Pivot - NBC's streaming service launches without Roku or Amazon Fire TV, Apple wins a tax battle, and a prediction on Netflix earnings

Episode Date: July 17, 2020

Kara and Scott talk about the launch of NBC's new streaming service and why it isn't on major streaming devices. They also discuss Apple's big tax battle win in the European Union and what it may mean for upcoming antitrust hearings in the United States. In Listener Mail, Kara and Scott answer a question about what technology is having a positive impact on our psychology. In predictions, Kara foresees some new media collaborations and Scott thinks Netflix is going to have major earnings. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Podcast Network. I'm Cara Swisher. And I'm Scott Galloway. How are you, Kara? Good. Guess what? Walmart is announcing it will require U.S. customers to wear face masks. Go, Doug McMillan. I think this is a good thing because Walmart often leads the way in these kind of things, as do many businesses.

What do you think? Yeah, it feels as if, I mean, there's a vacuum of leadership here that's pretty dramatic. It feels as if, I mean, there's a vacuum of leadership here that's pretty dramatic. And a lot of, whether it's Starbucks or Walmart or Best Buy, trying to set protocols that in many ways, in many ways, any action from Walmart impacts more people more directly than anything the federal government does. Yeah. They did it on guns, if you remember. Remember? Yep. With the shootings.

They have a lot of impact in a lot of ways. They did it in certain areas. And so I did it on guns, if you remember. Remember? Yep. With the shootings. They have a lot of impact in a lot of ways. They did it in certain areas. And so I think it's really important. I think Walmart has a real opportunity. I mean, they have their, obviously, their labor issues and everything else, although it pales in comparison to others now, including tech companies. But it's really, I think it's a really important thing. And what's fascinating is that I think what will happen is when it goes up against, say, the Georgia governor, who seems to be just a fatuous chucklehead of this week, where he is declaring that nobody has to force people to wear masks, any of the municipalities.

I don't know if he can control Walmart, though. I don't understand how that will go up against each other. Yeah, you had me at fatuous Chucklehead. That's your new go-to. It is. Yeah. Ridiculous Poppin' Jay is another one, but he's a Fatuous Chucklehead. Ridiculous Poppin' Jay. Isn't that a breakfast treat? How do you imagine that's going to go? Because these governments don't want to sort of argue with Walmart, presumably. Yeah, and it's just very hard to, it's very hard to come out against masking because this whole science thing gets in the way. There's never going to be a national mandate unless Biden is president. And that won't be till January. So it'll be interesting because

it looks like Trump won't at all say he can say people can do as they please. But I think it'll be an interesting, I think the mask wearers are winning this one at this point. And the fact that it took so long is terrible, actually. Well, there just appears to be a war on science. I don't know if you saw the other, the latest kind of dumpster fire, but Peter Navarro going after Dr. Fauci. It just, it's, okay, so the administration is now infighting and trying to undermine each other's credibility. And by the way, that's really going to help the pandemic. That's absolutely going to help us get through this. And then they pretended he didn't. He did it on his own like he's a rogue agent. You know, and then I call that mask lighting.

So it's just it's ridiculous. And then the Los Angeles Times had a story saying Trump approved. Of course he did. Of course, nobody makes a move in that White House without Trump's ridiculous. And then the Los Angeles Times had a story saying Trump approved. Of course he did. Of course nobody makes a move in that White House without Trump's approval. And then he doesn't have to resign for it. And Fauci, I love Fauci. He's just going all over the media. They obviously can't control him at this point because he probably could just leave, which he won't because he's a very longtime dedicated civil servant. But he was like, I don't even know what to say. Essentially, he was like, these crazy people. Who knows what they're doing. I'm just going to keep doing my

job. I think he's got a lot of leverage right now. Speaking of companies, see, all these companies are getting dragged in politically. The Goya CEO, of course, came out and supported the Trump administration rather effusively. He didn't have to do that, but he did. And then Trump and Ivanka take pictures, one in the Oval Office and the other, I don't know what she was doing, some sort of Price is Right move. But posing with Goya, it's so ethically bereft. But, you know, they've done this, at least. They've done worse. Yeah.

I mean, I'm like, everyone's like, is this ethically bereft? I'm like, yes, it is. Of course it is. But what does it do to a brand like that? I don't know if it's very good for Goya. What does it do to a brand like that? I don't know if it's very good for Goya. I think, well, you might argue if it was a smaller brand, any publicity is good publicity because it's that kind of awareness.

It's so hard. The very first stage at the top of the funnel is just awareness, just knowing a brand. And when you see it on the shelf, consumers, 98% of their purchases are with brands that they've heard of. so the first part of branding is just baseline awareness so if this was a smaller brand you know even the the even the negative associations would be positive because you just want awareness but this is a fairly established brand a big consumer base and it's it's kind of marginal or i would say negligible to slightly negative.

It won't have the impact that people think. People, generally speaking, aren't as in touch with the news as the media thinks people are. Right. And also, people are creatures of habit. And if they like Goya, they like Goya. It's just not. But I can't imagine how this is positive because it evoked a pretty negative reaction. If he had just been up there and said, thank you, Mr. President, and he'd just shown respect for the office and showed up.

But instead of kind of, did you see what a sycophant he was? Yeah, it was really quite something. But the pictures to me, that's whatever. He can do whatever he wants. I just don't think it's a very good look for them to insert at all, just at all in general. And, you know, they're going to, they have this boycott and we'll see. And then my favorite was Mary Trump who tweeted out a can of Whole Foods beans. Yeah. Yeah. In general, in general, boycotts get more, get more attention and more news than they have actual sales impact. And there were so many memes around Ivanka Trump. They had one of her holding Brad Parscale's head. You know, they just their memes were fantastic. And it just makes them look

like ridiculous grifters. And, you know, whatever. It's a totally odd brand for the Trump administration, but it's still gross. Speaking of which, you did say Twitter did the the the the the blue checks, the verifieds were off last night, including you. Are you a verified? I am verified, yes. Yes, that's kind of my, that's sort of, I mean, that's one of the few real credentials I have is the blue check. Yeah. So I'm going to allow you to rant about Jack Dorsey right now.

