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Friday, May 24, 2024

How ‘Buy Now, Pay Later’ Really Works

Money is tight these days. Holiday shopping, ballooning inflation, and a looming recession have forced people to more carefully consider their finances. Those factors might help explain the explosion of “buy now, pay later” services. BNPL plans offered by companies like Affirm, Afterpay, and Klarna let you spread the cost of a purchase—anything from a Peloton bike to a basket of groceries—over multiple installments, without the fees or interest rates of most credit cards. Of course, free money always comes with a catch.

This week on Gadget Lab, we dig into the buy now, pay later phenomenon and what it means for the future of shopping.

Show Notes

Read Lauren’s interview with Max Levchin. Check out more of WIRED’s reporting about buy now, pay later programs. Follow our coverage of all things ecommerce.

Recommendations

Michael Calore is @snackfight. Lauren is @LaurenGoode. Bling the main hotline at @GadgetLab. The show is produced by Boone Ashworth (@booneashworth). Our theme music is by Solar Keys.

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How to Listen

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Transcript

Michael Calore: Lauren.

Lauren Goode: Mike.

Michael Calore: Lauren, how are you paying for things these days? P2P, BNPL, good old-fashioned CC?

Lauren Goode: Are you using all these abbreviations because we're a tech show and tech companies love to abbreviate things?

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Michael Calore: No, I'm using all these abbreviations because I'm trying to be hip.

Lauren Goode: That might be worse.

Michael Calore: OK. What I'm actually really fascinated by is this whole trend of buy now, pay later, and how techies are trying to disrupt borrowing.

Lauren Goode: They are in fact trying to disrupt borrowing, and we should definitely talk about this.

Michael Calore: Let's get to it.

Lauren Goode: All right.

[Gadget Lab intro theme music plays]

Michael Calore: Hi, everyone. Welcome to Gadget Lab. I am Michael Calore. I'm a senior editor at WIRED.

Lauren Goode: And I'm LG. I'm an SW at W.

Michael Calore: Awesome.

Lauren Goode: I'm Lauren Goode. I'm a senior writer at WIRED, and I'm trying to abbreviate everything.

Michael Calore: A lot of us have got money on our minds these days. It's the end of the year. The holidays are here, inflation is still making it all sting. And of course, there's all the online shopping. If you're doing any of it, you have surely noticed all of those options that let you buy something now and pay for it later. And when you check out on a web store, you'll see offers from companies like Affirm, Klarna, and Afterpay, all giving you the option to pay for things in installments rather than all at once. This is the rise of buy now, pay later—BNPL for short. And yes, it's yet another way that big tech is trying to disrupt your wallet. Lauren, you've been reporting on buy now, pay later for a while, and you've just talked with Max Levchin, the founder of Affirm. He also happens to be a cofounder of PayPal, along with the guy who owns Twitter now.

Lauren Goode: Who was that again?

Michael Calore: Did we forget already?

Lauren Goode: Yes.

Michael Calore: What have you learned about buy now, pay later, both from Max and from your reporting? How does this work?

Lauren Goode: Well, if you've seen an option to use buy now, pay later at the point of checkout online and you haven't used them before, then what you probably don't know is that most of them will break things down into installments over let's say eight weeks or six payments over approximately that amount of time. Part of their appeal is that they're pretty immediate to use, and during that short period of time, if it's a short loan, it's generally 0 percent in interest or fees. There are going to be fees eventually if you take on a longer-term loan, or of course if you default on your payments, you might eventually get charged fees. But they're supposed to be appealing because of how relatively easy they appear to be to use, how quickly you get approved for these loans. And they don't have some of the financing fees that are associated with credit cards.

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Michael Calore: Is it really no interest and no fees?

Lauren Goode: I mean it is for a short period of time, like in the case of Affirm, which is the company I think we're primarily talking about today, I have used Affirm before. I used it to buy an area rug for my bedroom, and it was broken down—

Michael Calore: An area rug?

