The Best One Yet - ✏️ “Mr. Beyonce taught me Bitcoin” — Jay Z’s Crypto Academy. Spotify’s podcasting double-dip. Permian Basin’s whispering oil.

Episode Date: June 13, 2022

Spotify just revealed the financial numbers behind your podcast listening, so we’re whipping up the Takeaways for ya. Jay Z and Jack Dorsey just partnered for a Crypto Academy in a Brooklyn housing project. And since gas just hit a record $5/gallon, we’re looking at the Permian Basin, the profit puppy of American oil.$BTC $PBT $SPOTFollow us on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Monday. Welcome back, June 13th. And today's pod is the best one yet. TV Online. Here we go, Jack. You know how you kick off hot pod summer?

How do you do it? You'll meet me in New York City. I will see you there tomorrow. Where are we going to go? I'm very excited about this week's business trip. Nick and Jack in New York, very popular. Make a left of the flat iron. I've got a pizza bagel with your name on it.

For our first story, Spotify, just told us for the first time how their podcast business is doing. So far. unprofitable. You're listening. Yeah. Spotify's not making money. Second story. What do we got, Jack? Just as gasoline hits five bucks a gallon, one oil company's stock is doubling. Permian Basin. They don't celebrate profits. They whisper them. Third and final story, Jay-Z and Jack D. They're opening up Bitcoin Academy in Jay-Z's Brooklyn Housing Project. The biggest bubble in crypto isn't crypto. It's celebrity. But before we hit that wonderful mix, Nick, perfect mix to kick off the week, although I'm scared about this intro, Jack. It's hoarders

Almanac, week 115. Things we're running out of because of the pandemic. Jack and I have been keeping track for you. This week hits close to our bellies. Besties and Yetis, we are running out of Saracha. Nick introduced me to Saracha in 2010. Red bottle,

red sauce, green cap. What we have on our hands is a topping travesty. I think I said, Jack, just put out your hands. You can put this on anything. It burns. Oh, it burns. Jack, this actually is the biggest condiment crisis since the Great Mayo mixup of 78. Here's the situation, besties and yetis. A drought down in Mexico means we've had a very weak pepper harvest this year.

No chili pepper, no chili sauce. So for the first time in 42 years, the rooster sauce bowl, cock a looodle do. Yeah, and guess what? No shipments until this fall. If you have a bottle, yeah, you need to make it last six months. And because there's no substitute for a syraccia, your bodega is getting bombarded. People are hoarding hardcore, which makes the shortage even spicier. But remember, Yeti, Saracha, it isn't just a topping.

It is a tradition. For what is love without hug? Or Jack, what is a ramen without the racha? Romeo did kiss Juliet on her lips. But does Saracha not embrace your burger with the same love? If you can't chili paste the pizza, why buy the pie? Besties, if you've got a bottle of the sacred sauce, cherish it. Cherish it.

Relish. Brewster. Let's hit our three flavorless stories. Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm. That's it. I don't even think they need to practice. 50% that's a fat tip.

Tea Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more, so just start the show. Start the show. For our first story, Spotify, just revealed financial and financial. about its podcast business for the first time. Wondering how much money Spotify makes on your podcast listening? We were very serious.

None. None. None so far. None. But we're going to whip up the numbers for you. First, Spotify's big annual investor day. Feels like a missed opportunity, Jack. Well, I think they should turn the whole thing into a podcast episode.

I was going to say it should be a concert, but I like the way you're thinking. Podcast episodes a little more feasible because Spotify has two buckets of listeners. Yeah, they do. What do they got, Jack? Music listeners and podcast listeners. But they've never separated out the pod listeners from the music listeners. Until now. So we're going to walk you through the numbers in Spotify's podcast business because we just saw them for the first time.

All right, Jack and I jumped in Tebowis now. We were super curious because you guys listen to podcasts. We thought you would be too. One third of Spotify users listened to a podcast last quarter. That's about 125 million people potting while driving or potting while driving. or potting while squatting like you. But here is the thing. Podcast, that is an upfront investment that Spotify had to make, like a Tesla factory.

Right. Like Tesla building a factory, it's not going to turn a profit right away. You need to run that business for a while before it starts baking the goods. So they've made the upfront investment at Spotify. They've invested over a billion dollars into podcasts. A lot of money. They spent $200 million on Joe Rogan, $60 million on Call Her Daddy, a Bill Simmons, Anchor, Megaphone, a lot of acquisitions the past couple of years.