Go right ahead. Oh, you know, I don't, like, hacks, there's been a lot of hacks. And hacks, again, tend to not have, so far, haven't had a huge impact on the companies that are the targets of the hacks. I think the more interesting thing here isn't the fact that when they called Jack Dorsey and said your platform's been hacked and he had to ask which one, is that, that's my pivot humor, Kara. Pivot humor. I don't think the president of the United States who can launch nuclear weapons should be using a platform that can be hacked as his primary means of communicating to the world. That is an excellent point. It really is.

Oh, because he could write something like I'm bombing Russia right now. What if all of a sudden the president starts tweeting, I've ordered the 6th Fleet to begin operations and we have begun firing on the city of Tehran? I mean, it's just, he could, he could, somebody could start a shooting war by hacking Twitter. Well, except it's this president, so everybody takes a minute. They don't know if he's, you know, whatever, drunk tweeting. I think everyone's pretty much on edge.

I think someone who is politically pretty deaf could have a series of tweets over a few minutes that they would not have the time to react to that could potentially um escalate pretty fast the bottom line is that the president shouldn't be communicating through non-secure channels yes and he is right now but you do recall given how old you are as i am that the reagan we will begin bombing in five minutes thing his joke yeah but you know that was not good that was like a total current that was really controversial when he did that that one thing and you know it was clearly a joke when he did it but it was still really badly received when he did it um because it's not funny it's not funny well

it's a little funny it's a skosh funny it's not a skosh funny nuclear war is not a skosh it's not funny. It's not funny. Well, it's a little funny. It's a skosh funny. It's not a skosh funny. Nuclear war is not a skosh. It's never funny. Never funny. I've heard that's bad. In any case, we want to get to the big story, but I just want to say,

guess who is going to be at our most incredible live event, which is just becoming very popular with the people, Pivot School in August. Guess who is coming? Jack Dorsey? No. No? I'm sorry.

Go ahead. Sundar Pichai, the CEO of Google. Oh, my gosh. The likable Sundar. Yeah, Sundar is going to be here. We have a lot of questions for him. He was scheduled to be at Code, and he has very nicely agreed to come and do this for us

at our Pivot School, which is going to be off the frigging charts. Scott and I had an amazing meeting yesterday with our staff, and they have so many great ideas. They're doing such a great job. And it's going to be funny. It's going to be fun. It's going to be informative.

There's going to be a special Scott thing that's going to happen, I think, right? A special Scott thing. Wow, you really know how to sell the hell out of this bitch. I can't give away the whole whatever. SST, supersonic transport? What's that what it's called? There's going to be a lot of antics by Scott, let's just say. Antics.

I'm the serious part of this thing. I'm presenting actual domain expertise or lack thereof. Listen. It's going to be fun. Listen to me. It's going to be lit, as the young people say. Fatuous chucklehead. Fatuous chucklehead. Get tickets now. PivotSchooled.com. It's going to be so good. Okay. On to the big stories.

This week, NBC's streaming platform Peacock launched, but won't be available on two of the most popular streaming devices, Roku and Amazon Fire TV. Roku and Amazon Fire TV share a combined 70% of the streaming player market and reach about 80 million active users. Back in May when HBO Max launched, they were missing apps on Roku and Amazon Fire TV and still have not cut a deal to appear on those platforms. Peacock is available on other streaming devices like Apple TV and Google's Chromecast, among others. What do you think about Peacock? What do you think? They're doing this 30 Rock special. They're trying to do all kinds of stuff. What do you imagine is happening here? I think Peacock is going to struggle. First off, Peacock, late to the game. A lot of people have spent a lot of money and a lot of time and are, I don't want to say they're sated on content, but content

consumption has gone up dramatically during the pandemic. And they feel it, it feels as if they're just late. And I mean, they have some unique attributes. One, they do believe, and they're probably correct, that the whole world can't go to subscription, that there is a large market for people who want, will endorse some advertising for free. I think that their pricing in their brand architecture, I should say their pricing strategy is confusing. Three different prices. Explain it. Explain it. Free with a lot of advertising, five bucks for some advertising and more content, and then 10 bucks for a bunch of original content and no advertising. But it's kind of the Goldilocks.

So you pick, you have three choices. And I think in this age, consumers, marketers mistake consumers for wanting more choice. They don't. They want less choice. Less choice. People are happier with less choice. Right. They want to be more confident in the choices presented.

And Netflix is a very easy choice. You know what it stands for. It's no advertising. It's great content. It's original content. Yes. And you know the price. So I think that's a mistake. I would never get rid of Netflix. I would never. It's worth it. Yeah. And we'll talk a little bit. That's actually my prediction.

They are announcing earnings at the close of business today. We record on Thursday. Just a little inside baseball for you listeners out there. But back to Peacock. I think the most interesting thing about Peacock is that if you look at the wars that are going on between them and Roku, it's really telling around just how the power dynamic and media has changed so dramatically. And that is if you distribute, if you go on Amazon Prime, if you're part of Amazon Prime Video, it means you're in their app. You're in their app, and they basically control and have access to the data, and they serve it up as like a feature of Prime Video. Or you can go kind of above the fold, if you will, and you're presented as part of distribution. But if you're like Netflix and like Disney+, but Netflix and Disney+, control the experience. And most importantly, Kara, most importantly, they have access to all the data.

