Pivot - Apple's podcast play, Netflix's rough quarter, and a listener mail on crypto's carbon footprint

Episode Date: April 23, 2021

Kara and Scott talk about Apple's big announcements in the podcast space and what that means for other competitors in the podcast market. They also discuss Netflix's falling subscriptions and take a look back at their first quarter last year. In listener mail we get a question about cryptocurrency's carbon footprint. And Scott has predictions for Quibi content. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi, hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. delicious dining and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond and see for yourself how traveling for takes forever to build a campaign. Well, that's why we built HubSpot. It's an AI-powered customer platform that builds campaigns for you,

tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. Get started at HubSpot.com slash marketers. Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Cara Swisher.

And I'm packing right now my teeny weeny bikini. I'm not going to touch that with a 10-foot pole. And I am Airbnb dog. That's right. Okay, so this is what it means to be professional friends with Kara, and then we decide to make the bridge into friendship after knowing each other for 11 years. We're not really friends. Okay, so that hurts my feelings.

So, okay, first it's like, hey, let's meet in Miami to go check out some venues. And it's like, you know, I'll bring Amanda. She's bored. And then it's like, oh, you know, we have a kid. She goes everywhere with us. It's a baby. What, do you want to leave it here with like a cracker and the cat? And then, oh wait, our 16-year-old son is bored. Can he come with us? He's coming. It is literally a harem coming over here. I'm thinking, do I need a bigger house?

No. I heard your house is big. What can the Swishers expect? The Clampettes when they get there? I'm not bringing Louis. Louis wanted to come suddenly. I got to be honest. You are my, you are such my liberal progressive cred. I'm inviting all my friends

over to meet Kara and Amanda. They're lesbians. And then I'm going to turn on Christiana Amanpour and wear my Berkeley sweatshirt and boom, I'm fucking Alan Alda.

What can I expect Don't question my purple crib. Is this a nice house? Do I need to bring my own sheets? What's happening? Yeah. I got a beer fridge. Right.

Okay. I got like a big, fat, flat-screen TV. I got video games. Good. Okay. You have a basketball court, I understand. It's a total man cave and a basketball hoop. Alex is going to dunk on you.

He's very excited. Well, that's what his mother does every week. Boom! He's really good at it, actually. He's really, really good at it. So this is going to dunk on you. He's very excited. Well, that's what his mother does every week. Boom! He's really good at it, actually. He's really, really good at it. So this is going to be really fun. We're going to take pictures. Then we're going down to Miami. I'm still trying to schedule our meeting with the mayor because you keep saying you can't do things. So the mayor of Miami is going to meet us. We're going to

visit all kinds of things. Mayor Suarez. Who is already a vice presidential contender, right? He is. He was meeting with Nikki Haley. He's a very handsome man. And so we're going to meet with him. He is handsome. And we're going to go see some venues.

We're coming to Miami. We're coming to Miami. Miami is coming to us, let's be honest. That is fair. That is fair. Miami Beach. Miami is coming to us. This is very exciting.

We're going to have such, we're going to take pictures everywhere. I'm very excited. Our spouses are going to be horrified with us. Well, that's called a weekday. What do you mean? We'll make it all about us, our whole thing. Gonna be. Yeah, it's going to be fun. We're going to have a good time in Miami. Anyway, I'm not bringing a bikini. I don't wear bikinis. That happened.

Oh, I got a banana hammock. I got a Speedo. No, no. N to the O. I got a little kilt for Big Ed and the Twins called a Speedo. That's right. I like to scare people off the beach. Oh my God. I'm going to be wearing sunscreen. That's right. I like to scare people off the beach. Oh my God. I'm going to be wearing sunscreen. That's all I have to say. Anyway, we've got to get to what we're doing.

This is going to be really fun. We're going to do our whole episode on Monday about our adventures. Very excited. All right, me too. I'm kind of excited. I'm really excited. It's going to be great.

All right, listen, it's been a year since we've seen each other, really. It has been a year. So a couple of stories we have to talk about. That must have been rough on you. Rough on you. No, it hasn't been. That's rough.

So listen, Lena Kahn. I'm a hugger. Don't hug me. Don on you. No, it hasn't been. That's rough. So, listen. I'm a hugger. I'm a hugger. Don't hug me. Don't even try. I'm a hugger. Lena Kahn has been in her confirmation hearings to join the Federal Trade Commission. She was real tough. She still stays tough on the tech.

She's been a progressive big tech antitrust hero since her Yale Law School paper, Amazon's Antitrust Paradox. And now she's in line to be one of the FTC commissioners, Democratic commissioners. Pretty cool. I think this is super exciting. I think her and Professor Wu are just sort of, you know, Batman and Robin. And, you know, I'll say she's Batman, so I don't get hate mail on Twitter. But look, I think they're both incredibly thoughtful, smart, and they're reasonable, right? They're not, I think they're both incredibly thoughtful, smart, and they're reasonable, right? I think they recognize that good antitrust is about creating stakeholder value.

It's not seen through the lens of punishment. I think they're both capitalists, but we are blown by any kind of reasonable standards for antitrust. Agreed. And it's happening. I mean, I read somewhere that Google has, you know, a couple dozen suits already against them.

Yeah. So I'm very excited. And not only that, I've gotten to know Lena and Tim a little bit. And they're both just incredibly impressive people. If you thought, all right, I want, you know, we talk a big game here. Yeah. And I get angry at these guys. We know what they're talking about.

We don't know what we're talking about. What we want is elegant antitrust oxygenates the economy. It's not a punishment. It liberates shareholder value. And I think both of these folks get that. I've been having a lot of meetings with lawyers, like on both sides of this thing. There's others that have arguments against what Lena and Tim have been talking about. And so it's going to be an interesting time. I think all the antitrust lawyers seem excited to talk about it and what should happen.

And there's others that don't think there needs to be anything done in here in that regard, that market will take care of itself. And so it's a really interesting time. And, you know, Senator Klobuchar, who may come on the show, which will be really fun, has her book out on it. It's a big topic. It's a big topic. Well, for the first time in history, both epidemiologists and antitrust lawyers think people are actually interested in us. They are. People actually want to talk to us.