Which leads to the big question, Jack, is Spotify making any money on that big upfront investment? Well, they are making money in the revenue sense. They brought in $300 million in podcasting revenue in the past year, which is quadruple the podcasting revenues from one year before. So it sounds nice. It's just hidden those really nice notes, Jack. Quadruple sounds really nice, but that's an unprofit. profitable 300 million.

An unprofitable quadrupling. Yeties, all that money that Spotify has brought in from podcast ads is smaller than what it just spent on actual podcasts. Music, on the other hand, is profitable for Spotify. Spotify makes a 30% profit margin on every Mariah Carey stream. But Spotify put out this data last week because they believe long term that podcasts will be more profitable than music is. Because here's the deal, besties. It's kind of a secret in the whole audio business. Every music track you stream, Spotify has to pay the record label. Right. The musicians

and their record labels, they own the music. They merely license it out to Spotify and give them permission to stream in exchange for royalty payments. Enjoyed listen to hot and cold, but, you know, Katie Perry's going to get paid each time. When you listen to a podcast, however, Spotify doesn't have to pay anyone. Cough, cough, cough, kind of awkward here, but pods are self-minded. But pods are self-mise. monetized through ads, not through Spotify paying royalties. Right. So Nick and I don't get paid through Spotify. We get paid through the ads in our part.

We're fine with it. We're doing great. And that's why Spotify is so pumped about podcasts compared to music. They don't have to pay anybody. And that's why they keep pushing you pop-ups to urge you to try out other podcasts. Don't worry. Jack and I won't judge it. We noticed you loved your listening to music.

Why don't you stop listening to music and listen to Nick and Jack instead? It's not cheating. We know you'll always come back if you try another podcast. In fact, compared to music, Spotify believes that podcasts are the ultimate audio profit puppy. Which feels like a takeaway moment. So, Jack, what's the takeaway for our buddies over at Spotify? It's the double dip.

That is why Spotify loves podcasts. Yeties, when you listen to podcasts, Spotify doesn't have to send a royalty payment to the host like it does with music. So there's no cost to listening to a pod on Spotify. Oh, and Spotify gets to insert ads into the podcast that it owns. That sounds like a revenue for Spotify. Oh, and many more people even pay Spotify subscriptions to listen to podcast too. Sounds like a second revenue for Spotify.

So music, it's a tough business for Spotify to turn a profit in. But podcasts are bringing in ads and subscriptions with no cost to Spotify. That is a profit double dip. For our second store, Jackie, you're wearing the undershirt again. I know. There you go. Twice in a week. You don't go with it, roll.

This is a fashion look. I'm actually, the shirt's open. It's called fashion, honey. For our second story, $5 gasoline has doubled the stock of one particular company. Permian Basin. Permian Basin, because energy companies, they don't celebrate their profits. They whisper them. Not a fun opener here.

Highest inflation in 41 years. Okay, Yeties, the price of stuff you buy jumped almost 9% in May, a record jump. Yeah. The main driver of that is your energy. bill. Oil and natural gas is 35% more expensive in May than it was May of last year. And since we started sanctioning Russian oil, gas prices, they are a poppin. The result? Five bucks a gallon or like 200 bucks a tank if you drive a pickup truck. If you don't drive and you think things are easy for you? Wrong. Yeah, you're paying for this

high gas even if you don't drive because everything is more expensive. All of us are suffering from this record high gasoline except for one. industry. Except for oil and gas. They are loving every minute of it. Exxon mobile and Chevron. Their stocks are up about 50% each this year, while the rest of the stock market is down big. But Jack and I, we were curious over the weekend. So we jumped in T-Boy's style and we found one oil and gas company that is doing twice as well as the big players, Exxon and Chevron. Permian Basin Royalty Trust. Permian Basin Royalty Trust, which you may know from the movie like Friday Night Lights.

Permian High School, right? You're from Midland? You're from Midland? Midland is in the Permian Basin, which is a geographical area in West Texas. It's 86,000 square miles that is extremely rich and soaked with oil and natural gas. So, look, if you want to have a fun Monday afternoon, go to the Permian Basin Royalty Trust website because it's like a nature show. It's a really low-key website, but it includes images of seashells like a conk and a whelk.

What is a whelk? It's the second most recognizable seashell. I had to look it up. I got to go to the shore more off. It's like an Ariel situation. I think I can picture it. It is. And they're called fossil fuels because they are fossilized,

buried remains of plants and animals from like way longer. Yeah. Hold on to your Jurassic Park hats, besties. Remember, gas and oil comes from the remains of plants and animals over billions of years. Right. And after billions of years, those plants and animals become fossilized. And now they're oil. and gas sitting under the earth waiting for a straw to get stuck in there.