Lauren Goode: An area rug.

Michael Calore: Is that a throw rug or is it bigger than a throw rug?

Lauren Goode: It was bigger. I think it was an 8 x 10.

Michael Calore: So not a small purchase.

Lauren Goode: Not a small purchase, but I mean, it wasn't a Persian rug. It wasn't something that was super, super expensive, but I was actually curious about Affirm. And so I thought, “Let me try this, instead of using my credit card,” which a lot of people have stored in their Apple wallet at this point, or it sort of auto-fills in your browser if you're using Google autofill or Safari autofill. It's really easy to buy stuff these days with a credit card online. But I just figured, let me try Affirm because I want to see who actually serves this loan, what is the bank providing the loan, what's the fine print, how much am I going to owe? And sure enough, the area rug was paid off, the money was sucked out of my account, it was tied to a traditional debit card, and it was sucked out of my account, over four payments for 0 percent.

Michael Calore: Wow. So it's automated, so the payments just hit at regular intervals. You don't have to go and initiate anything.

Lauren Goode: You can set it to do that, yes.

Michael Calore: You can.

Lauren Goode: You'll get a notification, and there's also an app. Affirm has an app, so you could just go into the app and manage it that way.

Michael Calore: How is this different from a credit card?

Lauren Goode: This is a great question because it's the number one question that people have. Well, there are going to be certain people who use credit cards, let's just say, more responsibly. They pay it off every 15 days, 30 days. They really want to avoid the high interest rates, the APRs, the compounded interest over time, and they sort of treat it just like, “Hey, I need to buy a flight, so I'm just going to put it on my credit card, but I'm going to pay it off as soon as I get my next paycheck.” Or “I'm going to use my credit card to stack up points, but I know I can pay it off at the end of every month.” But then there's definitely a certain customer of credit cards who just carries a balance all the time, and those fees can be pretty high. If you let it go for a few months or longer, in some cases, you could end up paying what, 19 percent? You end up paying a lot, in some cases, just to hold the credit card itself, if it's one of the sort of premium credit cards. And two, you end up paying interest if you just can't pay off your entire balance at the end of every month. With buy now, pay later, they're offering a little bit of a longer-term loan. You could take as long as three months or something to pay for that item or items that you want to buy for 0 percent. In many cases, the banks that are actually providing the loans, like Affirm has these bank partners that most people have never heard of before like Cross River Bank or Celtic Bank. This is not like Wells Fargo, Bank of America, JP Morgan, because they have their own buy now, pay later services now. You may never have heard of these banks before. What you're really interfacing with is the tech platform Affirm, Klarna, Afterpay, and they're providing all of the service of the payment too.

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Michael Calore: I see. They're kind of acting as a broker.

Lauren Goode: Yes.

Michael Calore: Between two parties.

Lauren Goode: They're a middle man. They're a platform.

Michael Calore: I see. And they're making money—

Lauren Goode: Tech companies love platforms, they call it platforms these days.

Michael Calore: They do.

Lauren Goode: Yes.

Michael Calore: And they're only making money on the longer-term payments?

Lauren Goode: This is a good question. Yes, they do. They make money if you take out a long-term loan or if you default and they have to collect fees. But another way that they make money is they actually charge the merchants they work with to provide the loans for them. Here's a great example. During the pandemic, a lot of people bought into Peloton, but a lot of people would also look at a Peloton purchase, let's say a $2,400 bike or a $2,000 bike, depending on which one you got, and say, “I can't pay for that all up front.” Front and center on Peloton's web page was “Finance this for 18 months or 24 months with Affirm, 0 percent.” And so, Peloton would pay Affirm a fee for every time someone bought a Peloton and financed it through Affirm. The merchants want this to happen because they'd rather have you, Mike, not walk away from the purchase and say, “I don't want to buy this.” They want you to buy the bike and fine, Affirm will take on the loan, take on the risk. They'll handle all of this. We just want you to buy the bike. So the merchants will pay a service like Affirm or Klarna to basically work with them or be listed in their app, for example.

