Ask Paul: December 9 (Premium)

Happy Friday! We’re suddenly barreling into the holidays, but here’s another mammoth edition of Ask Paul to kick off the weekend a bit early.

Ads in Windows

AnOldAmigaUser asks:

Part of the argument for ads in Windows and pushing users to Edge and Bing, whether they want that or not, is that Microsoft is not making money selling upgrades. How much did upgrades actually contribute to Microsoft’s bottom line when they did?

I understand where you’re coming from, but that might be the wrong question. There’s no way to know for sure how much upgrades literally contributed in the past. But as a generality, we can say that Windows upgrades were revenue sources in the past but aren’t now, and that in the era in which upgrades were available, most people did not take advantage of them because they were reliability nightmares. The one major exception might be Windows 95, but compared to the user base we see today, even that was still a comparatively small market.

Perhaps a better way to think about this is that we used to replace PCs more often than we do today. There are multiple reasons for this, and while we often talk about how PCs are “more reliable” today and thus “last longer”—I often cart out these phrases myself—that may be somewhat incorrect too. PCs simply aren’t advancing as much year-over-year anymore as they did when PCs were the only major device in personal computing. This is true across the board: real-world performance goes up only marginally over the years now, and while we are seeing advances in things like USB over time, that too is not that dramatic to most people. A several-year-old PC pretty much works well for most users now (not including power users, gamers, developers, etc.).

Whatever the reason(s), people hold onto PC for longer time periods now. And since Microsoft is not charging for upgrades (and can’t), it’s getting less in recurring revenues than it used to. Most of which is tied to Windows license fees associated with new PCs. Which brings us to…

Most businesses were on Software Assurance, and could install whichever supported Windows version they wanted. Most consumers purchased Windows with a new PC, and ran that version until they got a new computer. Both of those trends are still in place as far as I know. I still see many professional offices running older versions because the software they use is not certified to run on the new versions. Travelling in Asia, I think I saw more XP than anything else, and I am pretty sure that was pirated, so there is no revenue there either way.

We think of subscription services as a relatively new thing in technology, but that’s exactly what volume licensing (Software Assurance) is, and that’s something Microsoft has been doing for a long time in the commercial market (business, education, government, etc.). The fear, of course, is that Microsoft will try to do this in the consumer market. The theory is that that would never fly: we are conditioned to not paying monthly fees to use PCs, just as we are conditioned to being able to download and install software from the web or anywhere else (which is why Microsoft can’t retroactively lock down Windows and require an app store, as it tried and failed with S mode). Trying such a thing would simply drive people to Linux or the Mac. Right?

Maybe. But ads are a way to generate some form of recurring revenues for this legacy product that is now being purchased less frequently through new PC buys. But as I’ve written in the past, Microsoft should offer users the choice of paying to not see ads. Surely, services that come in both free/ad-supported and paid versions have proven that this works: Spotify, for example, makes far more money per paying user (and far more money overall) than it does from non-paying users. Maybe Windows 11 could be ad-free for one year and then you pay to remove ads after that, so it’s tied to your license purchase. Maybe Microsoft 365 subscribers should get an ad-free Windows 11 experience. Etc.

Offering the Windows 10 upgrade for free was something that Microsoft had to do; in part because Windows 8 was a disaster, and in part because Windows 7 was reaching EOL and they did not want to continue supporting it. The Windows 11 upgrade was limited to specific hardware, and does not seem to be going gangbusters based on usage numbers.

It’s true that Windows 10 had to be free, just like Windows XP Service Pack 2 (SP2) had to be free: both were apologies for previous disasters. But there are other things happening. Apple long ago stopped charging for macOS (Mac OS X at the time) upgrades. Linux is free. There is no charge for mobile OS upgrades, and Microsoft seems eager to follow that model with Windows regardless of whether it makes sense. And Windows upgrades have now been free for 7 years. No one would pay for an upgrade now, and there’s no way to make people upgrade PCs more quickly, though Microsoft is trying exactly that with the otherwise arbitrary Windows 11 hardware requirements.

So is it fair to say that these changes are really just a grift for ad dollars? Squeezing a little harder because everyone else is doing it too?

