Sharp Tech with Ben Thompson - An Endgame for YouTube TV, Big Disney Decisions (And Whether Bob Iger Should Make Them), The Era Beyond Peak TV

Episode Date: September 19, 2023

How the history of Google and may predict the future for YouTube, the stakes for Disney and Bob Iger as the earth shifts underneath them, and various considerations for consumers and content makers alike as the entertainment industry prepares for a new era. At the end: missed exit opportunities, a few antitrust digressions, and one man's iPhone 15 grievance.

Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing? I'm fine. The question continues to be as you go through your middle age back pain phase. How are you? I'm doing great, Ben. I have never been better. Well, I have been better.

I'm not back to 100% on the back front, but we're going to dedicate this podcast to Big Pharma. I've been on a cocktail of muscle relaxers and anti-inflammatories and God knows what else over the last week or so. Big Pharma takes it on the chin in the public forum far too often, but they've really bailed me out on the back front. I'm still a little bit congested. It's hard to find good over-the-counter cold medicine, so Big Pharma failing me there. But I'm here and I feel pretty good. I mean, not to go out a total sort of a foray into pharmaceutical discussion, but it's actually pretty funny because there was the story last week about how, so, you know, was it 10 years ago, 15 years ago? Who knows?

I have no sense of time anymore where the real cold medicine, like proper pseudafed, got put behind the counter. You had to go and ask for it and have to show your license, all this sort of stuff, because the ingredient that actually works was used for meth production. and because it is, you know, pseudo-sudofedrine. I'm probably pronouncing that incorrectly. But, you know, it is sort of a bit of an upper. And the funny thing is, number one, it's no longer using meth production because it's way too expensive. Like they use, like, much more concrete stuff.

There's out meth is like a very sort of flexible sort of drug that could use lots of inputs. The meth wholesalers have gotten smarter as the decades have passed here, unfortunately. But in classic regulatory fashion, we are stuck with this regulation where the actual good cold medicine is still out there, but it's behind the counter. And when that happened, they came out with with Sudafed PE. Now, Sudafed is sort of my, my sort of drug of choice. I think it's essential to have on hand in case the cold comes along. But the pseudofed, P.E use a phenophrine. I, again, I'm sure I'm pronunciation is totally wrong.

I think it's phenolephrine is the way I read it. Yeah, that's probably right. Who knows? But so the story came out last week that, oh, turns out that it doesn't work at all. We've been selling this counterfeit sort of drug. You know, that's the one you can just walk up and buy. Or if you go to the pharmacy at, you know, midnight and the pharmacy's closed, it's all you can get. And that's been obvious. It's been obvious for years and years. It does not do anything.

It's totally worthless. And the funny thing was this was a real sort of chickens coming home to roost sort of experience. where every story talked about pseudofed doesn't work. And they had pictures of suede. Sudafed does work. It's the one that does work. But the reason they called it pseudofed P.E. is they wanted to ride on the coattails of the one that worked.

And so they just added on this P.E. And now they are reaping the rewards of being dishonest of trying to ride along on the tails of the one that worked where everyone says, oh, cold medicine doesn't work. and they have a picture of pseudofed right there. And so their actual brand that does work is now being denigrated. Yes. Well, and P.E., it refers to phenolephrine. So it's their way of slipping it in there and trying to disclose what's actually happening. Obviously to me 20 years ago, it did not work.

It's clearly been garbage all along. So anecdotally, we've all known this for quite some time. It's actually cathartic to get some sort of proof and scientific consensus that over the counter cold medicine is completely useless. And it was useless to me last week. The last episode we recorded about 45 minutes. Oh, no, you're still making this mistake. I'm sorry. I know. Well, the pharmacy was closed. I couldn't get the good stuff. So I had to spend like 1799 on a bunch of useless garbage. And then over the weekend, I read that article in the Atlantic confirming that two professors at the University of Florida have finally their crusade over.

over the past 10 years or so has finally yielded some consensus from the FDA that this just doesn't work. And everyone's been wasting billions of dollars on this for the past decade. In any event, big pharma giveeth, big pharma taketh. I'm here. I'm feeling so much better than I did a week ago. Right. You're not in pain. You're just high. So we'll see all this time. Exactly. I'm ready to podcast. And before we get rolling, this is a free episode of Sharp Tech. Oh, so as a reminder. I started having pharmaceutical takes. Yeah, well, if you're not already subscribed to Stretcary,

you're missing out on a ton of great written and audio content from Ben, as well as daily podcasts from me, the occasional digression about big pharma. We got some hoops. We got China. We got tech, business, top to bottom coverage of chestnut trees, everything you could possibly ask for in the Srotterbury bundle. So there you go. Absolutely.

I'm going to be complaining about the iPhone purchasing process later in this episode. So if you're not already on board, go to the show notes and there are links to subscribe. It's going to be fun the next couple of months. And Ben, as for tonight, I feel like we've done a pretty good job covering the upheaval in the entertainment business over the past few weeks, whether it's the cable providers, the network, the streamers, what all this might mean for consumers. We've covered basically all the bases. There is, however, one giant hole that I want to address before we turn the page on all this.

I still don't have a great grasp on YouTube TV and that piece of the puzzle. So I'll start with two questions here. First is from Joseph. He says, watching games this weekend, I notice that every other TV provider is advertising, subsidized deals to get Sunday ticket on YouTube TV. So my question is, what does this soft rebundling of NFL Sunday ticket mean for Google?

On one hand, Google seemingly is using the NFL to drive subs to YouTube TV, just like DirecTV once did. But the standalone offering complicates the competitive dynamic by removing the requirement that fans switch services. And I include that question just to underscore some of the content. the ambiguity here as to what YouTube's eventual goal is. And then Bob asks more broadly, what does the future look like for YouTube TV? If the traditional bundle is dying, does YouTube TV replace it? Isn't it more prone to churn since it's so easy to cancel after football season?

So what do you think here, Ben? I'll let you take it any direction you want. Well, the NFL Sunday ticket angle is interesting. I think what Joseph is articulating just to sort of expand on the point is it's not a YouTube TV product. So you could imagine a scenario where to get NFL Sunday ticket, you have to subscribe to YouTube TV, which is a replacement for your sort of cable bundle or satellite bundle, whatever might be. This would be a similar sort of. Which is how DirecTV did it for a really long time. Exactly. That's right.

And the difference here is you can get just Sunday ticket via YouTube. And it's served via sort of the YouTube app. It's its own special sort of place in there. and then you can have that in addition to your regular cable bundle that you get from Spectrum or you get from Comcast, Xfinity, or sort of whatever it might be. And on one hand, you could understand the first sort of option if they really want to sort of push YouTube TV. But I think the actual strategic goal for NFL Sunday tickets is they want to build up this concept and idea and sort of marketplace of streaming services within YouTube.