I know. That's true. I know. It's true. For the first time, our mom seems interested in what we actually do. I love a good epidemiologist. Anyway, what else? By the way, applications to masters for schools of epidemiology, the Fauci effect, they're up like 171%.

In fact, I had interviewed the head of the T.H. Chan School of First Way, Michelle Williams, Dr. Michelle, who's really impressive. And she said they were up 177%. You're kidding me. Yeah. Wow. I know. Wow, got it. She kidding me. Yeah. Wow. I know. Wow, got it. She's amazing.

Wow, that's crazy. She's an amazing figure. Anyway. She was married to Heath Ledger, right? That Michelle Williams? No. That one? No.

I love, she's a great actress. I can't name a single film she's been in, but I'm supposed to think she's a great actress. No. She's got in that sort of like sunbath. Carrie Mulligan always makes the joke that everybody thinks she's Michelle Williams. Really? Which is really funny. Obviously, the biggest story this week is Derek Chauvin found guilty on all counts for the murder of George Floyd last summer.

Good news, I think, for anyone who believes in justice. And bad news for, apparently, Tucker Carlson and some others. But it was a relief, I think. Tucker Carlson didn't think he was guilty? They just are going off on it. And today, Alan Dershowitz was another about how he should stay out of jail while he appeals, this and that. And so, you know, they sort of looked at it as a negative, I would say. But, you know, it's not bad.

Yeah, look, there's a lot here, and it's – it does – I mean, I was relieved. I don't know about you. I was relieved. I thought, Jesus, this is like – if they get this one wrong. Yeah. But I've been thinking a lot about organizations and systems, and a lot of this really reflects – I think a lot of the things that have blown up into scandals reflect a failure of organizations and systems. And that is police receive four hours of what's called, I think, nonviolent or deescalation training.

And when you're a police officer, I do think we lack an appreciation for your fight or flight or your amygdala response that takes over in situations. That is not the case here. I think he had obviously a lot of time to think about what he was doing. But I think a lot of situations require a lot more training. And also, I'm a big fan, everyone talks about strategic hires. I think that government and small businesses, and people don't like to talk about this because it's not aspirational, and the more progressive you are, you tend to think it's the system's fault, not the individual's fault. I'm a big fan of strategic firing. progressive you are, you tend to think it's the system's fault, not the individual's fault. I'm a big fan of strategic firing. Mr. Chauvin had 18 complaints against him, and two involved some sort of, I believe, violence. And the reality is he should have just never been on the police force.

And I think we keep finding reasons not to fire people because of legal liability or this notion that they need to be retrained or whatever, I'm a big fan that you're not, I believe you're not doing anyone a favor, keeping them in a job they're never going to be successful at. Well, you know, the Biden administration is doing a lot of investigating. Obviously, Merrick Garland announced investigations of the Minneapolis Police Department. I mean, a lot of these, I think, I've been listening to a lot of police officers. Val Demings has talked about this, like what goes into the training. And I think that's, it's going to be on the front burner for a long time, and it should be, these issues.

I think the thing that was, I think, I saw over Twitter was that it's depressing that we were worried if he was going to be found guilty. Isn't it? It was really strange to think, oh my gosh, there's a possibility that he might not. Yeah, that was, I think, the takeaway I had from that. And obviously the shooting right afterwards of a young woman after that looked like another, not in the same situation, but nonetheless,

it was another, why do people get, why is shooting the place it goes immediately? You know, even more than that, I'm sorry to interrupt you you the thing that always shocks me is it's never one shot it's it's in michigan i think it was seven shots yeah and i think it goes to the notion that when that that that flight or fight incident kicks in it is very hard it's just incredibly hard to make rational decisions well no excuse they're here to serve the people not oh no i'm not i'm not defending it i'm saying that that that's point is, when you hear about these things, like, okay, if you shoot someone once in the back, you'd think just rationally that's probably going

to disable them or take the threat level down substantially. And what you see a lot of times is they didn't shoot them once, they shot them seven times. And it's just there really needs to be, I think, a great deal more training about how to modulate and counter your fight or flight instincts that take over here. Because I don't believe these are all bad, violent people that have a badge. And when they shoot someone seven times, you think, okay, something. Look, I think that at a minimum, we need to absolutely revisit, there's some great police forces that do a fantastic job of training people that your job is to deescalate,

full stop. And a lot of police forces get a total of, police officers get a total of four hours of training around something loosely related to deescalation. Anyways, I feel much better. I'm relieved that this individual is going to be put in prison for the crime he committed. Yeah, yeah, I think so. Yeah, we'll see where it goes and if there's any appeals, but at least for a momentary

relief, and there's a lot of investigations going on in these various shootings, which are, I'm just reading a clip from the Cleveland paper about the shooting in Columbus. And it was, it just is sort of like, from a few few day with people on either side of him, the officer fires four shots and the teen slumps the ground, a black handled blade similar to a kitchen knife or a steak knife lies in the sidewalk next to her. The man immediately yells at the officer, you didn't have to shoot her. She's just a kid man.

The officer responds, she had a knife. She went after her. It just, there's got to be a better way. Well, okay, but to be fair, and it sounds like you know more about that situation than I do. Some of the pictures I've seen of that show someone stabbing another teen. Yes, I get it. I get it.

It's talking about how to handle these things. There was also a picture of a white guy hanging off, pulling an officer off a truck. He didn't get shot. I'm just saying. That's a fair point. They seem to be able to de-escalate when it's white people. So, anyway, I've seen lots of

photos like that. That's a very good point. Anyway, we're not experts on this area, but Derek Chauvin, I hope you rot in prison. That's how I feel about that. Let's talk about Apple's biggest push into the podcast space yet, and most importantly, what that means for us, of course. This is our big story breakdown. This week, Apple announced a lot of stuff, including a purple iPhone,

which I'm going to get immediately. But major changes coming up in its podcast app, including more discovery options, better layouts for publishers, space for more content. They'll offer premium subscriptions. Podcast publishers like Pushkin and Radiotopia, they're taking a vig again. I think it's 30%. Apple first launched Apple Podcasts in 2006. There was big news around Facebook audio earlier this week, which we talked about on Monday's episode with his interview with Casey Newton and the announcements they made. So what is happening here?