Yeah, data. And what this is so telling about is that HBO Max and Peacock, the original gangsters in not streaming video but premium non-advertising video, HBO, and also the largest now ad-supported content company on television, Comcast, they don't have the leverage to negotiate a deal where they're above the fold and they have their own app. Amazon's saying, no, we're happy to present you, but we're going to control the experience and have control of the data. So who has the power here? The device makers, like Roku and Amazon Fire TV and Apple TV? Because there's too many of these networks, right? And that's your point. It's sort of like being on a grocery shelf.

There's always a debate between content and carriage or between the manufacturer's brand and distribution, which is more important. In this instance, when you're Amazon and you kind of control the rails, you're in 83% of households and you're trying to launch. I don't think consumers are going to say, I'm canceling Prime or Prime is not nearly as appealing to me households and you're trying to launch, I don't think consumers are going to say,

I'm canceling Prime or Prime is not nearly as appealing to me because they're not carrying Peacock or HBO Max. It's just weird how in some, Disney Plus and Netflix now have much more power and leverage in the channel than HBO Max or Comcast, which just would have been unthinkable even five or 10 years ago. Yeah. So it'll be very interesting to see what happens. I think Peacock is going to be not nearly as big a disappointment as Quibi, where supposedly 92% of people did not up for the paid, did not transition to paid from the free trial. I mean, Quibi is just, people aren't even talking about it anymore. Still got some good content on there. But let me just say something of this, because I have a little bit of background in the cable business. My family owned a cable company.

Your family owned a cable company? Yes, a cable, yes, in Scranton, Pennsylvania. We sold it. It's a long story. Well, first to Adelphi and then, anyway, that's, anyway, I'm a cable baron and I worked in the cable business. Wow, cable baroness. Yes, I'm a baroness. We made quite a bit of money with Bob. Actually, it's interesting. When you said my family owned a cable company, I was actually more attracted to you.

What's happening to me? In any case, we had one that was just right next to each other. A lot of smaller cable concerns have little bits and pieces. We had the city of Scranton. It's a long story. My family owns a coal company. We built the lines for cable companies. I'm not going to go into it. Was it called Dunder Mifflin Cable? What was the name of Scranton. It's a long story. My family owns a coal company. We built the lines for cable. I'm not going to go into it.

Was it called Dunder Mifflin Cable? What was the name of the cable company? No, but it was like we owned a big coal company. And so we built that. I'm sorry. You owned a coal company? We still own a coal company. My brother runs it.

It's complex. In any case. Hold the phone. Your brother runs a coal company? Well, technically, we're trying to get. First mine, second blown. You own a coal company. Well, technically, we're trying to get- Two words, first mine, second blown. You own a coal company. Yeah, that makes sense.

Okay. That makes sense. Listen to me. It's called Jetto Coal. It's excellent coal. It used to supply the coal to the public schools of New York. It may still do that because they have coal burning heating in any case. You're the Coke sister.

You're one of the Coke sisters. That's what I am. Anyway, they got the Coke sister. You're one of the Coke sisters. That's what I am. Anyway, they went and they got the cable concern. My grandfather liked boxing and he liked HBO. So he wanted to have it in Scranton, Pennsylvania because they had to go over the Poconos. I'm not going to go into the whole thing,

but they built, they had the equipment to lay the cable lines. They got this 99 year lease on the cable on and on. We ended up selling it. My brother did. And, and, and it went my brother did and uh and and it went to adelphia now it's at comcast anyway um if you remember adelphia so i know a lot about this but one of the things that was interesting was some of the stuff when they were making them

they're negotiating these deals with these different cable uh channels some of them they had to have and pay up for others they they got to manipulate, right? Or just do whatever they want with. And I remember my grandfather, this other guy, was dealing with that. And he was like, we have to have HBO. We have to have this at the time. So whatever is the have to have, you had the leverage. Whatever wasn't, the cable company had the leverage. And that's what it looks like here.

Same thing. So just to bring it back from what sounds like the worst episode of Succession, and that is the Swisher family drama around their coal mine and their cable company. Can you imagine if you're a kid? You can work for the cable company and date stars or date actresses, or you can go to work for the coal company. No, the cable company was really ugly. I'm sure the coal company made all the money. But anyways. No, the cable company did. Are you crazy? That's interesting. But to bring it back

to Peacock, what you also really need or what's evident, and it's really the reason, one of the reasons why Disney Plus had such a successful launch, is it's a pain to take your credit card out. It's a pain to get these things up and running on your television screen. Disney Plus took me two and a half hours. But what Disney Plus had is you had a cadre of nine-year-old boys, i.e. my youngest, coming home and saying, dad, dad, The Mandalorian is on Disney Plus. We have to watch it. And Peacock was hoping to have that hook. Their Mandalorian was going to be the Summer Olympics in Tokyo, which is going to be available on Peacock, and they don't have that. So they don't really have, I mean, your kid isn't going to come home and say, we have to have The Office, or I need to see season seven of Friends. It

doesn't appear they have kind of that, at least not yet, that hook. And a lot of people say Quibi never really, one of the problems with Quibi is it never really had that breakout one thing. Everyone else has it. Well, it took a while for Netflix to get to. Game of Thrones. House of Cards, actually. Game of Thrones was on HBO. Oh, I'm sorry, HBO, yeah. House of Cards, thanks for that.

Yeah, House of Cards was. And Orange is the New Black. You sound like someone who owns a cable company. Yes, I do. And Orange is the New Black. I used to catch cable thieves. I'm not, well, that'll be a story for another day. Catch cable thieves?