Michael Calore: I see. Normally, if you're getting a loan, or even if you're getting a credit card, there's a credit check involved. Is there a credit check if you want to pay for something with Affirm or Klarna? And does that affect your credit at all if you don't pay it back in time?

Lauren Goode: There's a soft credit check that happens at the point of checkout. You get approved or not approved pretty quickly, I want to say in minutes, if not seconds, in my experience. Everyone's different, of course, because everyone's credit check might be run differently. It's this interesting combination of, it's a soft credit check, it's not a hard credit check, but also there's a lot of tech and machine learning involved in that really rapid credit check.

Michael Calore: Machine learning?

Lauren Goode: So Affirm, one of the things that Max Levchin talks about a lot with Affirm is how he believes Affirm is different from some of the other buy now, pay later companies out there, in that they underwrite their loans, which means they do this sort of rapid analysis to figure out what your credit score is, whether or not they think you are at risk of defaulting on this loan, how much of a loan they should extend to you, what's the amount or the max amount that you should pay? This all happens in seconds using machine learning. It's both a soft credit check and sort of a deeper analysis of what your whole credit picture is to determine if you're a good candidate for Affirm. And then, eventually, even though it's a soft credit check, it's not a hard credit check. Eventually yes, if you do keep defaulting on these buy now, pay later payments, it will affect your credit score.

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Michael Calore: It'll probably also affect your ability to get more buy now, pay later stuff.

Lauren Goode: Exactly. Yes. No more Pelotons for you in case you want six of them.

Michael Calore: In your interview with Max Levchin, he mentions that he really hates credit cards. Now, I'm sure part of this is coming from the fact that he's a founder of this company that's trying to upend the credit card industry, but also, I mean, he really has to believe that credit cards are bad and that his system is good in order to make it work. Break down this hatred for us.

Lauren Goode: It's very real. He has very much positioned Affirm as the anti-credit card company. He's blogged about this before on Affirm's blog. There's sort of a surface level answer to that, which is, yes, it's marketing and positioning of his tech company. There's another answer that's a little bit longer that sort of takes us back into the days of the early 2000s and then the 2008 recession, which is that broadly speaking, Americans love. We love our credit cards. A lot of us have credit cards. Currently, we have this huge national debt, this huge balance on our collective credit cards, but that ebbs and flows. There's this period of time in the early 2000s, I don't know if you remember this, but I was graduating undergrad in the early 2000s, and there were financial pundits like Suze Orman who write entire books on—

Michael Calore: The lady with the hair.

Lauren Goode: Yes. On why you should basically leverage your life with a credit card if you are just starting out and can't afford your rent, and why it's a good idea to build up this credit-to-debt ratio and start taking out credit cards. And then in the 2008 financial crisis, there was sort of a reaction to that, and consumers started to get wiser and realize that actually borrowing is not necessarily always a good thing. We've been taught to build equity, but it's really easy to get over leveraged. And that was a reckoning that we had as a nation. Then during the pandemic, when we were getting stimulus checks, our collective credit card balance in the United States went down significantly. People started paying off their credit card bills. But now they're back up again. We do have this relationship with credit and credit cards here in the United States, that's like it kind of flows in and out. And so, I think when Levchin started Affirm, and it launched in 2012, this was as we were emerging from the financial crisis of 2008 and rethinking the way that we borrow. I think he just saw it as a way to reformulate or, yes, hashtag-disrupt our traditional credit card system. And this was the approach that he decided to take.

Michael Calore: All right. Well let's take a break and when we come back, we'll talk about how that's going.

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[Break]

Michael Calore: The US Consumer Financial Protection Bureau, which is basically the watchdog for the lending and banking industry, they've raised a few eyebrows at these buy now, pay later schemes recently, haven't they?

Lauren Goode: That's one way to put it.