I think it’s important to understand that Microsoft is a business providing a service—free OS upgrades with many feature updates in the system and through apps—that it feels has value and absolutely has real costs associated with it, and the company understandably wants to be compensated for that. That the world has moved on is not its fault, and it’s struggling to figure out how to earn more per user per month/year. I suspect Microsoft’s envy of mobile is tied to how much those platform makers earn, especially given that both are “free” to users. The app store on Windows hasn’t amounted to much, nor has its attempts at paid services tied to Windows.

But paid services—Microsoft 365 Family and Personal, OneDrive additional storage, etc.—are only one way to make more money. Ads and ad-like things (sponsored apps in Start, etc.) are another way. And I feel like a “Signature” service with a clean, enterprise-style experience (e.g. no ads and real control over privacy, among other things) is another. And I don’t know why they aren’t trying this. I would pay for this. And I think others would too.

And that’s pretty much the content of an article I’m still working on called Ads and Subscriptions are the Future … of Windows. I may still publish it at some point.

Don’t pull another Microsoft

jchampeau asks:

Is there a tech company or product out there, big or small, that you think really consistently gets it right?  Microsoft, at least in the consumer space you (mostly) write about, seems to change direction frequently, put out confusing statements, regularly release problematic updates that break things, and lack vision and direction.  Apple makes great stuff that usually works well but it’s expensive and they’re outright hostile toward the notion of interoperability.  And there was that whole “courage” incident.  The downsides to Google and Facebook need not be explained.  Twitter is a $44 billion dumpster fire.  So is there any tech that makes you happy every time you use it?  Notion?

No, not really.

When I look at the companies or technologies that compete with the bits of Microsoft I care about, like using Linux, a Mac, or a Chromebook instead of Windows, all I see are different mistakes. This is kind of a classic “the grass is always greener” thing in that I have whatever complaints about Microsoft or Windows or whatever, but the alternative is always worse.

This comes up sometimes when I complain about something, whether it’s in an article, on Twitter, on a podcast, or wherever, where someone will respond to the tune of, “well, yeah, but [other company name] does the same thing,” or is worse, or whatever. And … sure. But I don’t care about those companies. Or those products. Or I don’t care about them as much as I care about Microsoft or Windows. I would have switched, and will still, if there’s a better alternative. There isn’t, at least for my needs/wants. Everyone is different.

You mention Notion, and that’s a good example. I do like Notion. But there are things about Notion I don’t like, and they prevent me from embracing it further. A small example: to add a heading, you have to proactively type “/h1” (or similar) and then type the heading. But in Word, I can also type the heading text and then apply the heading style retroactively (by typing CTRL + ALT + 1, or whatever), while the cursor is on that line. You can’t do that in Notion without using the mouse, which is cumbersome.

There are a lot of small things like that, and I can adapt. But from a writing perspective, whatever I use needs to paste cleanly into WordPress because that’s where basically everything I write ends up. Word does this. But I can’t use Notion for day-to-day writing because it does not do this. Neither do any Markdown editors, and I’ve tried them all. I would love to use Typora, for example, but the output it makes in WordPress is hot garbage.

(For the book, I have to put WordPress’s editor into “text” mode, copy and paste the HTML code from my Markdown editor into that, which requires extra steps too, switch back to “visual” mode and then make many manual edits. That’s OK for something like the book because it’s a finite thing. But I’m not doing that for every single article I write.)

After a lifetime of tech enthusiasm, I can only conclude that tech, while fascinating, is also frustrating. That this thing that’s made of 1s and 0s and should be perfect is never perfect, does, in fact, break down regularly. This morning, Brad and I connected on Teams to record First Ring Daily and the video window was blank, with no video or controls. The only thing displaying was that stupid Excel advertisement I complained about earlier and had just seen and closed yesterday on the same PC. F’ing Microsoft. F’ing Teams. That’s my life. A reboot “fixed” it. Why the F is that even necessary? It makes me nuts.

But not nuts enough to switch. Because everything else has problems too. And while trading the problems I have for new problems may seem interesting on one level, I at least know how to fix the problems I have now. Life is too short.

Ads vs. paying

jwpear asks:

Do you have a sense of what a typical person “pays” on a monthly basis to consume ad-supported content?

