The Best One Yet - 💵 “Why the rent is so damn high” — The Villain of Rising Rents. Krispy Kreme’s frenemy McDeal. Netflix’s binge defense.

Episode Date: October 20, 2022

If it feels like your rent is rising more than it should, it may have something to do with the startup Yieldstar. Krispy Kreme is now making donuts for McDonald’s — and it reveals a delicious quirk of Krispy’s business model. And what’s better: The Netflix episode deluge or the HBO episode drip?$DNUT $NFLX $ZFollow The Best One Yet 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 Thursday, the new Friday, October 20th, and today's pod is the best one yet. T-B-O-I, Nick, the best one yet. It's the best pod we've ever done. Jack, what's our first story for the T-boy? Netflix just announced that it is back. Back, baby.

And it defended dropping seasons all at once. To binge or not to binge, that is the question. For our second story, is your rent too damn high? It feels like our rent is too damn high, Jack. It may be because of one startup. that landlords love, yield star. Yield star and the rising rents. Our third and final story, the biggest partnership on Wall Street this week is Krispy Kreme and

Mickey D's. Yeah, for enemies, they make the best lovers. But Yetis, before we hit that fantastic, do they make the best lovers? And you have to ask Ronald on that one. Honestly, I don't know, and I feel uncomfortable that we're even venturing into this territory. Yeties, before we hit that fantastic mix. I mean, I guess they make good friends, but do they make good lovers?

It's going to be an interesting development. I can neither confirm nor did not. You have to define the relationship, but then you hate the person? I don't know. We get a lot of directions here. Yeties, everyone is talking about the Fed meeting these things. Everyone is talking about baseball playoffs. Everyone's talking what they're going to be for Halloween.

But Jack, are we wrong or are they missing the main event? Is everybody missing the most important event of the fall? Yeties get this. Today is the USA Mollet Championships. The old USAMCs. Jack, who has the mightiest mullet in all of America? Who has the finest flow in all of the land? Who is America's next top mullet?

Who's got the biggest hairdo since bangs? Tyra Banks, you got to answer on this one? Yetis, you know the mullet. You've felt the mullet. You've seen the mullet. It's business in the front, party, in the back, sexy all around. Nick and I are wondering with this competition, will they place a crown on the winning mullet head?

Oh, Jack, would that crown mess up the mullet? We'll find out today because the winner of the national mullet championships happens today. It was three weeks, 25 finalists. We are down to one winner. Now, each of the remaining mullets actually has quite a nickname. Yeah, good point, Jack. The leader right now is the Oregon tail. Yeah, the mullet merges into the mustache.

The challenger, though, is the Lord of the Drapes. The mullet is four feet long on this dude. But our money is on Poppy Fuego, the ultimate mullet. Yeah, because that mullet has its own mullet. Bestie's best of luck to all of the mullets out there. We'll report back tomorrow on who wants. the main event. May the Mangy is to final Mullet's with.

I don't know what Mangey means, but let's hit her three 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 an or nautics. 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, Netflix stock, just search. 13% yesterday after its earnings. But, Jack, what was the highlight? Netflix is doubling down on the binge. On the binge. But first, Yetis, 2022. We've said it before.

The year Netflix just stopped being Netflix. Netflix just hasn't been itself lately. What's going on, Netflix? It's us. We want to chat. First, Netflix started losing subscribers. That's unprecedented. And then in November, Netflix is launching a $7 option with ads.

It said it would never do that. Oh, and then the other day, Jack, we talked about how Netflix is bringing its movies to movie theaters first. What's at launching DVDs next? What's going on here? Bring back the Blockbuster buddies. But Netflix just announced something that was very Netflix. Oh, Netflix. Subscriber growth.

Is back, baby. Last quarter, Netflix added users again. 2.4 million to be exact. Netflix. You're kind of looking like Netflix right now. But a funny theme, Nick and I noticed, when we jumped in T-boy style to, the earnings call. Yeties, this is what Jack and I found fascinating about the earnings. It wasn't the subscriber numbers.

No, it was the defense of the binge. The defense of the binge. We all know the binge. We've all done the binge. Netflix drops an entire season of once and then you become anti-social for like two days. Netflix is the first company to do that, right? Oh, exactly. Jack, for example, like the Crown Season 5, what happens when Crown Season 5 comes out on Netflix?

Cancel your plans. Shut the door. grab your partner, get some crumpets, because God save the queen. Yeah, 24-7, 424-7. The binge, Yeti's, the binge. It isn't just an activity. The binge is a lifestyle.

