that's incredible. This is from Dolly Mini too. Yeah, it is. And Charlotte, when you look at this, are you fooled? Or can you kind of tell that it's AI? I mean, I'm pretty confident there's no Brontosaurus turning up at brunch. Oh, so there's so little, you know, just a tiny little pocket brunt. It's a lovely little pocket brunt. That's not the kind of thing that worries me. No, no, certainly not. But, but if I were to then say, let's say somebody else creates that and they send it to me. And that becomes my, I don't know, Twitter banner image. And then there are issues because of who made it. And is it the AI or is it the person who sent it to me? Is it me? I think we're going to see a lot more of that going forward. I like someone being like, oh, you know, why can't you put a picture of Sarah Lane at a brunch spot when you weren't there? Yeah, and well, that's always been the fear. That's always been the fear. And it's rarely realized. Maybe this is the time it's realized. Yeah, Tom. Yeah, there's always the yet to that. But I feel like we can tell and we get sophisticated and we learn that these tools exist and we don't get fooled. And I think it's very brave of stability AI to try to be the one to take that step because there's always going to be a company who takes that step and says, let's trust people to learn the difference so that we can get the benefits of these tools, because otherwise they'll stay locked behind and only the elites can have access to them. And it takes a stability AI to be willing to take that chance. Whether they can navigate those choppy waters or not is what I'm wondering. Yeah, and as I say, we already have issues with deep fakes of, you know, they're normally, you know, X-rated and around celebrities. But again, this is just bringing that stuff more and more mainstream. And I'm not saying we shouldn't develop this technology. I just think we have to be really clear about what the risks are. And to be fair, it seems like stability AI are being very open and honest to try and make things as clear to people as possible. Yeah. Oh, and that was that was Dolly too, not Dolly Mini that did the Brontosaurus. Yes, Dolly too. Yes. I mean, it's a really lovely image. One of my favorites. It's lovely Brontosaurus. It's just a happy Brontosaurus having some kale and a coffee. Don't blame it. You know, Folks, if you would like to send us your AI pictures of Brontosaurus's drinking coffee and eating kale or anything else, our email address is feedback at dailytechnewshow.com. Data from an analyst company called Antenna shows that 19% of subscribers to subscription video on demand services, you know, Netflix, Hulu, HBO Max, SVODs, canceled three or more subscriptions in a two year period ending in June. That's up. The number was 6% in 2020. So it went from 6% to 19% or canceling stuff. Monthly customer cancellations of SVOD rose from 5.46% a month from 4.46% a year ago. But paradoxically, it's not that people are cutting down on services. The average number of subscriptions is rising. There's just more services to choose from. And so we're dumping some of the other ones. One method of fighting that is to bundle them up. Disney does that with Hulu and ESPN Plus and Disney Plus. You can merge your services like Warner's going to do with HBO Max and Discovery Plus. Another way is to get subscribers through what's called a channel store. Yeah. So the Wall Street Journal sources say that YouTube plans to launch a channel store as early as this fall. Right now, if you're a subscriber to YouTube TV, which I am, you can add services like HBO Max or Showtime. But you have to subscribe to that base 54 per month service first. You don't get the other stuff otherwise. The new offering would potentially allow you to add services without having to subscribe to YouTube TV at all or presumably YouTube Premium either. YouTube has more than 2 billion monthly logged in users. It's a big draw for everybody. So it becomes a compelling choice for services that want to gain adoption with a huge subscriber base that's already there. YouTube could show trailers for shows that lead to easy subscriptions or the like. Wall Street Journal reports that everybody's doing it. It's not just YouTube. Walmart is doing it. They just signed a deal to include Paramount Plus according to Wall Street Journal. Peacock is exploring similar add-on options to be not only a service provider but a platform as well. Walmart would supposedly make it part of your membership bill, which gets you other perks around shopping and shipping and stuff like that. Peacock would seemingly treat it as an add-on to the Peacock service the way Apple TV does, the way Amazon Prime Video does, the way Roku does, where you can add channels to those base services. Verizon even has something called PlusPlay, which if you're a Verizon subscriber, you can subscribe to external services like Netflix, for instance, and add it to your Verizon bill. The whole point is to get one bill. Charlotte, what do you think of the, as we start to figure out the price of services and people start to figure out how many they want, we're addressing that problem of having to pay 16 different bills and consolidating them into one. Yeah, I get why YouTube would want to do this, and I kind of get why the services would want to be part of it, because as you said, a lot of people use YouTube or live in YouTube, and so if you can get people to your service that they might not go to otherwise, why wouldn't you? I have an example from here when a Paramount Plus launch recently, I realized on the slightly older TV I have in one room that the app wasn't there, but I could access it through Amazon Prime Video and one of the channels there. I've watched the Spanish football channel where you can add on Amazon Prime Video as well, so it does make life easier when you have some apps and it becomes your kind of platform and the place you live. So I get why everyone wants to do this, and I think for customers consolidation does make your life easier, doesn't it? We all just want to know how much we're going to pay each month for one service and it helps you budget. If