I don’t think there’s a way to generalize this, and of course, I discussed this above. But let’s look at that Spotify example again: this is a company that offers the same service in paid and free/ad-supported versions. And, better still, it reports hard numbers.

In its most recent earnings report, Spotify said that it now has 172 million paid subscribers that contributed $2.178 billion in revenues in the quarter, and that now has 220 million non-paying users that contributed $323 million in revenues in the quarter. So Spotify earned $12.66 in the quarter for each paying subscriber and just $1.47 per non-paying user.

Spotify—God bless their transparency—also reports on gross margins. And there, too, we see the same stark difference: the margins on paying customers in the quarter were 28 percent, while the margins on ad-supported users were just 1.8 percent.

Again, it’s not possible to claim that this applies directly to other offering types—periodicals, perhaps, or other types of online services. But this is generally representative, I think, of the difference. That is, it is far more lucrative to collect a subscription fee than to make money on advertising.

I’ve been thinking about the ad-supported vs subscription model recently while evaluating my own subscription spending, content consumption, and the right/need of content producers to earn a living.  Realizing that I really have no general understanding of what I “pay” as an ad-based consumer and how this compares to what I pay to read/consume through a subscription.  I don’t know what’s reasonable.  I do know that I have accumulated a lot of paid subscriptions and it is time to reevaluate some of them.  However, I hate sites that have more ads than content.  I also generally just distrust ads due to possible supply chain attacks.

Right. The web is a special case, sadly, because the ad market has fallen through the floor for content providers. That’s why every site, including this one, spams users with ads. It’s the only way to barely scrape by. And to be honest, it’s unsustainable. If this is all we did on Thurrott.com, it would be a charity and I wouldn’t get paid. Plus, we’d just make everyone reading the site unhappy.

But, yeah, I have been reevaluating this stuff myself. And because we pay so many recurring fees, it’s hard to even know where to start. I did write about using Next DNS on my mobile devices to block ads and now that I have an Eero mesh Wi-Fi system, I could add that to the whole house (but won’t). I’ve talked about swapping out video streaming services each month rather than paying for several of them at once, but that’s complicated by the kids relying on them too (and I could see paying for two, Netflix all the time and one other service each month). And, like you, I like the idea of paying content makers for their work, but it’s getting expensive. I pay for three periodicals, two Medium subscriptions (one for me and one for my wife), and for things like Pocket and Momentum Plus. And Amazon Prime. And two music services (because, again, kids). And I pay for some content a la carte, like videos from Rifftrax. On and on it goes.

I don’t feel that there is a real, sustainable movement to things like vinyl, physical media like Blu-Ray, or whatever. But as I get older, I get it. I would like to unplug but still have access to content. And it’s really not doable.

I was talking to my wife about a related topic and the result of that may show up in a Premium newsletter or something. I’m not stupid enough to believe that things were better “back when.” But some things were better then and some are better now. And I would like to find the right balance.

Microsoft vs. the FTC

will asks:

In watching the Xbox/Activision deal play out I have a theory, that might be 100% incorrect, and has no proof.  It comes from the question of why has Sony been so against the deal?  Xbox has said they would offer Sony a 10yr deal for COD, and Sony has quite a good library of titles that are exclusive to the PlayStation brand so I do not think people are running out to buy a Playstation to play Call of Duty.  If anything, they would buy a higher end gaming system.  Plus the Xbox GamePass might be a small reason, but Sony has something in the works for that as well.

Sony has made pretty clear moves that signal that Microsoft is onto something with its recent Xbox strategy. It has pushed heavily into PC gaming. And it has moved to make its online services compete better with Xbox Game Pass and Xbox Cloud Gaming. What Sony lacks, unless I’m missing something, is what Microsoft lacks, a real presence in mobile. And that’s where the real money is. For in all the hand-wringing over Call of Duty and PlayStation, we’re forgetting something incredible: Activision Blizzard already makes more money from Call of Duty on mobile than it does on consoles and PCs.

So my theory is that Sony was at some point looking to buy Activision but Microsoft beat them.  It kinda makes sense that if you are friends with the prom queen and are looking to ask her to the dance, but someone else asks before you do and they say yes, you might be bitter. 