What do we imagine is occurring? You have Spotify in this space. You have Facebook saying they're coming into it in a significant way. And others. The New York Times is doing it. I think Vox is trying to sort of coalesce around certain people with the Preet acquisition. What is happening here from your perspective? And what's the difference between a subscription

and sort of these free ad-based ones? Well, we talked about it. I mean, it's a collision of a few things. One, if you own the rails, you let kind of everyone have playtime and come up with their own media. And then if you control the rails, you can begin inserting yourself in between folks

and starting the margin. And I think Apple sees, okay, this arbitrage around NPS where people feel more loyal towards the host organization when they consume media as opposed to consuming an iPhone or e-commerce or what have you. And so they see the same arbitrage

and opportunity to go vertical. And they can, I mean, Apple with a mediocre, Apple can do for the morning show. The morning show had it been on Hulu, would have gone absolutely nowhere. But because it was on Apple and they could put it in front of everybody, what was it, the Bird Box,

that ridiculous film with Sandra Bullock? Yeah, it was Netflix. You had to watch it, because Netflix decided you were gonna to watch it because they have so much interface. And Apple will probably, my guess is, within two to three years, have three or four of the top 10 podcasts because they'll be able to take good and make it great in terms of downloads by ensuring that it just pops up everywhere.

Right. And so they're moving in and they're going to take control of that. It'll be an interesting exhibit for their antitrust case. The app store needs to be regulated. I don't think they should be broken up, but they charge an incredible tax to these guys. But the podcasting, it's a really interesting space right now. I think it's probably, I think Vox either goes either SPACs in 12 months or less or gets acquired because to Jim and Marty's probably, I think Vox either goes, either SPACs in 12 months or less or gets acquired because to Jim and Marty's credit, they invested early and it hasn't been easy and often in podcasting.

You were sort of early here. You deserve something big. You deserve the big piece of chicken or something. I was here seven years ago. But here's the thing, podcasts, you know, have mostly been free until now with us relying on ad revenue that we read, we enjoy doing it. And other, like an event that we might do. So this idea of, you think of Substack with the, Substack could get in a podcast, for example. There are more opportunities for creators to make money. And so this is subscriptions, podcast subscriptions. Why not do that?

And obviously, Luminary is one of these companies. So they can participate in this Apple podcasting program to do this. What do you imagine? Because there's also people, there's Patreon for some podcasts, there's YouTube channel memberships, there's all kinds of

things. How does it shake out? Does it move into sort of that sub-Stackian model? It's now a word, apparently, that I just made up. Or does it stay in this sort of advertising space? Because Spotify is a subscription, right? You have to have that, and then you get to use their exclusive podcast. Will Apple have to buy content, real content? to buy content, real content. Well, Apple usually is not acquisitive. Yeah. But look, the most accretive move in business history

is this move from transactional to subscription. And consumers, Mark Andreessen had a really thoughtful comment. He said that one of their biggest mistakes with Netscape was they didn't build micropayments into the browser. And if you look at how much traditional content that's ad-supported is able to monetize your viewership. So if you watch an hour of Fareed Zakaria,

which by the way is like, you know, butter on toast. Butter on toast was amazing. It's just an amazing hour. But Fareed is, you know, unfortunately, Fareed is surrounded with all this bullshit convincing you of how much it sucks to get old, telling you you have opioid-induced constipation. He's working on an Apple show, just so you know, but go ahead. But do you know what they get for that? They get a total, for pelting you with, gosh,

19 minutes of ads, they get 49 cents. And so, if you could easily, it's not the 49 cents that gets in the way, it's the technology and the friction around And so if you could easily, it's not the 49 cents that gets in the way, it's the technology and the friction around payments. If you could just blink your eyes or click a button and you would automatically be charged 49 cents or your browser had super easy ability to create micropayments, we would have the move to subscription

or just pay, you know, just micro payments would be substantial because here's the dirty secret about the brand industrial complex. It's a shitty trade for you. Yeah. It's a shitty trade. If you only let your kids watch Netflix and don't let them watch ad supported television, they save between something like nine to 13 days a year just in commercials. And you think, okay, that's probably worth 150 bucks a year. So there is no, I think the future for ad-supported TV is really, it's just the sun has passed midday on that play. And there will be a bifurcation.

There will still be a large percentage of the population that watches Fox, that has an Android phone and uses a Discover card that doesn't want to pay and is willing. You know, their time is less valuable. They have more time than money. And they would rather just see ads and get it for free. And there will always be a big audience for that. But the audience is smaller. The revenue stream is a lot smaller than it is right now.

We're seeing the cable bundle disarticulate. It's happening everywhere. It'll be interesting to see what Apple does because Spotify owns Anchor FM, which is an app that lets you create and distribute your own podcast. Obviously, Spotify has a bunch of tools for people to do it. You also stay, they've paid certain people

to stay within like Joe Rogan and others within the system, although he's also outside the system. But they've had others. They've Gimlet and things like that. So it's kind of interesting to see all these various and different sundry business models sort of running around to figure out what would be right. But Apple is the biggest player in this space. If you're on the Apple podcast lists, you do really well.

That's where we look, right? We don't look at the Android list. We don't look at this and that. And so I think advertisers look at them. And so it's going to be interesting to see which, whether it does become this subscription-based thing where you are part of a team of, you know, whether the New York Times, you're going to buy the New York Times podcast, you're going to buy the set from Amazon or whatever. But it's certainly still, the jury is out. But with Apple in here doing this, it's both problematic for Apple and also interesting for creators, for sure.

The thing, the mode here is that Spotify has done an amazing job. I mean, if you think about it, I just think it's remarkable what Spotify has been able to do. They've been able to distill an entire medium down to one app, one button and organize it all. Podcasts, songs, Tom Petty, George Michael, you know, it's all in one place. And no other, you know, what app has brought all television together? What app has brought all news and stories together from, you know, respected out? No one has been able to do it with Spotify.

So, so Spotify is a pretty, you know, they have some pretty powerful modes, but I would, respect it out. No one has been able to at Spotify. So Spotify is a pretty, you know, they have some pretty powerful moats, but I would bet, you know who Apple's, you know who Apple, I think Apple's first big move and the most under penetrated or the biggest opportunity is in news and business news. I think somebody is going to come up with competitors to one, the daily. I think Apple's going to come up with something that looks like the daily. Yeah. And two, CNBC is the ripest kind of old white guy head up their ass Joe Kiernan media company in the world. Hey, everybody, don't take the pandemic seriously. You're overreacting.