Yes, you'd have to point this weird cable gun at them, this cable finder. Literally, people would go up and attach the cable to their house by going up on really dangerous telephone wires to steal cable. It was always the mayor of a town that did it. It was always the fire chief. It was amazing.

It was amazing. When I was in high school, my mom and I stole cable. You know why? Why? Because we didn't own a coal company. Oh, what? You can't steal cable. You just can't. I'm sorry. school, my mom and I stole cable. You know why? Why? Because we didn't own a coal company. Oh, you can't steal cable. You just can't.

I'm sorry. Yes, you can. You go into the cable box and they have these weird breakers and you just unscrew them and boom, it's R-rated film for the 15-year-old dog. Yeah, my family is essentially Sopranos light, but I won't go into that yet either. Anyhow. That is a different spin on the swisher ball. You think it's not going to work. It's not going to work.

And you able company. Last thing Roku, you said was going to be acquired. Do you think that's still going to happen? No, but to be clear, my prediction is Roku is either acquired or begins acquiring companies because I'm convinced that the only way you can maintain or get to sort of a hundred billion dollar plus club is to be vertical. And that's kind of the, that's kind of the weak link for not only Netflix, but Disney, if there is an Achilles heel. And the companies, if you think about all the companies we talk about that are over $500 billion, they're vertical. And that is they technically manufacture and design their product and they control the

distribution, whether it's Apple or Google. And both Netflix and Disney don't have their own distribution. And Roku doesn't really have their own content. And I think any consultant that Roku hires to come in says, you're going to have to acquire distribution, or any consultant who talks to Disney or Netflix says, you know, over time, we have to control more of our distribution. So the reason why Roku's stock is, I don't want to call it bulletproof, but it's had such an incredible run is that if it were to get cut in half, it would be an acquisition target. And if it continues to go up, it can

begin acquiring the remaining content assets that are out there. And there's Hulu sitting out there. Roku. Yeah, I don't think Disney is going to give up Hulu. And in some, I think Roku is going to be in the news as most likely an acquirer because it's just so big right now and has such a great currency in terms of its stock. We need to get the CEO on pivot. We'll do that. Yeah, actually, kind of my most successful business school friend was a senior exec there for a long time.

I remember when it was first funded. I remember talking to the VCs. It was interesting. All right, Scott, let's go on a quick break and come back to talk about Apple winning a tax battle in the European Union and a listener mail question. Fox Creative. This is advertiser content from Zelle.

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The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Okay, Scott, we're back. This week, a European court sided with Apple saying it does not owe Ireland in back taxes. Back in 2016, the European Commission, the bloc's top antitrust enforcer,

ruled that Ireland must recoup $14.8 billion in allegedly unpaid taxes between 2003 and 2014. But in an unexpected rebuke of that decision, the EU General Court said the Commission failed to meet legal standards and that they had unfairly treated Apple. Marguerite Vestager, who's in charge of competition at the EU Commission, said she would continue investigations into national tax deals with corporations to establish whether they constitute illegal subsidies. Vestager recently launched two antitrust probes into Apple and is considering imposing a digital tax on U.S. tax giants.

It's definitely not a victory for her and a victory for Apple. It's a major win, actually, as Apple is about to go into antitrust hearings in the United States. How do you think that will affect things here? This is a big issue because if the most profitable company in the world doesn't pay taxes, the question is who does? Well, we know who does, and that is small and medium-sized business that don't have an army of tax lawyers. And this kind of double Irish or Dutch sandwich where you issue your IP, the license to the brand, to an entity such as Apple International, which is in the Isle of Sky or in Ireland, and then that entity charges the high-tax domain entities a huge fee for license to the IP, thereby suppressing profits in high-tax domains and inflating profits in low-tax domains.

And then Ireland uses low taxation as a future to get multinationals. It's nothing but arbitrage that takes money out of— Well, the profits do come back here and get paid taxes on. But go ahead. It's where you park the money, really. That's real. But go ahead. Go ahead. Yeah, but you have access to that capital. It's tax. But go ahead. It's where you park the money, really. But go ahead. Go ahead.

Yeah, but you have access to that capital. It's tax avoidance. Pure and simple. It's tax avoidance. And because we don't have international tax treaties around some of this stuff, the biggest companies who have, A, international businesses, i.e. big companies, and, B, have tax lawyers and lobbyists can effectively pay a lower tax rate than small, medium-sized companies. If you look at what's happened in the S&P 500 and you divide it into deciles, the biggest 50 companies are up since the beginning of the year, like 8% or 9%. And the companies in the middle, the kind of average-sized companies in the S&P 500, are down about 8%, and the smallest 50 companies in the S&P 500 are off 38%. So why is it that big is better? And it's for two reasons. One, big tech monopolies are booming. They're

skyrocketing. The market loves monopolies. And two, really big companies, the marketplace is now effectively saying that there's asymmetric risk to the upside for shareholders who will get bailed out on the downside and capture all the gains on the upside. So what we have is an economy where all the shareholder gains are either going to monopolies or companies that are too big to fail, which is an asymmetric or essentially a transfer of power and wealth from who have traditionally been the innovators and the job creators, and that is small and medium-sized business. So we have an unhealthy economy through kind of lax oversight, poor antitrust, and essentially companies that are created by moral hazard. I mean, JP Morgan has a floor on it because they can take outsized risk and not go out of business when they fuck up because they're going to get bailed out, as are the airlines right now. So it's really an unhealthy feature of our economy. So what, two things, what has to happen and what is the impact on Vestager?