Which is getting extracted from this Permian land over in Clark County, Texas, which becomes profits for this Permian trust. We looked at the earnings report. Royalty income for this trust has doubled in the past year, and so is the stock price. So, Jack, what is the takeaway for our buddies over at this Permian Basin Royalty Trust? Energy companies don't celebrate their profits. They whisper them. Most companies, they party, they boast, they pop the champagne when they hit record profits,

but not oil companies. Because oil giants know that their gain is consumers' pain. Yeah, so their profits are the least popular of all. Oil profits are so unpopular that in the United Kingdom, they just passed a special one-time tax on oil profits to pay for a special one-time check to all Britons to pay for their energy bills. Before you get too excited, that's unlikely to happen in capital. America. But energy companies still keep their profits on the down low.

Oil companies are whispering about their record profits right now. So shareholders can celebrate them quietly. Yes. And now word about our sponsor, Robin Hood. Nick and I got to know Vlad and Bayjou, the co-founders of Robin Hood when we worked there for three years. And there was this one business principle we heard from them. And we just, we honestly loved it. A, B, L. Always be launching. Always be launching. That's what keeps customers engaged. It keeps investors happy. And it keeps competitors kind of concerned. Always be launching is also consistent with Robin Hood's mission to democratize finance for all. Yeah, not just stock trading. Also options, crypto, spending, wallets, and more. They launched a lot of stuff. And that's something we heard. We saw and we adopted. Yeah, this week, we relaunched the podcast as the best one yet and launched a video pod right here. More to come. If you're not on Robin Hood yet, want to get started. Go to

Robinhood.com slash T-Boy and choose your free stock. That's Robinhood.com slash T-B-O-Y. Certain limitations apply. All investments involve risk. Robin Hood Financial LLC, member SIPC. By the way, Robin Hood is no longer affiliated with us or this podcast. For our third and final story to kick off the New York week, Jay-Z and Jack Dorsey are opening Bitcoin Academy in Jay-Z's old Brooklyn neighborhood.

This says us asking. What happened to all those celebrity crypto commercials? All right. So Jack and I, first of all, congrats to all the graduates out there, recently graduated, Yetis and Basties. This is an educational story for you because this year, Jack Dorsey and Jay-Z are teaming up. They're launching a financial education course called Bitcoin Academy. Now here is the really interesting key. It is only available to residents of Marcy houses in Brooklyn, the housing project where Jay-Z grew up. If you live in that housing project, you can enroll in a class sponsored by Jay-Z and Jack

40. Pretty cool. Yeah, Jack and I jumped in T-boy style. Here's the curriculum. Two times a week, now until September. This is a summer school focused on finance generally, as they put it, and Bitcoin specifically, as they also put it. It's online or in person. They provide meals if you show up in person. And they're giving all enrollees a fraction of a Bitcoin. Yes. A Wi-Fi device called Mi-Fi to make sure you can connect to your wallet. There we go. And a smartphone if you need it. It is like a crypto happy meal. Where do we sign up. Now, they hope to expand this financial education course beyond Marcy Houses in the future

if this goes well. So honestly, Jack and I are kind of torn on this. And we're curious what you yetis out there think too. Because this is basically content marketing. Yeah, like the content, it feels really wholesome, but the marketing, it feels kind of icky. Right. On the one hand, they are teaching financial literacy, which is fantastic because financial literacy is probably the biggest hole in American education. You did like three years of calculus with cosine. but you learned zero about what a budget is. Yeah, how much trigonometry have you used since high school? Mortgage 101.

That should be a freshman year class. Right. And Bitcoin Academy has some useful sounding courses. For example, one teaches you how to spot a crypto scam so you don't fall victim. That's great. I'll kind of use that. On the other hand, though, this school is kind of a crypto marketing immersion. Yeah, according to TechCrunch, the emphasis on this curriculum will be that Bitcoin is your

path to financial freedom. is sponsored by Cash App, the FinTech app that is owned by Jack Dorsey's company, Block. So financial education for free is great. Fantastic. But is investing in Bitcoin the smartest advice to give people who live in a housing project? It's definitely the smartest advice from Cash App's perspective. So, Jack, what's the takeaway for our buddies over in the Bitcoin Academy? The biggest bubble in crypto is the celebrity credibility bubble.