Go ahead. Keep going. No, I'm telling you, at some point, Andrew Ross Sorkin is going to say, okay, I'm sick of the dumb fucking senior home here. Andrew Ross Sorkin is going to say, okay, I'm sick of the dumb fucking senior home here. I'm leaving the village of stupid and letting the old angry white guys from New Jersey spread misinformation disguised as market information. And he's going to be the anchor of a new business network that is actually, you know, anyways, I think CNBC, I think there are a few media companies more ripe for disruption that have kind of sort of early stage prostate cancer mentality than CNBC. Your message. It is interesting. You're right. There's an interesting story here from Android Central. I don't read it often, but it said Spotify owns Anchor FM. Anchor FM launched a phone-based app

that lets anyone easily create and distribute their own podcasts, but also includes analytics, performance tools, monetization options like ability to earn ad revenue with no minimal listenership, the ability to do your own ad reads, even ability to raise funds directly from listeners. In addition to Patreon, these tools and services are what Apple's podcast

subscriptions are in direct competition with. So once again, Spotify finds itself in the crosshairs and in competition with Apple, which is, I think, interesting. Yeah, Apple's got to be really careful, though. These guys all have to. It's interesting. And this is why, you know, the innovator's dilemma, almost everything Apple, Google do right now is they say, okay, what is Lena Kahneman and Tim Will going to do with this move? Are they going to use this as exhibit H? Whereas Facebook clearly, I think Mark Zuckerberg has told his team, don't worry about anything. Someone says as a joke, hey, why no? Let's release

Instagram for kids. And everyone laughs because that's such an outrageously stupid thing. He's like, good idea. Let's go for it. And they say, that's such an outrageously stupid thing. It's like, good idea. Let's go for it. And I say, you realize that every parent in America is going to freak out and call their representative. He's like, I don't care. Is there an extra dime for daddy in it? Yep. Whereas I think Google and Apple and Amazon are like, okay, do we really want to poke the bear with a spear here?

Here's the irony. Apple was first out of the gate popularizing podcasts. They were. They were. They were the first people, but it hasn't moved in to be sort of the monetization engine. You know more about this space than I think almost anyone on this podcast. Yeah, definitely. What do you see?

Who do you think are the players here? I'm always fascinated with Apple because they were the first to do this, right? They're the first to popularize it and they're the first to really make podcasts the thing. I mean, that's where it happened really. And so who gets to monetize and how it gets to monetize?

I don't know. Like we think about this. Should we use subscription or should it be free or should it be a hybrid model? I don't think I have an answer yet because once you get into a gated community where only the people that subscribe get it, what do you offer them? Like, interestingly, Casey, I was talking to Casey Newton, who does the platformers on Substack, which he's getting pretty big. A bunch of them got together, not just Substack people, people on Medium,

in the same generalized tech area. And they created something on Discord called Side Channel, which is in order to keep subscriptions going, they have to offer them something else. So when you're in a subscription model, you have to keep upping the game just like Amazon did with Amazon Prime. And so they have this Side Channel thing, and their first guest was Mark Zuckerberg. So that was great for subscriptions. And they've seen subscriptions go up, each of these various members of this collective on Discord. That's where they located because they didn't want to, because it was free. They didn't do it anywhere else, which was interesting. They could have done it on Facebook. They could have done it all kinds of places. And so, or Clubhouse, there's all kinds of ways they could do it. But it's an interesting time. It's a very creative and interesting time. And I have to sit and think about it. In fact, perhaps we'll do that by the ocean together. We'll sit and contemplate business models. Holding hands. Holding hands. All right. As you spread La Roche-Posay on the small of my back. On my tramp stamp. That shall not be. Do you have a tramp stamp? I'll find out. All right,

Scott, quick time for a quick break. Wouldn't you like to know? No, I wouldn't. You and the 45 other Swishers you're bringing with you. I mean, literally, there are nine Swishers showing up. Where's Dr. Swisher? Why isn't he rolling? Oh, you know what?

He should. Why doesn't he roll? I'd love to meet Jeffrey. Yeah, he's a good Swisher. Oh, I have met Dr. Swisher. Yes, you have met him, but he'll roll in. Don't worry. They're all coming. They'll all show up. We're a gang is what we are. God knows he rolls into

our Twitter feed a lot. I know he does. He is clearly, he got out to an early start. Mom, I'm going to be a doctor. And then you have jumped out ahead of him and he's like, hey, love me, mom. Love me. That guy totally hijacks our Twitter feed. I need your reaction to my mother when you see her. Anyway, Scott, it's time for a quick break. We'll be back. We'll talk about Netflix earnings report not good and a listener mail question. Fox Creative.

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That's anthropic.com slash Claude. Okay, Scott, we're back. Netflix released its quarterly earnings report and it was not pretty. The company saw a huge slowdown in their subscriber numbers. Probably not a surprise since they had a huge upsurge. They added about 3 million versus 6 million they had expected. Shares for the company fell 11% following the news. In a shareholder letter, the company said, we believe paid membership growth slowed due to the big COVID-19 pull forward in 2020 and a light content slate in the first half of this year due to the COVID-19 production delays. Well, even though they pumped out more content

than anyone else, really. Flashback to this time last year when Netflix was having its biggest quarter ever. Here's what we said back then. I gotta say, Reed Hastings is flawless as far as I can tell in everything. So including his weird little bedroom. So tell me, tell me what you think of this

and what do you think is gonna happen? well it's not it's not surprising right and but it's okay so netflix i believe is up 28 year to date so they're obviously accelerating through the crisis it's what what do they do um this is a company not worth more than disney what they do is they they either buy spotify or they start making these massive, super interesting investments, as they did in Madrid, where they have hired 10,000 creatives. And they're creating content that can be morphed into German and Norwegian and Ukrainian content really easily. They just slip in into the same sets with the same scripts, different, you know, the hot star from Kiev, and they make a Ukrainian version. They're the only company other than Amazon. Yeah, they're the Amazon of entertainment.