This is something that Google is fairly late to. I think we talked about this when the deal was made. Apple and Amazon have nice little businesses, I think particularly Amazon, selling access to streaming services. And then you access it through their app or their device or whatever it might be. So if you're on the Apple TV and you want to watch Disney Plus, you can subscribe to Disney Plus, the good thing for Apple is then they take a cut of that subscription revenue every month sort of going forward. Same thing on sort of the Amazon side. And so I think Google, you know, they're building up this YouTube marketplace. And the Sunday ticket is sort of like an anchor tenant where this is a big brand, well known.

You go in there, you can subscribe to it and get access. And then that's a reason to get other people on board, whether it be Disney Plus, whether it be peacock, whatever, your streaming service sort of choice. So I think that's sort of a big picture, the reason to do it standalone as opposed to driving YouTube TV. I think though when you zoom out, it's particularly interesting. And Google feels very well positioned for sort of the very long run here. So if we zoom out and leave things as they are today, what is the challenge that is presented in this world of lots of streaming services? It's the fact you have no idea where to find stuff, right? It's like, where do I go?

And yet folks like us can manage it. We're used to looking online and looking it up and then going to the streaming service. It's not that big of a deal. There's huge segments of the population that prefer and are used to and don't want to get away from just sort of going to a grid or going to a listing and sort of getting what they want. And you know what? And just to put a finer point on that, you and I, I mean, look, you're as technologically fluent as anybody gets in terms of you're like the top 1% of the top 1%. But I'm also fairly fluent despite my, you know, pretences on this show. and even I struggle to find like Paramount Plus when it's showing a soccer game or something like that or peacock sports when they have the Olympics.

Like a lot of this stuff is confusing even for people who broadly understand what's going on. And so, yes, at some point, some sort of re bundling and centralized resource would be useful for everyone. Right. Well, this is the key point. It's particularly a problem for sports because the sports you sit down, you want to watch the game right now. And then it's particularly pressing and irritating that you can't. even figure out sort of where to get it. And so this is a problem. You know, I talk about this where things happen in cycles and what's happened before is to some extent predictive of what happens

next, but not completely. We'll get to the not completely in a little bit. But you go back to a world where everything is sort of online as far as text goes and you end up with this abundance of content stuff that you like where you know it's out there. How do you find it? Google solve that problem and Google by solving that problem and because the market was so spread out and was so everywhere, it became basically the front door to the internet. And when you're the front door to the internet, everyone is on your service. And it was on your service. You know what they're interested. You know what they click on. You actually can have a feedback mechanism where your product gets better because more people are using it. And this is sort of how Google's search became sort of so dominant and

extracted all the profits sort of all out of the the text-based sort of industry by and large. Sure. And you can see the landscape sort of spreading itself out for Google once again, where the idea is, you know, and again, we'll see to the extent Google is on top of this, but I can definitely see a world where there's like the Google sports app or there's the, you go to YouTube and there's a sports section. And it doesn't just list what's on YouTube. It doesn't just sort of list what's on YouTube TV.

It doesn't just list NFL Sunday ticket. It lists your soccer game on Paramount Plus. And then you go in just like a grid or it shows you everything. You click on it and says, oh, to watch this, you need to be subscribed. Click one more button. You're subscribed. And Paramount Plus is now getting money. And Google is now getting 30%.

And they're sort of taking that sort of skim off it. And I think there's a real opportunity to solve the discovery problem for video. And Google is well placed to do that. And YouTube TV is a tool in this regard because they will have access to all the sports that are still on linear TV, which is a substantial portion of them. And so I think that's the way to look at it. Is why did they not use Sunday ticket to make YouTube TV differentiated? Because I don't think the goal is to own linear TV. I think the goal or is or at least ought to be to own discovery for video broadly.

And there is no company better positioned to do that than Google. It's not just YouTube TV either. Google has exclusive total control over the largest and fastest growing section of video in the world, which is YouTube, right? Like YouTube is 100% competitive with every other bit of video because the only, scarce resources time. If you're watching a YouTube video, you're not watching something else. So Google is sort of slowly but surely getting control over everything and setting up a scenario where if you have content on some random streaming service that people is hard to find,

you would be silly to not be plugged into whatever Google offering sort of comes along because they will deliver you customers. And it's a bit of a replay of what we saw happen with text 25 years ago. Yeah. Well, and as far as YouTube is concerned, I mean, that's why I'm not taking them lightly as we try to envision what the future looks like because you talk to anybody who's 14 or 15 years old. And a lot of people just sort of get together and like watch YouTube for an entire night on a weekend. And like that's what teens do now. Just wait until Sir Charles discovers YouTube. It's going to blow your time. I know. So like I know that all of this is to be taken seriously. And what I think the source of my confusion though is in our conversations over the

the last couple months, like we've been talking about how the linear TV business is pretty low margin. And there's churn risk for these a la carte streaming services, including YouTube TV, where it costs you nothing to sign up and then cancel it a couple months later if it's not working for you. And so in terms of like their long term objectives for that business, I was a little bit unclear. But it sounds like what they're trying to do is use YouTube TV as a way to slingshot past like Prime Video and Apple TV and some of these other platforms that are currently trying to act as aggregators that can take 30% of the channels that they're selling to people.

And ultimately, Google wants to be that destination. And that's like the next big fight. Is that right? Who knows what Google is ultimately doing? I've been hedging my comments a little bit because to me, this opportunity seems very queer and something they've been building towards it. But Google has been so sort of like slow and scattershot. I'm not crazy for feeling like, okay, that makes me feel better.

But the reality is we could very well look back in five years. And I think we're starting to get the edge of that now and say, actually, they weren't slow. They were very deliberate in really building up access to all video. I mean, YouTube TV, if you have this vision of being the aggregator of all video. and aggregators are ultimately about discovery. That's the key thing. They're not about delivery. They're about discovery.

That is the key value they provide to consumers and the key leverage they get over distributors because they're the only way for consumers to find their content. This is about you control demand via discovery. To execute that, you need access to all the video. And so because of YouTube TV, they have access to all the linear video. So you can have this Google sports app or YouTube sports app and you go in and you find the game and the game is on ESPN. Well, what they can do is present you a sign up form for

YouTube TV. So you can sign up and get it. Apple and Amazon don't have any sort of equivalent. They could theoretically get Hulu Live or Fubo or whatever it is to plug into their service, but there's an extra bit of mediation there. Like these markets tend to work best when you, like Google wants to be the one in the middle. They don't want anything. anyone else in the middle. They want to sort of like cut everyone else off, right? And they're getting to this scenario where the only one in the middle as far as getting your ESPN content, your T&T content or your FS1 content is themselves. It's sort of YouTube TV. You can sign up there. The only one in the middle. And then if you're a streaming service, it's like, well, you know, I want to, I wish customers would sign up for me directly. But the way to do that is I'm going to spend a ton all this customer acquisition costs. And I mean, you know, you use it Facebook ads or you, you whatever it might be, you know, and if I'm plugged into this Google interface, I'm just going to get signups for free because they're going to, they're going to help people know that there's soccer on Paramount Plus. And it becomes an offer that you sort of can't refuse. And this is why I've been so insistent that these entertainment companies are making a mistake and fighting with the cable companies. The way to avoid an aggregator is to establish a direct connection to your customers.