Michael Calore: Well, last year the agency opened up an inquiry into BNPL. It has warned consumers that these programs could potentially lead them to overextend themselves financially. Tell us a little bit about this inquiry.

Lauren Goode: There are some concerns that buy now, pay later is a little too easy to use, because the extension of the loan happens so quickly at the point of checkout, takes seconds to get approved or not approved. It's right there next to “Enter your credit card number, pay with Apple Pay, pay with Google Pay.” Or like, here's Affirm, or buy now, pay later. It's all so easy to use that I think there are just concerns that consumers could get into a little bit of hot water with it. And in particular, some of the concern is around younger people. These may be people who are technically adults, but maybe they don't have a lot of disposable income at this point in their lives. Maybe they're just starting out in their careers, and they're seeing lots of products these days. I don't mean to sound old, those kids are seeing all these products, but it's true, you see things in Instagram and TikTok, and influencers that are totally hawking these products and saying, “You have to buy this bag, this beauty product, these sneakers.”

Michael Calore: This water bottle.

Lauren Goode: This water bottle. And it's really easy to shop these days directly from social media. You've got this sort of path of, here's a young person who wants the latest thing, they're clicking on this link, they're being taken directly to a web page—and by the way, just pay this off in four payments for 0 percent. You don't even need to use your credit card or your parents' credit card if that's what you're using. I think there have been some articles written and some concern expressed about the ways in which young people in particular might be exploring this as an alternative to traditional credit cards, but they aren't necessarily building up the right kind of credit to start, either. And so, the Consumer Financial Protection Bureau is just keeping an eye on it, has been just sort tracking how these companies are operating. It hasn't taken any kind of official action yet, but I think it wants to just keep an eye on it to determine if this is something that's problematic.

Michael Calore: I will say that the ease of that path where you can just click a button and two minutes later the thing is being boxed up and sent to you, and you haven't yet paid for it, that kind of turns me off. I understand how that's attractive, but I think it also could be hindering the growth of these companies. Because I'll tell you what, I have been using credit cards for decades. I understand how they work. I have one of them, as you said, already in my phone and already ready to go and auto-fill. But when I see like Affirm wants to buy it for me and then have me pay them back, I'm thinking like, "Zero percent? What's the catch?" Because buying something has always come with the responsibility of paying it off or else getting hit with interest payments. So what's the catch? I'm skeptical about using it, and it's prevented me from using it up until—

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Lauren Goode: So you have not used a buy now, pay later service at all, yet?

Michael Calore: Right. Just because, clearly, that is the psychological hurdle that is holding me back from using it, where I'm looking at it and I'm thinking, “It's not really 0 percent, is it?” And like, “Do I really want to step into that world and get entangled in another financial system when I already have one that I've been using that I'm comfortable with?” You know what I mean?

Lauren Goode: I think that's very real and very valid. It is so interesting because there are some credit cards that really don't have super beneficial terms, and yet if they have a brand bank name attached to them or we've been using them for years, we're just sort of like, “These are the terms.” Right? And if you do a side-by-side comparison, buy now, pay later services might, and you know that you could pay something off in four payments, it might actually be a better deal. But there is that hurdle, that like, “What's the catch? Free money? What's the catch?” I mean, another thing that we would end up dealing with if you did use one of these services, I've used both Klarna and Affirm, is that you're just in their email marketing loop until the end of time. Particularly now that it's the holidays, I've gotten so many emails from them promoting so many products, and one of the emails I got was actually kind of dark. It was from Affirm, and it said, “When the holidays are coming and you're supposed to be thankful, but you're hosting and you're not very thankful.” I talked to Max Levchin about this and said, “The subtext is like, you're broke, but you're supposed to be hosting.” And to me that's like, “Are we supposed to be using buy now, pay later to buy food?”

Michael Calore: Are people using it to buy groceries?