That's what I was just thinking. 100%. Because by virtue of the fact that they're, as long as they manage that incredible story they have in concert with this, that's the peanut butter, the chocolate is access to the cheapest capital in the history of entertainment. And they can keep making these forward-leaning investments. And then the wind of, look, the wind of corona will eventually subside and people will hopefully be spending less time in their homes, but they're still going to spend more time in

their homes than they did pre-corona. And you have one company that is just going out and absolutely making such incredible investments. And they're making, if you're making triple the capex of anybody else and you're just as good or better, which Netflix is, you kind of can't compete. Yeah, they're really good. All right. So they are very good. I still think they're very good. But, you know, people think this is some analysts thought that future growth prospects were problematic.

Once COVID ended, when people were not inside, they got an enormous boost from COVID. And they, of course, have spent a lot of money. They're ahead of people. They also got an enormous amount of competition from HBO, from Disney, from all over the place. BritBox. I was just watching BritBox the other night because I wanted to see something. So what happens here? They sort of have been lapping all the other competition, and now the other competition has met them. And they benefited from COVID, which is people are now going out, and they're not watching as much, and they didn't have enough content. That was like, did you see the movie Defending Your Life? I feel like we're in heaven

looking at ourselves. I'm Albert Brooks, you're Glenn Close. No, I'm Meryl Streep. I'm sorry, Meryl Streep. Oh, that's right. Same, same. Tomato, tomato. All right. Both amazing actresses. True.

Look, the thing that's catching up, I think, to Netflix is that the novel coronavirus has slowed production. And the reason why, I think the most interesting thing here is Disney's progress against Netflix. I think Netflix has almost a quarter of a billion subscribers, but Disney has breached 100 million. Yeah. And what Disney has that plays to their advantage in an era, a crisis where production is slowed, if not halted, is they just have the biggest bank of content. Peacock? That's not about Peacock. It's not doing badly.

Friends and Star Trek. Yeah. I mean, they do have a lot. I just, just nothing, nothing matches the franchise value of Star Wars

or of Marvel or of the animation or the kids. So it strikes me that more than, so the novel coronavirus has been a fantastic win in the sales of all streaming, but it's been especially, but the catamaran here, if you will, or the one that's just able to leap

out ahead relative to the rest, a little bit of a sailing metaphor from the dog, the little nautical dog. We're not going sailing. Go ahead. Is Disney because they, if it's about capital and new production, Netflix wins because they have access to the cheaper capital. But if it's about capital and new production, Netflix wins because they have access to the cheaper capital. But if it's about a base of content that you have to draw on because production has been slowed, then Disney makes more progress than any of them. And if you look at what's happened over the last 12 months,

I mean, Disney has basically gone from zero to 60 in like two seconds. Yeah, yeah. And they have a lot to- But you said this before. You don't want to bet against Reed Hastings and Netflix. I never do. Here's an interesting quote from this guy, Nat Chandler from Bank of America. He said, people aren't talking about the fact that they beat revenue.

People aren't talking about the fact that they crushed EPS estimates. People are talking about the fact they missed net subscriber additions in the quarter over last quarter. Not year over year growth, not even total subscribers. It was just off by less than 1%. So this is really a tertiary metric. It's extremely volatile. It's extremely difficult to predict what's going to be in the given quarter.

I look at this as a buying opportunity because if you look at what happened in the past and the times Netflix has missed in the past on this really hard-to-predict number, the stock has rebounded immensely. That's a fair point. I would say against those previous times, they didn't have competitors. And so when you have a thing, COVID ending, summer happening, they don't have quite enough content, and everyone else has

some really good content. I mean, I've noticed what I've been watching, and it's not only on Netflix, and it used to be only on Netflix. And I love Netflix, let me just underscore. I think they've ran circles around all these other, these companies. But they've gotten their tricks. They've figured out their tricks, I think.

And that's really going to be hard, especially as streaming wars heat up overseas and that they can't, that they are competing for talent in a way they weren't before. So, those are all, it needs, you know, they had Bridgerton. And so, now it needs what else? You know, they need to keep feeding the beast of consumers' expectations, I think.

There was, I mean, Netflix really benefited from the fact that they effectively had no competition. Yeah. I mean, Amazon Prime came in, but I think relative to the amount of capital they spent, I would argue that Amazon, Amazon was spending $350 million for every, for every Emmy to like HBO 60. I mean, they just didn't have the culture punching out creativity at the same efficiency as everybody else. HBO kind of was caught a little bit flat-footed. And Netflix came in,

and arguably, given how much they grew the space, didn't have a lot of competition. And then competition exploded three years ago with all these people coming in with kind of half-baked efforts to protect their legacy assets that didn't threaten their legacy assets. And then all of a sudden, AT&T got very serious when they took their franchises direct to HBO Max. And Disney has absolutely come in like a house on fire. I think it's- Yeah, great move by Bob Iger. But the thing, I think the thing you take away when I talk to companies from subscription is everyone says, okay, it's a better economic model. But that's, it's more than that. And that is when

you go to subscription, when you're in a transactional model, all you're focused on is how do I get the next consumer in the door tomorrow? And your best and brightest are focused on creating more traffic. Whereas when you enter into this, what I call long-term monogamous relationship, you're really focused on the relationship and pulsing value to the end consumer. And you just end up with a more product, consumer focused organization. And you end up, I mean, when you think about it, Netflix and HBO, they just have better content. And there's no logical reason why they should have better content. There isn't. Than ad-supported media, except

ad-supported media takes its best and brightest and sends them to Procter & Gamble to talk about new ad packages and doing whatever they can in the short term to juice viewership the next week. Yep, yep. They're just not as creative.

They're not as creative. And they can't invest for the long term. They can't say, okay, this show needs time to marinate or this show is about not a huge audience,

it's about extreme quality because that pulses value to a smaller segment. Well, Harry and Meghan to the rescue. They have their first series on Netflix, just so you know. I think one of the things, there was a really interesting article in CNN. Harry and Meghan?

Oh, that's right, they did a deal with Netflix. Yeah, they did a deal with Netflix. You know what her greatest accomplishment to date is? What? She has accomplished what every spouse wants to accomplish and that is she has convinced her spouse that their family are total assholes. I think that's a huge accomplishment. That's what we all try to do.

We all try to convince our spouse, hey, your family, let's be honest, they're total assholes. And she's done that. She's convinced him. Well, we'll see how long that lasts. She's convinced him. We'll see. We'll see.