That's the way you sort of build a, you know, and the New York Times is always set as the sort of alternative of a print publication that figured it out. Well, sort of no one else did. And what's the key to their success? It's direct connections with customers who pay them directly and who have the app on their home screen, whether it's to play Wordle or whatever it might be. And it's right there. They're not intermediated by Google. this is this is the way right and and the the the problem is that to execute on this you have to do so much work on the front end as far as customer service as far as building out your service as far as customer acquisitions support all these sorts of things and you have this entire buildup from these cable companies that have stores that have people out in the field that send folks to people's houses and it's very easy you know it's hard to say this sort of delicately. But the reality is, is you and I and probably most people listening to Sharp Tech,

we number one can manage this and figure it out. And number two, people ask, who are these people that are watching TV six hours a day or whatever the average is? Like, I watch a couple of shows or XYZ. There's a whole swath of people that are not immersed in content online, that are not listening to podcasts, that are just watching TV. And that sort of population is maybe not the best equipped to navigate this world that's been spun up by all these college graduates making things very complicated and just go search for it and you'll figure it out there's like there there there's a big market opportunity that cable has served very well over time and that is sort of the broad base everyone's like oh who watches all these shows you know

that these quote unquote trashy show what there are people who watch tv six hours they watch watch those shows, right? And there's a real hole in the customer service proposition of these streaming services that I think cable could solve. And if they don't figure it out, if they don't solve it, and it's probably frankly too late, it's going to be solved by someone in the long run. And that someone right now looks like it's going to be Google. The answer to your, to someone that doesn't know how to navigate this in 10 years is going to be go to the YouTube app on your TV and it's right there. Okay. Yeah. Yeah. Well, that connects some dots for me because YouTube TV, part of what I'm wondering is, like, is YouTube TV profitable at this point?

I mean, it doesn't matter. It's launch. Well, yeah, it doesn't matter to Google, obviously. It's gotten twice as expensive as it was when it launched. It was $35 a month in 2017. It's now $72.99 a month. They're going to lose money on the NFL deal. Although losing money on the NFL deal, I think the value of having Sunday ticket is, it's a signal

to all kinds of normy mainstream consumers that YouTube, is in the TV business and it's not just in the like viral video business. Yep. And that is one hurdle that they're going to have to clear if they want to enter like mainstream households. They need to transition the YouTube brand from being, you know, at home uploaded video to video. Right.

It's just all video. And the NFL can help them do that. Absolutely. And this is, and this is the glorious history of NFL TV deals. I mean, I was, you had that interview with Craig Moffitt last week. Like the transformative aspect of that Fox NFL deal back in the 90s, Fox lost tons and tons of money on that. And it was one of the best investments they made because it promoted Fox from being, you know, a CW type of, oh, I guess I have another channel over the air. Where'd that come from?

What is this? To there's not no longer three broadcast networks. There's four. And for years and years now, Fox has made all this money and retransmission fees from the cable bundle. and they have their shows have been much bigger because they have broke for the NFL. Like there's so many things that are a downstream of legitimization via the NFL. And I think that is the framework to think about the Sunday ticket deal. Now, it's not quite the same because it is Sunday ticket.

You know, the value of Sunday ticket has gone down over time because there's way more national TV games. Back when there was only like two Sunday, you know, there weren't that many games, it was worth more. There was a Thursday night football. There was a Sunday night football. Monday football. I mean, there's been a lot of those. for a while, but also, you know, the, the, in red, red zone, you can sort of like follow sort of, sort of games, right? And, but, but, but I still think it's, it's, it's a big deal. And the idea that by all accounts,

they've delivered a great product that people are super jazzed about, like this, the quad view, and you can actually, you know, they, they broadcast every permutation of four games, so you can sort of, you know, get whatever you want. Part of that is downstream from being an internet company. There's no restriction on what you can broadcast. You're not, limited by cable bandwidth or frequencies or whatever might be. And they're good at it. Yeah, these are the problems that Google solves.

And, you know, the one extra point to make is why this is different. The thing about video is that the, so there's three sort of mediums that you could think about. There's text, music, and video.

Text was like the perfect field for Google because it was fully sort of like, it's pretty highly substitutable so you can sub one thing in for another. The cost of production is very well so there was an explosion in content because online it's not just the newspapers, it's like trajectory, right? There's all sorts of content

online and it both has immediate value and long-term value. Like there's value in articles that were written 10 years ago, 15 years ago, 20 years ago, sort of whatever I'd be. And it was completely dispersed. There was no centralized control. So,

everyone was just sort of on their own wandering in the wilderness and Google can sort of scoop up the entire market. Music was different. Music on one hand has tremendous value because old stuff still has value. Like, you know, why would I want to listen to anything other than 90s alternative, right? Like, you know, there's, you know, music teams, it's been all downhill. That's right. That's right. And so that's over one.

All stuff and Taylor Swift, of course. I'm sorry. Hey, only with my daughter for the record. Number two is there's only three companies already had. all-bolicistic control of, I might have butcher that word, but of the music industry. And so they had negotiating leverage because, you know, don't call it collusion, collusion. They could sort of work together to get a good deal relative to a Spotify, relative to an Apple music. And they have tons of value because they owned all that old music.

So the music played out different than sort of text in a way because older stuff had more value. And also there was only three companies that really mattered. video is interesting because video the back catalog doesn't have that much value like yes people go and watch old shows but the old shows that end up having value are all like from the 90s back when we had a culture that was sort of a more unitary culture and everyone has a link to friends or to Seinfeld or maybe 2000s at the office those shows by and large don't exist anymore in part because of this fractured sort of environment that we're in the more fractured the environment the more the environment the more the environment looks like text on the internet, the better it is for the aggregator. So it's better for Google in that regard. On the other hand, video is very highly differentiated. There's no substitute to the extent there is in text, for example. I'd like to think strategically is highly sort of differentiated.

But at the end of the day, like you can find good stuff to read sort of like there's just a lot of it out there. Message boards. Yeah. If you want to watch, if you want to watch the NFL, there is no substitute. If you want to watch, you know, succession, there is no substitute. So that does give the content providers somewhat more negotiating sort of leverage, but they're sort of highly disparate in the back catalog doesn't have much value. So they have to keep producing new stuff, which is really expensive.

And this is the challenge that all these streaming services are facing, which is the only way they can stop churn is by producing more content. But that's sort of unsustainable. And so it's the cost of production combined with churn that is going to make them susceptible to a Google offer, you know, to live. will help people find your stuff and also ought to spur them to re-bundle as soon as possible because, you know, Disney has to figure out, like, just to go back to Disney for a second. Sorry, this is an incredible monologue. No, no, no, I'm good. I'm enjoying it and following along.

I assume the audience is as well. You said it was the last episode of talking about this. I have to get all my thoughts out before we move on. Exactly. Good. Put it all on the table. I still don't quite get why Disney is going to put. ESPN over the top.