These days, celebs are promoting crypto more than they promote. about cars. Nick, never forget Matt Damon's commercial where he basically challenged all Boston based dudes to be brave by investing in crypto. And then that was one-uped by Reese Witherspoon saying crypto is here to stay in another ad. Gwyneth Boutro promoted Bitcoin by giving them away. Tom Brady still got laser eyes. He's rumored to be moving to Miami, Bitcoin's capital. Naomi Osaka. Larry David. Every celebrity is telling you on TV to buy crypto. And they all did these ads, promotions, these giveaways when crypto was at all-time highs. But now, with Bitcoin about half of its record high, all those celebrities are much quieter

this year. Yeah. Now, so Jack and I, we absolutely respect Jay-Z and Jack Dorsey's consistency here. Yes. Even though crypto prices are down, they're still taking action because they believe in it with this Bitcoin Academy. Yeah, that's fantastic. But Bitcoin is down this year. Celebrity's credibility on crypto is down even more. Jack, can you whip up? the takeaways for us to kick off the week. Right now, music is profitable for Spotify. Podcasts aren't. But the podcast double dip? That is why Spotify loves podcasts. For our second story, gas prices hit $5 a gallon for the first time. Oil companies aren't celebrating record profits. They're whispering them. Yes. Yeah. For our third and final story, Jay Z and Jack D. They're offering free Bitcoin

education in Brooklyn. The biggest bubbling crypto is celebrity credibility. Now time for the best fact yet. This one sent in by Eddie Scott in Austin, Texas, which is based on the edible burrito tape challenge we had last week. Yeah, we asked, is there a better invention of 2022 so far than edible burrito tape? Okay, we will announce your inventions tomorrow. But for today, Eddie just had a good one. We want it to whip up. Here we go. Let's do it. Hey, Nick and Jack. My name is Eddie Scott from Austin, Texas. And I think I may have found the best invention of the year. It's an Austin-based startup called Free Water that is looking to end the global water crisis.

They make recyclable metal water bottles covered in so many ads that the advertisements pay for the price of the water and cover a 10-cent donation to charities building water wells across the world. The water bottles truly are free. This is brilliant. Brought you by AT&T!

What do I got it do to get you into this H2O? It's a brilliant idea. I think this is really smart. Honestly, no who would love this? Spotify. Oh, because of the ads? Yeah, because of the ads. That's a triple dip.

Besties and Yetis, you look fantastic. Jack, you look great. I'll see you tomorrow. Thanks for accepting my undershirt. It was pressed like a fresh panini. H-Y-H-T-B-L-O-Y. Have you had the best one yet? Nick and I'll see you tomorrow.

If you know, you know. And before we go, congrats to Yeti Mary Martz, who just started a business in Lagos, Nigeria. And Maria Ocampo passed the Series 7. A brutal exam, Nick and I have today. too. It's awful. It's awful. Out on Long Island. And Lauren Rothenberg just moved to San Francisco. We'll see it soon. Congratulations to Carthick and Aisha, who is celebrating the anniversary of their

engagement in Hartford, Connecticut. And Mark Vincent II tossed that graduation cap over at UC Riverside. And congrats to the whole northwestern Kellogg MBA class, a fine institution. Shockful of besties and yetis. Middy down in Seattle, happy birthday. And happy birthday to Max Labyak and Colt's Neck, New Jersey. And Aiden Johnson, turn in 15 in Jacksonville, Florida. Happy birthday, Tiffany Albrow in Traverse City, Michigan. And Tomlin and Kevin, enjoy that well-earned vacation by the Gulf of Mexico. And to anyone else celebrating something today, making a T-Block.

Celebrate the wins. This is Jack. Nick and I both own stock of Block, Spotify, and Robin Hood, and we both own some Bitcoin. And now a word about our sponsor, Robin Hood. Funny little thing about the Robin Hood logo. look at it right now. Most people, you just see a feather. Robin Hood's feather and a cap. Pretty classic. But it also looks like something else. If you look closer, closelyer, you may see an arrow pointing up to the right. Yeah, the Robin Hood logo. Nice little Easter egg in there. It's not just a

feather. It also symbolizes bullishness. There's a little arrow in there. If markets are up or down, it's nice to be optimistic. We always love that little detail in the Robin Hood logo. Honestly, it's all about little things in life. If you're not on Robin Hood yet, want to get started, go to robinood.com slash T-Boy and choose your free stock. That's Robinhood.com slash T-B-O-Y. Certain limitations apply. All investments involve risk. Robin Hood Financial LLC, member SIPC. By the way, Robin Hood is no longer affiliated with us or this podcast. H-2-O. Yeah. Powered by Hyundai.