And one of the things that the CNN story was funny is like, Disney, I don't want to go into megan territory um uh disney oh my god has this is 98 year old white people are racist that's a shocker that's a shocker queen looks so sad at the shocker i like that queen i don't know why anyway we. We've matched on Tinder. You heard. You heard. I know. That's right. That's right. The dog's taking her to Red Onion. Two for one Long Island Iced Teas on Fridays.

Will she be in Florida with us? Exciting. That'll be great. I wouldn't be surprised. She could play basketball with Alex. I wouldn't be surprised. That would be great. Listen, Disney has other businesses.

This is a point that was made in the CNN story. Theme parks, baby Yoda dolls, et cetera, ESPN. Comcast has obviously, Amazon obviously has all the toilet paper it sells. Warner has its other businesses. Netflix only has its Netflix. And so that's one of the problems is can it get into other businesses? Like they were suggesting ad supported Netflix possibly, or other things they could buy. You had talked again in that quote about buying Spotify and whatever. And so you wonder what other businesses it's going to get into, what other to support itself. They need a dumb hardware device.

They've got to go vertical. Netflix, it's very hard, and this is Disney's Achilles heel, it's very hard to get past a quarter of a trillion dollars without investing in and owning the rails. Because at some point, Apple can come in and start. I mean, it's just amazing. If you look at Apple across, do you realize Apple gets somewhere between 3% and 12% of the top line revenue of every streaming service? They really are the toll keeper. They are the toll keeper. Because if you want access to their app store, which you have to have,

you've got to pay the tax. And so Netflix, at the end of the day, and Disney to a lesser extent, because I guess they have some vertical with ABC, but I've got to think these guys are going to get into some sort of dumb device. And that's why Roku is so powerful. You keep pushing the Roku thing. You're right. I think

you're right. Roku is the most innovative company that gets the least amount of press. Although, here's a quote from Reed Hastings. They were talking about, asked about Netflix's second act during the company's post-earnings call on Tuesday. Hastings again placed the company's focus on pleasing subscribers. We do want to expand. We used to do that shipping DVDs, and luckily we didn't get stuck with that. We didn't define that as the main thing. We define entertainment as the main thing. So he's sticking with his plan. I think I would never count out Reed Hastings ever, not once. I think he's brilliant. Oh, that guy's a genius. Brilliant. That guy's a genius.

Anyway, let's listen. We'll see what happens, but definitely this has happened before to them, and we'll see how they cope, but it's a harder time. I feel bad that I was so mean to say. I love Carl Quintanilla. I think he's wonderful. Quintanilla. Quintanilla. Quintanilla, yeah. I think he's wonderful. Quintanilla. Quintanilla, yeah. I think he's wonderful. He seems like a real gentleman. He's a sweetheart.

He's a sweetheart. Yeah. All right. I feel bad that I was so harsh. You're like nobody there but Carl. I had Jacqueline Novogratz on my other podcast, Prof G. And after the podcast, she literally said to me in a very sincere way, she goes, are you all right? She literally said to me in a very sincere way, she goes, are you all right?

And I realized like, she's like, do you need, and she asked me this sincerely. She asked me this sincerely. She said to me, she said, do you need a hug? And I thought that was so nice. And so like, and she said it in such a thoughtful, earnest way. Oh, no. And anyways, now I'm all of a sudden looking back on my life that was the first half of this podcast. It was too harsh.

I was too mean. I was too mean. You're not getting a hug from me, just so you know. Okay, Scott, let's move on to listener mail. Roll the tape. You've got, you've got, I can't believe I'm going to be a mailman. You've got mail. Hey, Scott and Kara, Bridget McGraw here from Oakland, California.

Love you both. I'd like to marry you both, but I don't think my wife would appreciate that. Her work husband wouldn't either. Anyway, my question is, why on earth nobody is talking about the environmental impact of cryptocurrencies? They are created by computers crunching numbers. I'd love to know what you guys think. Thanks. They'd like to marry us. She'd like to marry us? There you go. Yeah. I say we date first. I know. By the way, if you show up with her, I wouldn't even notice. You could literally show up with Prince Andrew and say, oh, it's my older son, and I wouldn't know. There are so many strangers

showing up in my house this afternoon. All right, listen to me. I know you're getting triggered here. Jesus Christ. I have talked to you. Thank you for your great question, Bridget. I do talk about the environmental impact of cryptocurrencies. Actually, when I interviewed Beeple, we talked about it at length. And a lot of these kind of, I think, have written about it,

and I think we've talked about it here, is that there's an enormous environmental impact. There's all kind of movements to change the way Bitcoin and other cryptocurrencies are mined in order to be less problematic on the energy grid. A lot of the mining is done in China, which is not under everybody's control, but there are all kinds of movements of creators

and those involved in it to want to make it more environmentally better, I guess. And so they're changing it. There's a thing called point of work and point of whatever. There's all kinds of ways they're thinking about doing it to make it more efficient from an energy point of view. But right now, yes, it's a real drag on energy grids. Scott? Yeah, this is like everything involving crypto. It's a religious war. And on

one side of the war, you have, okay, so crypto is now consuming more electricity than Argentina. And it really is an issue. The power consumption here is, and then subsequent carbon footprint is a real issue. Now, on the other side of the argument is 75% of mining takes place or is geographically located close to alternative energy sources. And that a lot of people feel that crypto, in fact, might subsidize the development of alternative energy sources because a lot of crypto mining is locating near hydro facilities and thereby creating more revenue streams for

alternative energy, thereby, if you will, subsidizing it or creating more demand for alternative energy. So there's two different ways to look at this. You could argue that crypto is only expediting what is perhaps the crisis of our lifetime, which is climate. And then other people say, no, crypto is actually expediting the move towards alternatives. It's just, it's one side of the argument. I don't have a viewpoint. I don't have enough domain expertise to take one side or the other. But like everything crypto, it's very, I find it's hard to get your arms around to say, okay.

Anyways, I find this stuff, it's fascinating, but the amount of energy, and not only that, the amount of energy consumption is only going to go up. So, it'll be fascinating to see, but the primary input or cost for miners is energy. Yeah, but there are efforts to do cryptocurrency more sustainably, and they're addressing it immediately, actually, compared, look, it takes a lot of energy to make a dollar. It takes a lot of energy to make coins. Is that right? Yeah.