Answer that one first because she's been so aggressive and she continues, I don't think she's going to back off in any way, but it's, she's been winning really and sort of been a thorn in the sides of these tech companies, including Apple, especially Apple and Facebook and others. And a very big voice on this in Europe has a big impact. What do you, you know, and of course, France tries to impose taxes, this and that. So it's kind of a two-edged sword because the U.S. wants to do some regulation, but they also want to be defensive of U.S. companies. Even Barack Obama was enormously defensive of U.S. companies against European incursions and stuff like that.

So what do you think about that? And then what do we need to do to make this right? Or we just live with these weird tax loopholes that these companies can go right through? There's just no getting around it. It's a black eye for Marguerite Vestager. And it's, you know, it's a win for them. They push back. They appealed this ruling. And the appeals courts, and I don't understand the dynamics of the appeals courts, sided with Apple. this ruling and the appeals courts, and I don't understand the dynamics of the appeals courts, sided with Apple. There's just no doubt about it. It's a win for Apple. It's a loss for Commissioner Vestiaire. What needs to be done is simple, and I'm a broken record around this,

is more aggressive, thoughtful antitrust action that breaks up the biggest guys who overrun government. And two, we do need some sort of international tax treaty such that all companies agree to tax based on the revenues they recognize in their own nation. And also, the U.S. probably needs to go gangster on these low tax or these tax havens and say, we're going to eliminate corporate tax and then you're going to, we'll put you out of business, period. And I think there's actually, I'm not one of these, you know, just lower taxes for no reason. I think we are going to have to raise taxes and start behaving more responsibly fiscally. But corporate taxes, I think is about 20 or 30% of our total revenues. And there is a decent argument for just eliminating corporate tax

because it creates such weird, abnormal behavior around reverse mergers and aversions and tax avoidance. But we need some sort of international tax treaty that says to everybody, the money we make here, we tax, the money you make there, you tax in some sort of, you know, everyone's got to hold the hand and figure out a way to, especially around these big guys, figure out a way for them to not engage in massive tax avoidance. And it's also- You know, it's ultimately the fault of the regulators for not writing taxes. A hundred percent. These businesses are doing what they're supposed to do. Why wouldn't they do this? Why wouldn't they do this?

That's right. When I started L2, I set up a subsidiary in Ireland because I'm like, what's good for the goose is good for the gander. And I read what GE was doing. Unfortunately, over time, I didn't take advantage of it because we're a venture-backed company and we weren't profitable. But the bad news also for the company is that when tax avoidance becomes a core competence and you lose sight of your core business, you end up like General Electric. A lot of people would say to General Electric, when the best thing they did and the focus of the CEO was having a 400-person department focused on tax avoidance, they kind of lost a little edge around things like,

you know, making light bulbs and jet engines. You had an Irish subsidiary? You know, Apple at least has a facility in Cork and a lot of people in, They certainly have a lot of people. Their international unit is basically a sign and a delivery bay in the Isle of Man. No, it's not. It's a facility. No, Ireland has customer service, but the Apple International, if you will, quote-unquote, that is supposedly a multi-billion dollar, is essentially almost a P.O. box in an office park.

It's total bullshit. Well, they do have a corporate presence that's significant in Ireland. So does Google, by the way. I visited it. There's a lot of U.S. tech, had been a lot of U.S. tech companies there, and it had to do with both the population and, you know, the ability to attract talent

and a good place to live in Dublin mostly. And also these tax laws, stuff like that. So it's interesting. You just got treated differently because you're a coal baroness. And you're a tax scofflaw, an Irish tax scofflaw. Unfortunately, I'm not successful enough to engage in successful tax avoidance. But the thought was there. You know, my grandfather was an immigrant.

He's from Italy. That's a flex. All of us are immigrants. Now that we're getting to know each other better, we're going to take a listener question, which is a great one that we've gotten this week. Let's go to the tape. You've got mail. Hi, Cara and Scott. This is Todd Pierce.

I'm a retired U.S. diplomat now living in Miami Beach. I started listening to the show when I was posted in Geneva, and I'm a huge fan. I'm also someone who's dealt with anxiety and depression throughout my life. I appreciate how you address in a nuanced and clear way, negative impact tech can have on our emotional state, whether it's the addictive quality of Robin Hood or the body dysmorphia that can creep in after too much time on Instagram. My question is what innovations do you see having a positive psychological impact? I know telehealth is the obvious example. It's enabled me to stick with my psychiatrist even when we don't live in the same country. But there have to be more positive examples, no?

Thank you guys for making the show and taking my question. That is a great question. And let me just say, we got a nice tweet from the father of the boy who killed himself over the Rob Nodak, which was wonderful. It's telling Scott to keep going, which is great. And there's also been some, we will do that. And there's also been some legislative action.

Some Congress people are calling for an investigation in Robin Hood's practices, especially gamification. This week, my son talked about it a lot, that he gets, I didn't know this, but on YouTube, which he uses a lot, he said he was like reciting the ads. He sees them so much for Robin Hood. And so, and he was, he was like saying, you should do this. You should play with us. And he's, you know, 15 years old. So Scott, what do you think about this? Let's find something good in

this, in this. Well, first off, yeah, you're right. So Representative Lauren Underwood wrote a letter and she kind of summarized it. She said, this should not, this should have never happened. And she wrote a very thoughtful letter. And it's really encouraging to see a U.S. representative start to take an interest in this. And per what you talked about, I'm very committed to this personally, trying to make some progress against this before it explodes into another one of these companies that is in kind of, you know, the business of exploitation of our most, obviously, our most valuable asset, and that's our children. But it's good to see that Congress is taking an interest in it. I'm speaking to a couple senators this week about that issue.