I think it's kind of nuts. Like you, why do you want to isolate the ESPN product and make it a subscribe or don't subscribe, churn or don't turn a decision with one click of a button? Disney benefits from being together with Fox in particular. Fox has a ton of sports rights. They're huge at college football. FS1 is, you know, they see it as a competitor, right? A huge spur for ESPN buying up all those sports rights in the 2010s was fear of Fox.

that they were sort of trying to come in and eat ESPN's lunch. They need a reset. They have to let go of the 2010s. Fox is not your problem. Fox is your friend. Like every other entity that is actually producing valuable content for the winner TV bundle is Disney's friend. And it's nuts that Disney wants to make a product that ESPN over the top

that divorces that friendship. and so they can wander alone in the wilderness and ultimately be gobbled up by Google. Like, Disney is just so stuck in the 2010s. Like they can't seem to accept the reality of where they are. And it's not, and I think the fact they're still, it's not just we're still exploring it's being over the top. Bob Iger's out there. It's definitely happening. I have a date in mine.

I don't really understand why. Well, look, part of your genius is to say, nobody's ever just making stupid decisions for no reason. Nobody's stupid. So if you were to put yourself in Disney's shoes, and actually, maybe you can step back and say certain decisions are objectively stupid sometimes. And you can certainly say that about the entertainment business. But I think they're probably just operating from a place of fear and insecurity right now as they watch the traditional business model kind of go up in flames. And the pivot would be to go over the So it takes sort of an extra layer of foresight to recognize that eventually the tech companies are going to eat your lunch if you go that direction.

And right now they just, they have not made that second leap of logic. Yeah. Well, there is a bit where I am being unfair to the entertainment companies just sort of broadly. You know, the sort of argument is yes, Netflix was taking time away. Yes, Netflix was using their content. yes, Netflix had these great P.E. multiples that all these companies were sort of jealous of, but they should have still stayed with the cable bundle. They should have, you know, TV everywhere might have been a mistake, especially because it wasn't cracked down at all. You could share passwords willy-nilly. So, you know, the real original cord cutting was new household formation, which is young people, basically, that they got Netflix and a password from their parents to watch the sports game if they wanted to, right?

And so that you could say that they should have held firm. They should have said, if you want to watch that hot news show, you're going to watch it at XPM on a Friday night. They should have embraced TiVo. They should have embraced DVRs to a much greater extent than they did. They should have worked together like the record companies did in the music business. But there were also more players at the table than three or four record companies. That's right. There are more players at the table.

And it's probably unfair to what I'm basically proposing is they should have main. a sort of unstable equilibrium. Like you sort of like go to like a game theory sort of perspective. When the bundle was around, that was the only way to distribute video. So everyone was forced into the best business model, even though that business model effectively meant cooperating with your, your enemies, who you were competing with four ratings, for example, right? Disney was competing with Fox. They were competing. They were worried about FS1 as far as sports goes.

That was their, that was their frame of reference. And they were also sort of competing with the cable. providers for who gets what share of the profit that sort of goes through. And as we've talked about, basically the interdemic companies took it all. But for years and years, that was their frame of reference. This is who we're sort of fighting with. The internet comes along. What the internet provided was the option to desert or the option to cheat in sort of like game theory terms, where, you know, the classic sort of prisoner's dilemma is if you sort of tell on your, you know, the other person and they don't tell on you, you get out and they get a worse penalty.

If you both telling each other, you're both screwed. But if neither of you tell, then like you're, you're both in a better position, right? And the, there's a bit here about, you know, when you play the printer's dilemma one time, the optimal option is to always desert. If you play it multiple times, the actual optional way to play is to punish your opponent, where you do whatever they did last time. If they desert, next time you desert. If they stay, next time you stay.

And that's actually the winning formula for the sort of prisoner's dilemma. And the problem for these companies is the advent of streaming was a one-shot game. They don't get a play it multiple times. And so it was inevitable that people were going to cheat. They were they're going to desert. Like, oh, I could get my money in the cable bundle and I could get a streaming service on the side as a treat. Right? And so, you know, the funny thing is Disney was actually,

not the worst. I think Paramount or not Paramount. This is what shareholders wanted, which is part of what was driving a lot of these decisions. Ever look at enough of stock prices? They're using our content. That should be ours, which is a replay. Anyone that's been watching the internet, this has been a replay again and again. Google is the only reason Google is useful is because it's our content. Yes, but the problem is it's your content, broadly speaking, and your competitive position,

relatively speaking, in a world of abundance of content, where the key, thing is discovery means you are easily substituted and you have no leverage. You have the famous examples of Google News being told to charge for Winks and then, fine, we'll just leave the market. And every newspaper is like, no, please come back. We needed the traffic. Where are you going? Right.

And eventually the later laws, they had to mandate Google News stay in the market, which ought to be a red flag that maybe the power in this relationship is not the content providers. Maybe it actually is discovery that matters. And so you had this situation with video where it was a one-shot game. And so the incentive to dessert was very high. And I'm sorry, it wasn't Paramount. It was Peacock. That was the, you know, putting football games on their service. Taking the Olympics, to me, that was a real, like when almost all the popular Olympic sports, every men's basketball games at the title was on peacock. It was not on NBC's channels. Like, what is Disney supposed to do? Be the, like, loser. What I love is that you've been complaining about that particular decision for years now.

So if they were fighting Netflix. Where everyone else deserted actually before they did. And so there was a bit where I can sit here and say, you guys are a bunch of idiots for deserting the bundle. But the bundle to succeed, they needed, everyone needed to stick around. And everyone deserted. You would have had to get the five or six families together at a table and say, we are actually going to squeeze Netflix. We're not going to sell content to Netflix except at like a major premium.

And we're just going to watch them die on the vine. And we're not going to start our own streaming services. Everything is going to run through the cable bundle. Like that conversation isn't feasible because you're talking about six different companies with six different sets of shareholders that all wanted a piece of the streaming money. A lot of whom are family run and are like vanity projects and things on those lines. The Netflix you have to remember was good for them financially. They had all this old content in the vault that suddenly they could make money off by selling to Netflix. And that was actually the ideal endpoint was original content is on cable.

A year later, you can watch it on Netflix. Recycline on Netflix, yeah. But this is where I think it's like that's where they should have stayed. But I think in the like people aren't stupid perspective. it was probably unsustainable. Just the reality of the internet, when anyone owns distribution, anyone can go to consumers.

And again, this is where people complain, oh, you say distribution is free. No, do you know, option to pay Google? Distribution is free. It's discovery that costs money. And, you know,

and so I do think, you know, Google is the best position. Tech broadly is probably going to win this space. When you have this problem of stuff sort of scatter it around and it's hard to find it's a consumer problem or it's consumer challenge. There is an

opportunity to provide a real consumer benefit, which is discovery and easy sort of access. And the long run outcome is you're just sort of a content provider. And you know, I put Disney's Taylor Swift era. I wrote that article a couple weeks

ago and Disney is still better place because they have other ways to monetize. They can build towards these real life experiences, but real life experience is they don't scale like digital experiences do. I think that's just sort of the reality for Disney sort of going forward. Well, and in terms of not taking ESPN over the top, obviously the toothpaste is out of the tube in large part when we talk about like the future of the landscape here.