That's a fascinating stat. What? That it takes a lot of energy to make a dollar. It does. Anything. Anything you're going to use for anything creates energy. But it causes energy to make dollars, to make coins, to make all kinds of things, has an impact on the world.

We just don't talk about it. But I think people are talking about this quite a bit in the cryptocurrency space. I don't have a conversation with cryptocurrency people of any repute that don't care about this issue. And especially creators and others are worried about this and buying carbon footprints, buying carbon, whatever, offsets and this and that they're doing. And so I think it's good. I think Scott is right here. It's going to be possibly a change agent in a good way rather than let's just make a big old carbon mess here.

And, you know, look, there's a question. Is it a reason not to invest in crypto? You shouldn't invest in anything. Like, Disney parks use a lot of energy. So does, like. If you start to really think about the carbon footprint we all have, breathing is a carbon problem. And so it's an interesting thing, but I do think that the industry, as it becomes more in the mainstream, is going to deal with it in a way that's... And they're already doing all kinds

of stuff around how all the proofs happen. Again, I'm not an expert, but I certainly have heard about it extensively. I've been thinking a lot about crypto, and I think the discussion around the environment, and it's a worthwhile discussion, but I think it actually benefits crypto. Because I think there's a much bigger concern around crypto that doesn't get nearly the attention it should, and that is its threat to the USD as the default currency. People just don't recognize our greatest asset to, our greatest, I don't know, our biggest arrow, our biggest bazooka for US is that our values, I would argue, wrapped in the steel hand of incredible ability to deploy force and violence across the world, 138 bases overseas, aircraft carrier squadrons that can deliver unbelievable force. Close number two is the US dollar as the default currency. 60% of foreign exchanges held overseas are held in dollars. And that usually means it runs through a US bank, which means we have transparency and influence

over almost every organization in the world that wants to participate in the global economy. And the reason that China's all of a sudden jonesing to create their own crypto, the reason India is playing the reluctant bride and might step in and support one crypto over another, if the USD goes from 60% to 40% to 30%, that's almost the equivalent of taking out several aircraft carrier squadron in terms of our foreign influence. And no one's really talking about that. And my fear, my real fear here is that if you think about our lawmakers and our regulators, they used to be kind of citizens that came from industry. So they came from the oil industry because there were a lot

of people in energy. They came from consumer products and they sort of understood the externalities of oil or aluminum or financial services. They sort of understood it because a lot of people came from that. The tech industry, the domain expertise, the gap between the actual what's happening in these industries and trying to understand them or domain expertise that leaks into our elected representatives, the delta is so huge that it creates an extraordinary opportunity for delay and obfuscation. And what you end up with is because 8% of our elected officials don't understand technology, technology continues to wreak tremendous damage and we don't know how to regulate it because all the regulators and elected officials are catching up. That gulf is even wider between cryptocurrency

and elected representatives' understanding of crypto. And I worry that similar to just as big tech has run unfettered for way too long, I think it's going to take our elected officials a long time to catch up to the externalities of crypto. I think it's a huge threat. Yeah, yep, and they don't love to talk about it, I can tell you that. I've been trying to get a lot of the more official people to talk about it, and they certainly are going to have

to on some level. Well, it's because we're all scared to look like idiots. Yeah, not just that. People ask me every day about crypto. I don't think they get it. I think they don't understand it. Do you get it? I don't feel as if I get it. No, I do on a big level, not on a specific and the impact. I don't, you know,

you have Peter Thiel on one side talking about the impact, I don't, you know, you have Peter Thiel on one side talking about the impact, and you sort of were like, it makes sense. And then there's others who say this and that. Anyway, it's an important time for currency, let's just say. All right, Scott, one more quick break. We'll be back for predictions. Support for this show comes from Constant Contact. You know what's not easy? Marketing. And when you're starting your small business, while you're so focused on the day-to-day, the personnel, and the finances, marketing is the last thing on your mind. But if customers don't know about you, the rest of it doesn't really matter. Luckily, there's Constant Contact.

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Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca. I just don't get it. Just wish someone could do the research on it. Can we figure this out? Hey, y'all. I'm John Blenhill, and I'm hosting a new podcast at Vox called Explain It To Me. Here's how it works. You call our hotline with questions you can't quite answer on your own. We'll investigate and call you back to tell you what we found.

We'll bring you the answers you need every Wednesday starting September 18th. So follow Explain It To Me, presented by Klaviyo. Okay, Scott, you already gave us some predictions earlier this week, but it's Friday and we want more. More. We want more. More. We want more. I think Val Demings, Representative Demings, kind of had her moment. I think she'll be the Democratic nominee for governor in Florida, which makes her a vice presidential candidate for the Democratic Party. Explain what she did for the people who didn't.

Well, she just, there's these kind of moments of what I'll call righteous indignation when Representative Jordan, who I think is one of the, kind of, he's kind of a representative gaslight. I mean, he takes pride in, look, the defense, all of a sudden,

Republicans finding an incredible defense and affinity for the good work police do when they commit these sorts of atrocities, and yet they don't seem to empathize with police when they're bludgeoned with fire extinguishers at the behest of a mob encouraged by some representatives in Congress and our president. She pointed out that protecting or endorsing or supporting officers in uniform, which she was for, I think,

24 years, rings hollow when it's convenient. Yeah, he's politicizing the police for his own gain. And I think everyone, I think at least here in Florida, a lot of people are seeing that clip, and I think she comes across as very strong. And I thought, you know, that's the person that should represent us in this state. You know what's great about her? I think she's, these issues are really complex. You can have, you know, look, she was a longtime police officer. Really complex. She recognizes the complexity of the job and the abuses and wants to have a real discussion

about it versus him who just wants to, you know, they just want to reduce everything to a ridiculous cartoon characters of each other and she's not having it. You know what I mean? And also, by the way, she has more respect for the people that police serve or supposed to serve than he ever would. And he also doesn't,

it's like those people that sort of are like, I'm for the military, never been in the military and lecture people who've been in the military and also people who have problems with the military. You know, he doesn't want a complex society because then it's hard. Then it gives a hard situation. And so, he's just a, worse than a gaslighter, he's a reductive nincompoop, really. That's what I would say. And I have a couple more.