So hopefully, hopefully, you know, hopefully government works. But to the retired diplomat living in Miami, which, by the way, good for him. That sounds like a pretty meaningful, interesting life. Yeah. I think these companies do a lot of good. Yeah. I think, I mean, you were talking about coal. I think coal and cable companies are probably, maybe not coal.

I would say almost every big tech company, we're net gainers. The problem is with the word net. And that is, we have the ability to hold two thoughts concurrently in our mind. And that is, maybe even if fossil fuels were net gainers, we still have emission standards. fossil fuels, we're net gainers, we still have emission standards. Even if we're net gainers from automobile companies or autos, we still have manufacturing standards, we still have emission standards. So yeah, I want to acknowledge up front, I would say with the exception of Facebook, we're net gainers. There's more positives and negatives across all these companies, but that doesn't exonerate them from the same regulation and scrutiny as all of us.

Let's answer his question. So telehealth i know has been great i've done a few things on it it's been really good i have lots of friends who are doing their psychological stuff still online i think it works out it's actually working out really well because it's quite intimate um uh fit trackers are good meditation apps um there's all kinds of of stuff that have has positive psychological impact. These workout stuff, the Pelotons, things like that. You know, you have these movements. Another listener recently asked if movements like Me Too and Arab Spring

ultimately outweighs the damage that social media does. I don't think so. As Twitter moves into possible subscription model, that's a possibility. So do platforms like Zoom and Slack let you work from home help? Name some more. Name some more where you think the positivity is stronger and the net is a little more on the positive side. Well, I think all of those that you were talking about, I also think many of the, I mean, there's food and nutrition apps that do a pretty good job. I think almost all of these guys do a nice job. I don't, I'd love, I mean, what we're

seeing or where the opportunity is, I would say economically and also from a human capital standpoint is, I think COVID-19 has inspired what I'll loosely refer to as the great dispersion. And that is medicine and education are no longer going to be filtered through the constraints of these geographic regulators, specifically a hospital, a doctor's office, or a university, such that, as you mentioned, with a therapist or a psychiatrist or a trainer or a nutritionist, unless it's hands-on, unless it's a chiropractor or an acupuncturist, you're going to probably be able to digitize it and deliver 80% of it for hopefully 30% to 50% of the price through this great dispersion. And what's also interesting is that COVID-19 has inspired regulators to apply HIPAA compliance or just kind of get out of the way and let people prescribe medications and move to remote medicine. It's cleared out a lot of bureaucracy that people would argue pharmaceutical and doctor's lobbies had left in place because it benefited them. So there is one of the upsides.

If you talk about TIG, all these apps, it's the same thing. They've all leapt forward 10 years and about 8 to 12 weeks. And there are now venture capital firms raising funds with one word in terms of the strategy, remote. So anything, you know, we're just seeing just such an acceleration in anything that can be delivered remote. But it feels like mental health is a killer app around this stuff. It feels like travel in the early days where it's a huge industry, an important industry that is an information-based industry. And I think it's a great, you know, Amanda's parents are both psychologists and they've used it. I think her father's a psychiatrist and her mom's a psychologist. They find it works really

well. I mean, there's nothing like being in person in many ways and having interactions, but it's, it's as opposed to say education, everyone who's used telehealth and psychiatry and things like that seems relatively satisfied. And it does have an intimacy that does work even doing podcasts, not just with us. When I was doing Rico decode podcast, they worked out really well with, with,

with we used the squad cast. Other people use zoom and I find some meetings are pretty good. Like there's, you know what I mean? Like, so, with, with, uh, we use the squad cast, other people use zoom and I find some meetings are pretty good. Like there's, you know what I mean? Like, so there are, there's a lot of stuff as they, as you begin to tweak it, that work well. And in telehealth, let me just say, and then we can move on to predictions is that there's been, I've noticed a lot of commercials on cable, uh, cause I watch late night cable, uh, all the time. And so it's either the, I don't see them in my pillow guy very much, but there's a lot of commercials that lately that are showing like someone putting their hand up to a

screen and then the doctor can x-ray or there's an x-ray that gets taken and then they can diagnose stuff. And you can see that you don't have to go to the doctor for a lot of stuff, even though certain things require hands-on visits, like an MRI or something like that. But I think more and more, this is going to be good for people's health if they can have more easy access to experts without all the friction that causes it. You have to go to the doctor. You have to park. It takes money. It takes time out of your day, extra time and stuff like that. One observation I would make is that I think whether it's the service provider, whether

you're teaching an online course or you're the psychiatrist delivering an online therapy session, most of our focus, because we're a consumer-led economy, is if it's good or bad for the consumer. And the general viewpoint is it's good for the consumer, it saves him or her time, and over time should be able to be more cost effective. I find on the service provider side, it's actually more taxing. I find teaching online classes very, very difficult. Oh, you do? And also, if you talk to, I mean, when you're talking about Zoom, my team finds it exhausting.

And supposedly delivering, if you're a therapist on the other side of delivering online therapy, they say it's very difficult and very tiring to do these online sessions. So it's, I worry that over the long term, everyone's talking about the benefits of remote work and there is benefits, less commuting, more efficient, live where you want. But there is something to the notion that if your job can be outsourced, if they can let you move to Denver, that means they can keep going and move your job to India. And I find that delivering stuff via Zoom as a service provider is just exhausting. Okay. Yeah.

All right. I like some of it. But, you know, it's interesting because Amazon announced people didn't go going back to 2020. I think the New York Times did. So that's going to be, you know, pretty much everyone's every major offices are going to be stay at home and don't come back in for a while. So more and more people will get used to it and find workarounds that will then become permanent. I think that's very clear. All right, Scott, one more quick break. We'll be back for predictions. Support for this podcast comes from Anthropic.