But it is also pretty clear that eventually the tech companies are going to take their pound of flesh if they're the ones that are acting as like the point of contact with the customer. Right. Disney squeezed out all the profit margin away from the cable companies. So they were basically taking all the margin. They're not going to squeeze. Like, look at the. And so my question is trying to squeeze Apple of their app store margin.

It hasn't gone very well. Is Bob Eiger, when we talk about foresight, does he just lack that layer of foresight? Is he the right person to be making these calls going forward? Not to get all agist or anything. But if you're 20 or 30 years younger, maybe you. see the future of the landscape more clearly than it appears. Iger does as he plans and proudly announces that ESPN is eventually going over the top. Disney for Iger's entire career has been the maker of its own reality.

And not just in the context that they make films and they make, you know, animated movies and cartoons and all that sort of thing. They make an offer and everybody else agrees to the offer. that you know that i recounted that history of ESPN and you go back to iger's great triumphs his acquisitions of Pixar and and star wars and uh you know what was the other one uh marvel which obviously the biggest one of all and they take these properties that were you know valued in this single billions of dollars and increase their value 10fold hundredfold however however i mean a hundredfold maybe a bit strong but they because they are disney they have an apparatus they

have the relationships. They have the distribution. They can go to theater chains and say, look, you're going to put us on eight screens here. Otherwise, we're done doing business with you. Eight screens for a month. That's right. Exactly. And we're going to take 60% of, of sort of ticket sales. And I think it is a challenge for anyone, no matter how brilliant they are, if their entire career has been about strategically making their own reality and dictating to their sort of people in their value chain about the way things are, to even accept the reality that you no longer have power, much less act strategically in that regard. And, you know, the reality is that maybe Bob Eiger, to his credit, realizes what a no-win situation

this is, because any CEO of Disney would be screwed. If you have a new person that comes in and their first order of business is to say, the way we have operated as a company for the last 40 years is no longer valid and we are going to accept a reality where we are subservient to tech where our best friend in the world is Fox. Does a new CEO have the credibility to even pull that off? Like we see this again and again where new CEOs come in and they have to face sort of reality and they get chewed up and spin. out even though they're right. Who's this lame duck? Yeah.

No, that's true. And so, you know, we'll see. We'll see how, what Iger does. There is a bit where, yes, he could actually do a final service to Disney because he has the credibility to actually make what is going to be a very painful transition. But this, the ESPN over the top makes me nervous because it's sort of this world of this is so essential we can dictate to customers what it is and what it isn't. And the mistake that Disney has made all along, that all the streaming service is made all along is not thinking about churn. The issue with subscription, the issue with going direct to customers is churn. Churn kills these models, absolutely kills them. And you need a way to reduce churn. And the best way in this case to reduce churn is to bundle.

Yeah. Well, in parallel to the question, is Bob Iger the right person to be making these. massive decisions for the next 10 to 20 years. I just say he is for the reason I just said. I don't know if he's going to do the right thing, but I think the credibility necessary to do the right thing is so substantial that the only person in the world that has that level of credibility is Iger. That is insightful. However, at the same time, I find myself wondering, how much does Iger regret coming back

a year ago and inheriting this mess? You would have only had people like, you would have only had people like, you would have I've only had people like me saying, yeah, Iger kind of screwed it up at the end there. And everyone else would be like, oh, what a great CEO. And then the new guy would continue to get killed because he would be held responsible. This is what I wrote when Sheapec got shipped out and I ever came back in. I'm like, Sheapec's kind of getting a raw deal here because all he's doing is following what Iger set out. Right?

And then I get to come back and say, man, you screwed this up. It's like, why doing what you told me to do? But it is what it is. well, we said when Iger came back, there's a chance this could be Jordan on the Wizards. And nobody remembers Jordan's time on the Wizards. And I'm sure Iger's legacy is secure regardless of how this ends. But as we close the book, before we move on, I did want to hit this note from Bradford. He had a few good follow-ups to last week's discussion.

And first he said, you mentioned how all of this is going to be great for the consumer. There will be a cost, however. and that cost is going to be new content. Once bundled and at a discount, the overall revenue projections for these streaming services are going to be lower, and in addition, customer acquisition will not drive the insane budgets

and investments in new content we've seen on each new platform. Add to the fact there is all this legacy content from the last 10 years, I think we are going to see a significant reduction in new content, and if anything, as we've seen in suits, a push towards reintroducing audience to older shows, such as a push to repromote the wire or the Sopranos and the like.

And that's a reference to the sensation on Netflix suits, which I'm sure you haven't seen, Ben. But I thought it was an important addendum to our conversation about re-bundling and how it can benefit the consumer. As all these companies start to pay more attention to cost, there is just going to be a lot less new content out there on the market. There will never be a 15-year run of content like there was because all of that was sort of predicated on this this massive push for customer acquisition and that we can acquire all these sorts of folks.

And the truth is the steady state is probably going to be whatever it was before all this insanity happened, which is going back to the late 90s, the 2000s. and there were good shows then. I think the quality would be higher, right? You know, one of the most important shows. That's what I think, honestly. I think we were stretched pretty thin from a content standpoint. And there was a lot of really mediocre content being generated in the name of feeding some imaginary demand on streaming services that nobody was actually watching.

And so long term, I don't want to overstate Bradford's point where there's going to be fewer shows. but I don't know that consumers are going to really, like, get a raw deal on the back end of this because things were already getting pretty mediocre at the end there over the last few years. Yeah, I mean, the, you know, I think one of the most important shows was Mad Men. And Mad Men was important, not because people watched it. Actually, very, very few people watched it, relatively speaking. Walking Dead was sort of much larger. But Mad Men was the first show where AMC really laid out this.

if you create a must-see show, even if the must-see folks are relatively small, your ability to extract money from the cable bundle is massive. And so that kicked off this real sort of, you know, I mean, HBO was first with like the Sopranos and stuff and being back, like reestablishing prestige TV. But prestige TV in the cable bundle led to this explosion and just this incredible string of shows.

And you have things like Breaking Bad and Better Call Saul. And like a lot of these shows that, you know, the Americans on FX or whatever, that really was driven by, oh, look, there's the best extra money to extract sort of in this bundle. Those dynamics, the dynamics of being something that's super great and so I can get a better share of the, maybe if we're in a rebuttal world, that will happen. I think that's the optimistic take, but that world of the 2010s over the last five to seven years where there's like 300 new shows a year or 500 new shows a year or whatever it was,

It's not sustainable. And it's also worse. It's qualitatively worse. The early 2010s, the TV, the peak TV era was just flat out better than what it has been from like 2016 on when shareholders have been demanding more and more content. Everybody has a streaming service and there's just a lot of crap out there. And all that was predicated on the cable bundle. That's the key thing.