I view this is pure market protectionism. Sony is killing Microsoft in the console space, but the future of this market is really on mobile and with subscription services. Microsoft has already made strong moves in the latter, and Activision Blizzard would give them a strong foothold in the former. They complain about Call of Duty on PlayStation, but that’s a red herring and easily addressed. They don’t want this deal to go through for other reasons. If that wasn’t the case, it would have agreed to the 10-year deal.

The other thing about this deal is that the FTC is that they have not sought an injunction from blocking the deal, so there is still time for concessions.  But the only thing Sony wants is for Microsoft to spin off Call of Duty, or a very long agreement.

Yes, this is an important point. And I think that’s what happens next: a set of concessions that expands on what Microsoft has already publicly offered.

Anyway, just a theory and open to your thoughts on why Sony has been outright refusing anything publicly and if you think this will happen at some point?

Yes, I do still think that Microsoft buys Activision Blizzard, and that those concessions are key. Oddly, that’s always been the case.

The future of podcasting

helix2301 asks:

I was wondering about your feelings on podcasting and where it is going.

Recently there was an article saying that SiriusXM Media has been taking the lead with purchasing Pandora and Sticher and a bunch of enormous podcast networks and names. They are to the point where they have passed iHeart Media and Spotify now as far as listenership on all 3 platforms combined.

They air the show live on the radio then release it in podcast format a little bit later on Pandora and Sticher (the same way Leo does it) to service both their radio audience and podcast audience.

They got Howard Stern years ago but recently bought out Megyn Kelly podcast, Conan podcast network, and bar stool sports podcast network to name a few plus they syndicate shows now from other podcast networks.

I know in the recent earning report Spotify did say and Leo made mention of it that some of these popular podcasts seem to lose their momentum when they move exclusively to Spotify. Why do you think that is and why are shows on Sirius getting momentum rather then loosing it?

Do you think its a different audience? The live setup? I know on TWIT someone made mention that people listening to Sirius are listening more because they are paying for it and willing to pay for content?

Just wondering your thoughts on this sorry for the long post.

This is the natural maturation of this market, I guess, and while many tend to think of podcasting as a direct replacement for radio, it’s emerged as a more general form of entertainment, with something for everyone in both audio and video forms. There are super-popular mainstream podcasts now of every kind, and big players are consolidating by purchasing smaller publishers (like Amazon buying Wondery). Podcasts are nice because they are on-demand—you’re not beholden to a schedule as on the radio—and can be enjoyed while you do other things. I listen to podcasts when I walk and work out, but I also do so when I wash the dishes and shave. And when I’m driving, often to and from the gym. I love reading, but podcasts are a way to enjoy the types of content I’d read (or, on video, watch) in the past at times when I’m not able to read or watch. It’s a nice addition.

I don’t like the idea of podcasts being specific to a network/app/service or whatever. At all. I’m not going to suddenly use Spotify because it has podcasts that I can’t get elsewhere. But the proliferation of podcasts to what used to be unrelated apps/services (Spotify, but also Audible, Amazon Music, and more) is interesting and I think telling: podcasts are big money. But this platform makes sense because it’s open. Splitting up the shows as we see with video content on paid services like Netflix, Hulu, HBO Max, and so on won’t work.

TWiT is a special case where Leo created a company that serves a particular market and it’s interesting to me that it’s still independent. But I suppose that companies like Wondery that create more mainstream content—as opposed to technical content—are, by nature, more popular with normal people. Certainly, TWiT is incredibly successful.

One of the many things I like about TWiT that’s probably true of other studios too is that there are multiple ways to consume and interact. You can just subscribe and listen. You can listen live. You can interact with the show while it’s on via IRC or Discord. And you can subscribe to get an ad-free experience, either across the network or per show. All that is smart, and it helps build a community.

Sustainability

Mulderjoe asks:

Over the years I’ve compiled quite a collection of devices which have been replaced for a variety of reasons. My house has reached maximum capacity and I want to get rid of the piles of unused tech I have scattered around the home (except for the TRS-80 Model III – love that thing).

Weird, I’ve never had that problem. Oh, right. 🙂

As someone who has lots of history of owning devices, computers, etc, I was hoping you would have advice on how I should safely get rid of this stuff. Do you recommend a service? Do you recommend different solutions for different products (old tablets, do “A”. Old PCs, do “B”)? I have an original Xbox, which is cool, but I don’t need the three Xbox 360s I have.