Lauren Goode: They are, interestingly enough. Some of the Black Friday, Cyber Monday data that has come through so far from some of these services, I got notes from Affirm and Afterpay. Afterpay indicated that actually food was one of the bigger categories for buy now, pay later during this period. And that's an interesting shift, because it's not “Here's a 21-year-old who's spending a lot of time on TikTok, who wants to buy the latest sneakers.” People are using buy now, pay later increasingly for things like fuel and food. And so when you look at the terms of the lending, is that necessarily a bad thing? Well, we don't really know yet. When you think about it sort of societally, it's an interesting time we live in, when there are people who are really struggling to have their basic needs met and are turning to these relatively new, decade-old consumer lending systems that are backed by tech.

Michael Calore: It's kind of like Uber and Lyft, where those companies have a really hard time being profitable, but that's OK because they're backed by venture capital.

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Lauren Goode: Right. It's kind of like back in the 2010s, this kind of frothy era of technology, particularly here in San Francisco where we live. Our pal Kara Swisher always says, “It's like assisted living for millennials here in San Francisco,” because you just have all these services that will do anything for you. Laundry, food delivery, ride sharing, whatever it is.

Michael Calore: Find you a date.

Lauren Goode: Right, or find you a scammer on Hinge. But yes, companies like DoorDash, Uber, and Lyft that have had a really challenging time turning a profit but are so heavily funded by all these entities that we are basically as consumers benefiting from this relatively new structure that's in place in society that is funding our rides. And so, you do have to wonder about buy now, pay later and long term profitability and what their businesses look like in a really serious downturn, and how much that “free money” will continue to flow, and who ultimately is funding our purchase of the thing.

Michael Calore: You talked to Levchin about what the world would look like if people stopped using credit cards and started using buy now, pay later services, and he has a pretty rosy view of this future, right?

Lauren Goode: I mean, he's just so anti-credit card. He was very on the message. When I posed the question of, “What does a society look like when we're buying all of our things on buy now, pay later versus credit cards?” He was just like, “Well, that's great.” I mean, better than credit cards.

Michael Calore: I mean, he has skin in the game, of course, so we can't really trust him to paint any kind of skeptical scenario. But what do you think would happen if they really did succeed? Not just Affirm, but Klarna, Afterpay, all these companies really did succeed in replacing the credit card as the traditional way of offsetting financial responsibility for something to the near future for most Americans?

Lauren Goode: I think what you see is then more fees start to emerge, maybe in different ways, because what a buy now, pay later company has to do is strike this delicate balance between what they're charging to partner with merchants and handle their transactions and what they're charging consumers, if anything at all, or eventually charging consumers. And in the event of creeping interest rates, if interest rates go up again, a serious downturn, people stop shopping in 2023, whatever may happen, a company like Affirm or its competitors are going to constantly have to manage that balance to figure out where they're going to get money from. And so, who are they going to cater to more in that kind of dynamic? The merchants or the customers, the consumers, people who are clicking Afterpay or Klarna or whatever it is at the point of checkout? Right now, Affirm says they only have about 2 percent of the ecommerce market, so there's a lot of room for growth. As they grow, where does that cost get shifted? I wouldn't be surprised if it was more on the consumer. I'm not running the business, so I don't know. But I imagine over time there have to be more fees or more ways to just get more people onto the platform, baked in, in ways we notice and in ways we don't probably.

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Michael Calore: So maybe what we need to do is watch now and find out later.

Lauren Goode: It's like the thing that your editor, Mike, never wants you to write at the end of a story.

Michael Calore: I guess we'll just have to wait and see.

Lauren Goode: I guess we'll just wait and see.

Michael Calore: Boy, that's my favorite thing to cut out of any story. Let's take another break, and when we come back we'll do our recommendations.

[Break]

Michael Calore: Welcome back. Lauren, what is your recommendation?

Lauren Goode: I was really hoping we would start with you, because I feel like I've been talking a lot.