Yink and poop, really. That's what I would say. And I have a couple more. I think that just as WeWork rose from the ashes, you're going to see another brand rise from the ashes, and that is Quibi. Quibi? What? Yeah, Quibi. What? Or at least the content from Quibi.

I heard it's for sale at various places, right? Roku was looking at it. Roku bought it, I think. Bought it, right. And I think they're going to bring a lot of that content in short form, quick bites, back to life.

And I think all of a sudden, Roku and its vertical content, this is a gangster movie no one's talking about. Roku has the hardware, they have the rails. Own Roku? You love talking about Roku.

No, I don't own Roku. I wish I did. It's been one of the best performing stocks of the last decade. You love that Roku. An incredibly bright CEO. He's probably,

I mean, he again is kind of what I would call the kind of the mini Reed Hastings or the heir to that kind of strategic blue flame thinking.

Can we get him on our show, please? And also, one of the early product guys, Steve Shannon, is one of the brightest guys I've ever met.

So anyways, bought Quibi. So they bought Quibi. I think Roku going vertical, and I don't know if it's branded Quibi, but I think it's Quick Bytes and that format and that jumpstart that it will give Roku around vertical content is really interesting. And I think we're going to hear more about that. Yeah.

And the other thing we're going to hear more about is— By the way, can I just interject? I'm sorry, go ahead. Every idea around Quibi wasn't bad. It's easy to make fun of Katzenberg, but he is still a great programmer. Great content. And there's a lot of good stuff on there. It's just something was wrong about it,

but it wasn't some of the content, for sure. Content wasn't really the biggest problem there. Yeah, it's just that they were trying to charge. You get a dollar for every billion dollars in content from most of the streaming services, and they were trying to charge eight bucks. In shocker, people didn't want to sign up for every billion dollars in content. Anyways, also, I think we're going to

have a much broader conversation around the role, whether or not elite universities should in fact be nonprofits. And that is if Harvard is accepting 3.4%, if 54,000 people are applying and they're accepting 1,700 to fill a class of 1,400, so 1,400 people, a Starbucks will serve more people than that in a day, and yet they sit on the GDP of El Salvador. It's like, well, okay, is Harvard really a nonprofit? Is their mission really to make society better? What is exactly the mission of these elite universities other than to make the faculty, the alumni that already have a degree, and the leadership there feel like some douchebag who shows up in a Lamborghini with a diamond-encrusted Rolex and says, look at how blingy and look at how rich and prestigious I am. I think that is really where these universities have gone. They have decided that they're luxury brands, not public servants.

Yeah. universities have gone. They have decided that they're luxury brands, not public servants. Yeah. And I think people are sick of it. I'm going to say, should they be able to buy real estate and then not pay taxes on that real estate when they scrub it? Yeah. Or they make it. And what is the point if a nonprofit is supposed to, at its core, be adding social good? And that clearly isn't at the forefront here. You know how, and the thing I hate the most, I just hate it.

What's the most? There's so many things. You know, when someone says, oh, I went to school in Boston, it's like, okay, and what they're really saying is, I want you to know I went to Harvard without actually telling you I went to Harvard. It's like that whole thing. Tell me you're a total douchebag without telling me you're a douchebag, then just say you went to college in Boston. I find that this elite luxury… You hate it. …hermesification, and my university is guilty of it too, where we have decided that prestige and exclusivity is the benefit we provide ourselves and other people. You're not a nonprofit. You're Chanel. Okay, fine. There's a market for it, but you got to pay taxes.

So I think there's going to be a bigger conversation around elite universities where you're 77 times more likely to get in if you're in the top 1% of income-earning households. There's more people from the top 1% at a third of the top 100 and five of the Ivy Leagues in the bottom 60%. And we're going to have a more thoughtful conversation around, all right, are they really nonprofits? Are they really – what is the social good here? And I think that's a conversation that's going to go front and center, and it's overdue. All right. I like all those.

That's a lot of predictions. A lot. Those are many predictions, Scott Galloway. Here's what I predict. Yes. We are going to have a great time in Florida. We are going to have a great time. I'm making plans for us.

The Santas, I'm headed down. Get ready for Kara Swisher. That's all I got to say. Seriously, it's Prince Andrew and your carry-on luggage. Who else is coming down? Lucky's coming down, your aunt. She's there. My mom lives there for this winter.

And my aunt does too. That's why. I got to see them. God, it's like 14 people. They might just show up at your house. They might look through your things, rifle through your expensive items, and then leave.

That's what we're like. That's the Swisher family. That's how we roll. And I'm coming down, people of Florida. So put your mask, so mask up is what I got to say to you. Yeah, that'll happen. That'll happen.

You know what? I'm going to make some noise around that issue. I'm just like so excited to Florida. And Matt Gaetz, can't wait to see you. That'll happen. You know what? I'm going to make some noise around that issue. I'm just like so excited to Florida. And Matt Gaetz, can't wait to see you. Rep Gaetz? He doesn't live in Florida. He lives in the panhandle. That's not Florida.

I don't know what that is. You know he's going to be in Miami in some club. He's going to like, we're going to sidle up to him. Yeah. I'm going to give him a big old bear hug when I see him. He's big. Anyway, all right. Don't forget.

You're salty today. We're both salty. I'm going to have so much good Florida fun. Anyway, all right. Don't forget. We're salty today. We're both salty. I'm with so much good Florida fun. Anyway, don't forget, if you have a story in the news and want to hear our opinion, submit your questions to nymag.com slash pivot. Scott, read us out. Today's show is produced by Rebecca Sinanis, Ernie Andreton, engineer of this episode. Thanks also to Hannah Rosen and Drew Burrows.

Make sure you subscribe to the show on Apple Podcasts or if you're an Android user, check us out on Spotify. If you like the show, please recommend it to a friend. Thanks for listening to Pivot from Vox Media. We'll be back next week for another breakdown of all things tech and business. The Swisher posse, the Swisher posse, all 73 of them are coming to hang out

with the dog in his pack. Oh my God, what a thrill. Yeah, there can be only one. Let's see who survives this particular show. Support for this podcast comes from Anthropic. It's not always easy to harness the power and potential of AI. For all the talk around its revolutionary potential, a lot of AI systems feel like they're designed

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