It was about winning share on the cable bundle. Once we got to the streaming world, it became. became much more of a volume game and that's where the quality I think really diminished. Yeah, I mean, we're old, so obviously we're going to be biased as regard, but my certain sense, you know, I don't watch a lot of TV, but talking to my friends that do is how many truly memorable shows have they been in the last seven to eight years, not not really that many. And so, yeah, that that's going to be, you know, maybe we'll end up, maybe we'll end up in a better place. But Bradford is definitely right. The amount of content is going to go down.

Yes. And he adds, I'm not sure bundling is going to bring back people who are more comfortable with monthly a la carte payments, easy cancellation, and the in and out approach towards media content that we've seen emerge over the last 10 years or so. It'll be interesting to see if like when newspapers gave away content for free and set customer expectations of free news, it was a mistake they could not undo. And streamers all offer it. month-to-month subscriptions might have been a similar industry mistake, which they also will be unable to undo because customers only want to pay month to month with easy cancellation options. That's another aspect of this economy that I'm going to be very interested to watch over the next year or two, because it may make sense to offer things in like six-month increments where you get a lot of sort of fixed revenue from each customer. here would be the most aggressive thing that Disney could do. And they made me the only company that could pull this off.

Your subscription offering from Disney is you pay $50 a month for ESPN, Hulu, and Disney Plus. Sorry. Let me correct. You pay $500 a year for those three things and that's it. I mean, look, when you put that price out there, you can extract $500 a year from me. but if I'm paying $500 up front, I am going to blink and say, wait, there's got to be a cheaper way for me to do this. You offer $50 a month, but it's with a contract, right? I mean, like, this is where video is different than text.

Bradford is right about text. It was too easily substitutable. If you find one news story about Story X, there's another news story. Maybe you. That's free. That's free. Or news in particular, once the news is out. there. It's on Twitter. It's everywhere, right? The whole point of video is you're not

watching it to get news. You're watching it because it's an experience. It's the cinematography. It's the sound. It's the time occupied if you're bored, right? You actually, you don't want a five-minute experience. Or it's the live sports and the tension of what's happening. This is still a differentiated product. And if Disney wants to preserve their position and value, there's a bit where they might have to play hardball. The challenge to your point is it's no longer playing hardball with John Malone and the cable companies. It's playing hardball with consumers and you're making them mad and you're pushing them to try to pirate stuff and all the sort of issues that sort of that are reality online. But there is a bit and I've talked about this in the context of Shrestecory, right? The customer is not

always right. Of course people would like it if my content was free. I would have way more readers if everything was available. But if you want to make money, at some point, you have to actually run a business. And in the case of Stratory, that means some stuff is free and some stuff isn't. If you want the stuff that isn't free, pay up or be a bad person and pirate. Exactly.

Look, this is a free episode of Sharp Tech. Subscribe to Stratory now. There's a whole universe of content waiting for you. If you click that button in your show notes. And there's attention, right? It's attention. We know we have to have free content to sort of acquire customers. And we want, you know, like anyone who sits on

line and spews out their opinions, we have some sort of like narcissistic view of the value of our takes. And so we want more people to hear and get out there. That's right. Absolutely. Right. And so there is a real tension. And I've always written about this.

There's a real tension in charging for content that is zero marginal cost. But at the end of the day, if you want to make money, you have to actually run a business. And I think the most interesting question is would Disney ever be like, guess what? Disney plus? content is pretty important to you. Your kids love it. You need to pay. But you're not getting it by itself.

Sports content, pretty important. You want it, but you're getting all of it together. And re-bundling, building their own sort of bundle, this would be very risky. But yeah, I mean, this isn't going to work. Let me stop you right there. You would have to charge so much money that people would balk and people would say, no, no, no, I'm not going to, in order to make your money back. and make it a profitable enterprise. $50 a month for all the SPN content, Disney Plus and Hulu.

I don't think that would be enough in order to make it profitable long term. And if you're charging $50 a month, I don't think you're going to have an audience big enough to spread the cost across in order to make it work. So even $50 a month, I think is probably too much. But that's also not enough for Disney. So I just, I think they're much better off. You're just making assertions out of thin air because you're just appalled up the idea of taking $50.

No, because I'm thinking of myself as a consumer. I'm going to resent it. And to Bradford's point, part of it is because of the way they've set my customer expectations by entering all these markets with heavily subsidized products and all these cheap prices. Why can't you? Why can't you go back? Why not? What do you mean go back? Go back to what?

Reset consumer expectations. Heavily subsidized. No, reset consumer expectations. It hasn't really worked. It hasn't worked for newspapers outside of the New York Times. I think that's the point is it's going to be really thorny to try to, you know, Disney content is highly differentiated. There isn't a substitute.

Maybe. I don't know. I don't know that I buy that they'll be able to extort people for quite that much money going forward. It's not extorting. It is, in Netflix's words, charging people for the value that you're providing them. Well, I'll say this. If Disney wants to retain their position of Kingmaker, of dictating the world to the way they think it ought to be, this is the only way to do it. If they want to keep going piecemeal and sort of like, oh, here's here and here's an ad free version, X, Y, Z.

You don't think the ad supported if they go to like $1.99 for ad supported and try to have a billion and a half customers. You don't think that's a more viable path than trying to do it at $50 a month and have. Do both. Do both. You'll make your ad-free product very attractive if it's $50 a month for the ad-free ones. Okay, well, you heard it here first. They can do both and the ad-supported product will work better. Their leverage is slipping away every single day.

At some point, they have to decide, are we going to actually use it and reestablish our dominant position in sort of the value chain? Or are we just going to meekly go the way of, are we going to be the New York Times? are we going to be the Wall Street Journal or are going to be every other newspaper in America. We talked about

the teenagers, my son Charles, you know, they're going to grow up not giving a shit about any of the stuff that Disney's producing because they're all living

on TikTok and YouTube. Oh, so they should just lay down and just accept their long-term demise. Honestly, no, I don't know. And this is something only Iger could do.

If Iger wants to make a mark, rebuild the bundle and say the bundle is Disney. And guess what? We're going to end up with maybe not as many Disney X, you know, Disney plus subscribers you have today. We're going to have like 50 million subscribers in the U.S. And oh, guess what?

We're actually making real money. And if you want to, you know, and we actually have revenue now to acquire other content. And there's going to be only a couple folks left standing. It's going to be Netflix. It's going to be us and all the rest of you. Good luck with your 599 streaming packages that customers churn out if they watch the one good show that you have. Yep. Well, we'll see what path.

they choose. And I wanted to note, Blake says, while listening to the most recent episode of Sharp Tech, I couldn't help but be reminded of Goodfellas when Ben discussed the NBA turning to tech companies. In this scene, Henry Hill explains how the mob extracts every last bit of value from their partners until everything is dried up. Then they just light a match and move on. I often think the biggest difference between Ben and Bill Simmons lies in the pop culture references that help connect the points for a broader audience.