anyone's going to be able to take on the kind of Apple and Amazon duopoly of this, clearly YouTube is going to be the place, particularly I would guess with younger viewers. Yeah, I don't know. I mean, I feel like the Amazon model is really what's driving this, even though I don't watch a ton of video on Amazon Prime Video, but I'm a Prime subscriber and I can if I want to. I just, you know, there are certain other places that I can get the content that I'm looking for, but it kind of reminds me of when Verizon bumped me off of the old grandfathered-in unlimited plan and was like, this limited plan is actually better. It's cheaper and will give you Apple, not Apple TV Plus, but Apple Music for free. You don't pay $10 a month. It's just part of your $85 a month thing and that was extremely attractive to me. I was like, oh, wow, this saves me like $15 a month for doing absolutely nothing. And I think companies are getting hip to the game that there are a lot of services that we, you know, are ingrained in our lives. We're going to use them anyway. So if you can give me some sort of a perk, some sort of a bundle that makes sense. I mean, it's kind of like recreating cable, but not just for watching things. But keeping the benefits of not having cable, right? Because you can add and subtract services easier and at a more fine-tuned level than you can with cable or satellite. I mean, there's a general thing going on in streaming, isn't there? Of like a rebundling, which, and this is clearly part of that same phenomenon. And also I think maybe for the services, they're like, oh my God, if people see another 799, 899, 999 coming out of their bank account, they're just going to cancel it. Whereas if they just see one bill, they'll let it roll on and on and on. Yeah, that $8 gets lost in your bill from Verizon, in your bill from Comcast, in your bill from Sky. I think that we are going to see a battle between those platforms, the ISPs, who should have been doing this a long time ago, but I think cable TV interests kind of kept them from wanting to jump on it too fast and saying, hey, you're already paying for phone service and or internet service. Why not just have your Netflix, your Disney Plus added through that and you can manage it all in one place. And the machine platforms, the Roku, if you notice Roku, Amazon, which makes the fire TV, YouTube made by Google, which makes the Google TV devices. It's the set top box TV operating system platforms versus the internet service provider as the platforms going for that one bill for all your services. And the one that's going to win is the one that makes it easiest and has the best selection. So Verizon's got an early lead by having Netflix. The question is, can it get everything else? I think the other point about this is it's particularly pertinent for the quote unquote newer streaming services. I'd be much more interested in being part of this if I was Paramount Plus or Peacock than if I was Netflix and certainly Apple where you've got your own thing anyway. Yeah, I think it's a tall order for Peacock to become a platform. You know, good luck to them. As a channel, I'd rather be one of these platforms as a Paramount Plus. That's my point. You're very correctly pointing out that Peacock needs adoption. And so being a platform is kind of a tall order for them. Walmart also because they don't have anything else. So you kind of don't think of them as being the place you want to go. Maybe it'll get enough people wanting to subscribe for free shipping. They can pull off an Amazon. But this is definitely the new battleground. We've figured out the services and the pricing is starting to consolidate. Now it's how do you want to pay for them? And which service do you want to consolidate your billing? All right, let's check out the mailbag. This one comes in from Kevin who had really nice feedback from our experiment week last week. Kevin says, Aloha DNS crew. DNS crew. Well, I enjoyed experiment week. My favorite show by far was Boba Tech from Nicole Lee. I'm an Asian American in the e-commerce industry. A doctoral student at Pepperdine with research focus on raising the voices of minorities in organizations. Nicole's show spoke directly to me and I'm grateful to her and Eileen for sharing their thoughts. Please pass along my compliments and my support. If they ever launch a Patreon, I'll be one of the first to sign up. Thank you, Kevin. That's great. I want to thank everybody who did experiment week stuff. Willie Scott, Brian Hoffman, Rob Dunwood and Rod Simmons and Charlotte. Charlotte had a great episode. Thank you so much for doing that episode as well, Charlotte. I loved that interview that you did. Yeah, it was really fun. It's kind of the style of my usual podcast, the edition podcast. But Chris is a great guest. He's literally written the books on TikTok on YouTube. If you want to talk about those subjects, he's the right person to get on. Yeah, it was really fun to be part of. So thank you for having me. Well, Charlotte Henry, thank you for being with us today. And let folks know where they can keep up with all your latest. Yeah, but if you haven't had enough of me, I'm at theedition.substat.com. That's a double day. And at Charlotte a Henry on Twitter and all the other social media platforms. And if you look for the book, not buying it on Amazon, I wrote that too. Excellent. We also have some brand new bosses to thank. They include a Sensei, Skyler, Kumar, Clint and Peter. They all just started back in us on Patreon. So big thanks to Sensei to Skyler to Kumar to Clint and to Peter. Ah, that could be you tomorrow. Patreon.com slash DTNS. Speaking of patrons, stick around for the extended show, Good Day Internet, where we talk about all the things. You can also catch the show, this show, DTNS, Monday through Friday at 4 p.m. Eastern, 2100 UTC. If you can catch us live, we'd love to have you find out more at dailytechnewshow.com slash live. We are back tomorrow talking to Def Con with Shannon Morse. Talk to you then. This show is part of the Frog Pants Network. Get more at frogpants.com. Diamond Club hopes you have enjoyed this program.