Michael Calore: You have been talking a lot because you are our guest, but of course, the rules of the show dictate that the guest goes first.

Lauren Goode: OK. My recommendation is Dead to Me, season 3.

Michael Calore: Very nice.

Lauren Goode: Have you finished it?

Michael Calore: Finished it last night.

Lauren Goode: You did? So Dead to Me is a show starring Christina Applegate and Linda Cardellini, among other excellent … I know Mike just put his hand to his heart. Who does not love Judy? Everyone loves Judy. There are some other fabulously talented actors in it too. James Marsden, like wow, that guy is—

Michael Calore: He has range.

Lauren Goode: He has a recurring character as well. He actually played twins in the show, but Linda Cardellini and Christina Applegate play best friends, these middle-aged women who met through a grief support group and murder ensues. If you go back to season 1, you'll catch up. So they end up basically being in cahoots, trying to cover up this murder, and their friendship blossoms as a result of this. And it's this really, really deep, funny but deep friendship that I think happens because they're these two middle-aged women are in this situation together. It's really funny, but it's also a really beautiful friendship. Season 3 is the final season. Christina Applegate has been having some really serious health issues. She's in public about this. She has multiple sclerosis. She was diagnosed in 2021, and they shot the final season, the season 3, with her sort of finding her way through this disease. There was a lot of blocking that had to happen in order to shoot it, and it's like remarkable that she did this.

Michael Calore: A lot of scenes with her sitting in a car or at a table. Not a lot of scenes of her walking around.

Lauren Goode: Like bursting through doors and that sort of thing. And they sort of find interesting ways to work it into the storyline, but she, not that specifically, but she does a fantastic job, the whole cast, it's a really great show.

Michael Calore: I think the casting is key for the show. It's really great to watch these two actors really just stretch. But also the tone is really interesting because it's a mystery and it's a comedy and it's a drama. I wanted to use the word “blubbery” drama. There's a lot of tears in the show, but it's not really that blubbery. It's kind of interesting how they mix it all together, and sometimes, there are a lot of shows that do this and it usually just feels silly or kind of forced, but this show does not feel silly even when it is. And it does not feel forced, even when it's being almost melodramatic, it kind of teeters on the edge of melodrama and then pulls you back with jokes. I really liked it. I thought it was really just a nice, beautiful three seasons.

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Lauren Goode: I think that's a good way to describe it, that just when it gets to the point where it could be melodramatic, something happens that is deeply weird or funny, or literally the kitchen ceiling crashing in, and it all ties back really well. It's really well written, these little plot points that show up again and again.

Michael Calore: For sure. And it takes place in my hometown.

Lauren Goode: No, really? Wait, Laguna?

Michael Calore: Laguna Beach.

Lauren Goode: Wait, I think I did not realize that Laguna was your hometown.

Michael Calore: But I grew up in that whole part of the world. Dana Point, Laguna Niguel, Laguna Beach.

Lauren Goode: I mean, I know we talked about surfing down at Dana Point, but wow. Was it actually shot there?

Michael Calore: Most of it, like the exterior scenes. I don't know where they shoot the whole show, but the locations are all locations that I'm intimately familiar with from my teenage years.

Lauren Goode: So great. It's one of those shows that you kind of don't want to leave. You want to just be in it, and you told me about it, was it two years ago?

Michael Calore: I think I recommended it.

Lauren Goode: I think you recommended it during the pandemic. We could talk about this forever. Let's just make this the Dead to Me podcast. Mike, what's your recommendation?

Michael Calore: I'm going to recommend a podcast that I was a guest on.

Lauren Goode: Yes.

Michael Calore: Can I do that?

Lauren Goode: Yes, you can.

Michael Calore: All right.

Lauren Goode: Shamelessly self-promote.