So that prompted how, if you started just peppering your strategy articles with random pop culture references, how long do you think you could do that before people realized it was a bit? Well, I was at our, you know, cigar night a couple, a few weeks ago. And I was accosted by one of the members saying, like, look, I've been going to.

stadium concerts for 30 years. As you lists all these amazing bands you've seen, how do you get off saying Taylor Swift is something special? It's very irritated. It's very fair. And I had to explain my point was, you know, in this ecosystem, the internet's lots of concerts. No, that's not true.

I've been to a lot of great conscience in my life. I think the difference is the fractured ecosystem where anyone that rises above, now it has actually made him happy. I'm like, the whole point is anyone, that breaks through today ends up more popular than they would have in the past because they get these feedback effects where everyone just wants something that's popular. They want Seinfeld in the 90s. They want friends in the 90s. And there's nothing in pop culture sort of filling that void of something everyone can sort of congregate around. And that made him happy because it was

implicitly diminishing the value of the Taylor Swift experience. But the reason I bring that up is because that's about as far as I could go as Taylor Swift. And I get killed for it as is. So yes, Bill Simmons can retain the pop culture crown. I sent this question to him. That's his corner, Bill would say. Yeah. No, and it's good. It's a good stick for sure. I'm just stuck here with the nerds and talking about my bags and my cords. So it's all good. No, but listen, good save with your buddy at Cigar Night the other week. That's why you're a professional bloviator paid the big bucks to just talk in perpetuity. Let's close with Misha says, I previously wrote asking for your takes on the worst acquisition of all time, Mount Rushmore,

which ended with Ben skewering Steve Balmer. And just as an editor's note, that was a Christmas episode like six months ago. It actually ended with Ben saying that Steve Balmer deserves a statue like Michael Jordan has outside the United Center to commemorate all of his horrible acquisitions when he was running Microsoft. Just want to make sure we all are on the same page with that one. And he continues and says, I just thought of a different question within a similar vein. What are some of the biggest fumbling of the bags in the history of tech? I first thought of this because Clubhouse recently pivoted and at one point Twitter was ready to buy them for $4 billion, but Clubhouse said no. They won't sell for anything close to that now. Facebook tried to

buy Twitter multiple times and Twitter said no each time, but I bet if they had sold in 2010 and gotten Facebook stock, everyone involved would have done better as Facebook now has a $700 billion market cap while Twitter slash X is a massive write down for Musk. Do you have any other nominations that come to mind in this category? Ben, do you have any nominations for Misha? Well, there are some like classic examples. I think Microsoft turned around Yahoo is one. Although, the Microsoft people that were behind that would say that included the Alibaba stake so actually it wasn't as bad as it looked. Microsoft offered like $44 billion or something like that. Google tried to buy a Groupon.

I have sort of way back in history here. I think that Yahoo, I believe, bailed on buying Google. Like they tried to lower the price by a billion dollars or something at the, sorry, $100 million, some very small number. They got cute with it. And that was obviously one of the greatest misses of all time. Whoops. But I think there's a whole category of ones that are interesting in this one. Like people used to always talk about, oh, look at how brave Evan Spiegel was to turn down Facebook for sort of $3 billion.

And, you know, for a long time, that looked sort of very stupid because Snap was sort of worth a lot. Snap is, even with all its troubles, is down, is still worth $15 billion. It's like, oh, well, you know, that's a good example of someone turning it down and sort of doing better. the problem is that Facebook has done much, much, much, much, much, much, much, much, much, much better since then. And so the equivalent of $3 billion of shares of Facebook would be worth drastically more than what Snap is today. I think this is the reality for a lot of these turned down sort of acquisitions and, you know, it just speaks to the dynamics of how powerful these large companies are. What makes them so powerful is they, and useful and actually beneficial, is they take technology and disperse it, what's the word I'm looking for? It's not dispersed.

But they diffuse it. They diffuse it to billions of people overnight. And so there's an aspect where, yeah, it's, you know, and this is a danger as far as sort of innovation and benefits that comes from some of the sort of antitrust crusaders where. there's a big difference in saying, oh, this company needs to stay independent and needs to go it alone because they could rise up and be a new company. Even in the best case scenario, that product and that company is going to take 10 years, 15 years of very long time to reach sort of the entire world. And rarely they make it that far. They hit a wall.

Whatever thing happens, their valuation diminishes. Whereas if they were acquired by a large company, like a Google or a Facebook, whatever might be, that product innovation is available to consumers immediately. And it makes sort of money sort of right away. And so there is a lack in the discussion of sort of like a discount function on innovation diffusion, which is there is value to consumers and to sort of the economy broadly to this stuff being diffused faster rather than slower. And it's generally for the same reason it's much more profitable. for a lot of companies to be acquired in this way because the stock, the value of their product is going to be much higher in the distribution of the large companies.

Now, I'm not dismissing the question of concentration, all these sorts of pieces. So I can't resist pointing out that Google is currently subsidizing this disruptive force that is helping to upend the entertainment business. and as we've discussed over the last couple weeks, is going to be worse for literally everyone in the value chain, including customers but also creators, all these different content companies. And we've talked about on this episode, it doesn't really matter whether YouTube TV makes money

or whether YouTube, we don't even know what YouTube's financials are. And so it's just one benefit of having monopolistic profits over here is you can then shift the money over here and end up disrupting different sectors of society. But that's what came to mind. What kind of profits? Well, I said monopolistic profits.

Another search is it is just to click away. No, I mean, you're tapping into the whole, the whole sort of tension here. Because on one hand, you know, you know, yeah, by the way on YouTube, good call on the financials. We get the revenue and not the costs. We don't know it's profitability. No idea.

I can't believe it's allowed to. It's not. Against SEC rules. This is a major division that reports directly. Now, the way Google got around it previously was that Larry Page was the CEO and Sundar Pachai was in charge of Google and YouTube was under Sundar Pichai. There is an SEC rule that says that a division of like YouTube's stature that reports to the CEO has to report his financials.

And when Sundar Pachai took over as CEO, they started releasing YouTube's revenue, but they still haven't released its cost and its profit. And I think it is in violation of SEC rules. And it irritates me that that they're getting away with this. But anyhow, that is an aside. So, but yeah, this is a real tension, which is, you know, okay. Yeah, it's fine. Ben. Search is a quick away. In reality, if you're a video creator, are you going to post your videos in rather than YouTube? No, of course you're going to go on YouTube. If you're a consumer, you're going to know YouTube because that's where all the content is. And there is this reinforcing mechanism, which I call aggregation, which is you get effectively monopoly type power, but it's such a problem

for regulators because it's not controlling the pipes. It's not controlling distribution. What it is controlling is individual consumer preference made en masse. And so you're trying to regulate consumer behavior. And so beyond the fact that it's not a monopoly in the traditional sort of sense of the word in any sort of way, the regulatory solutions are only going to make it worse because you're trying to, the way I always put is you're pushing on a string. Like you were saying, oh, we needed to control the pipes better.

If the consumers are choosing the pipe, what you're actually trying to do is consumer, regulate consumer behavior. We see it again again in Europe where they come up with these things, oh, this choice screen is like a favorite thing. And the consumers just choose what they had before. This is sort of the question that issued the DOJ case, which is, you know, and this is sort of The question, why is Google paying Apple all this money if everyone's just going to choose Google anyway? And there is a bit about they don't want to avoid any sort of weak.