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i think they're going to have to spin it off and go public in the u.s and just break the ties so they're not subject to the national intelligence, the heinous national intelligence laws of China. Even though there's no proof that there's any kind of movement of data to China, they can be compelled to. And even in their privacy policy, they say they could do it even though they don't do it. So I think they're going to spin off. That's my feeling. That is my prediction. And they've signaled that. There was, it wasn't an accident that they hired, you know, a big white American guy. I think they're planning this.

And I think they figured, they saw this coming and said, okay, how do we- I think it's accelerated. Yeah. How can we come across as more global slash American and reduce the perceived threat and xenophobia that we kind of feel towards almost all things Chinese or non-American. So I think this was part of the reason that he was able, he's going to be probably the newest minted CEO billionaire when they go public. Billionaire. You're right. Anyway, that's my prediction. That makes sense.

And then my actual prediction. So I'm going to make a full disclosure because I work for New York Times and New York Magazine. And I have some personal relationships involved here that aren't worth getting into, but they're awkward. Totally Google-able if you are in the mood, but why bother? This is good. I'll use some music in the background. And episode four of Succession, dysfunctional yet boring, the Swisher controversy. Go ahead. Go ahead.

I'm waiting. It's juicy. It's juicy. I know it is. It is. This week is likely. Go on. Go on. All right. Anyway, Barry Weiss, longtime New York Times op-ed writer. Not longtime, actually. Uh-oh. Here it comes. Resigned from the New York Times. She accused the company of internal bullying. She's not conservative. She calls herself centrist. She also published and widely shared her resignation

letter. Same day, Andrew Sullivan, and widely shared her resignation letter. Same day, Andrew Sullivan, the conservative political writer, again, which he's so concerned, I don't know what he is anymore, at New York Magazine announced he would be a contrarian, I'll say contrarian writer, announced he would be leaving the publication, Ben Shapiro, leaving wherever the hell he is. So, you know, I had known, heard about this through the media entrepreneur circles that there was something they were all cooking up together. Not the cold circles.

The cold circles. No, not the cold circles. That's a whole different group of people. That's a lot of guys, you know. That's a lot of bad food and windowless conferences. Yeah, yeah. That's a lot of beer and other things. Let's get some wings.

Anyways, I'm sorry. Wings, wings and strippers, whatever. Anyway, so I think they're going to start their own publication. I don't know. The Heretic Daily. Yeah, they already announced it, didn't they? Didn't they announce they're starting something? The Uncanceled.

The Uncanceled. I don't know. They're going to start something and be funded. I'm curious, you know, maybe money from Teal. Who knows? But I think this was a long, I think this is a long game of PR in this regard. I don't I don't agree with her letter. I think it was missing a lot of pertinent facts. But and and was designed to to do this next thing. I think a lot of people think that. And so I predict you're going to see a new,

right in the middle of the time when lots of, including Vox Media and others are having layoffs, BuzzFeed and things like that, you're going to see a newly funded organization possibly, or linked to something like Joe Rogan or just, I think they're close. And so you're to see something with, I think probably those three. But we'll see. It makes sense. You're definitely going to see a book deal, obviously. But it seems like there's something afoot. That's what I would say. I've heard this for months, and I actually said it to people privately. I thought the letter was well written. I do think there is.

We disagree over this. Desperate need of an editor, but go ahead. Well, I know one that's a coal baroness. Anyways, she's. I would not edit that letter. But yeah, it felt, I would say, I don't want to, it didn't, it didn't, it did actually undermine and diminish a bit of the credibility of the letter when the next day I thought I read that they were going, they were starting a new company. It felt like kind of a press release and kind of a means of getting awareness for whatever their new co is going to be.

But I don't think it's, I think it's unfair to sort of associate it with what I think they're going to plan to do with Peter Thiel. I think what they're trying to say is- I don't know if it's Peter Thiel, FYI. Yeah, I know. But my point is, it's not a libertarian band.

I think what they're saying is- Contrarian. Is that there's no middle left and that there's an opportunity for media that tries to place itself somewhere in the middle. The other thing that I thought was interesting in her letter, and I've seen this in companies, is that there appears to be a fissure between kind of the over 40, quote unquote, liberals and the under 40- It's untrue.

Woasters. Yeah, it's untrue. It's untrue. That's one thing she left out. She tweeted all this stuff after the Tom Cotton thing that was pat's untrue. So they were furious at you. It was a regular editorial back and forth. It was not a civil war. There's just, it's, I am there. I, I'm not deeply enmeshed in the New York Times, but it's just untrue. It's not a young. I don't think anyone, I don't think the people were worried about that. I think they were a little disturbed when they heard that you got very angry at the letter and you hopped in your car and you put on diapers and you drove 30 hours to speak to her. That's, oh wait, that's not right. That's not you. I've never met that's not you. I have never I would never do that. I have no I have no personal relationship

with this person. So no personal relationship with this person. And something tells me you're not going to develop one. I it's you know, the work is not my cup of tea, but a lot of people's work are my cup of tea. So it's fine. Like, I don't mind it. It's fine. Not your cup of coal. It's not your cup of coal. But here's cup of coal but here's the deal aside from this letter which i think is is problematic i'm gonna it's problematic and i don't want to discuss later because i don't think this is i think there should be discussions about editorial issues within newspapers i think that behavior on slack for example is bad you know she noted an axe emoji. You know, I don't know. Like, let's look. They should do an investigation into how people behave.

But if it's just basic, like, Slack meanness, I don't know. I don't know. I don't know. I don't know. Well, let's look at it. I think the key is just to not understand Slack and you're not subject to anything. People lose their minds on Slack. Slack is demonic for a lot of people.