Michael Calore: I mean, I'm sure if you listen to this show, you don't get enough of me talking, so you have to hear more of me talking. But you can hear me in the hot seat. I think it's fun. The show is called Select Five, and it's hosted by my good friend Pam Torno, who's a DJ, DJ Pam Chop. We have done DJ gigs together. That's how we met. We've become friends over the years, and she has hosted this podcast for a few years where she invites a creative person on, either like a musician or another DJ or somebody who just has a creative profession, to talk about five songs around a specific theme. So it could be the five songs that remind them of where they grew up, or it could be like some sub-genre that they're really into. She asked me to be on the show. We tossed some ideas around, and we decided to talk about sleep music, because I'm obsessed with music for sleeping. I have been listening to music falling asleep as long as I can remember, my entire life. And through the years with the radio era and then CDs, and then streaming, the types of music and the songs that I've had access to have changed a lot, grown mostly. So I sort of have gone on this journey of the music that I listened to, to fall asleep 10 years ago, five years ago now, it's all represented in the talk. We talk about the selections, and we talk a little bit about my life, and it's fun because it's way different than what I normally talk about into a microphone.

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Lauren Goode: Which is tech.

Michael Calore: Which is technology. We were going to talk about technology on her show as well, but we just ended up talking about sleeping.

Lauren Goode: Can you give us a sneak preview of some of the things that you recommended? Some of the tracks?

Michael Calore: Sure. There's a Brian Eno generative piece in there. I talk about the Max Richter piece, Sleep, which is like an eight-and-a-half-hour-long album, classical album that's intended for you to listen to while you are asleep. It's good times.

Lauren Goode: I really need to try that. My current sleep music is “Hey Google, play ocean sounds,” for hours on end.

Michael Calore: You just triggered everybody's Nests.

Lauren Goode: Sorry. But enjoy the ocean sounds.

Michael Calore: Yep. There's no white noise in my selections, but there are some fake rain sounds in my selections. You have to listen to the show. Select Five is the name of the podcast, and I'm on episode 19. You'll see my photo.

Lauren Goode: What happens if you travel and you don't have access to a speaker in the room that you're staying in?

Michael Calore: I usually just use my phone. I'll just play something on my phone and put it down next to me. And true story, one time I logged on to the hotel Wi-Fi, and then I turned the music on and went to sleep, and I woke up to an alert saying that I just used 2 gigabytes of data.

Lauren Goode: Was it a good night's sleep? Was it worth it?

Michael Calore: Nope.

Lauren Goode: That is the worst. I mean, music streams aren't usually that heavy.

Michael Calore: Well, I have everything cranked up too extreme, because I can't stand crappy audio quality.

Lauren Goode: Just the highest quality.

Michael Calore: Only the best.

Lauren Goode: The best.

Michael Calore: Only the best for me for my little precious ears, the princess and the highly compressed pea.

Lauren Goode: That's a great recommendation. Thank you. I really need to use this—as you know, I'm not a good sleeper.

Michael Calore: I'll set up some playlists for you.

Lauren Goode: Thank you, Mike. I say this every time I'm coming to the office. “How are you doing?” “Well, I didn't sleep well last night,” per usual.

Michael Calore: Try listening to music. All right. Well, that's our show for this week. Thank you all for listening. Lauren, thank you for being on the show.

Lauren Goode: Thanks for having me on my show. This is really fun. I love it when it's just the two of us.

Michael Calore: Right. We could talk about anything for an hour, and at least two people would be interested inside this room.

Lauren Goode: Exactly.

Michael Calore: If you have any feedback about the show, you can find all of us on Twitter. For now, just check the show notes. Our producer is the very handsome Boone Ashworth. Goodbye, and we will be back next week.

[Gadget Lab outro theme music plays]

[Outtake]

Hi, everyone. Welcome to Gadget Lab. I am Michael Calore. I'm a senior editor at WIRED.

Lauren Goode: And I'm Lauren J—

[Lauren and Michael laugh]

Lauren Goode: I can't even pronounce my own name. What's wrong with me?

Michael Calore: All right, let's back up.

Lauren Goode: OK.

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