There are so many different ways to go here. But the first option should always be putting these things in the hands of people in need who will use them, assuming they still work. We use Facebook groups like “Buy Nothing” for hardware giveaways, for example. Craigslist would be another avenue. We do this for non-tech items too, by the way.

If the devices are broken, you can recycle them. This differs by locale, but here in Lower Macungie, we need to contact the township, explain what we have (monitors, PCs, whatever), and they will give us a date when we can leave it out and they will pick it up. You’ll have to check with your town to see what the policy is. And if there isn’t one, find another local place where you can perhaps drop off recycling. There are also businesses that will pick up junk, oftentimes because they want to recycle it and get paid for the metal or whatever other contents. We’ve not tried that, however.

Obviously, if the device is viable, you could sell it or trade it in.

Should I have data concerns? Most of my devices which are no longer in service have been factory reset. In the past, with older desktops, I would remove the old hard drive and physically take the drive apart. But, I have some old tablets which eventually could no longer be charged (due to the crappy usb port) that I didn’t have a chance to wipe, thinking there was one more possible charge.

Yep. And I just went through this.

In our latest decluttering push, we did what I said above to get most of the old devices given away. But like you, we had some, like one of the Xbox 360s and some PCs, both of which have internal, non-removable storage or other issues, where I don’t want someone else resuscitating them somehow. And so what I did was put them aside, borrow a sledgehammer from my brother-in-law and literally destroy them. I pulled apart the logical boards, cut chips in half, etc. And then I bagged each separately, called the township, and told them I had some number of each item to recycle. They picked them up, no questions. I suppose you could ask your town/whatever if it’s OK to do this and just throw it in the recycling bin. But I didn’t do that.

Alternative personal history

andrew b. asks:

If you had stuck with developer as a career and not gone into tech journalism, what do you think you would be working in today? Would you have gone to C# and the Microsoft stack? Would you be the Delphi greybeard that some company needs on staff for that one legacy app? Or something else?

I wonder about that sometimes.

It’s impossible to say, of course. But I suspect I would have stuck with Microsoft as long as that made sense. Today, it would probably make more sense to learn web or mobile development, or some cross-platform solution like Flutter.

I wouldn’t be using Delphi. At the time it appeared—the late 1990s—Delphi was a revelation, and that includes Object Pascal and the VCL framework, not just the visual tools. But Delphi was always a step behind when it came to adopting new Windows features. And its logical successor came out of Microsoft, culminating with .NET, C#, and Windows Forms/Windows Presentation Foundation.

But even that was a million years ago. Today? I don’t know.

Soccer

ggolcher asks:

Have you been watching the World Cup at all? Do you enjoy that sort of thing?

Nope. I’ve said this of many things, but my quote is always, “there is nothing I care less about than [this thing]” where this thing, here, is soccer. Horrible, boring game. To me. (The first three U.S. World Cup scores this year say it all: 1-1, 0-0, and 0-1. Spare me.)

That said, live sports are always good, and I’ve been lucky enough to attend soccer games in Barcelona, Lyon, and at Estadio Azteca in Mexico City. Those were all good times.

And yes, I call it soccer. I’m American, sorry, and the sport we call football is vastly superior and more interesting to watch! Assuming you can overlook the CTE, I guess.

Pixel 7 Pro

leoaw asks;

How has your new Pixel phone been working for you?

Very well. I don’t want to ruin my review per se, but I guess I will. Some of the issues I had with the Pixel 6 Pro, like the slow charging and the curved display, are still present. But Google has also fixed the issues with the fingerprint reader and the adaptive display. And that changes things for me quite a bit. Where I couldn’t recommend its predecessor, I can and will recommend the Pixel 7 Pro. I like the subtly updated design, which feels more premium, and it is very much the best value in the flagship smartphone market. As I write in the review that should be out soon, “If Google had released this handset a year ago, I never would have switched to the iPhone.”

But I did. And because I’m currently using an Apple Watch, I will continue to do so. We’ll see what the iPhone 15 Pro/whatever and Pixel 8 Pro, and maybe the Pixel Watch 2, look like next year. I am very much open to switching back.

More on this soon.