It's just clearly worth it. And the fact that these payments to Apple exist is some evidence that consumers might or Google's worried consumers might choose differently. Well, it's also a testament to the power of Apple, frankly. It's like Apple's the one entity in tech that's even more powerful than Google because people are just going to search on whatever search engine Apple presents them with. Yeah. The only entities that can check tech companies or other tech companies, that's just sort of, and, you know, and again, this is not to say this is good or, or doesn't have major sort of issues. I think the answer, broadly speaking, is more openness, more freedom, more alternatives. I think we have, we should have more guarantees that things will not be

limited or filtered or censored on the distribution level. I'm actually in favor of the DOJ lawsuit in this one, as I wrote a couple years ago, I think the fact that Apple and, you know, I think this ability for these dominant players to contractually lock this in is problematic. You know, let Google win by consumers choosing them. I am admittedly on somewhat shaky ground legally because if why can't Google sign a deal?

Microsoft could sign a deal. Are we outlawing deals, right? Like, and this sort of gets to the same idea of YouTube TV presumably running out of loss or barely break even. do we really want to outlaw companies making investments in the assumption of long-term profits? That's literally how new things get built. And so, you know, so I'm very wary while recognizing the problem, the instinctual grabbing for tools that don't apply and don't make sense and make the problem worse, I am more wary of because, and I say that recognizing I don't have a neat, tidy solution sort of in the other direction.

Yeah, no, and I just couldn't help pointing out as you talk about the value of acquiring some of these smaller companies and then bringing their disruptive technology or revolutionary technology to a market of two billion people overnight and the social value of that is there are distorting effects on some of the other elements of the economy that have to be considered with all of this stuff. Well, this is something like Slack's complaint about Microsoft, you know, in sort of teams is like they just bundled it in and we had to actually excel it directly and and that is it's true that was a big problem it was also as i've written the case that all microsoft products sort of

kind of work together which is slacks is for the normal person who's not in a tech company is a pain to sort of get integrated with with other stuff relatively sort of speaking especially you know a few years ago when this when this really mattered and so yeah i'm sympathetic to the point But one of the other bits is the reason tech wins is because they solve problems for people, right? Like this, we have a problem in streaming of stuff scattered everywhere and you don't know where to find it. And to the extent this Google sports app I'm talking about is success, it's success because it's solving a real problem people have. And what you see in market after market is you have an alignment, a coalition of the biggest tech companies and consumers. and they're actually on the same team

and their power stems from each other. And the ones that are stuck are the content providers, the ones that are sort of in the middle. And you see this, I think the sort of new brandies sort of like antitrust folks, I might have mispronounce that,

whatever are all about this. Oh, the problem is they want a shift to antitrust being based on is their competition in the space or not. And it's necessary for them to denigrate the consumer welfare standard, not because just because the consumer welfare standard

it has in their view been abused over time, but because they do want to make it worse for consumers, at least in the short term. And their argument is, yes, competition in the long run will produce more innovation will be better for consumers. That is a statement that requires some examination, number one, and number two, they have to denigrate it

because they want to, the reason the big tech companies win is because consumers prefer them. Yes, well, another reason that the big tech companies win is because they're also at this point, working with massive advantages that they have earned by being the best in their given category. But like when Apple introduces something, it's much easier for it to succeed because billions of people already use Apple products. And on that note, I want to close with this.

My final big tech complaint, not that I've had that many big tech complaints on this episode, but as part of our efforts to reach carbon neutrality by 2030, iPhone 50, Pro and iPhone 15 Pro Max do not include a power adapter or ear pods. Ben, I was so excited to buy my iPhone 15 Pro last Friday. I bought it at the opening bell with you and a couple other nerds in our nerdy tech group chat. And I was feeling great. And then I read the fine print and hear that in the name of their carbon neutrality push, I'm getting stiffed on a power adapter or a USBC pair of ear pods.

It is absolute nonsense. And as apathetic as I was about their stupid YouTube video skit that they did with Mother Earth last week, I am now completely pissed off at this bullshit from them. And I just needed to state it for the record. I think it is incredibly lame that they are not, including a power adapter and my beloved ear pods in the iPhone that I spent $1,200 on last Friday. In my view, you should be grateful that USBC AirPods even exist. Apple would actually be doing you a favor by forcing you to go to AirPods.

So I have, you know, I'm just dragging me into the future, kicking and screaming, huh? You know, call you Bob Eiger. But yeah, somebody needs, you know, needs to set you straight. And maybe it needs to be big tech. I think that's sort of my takeaway. Oh, boy. Well, Tim Cook, you're on my list. But I'm still going to enjoy my iPhone 15.

I do think that I think it's reasonable to stop shipping the power adapters by and large. People have one from their old phone. Like that's, you know, power adapters, especially the Apple made ones, which are high quality. You don't go anywhere. You should get the anchor ones, which are better. But if they're changing the, if they're changing the port. where, you know, until a couple years ago, they've been shipping a USBC

and in power adapter that goes to a lightning cable for two or three years. But people don't always upgrade their phones every year or two years. The previous ones were USBA to lightning. And there's going to be folks that still have that. I feel like for this transition, it might have been reasonable to include a power adapter.

But again, it's actually better because there's a new sort of technology Certainly more profitable for Apple. No, no, don't buy an Apple. No, don't buy an Apple power adapter. There's this new technology called GAN. It's capital GAN, it's some chemical term. But basically you can get much more high powered charging from a much smaller adapter. Now, again, I think you should be careful buying adapters generally.

Like that is the one piece that can start on fire. Yeah. No, no, I think it's more about your house burning down is the issue. I personally, like a lot of nerds, like Anchor, products. They have a nice small adapter that is the same size as the traditional iPhone adapter. It just charges your phone like four times as fast because it uses this sort of new technology. So Apple is saving you from yourself. They are giving you an opportunity to buy AirPods and they're letting you buy a better charger. So you know what? I think you should be thinking Tim Cook,

not dead. You know what? Mother nature had it right. Well, yeah, that's right. Well, a perfect note to end on. we'll come back later in the week. I'm glad we could close the book on our cable bundle month here. A lot of news the last couple of weeks. And we'll come back with a non-cable episode. If you're not subscribed, subscribe now. Maybe. I mean, it does feel like we've overdone it to a certain extent.

But this is, we only go through these transitions like once per medium. And video is the biggest medium of all. Like it is a huge deal. And this is something that occupies our. Hours and hours of people time. And look, the strike could end in 24 hours. There's going to continue to be news on this front as we go here. So no promises in terms of the content for the second episode this week.

However, I look forward to coming back. We've got a lot of good mailback questions to hit. And Ben, until then, I will talk to you soon. Go listen to greatest of all talk. A little tough love for Janus at the top of this week's goat. So look forward to that. and we can circle back later in the week. Sounds good.

I'll talk to you later.