It's like Twitter. But having a disagreement with someone is not the same thing. And if you write things that are offensive and then people are offended and then you're mad that they're offended, it seems like this is just not the hill to die on. This particular letter is not the hill to die on for this point. That's my feeling. And they're going to start something, and that's great. I think that entrepreneurs welcome media entrepreneurs everywhere. And it should be interesting, and it should be, you know,

it could be called the uncanceled. The uncanceled. Whatever. Yeah. Whatever. That's my feeling. There you have it. Now you know so much about my personal life.

This has been very illuminating. Okay, so my prediction. Prediction. Go ahead. My's my feeling. There you have it. Now you know so much about my personal life. This has been very illuminating. Okay, so my prediction? Prediction. Go ahead. My mind is blown. I've been thinking about this all week here, and that is, in the history of business, something we record on Thursdays and something this afternoon is going to happen as a function of what is an unprecedented situation in business. And that is we have a company whose sales or consumption of their core product is up 38% year on year, which is just, I'm talking about Netflix. So the consumption or the core product is up, consumption of the core product is up 38% year on year. It's great.

That's because it's great. I agree. I agree. Give me some running room. Give me year on year. It's great. That's because it's great. I agree. I agree. Give me some running room. Give me some running room. Go for it. But at the same time, and I don't think I've ever, I can't name another company or another situation where this has happened.

At the same time, their costs have absolutely plummeted because they're no longer allowed to be in production. So what you're about to see, and this is my prediction, I think Netflix goes over an after hours today, breaches 600 bucks a share, and becomes more valuable than Comcast, AT&T, and Disney. On the back of this, not only their incredible success, they're up 80% since the March lows,

they're up 60% year to date, just behind Amazon, which I think is up 64%. But I'm trying to think of another situation where a company's, it's as if General Motors said, we've sold 40% more cars, but we haven't had to keep our factories open. We've been able to close them and save money. I don't think in the history of business we've ever seen. Plus they have a backlog. Netflix is an endless well of new content. Right. They have this library. So you're about to see this trope, anomalous, incredible earning surge announced today at Netflix. And they'll do anything they can to throw expenses on it to take it down because once they do fire up production again, their earnings will go back to kind of normal levels.

But I think the stock is going to pop. I think Netflix has so much momentum and they're going to look out 10 years as the market is doing and saying this company is just a juggernaut. Anyways, Netflix, over 600 bucks a share, after the market closes today, on the back of this incredible trope-like notion where a company can increase its sales 38% while seeing its costs plummet. I've just never, I've never, I've never seen it before. Good one. We have good predictions today. That's a good, let me just say, I agree with you. And by the way, there's so much, there's so much good content. I keep discovering it and it's quite delightful. Like I just watched Eurovision,

the Will Ferrell, Rachel McAdams. Oh yeah, I watched that with my sons. It was cute. It was adorable. I was so happy to have it. And then I moved over to another thing that was more serious. I forget what it was, but it just, there's an endless supply of really good content and whatever strikes your fancy. And it's always sort of serving you up very much like TikTok. Actually, I really enjoy using TikTok. Really great product away from everything else of any of these apps. I like to focus on great products. And I think even though the costs have gone down, Netflix is great because the product is great. Yeah, they do a fantastic job. No doubt about it. No doubt about

it. Good prediction. Good prediction from you. Okay, squat, Scott, squat, squat, squat. I'm going to call you squat from now on. All right right another quarantine weekend is upon us i know you're going to call me six times i know i know i didn't call you back the other night i'm sorry oh you're bragging now you didn't i was watching eurovision that's what i was doing yeah that's what i was actually and it was so good i couldn't stop watching adorable rachel mcadams being icelandic i just couldn't i just couldn't stop yeah that thing read like kind of from the Chamber of Commerce from Reykjavik. It made Iceland seem really likable. I know, but I loved it. She's so adorable, I couldn't stop watching. And anything with Pierce Brosnan. I know. He's so handsome,

my handsome father. Very good looking. He was really good. But what are you doing this weekend? What are you up to? Absolutely nothing. I can't, I literally, like my mind's blank when you say, what am I doing this weekend? I'm writing a big piece or a big piece for me on education. I'm trying to assemble a list of which educational institutions bring this toxic cocktail of a lot of international students, low endowments, high admit rate, and high tuition with a kind of a low experience and a tier two brand, because I think there's about to be 500 or a thousand universities that'll start a death march on September 1 with the demand destruction. I will note that Scott gave this lecture to my son. I think you were trying out your arguments on my son who asked about NYU. Thank you for doing that, by the way. It was very helpful. It's my pleasure. And I kicked off my latest Prof G strategy sprint. So I'll be doing my first class on, not this weekend, but Tuesday night. I've got 1,000 students all online.

That's exciting. So, yeah, just doing my gig. That's good. Doing my gig. I'm going to install Baby Gates. I'm not. Baby Gates. I'm doing this.

Baby Gates. I'm installing Baby Gates. That's where my life is right now. Nice. Don't forget, if there's a story in the news that you're curious about and want to hear our opinion on, email us at pivot at voxmedia.com to be featured on the show. This was a really good show. It was full of information. I really have liked your analysis this week, and I really appreciate it.

Thanks. Anyway, read us out. Today's show was produced by Rebecca Sinanis. Fernando Finite engineered this episode. Erica Anderson is our executive producer. Thanks also to Drew Burrows. Make sure you've subscribed to the show on Apple Podcasts, or if you're an Android user, check us out on Spotify, or wherever you listen to podcasts.

If you like the show, please recommend it to a friend. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown of all things tech and business. Go Netflix. Have a great weekend, Kara. things tech and business. Go Netflix. Have a great weekend, Kara. Support for this podcast comes from Anthropic.

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