You're going to emerge from the home, unbathed, 36 hours later with a British accent. Jack, remember the last season of Stranger Things? What I had to do? Remember what I had to do? Showed up at your house. I had to shave you and feed you. Yet he's true story.

House of Card, season three, I had to put an IV in Jack after 24 hours. But yet he's after after. the last season of Stranger Things, Netflix split the season in half. It was weird. And Netflix was struggling to keep people subscribed. We wondered if the era of the binge was over. Well, no more because Netflix just announced yesterday, they're doubling down on the binge. Netflix said, we think our bingeable release model helps drive substantial engagement. Right. Netflix said, you know what? We think it lets you get immersed in the story.

And it shows in the data. They looked at the number of Google searches for Netflix shows, versus similar shows on other streamers. Well, get this. Netflix's Dahmer. It had over twice the amount of interest as House of Dragons on HBO or Lord of the Rings on Amazon Prime. Netflix's Dahmer had twice the interest on Google

than those other super high profile, high blockbuster show. The binge. It is a content delus, Jack. And Netflix is keeping those floodgates open. All right, resuscitating you for season five of the crown. What is the takeaway for our buddies over at Netafel? The existential question in entertainment right now. The deluge or the drip? The deluge or the drip?

Yeties, we are seeing an epic battle heat up right now. And it is not the Targaryens versus the Targaryens. No, it's HBO versus Netflix. To drop episodes or to delay them. The deluge or the drip? We just heard Netflix defend the binge. Defend the drop. Defend the dayluge.

Yeah, but HBO, HBO does the opposite. It's HBO only drops a new episode every Sunday. They delay the episodes. It's a drip. Yeah, Jack, you can't watch Succession in one weekend. You gotta wait every week for, like, Logan Roy to show up. Now, HBO says that their strategy of stretching out episodes, it nurtures the show, lets it breathe, builds anticipation,

and maintains long-term interests. In fact, HBO has kind of trolled Netflix's binge strategy. HBO says that Netflix's shows fade fast. It's a flash in the pan. It's a binge and burn. It's done in a week. Now, he had these both sides say they're right. Actually, both sides may be right.

The deluge or the drip. That is the existential question in entertainment. For our second story, why is your rent so damn hot? Because Yield Star's algorithm told your landlord to do it. Yeah, because your landlord was told by a software. Yield Star is the software that lets landlords collude without colluding. Okay, Jack, if our economy had like a Ten Commandments list, What do you think should be like number one on that commandment, Celeste?

Thou shalt not collude. I thought we were going with guac as always after. We can totally go with this collusion amount. It feels appropriate. Yet is collusion. It is the opposite of competition and therefore it's illegal in this economy. You can't collude. Yeti's just can't collude out there.

Rival companies cannot coordinate prices to make sure prices stay expensive. Yeah, like for example, Lyft and Uber, they can't collude. They can't like mess with prices together. They're supposed to compete. They can't be like, hey, there's a Giants game tonight. How about we both charge a minimum of 200 bucks per ride from right outside the stadium? If they did that, it would be illegal. Like, not even Travis would try to pull off that scheme.

Here's the deal. Competitors can't coordinate prices on consumers. It can't collude. No, you got to compete. But according to some deep reporting by ProPublica, one software company is doing that with your rent. Yeah, with your rent. Yeah, one software company. One software company lets landlord A and landlord B coordinate on prices and jack up the price of your apartment.

That software is called Yield Star. The company that owns the software is called RealPage. And it's owned by Shocker, a private equity firm called Toma Bravo. Now, Yield Star is a software program that landlords use to maximize the rent of all the apartments they are. Like, let's say you're a landlord must be nice. What are you going to do if you own that building, Jack? You're going to enter the address of the building and enter the number of units. And then the software is going to be like, hey, our data says you could easily jack up the prices by 10%.

So landlords, they are firing their leasing agents and saying, hey, we're just going to let Yield Star's algorithm decide the rents for us. We're going to let the ruthless data algorithm decide how much we charge these families. Cindy's got a heart of gold. She let them miss a month's rent. Yield Star isn't going to do that. Cindy's fired. So right now, Besties, currently there are 32,000 landlords setting their high prices,

based on what this software is spitting out. And what is the software spitting out, Nick? Well, Jack, it's spitting out higher rents and higher rents on 32,000 landlords. And according to ProPublica, cities where this software is popular, rents have risen much faster than cities where this software is not popular. You can't just send your buddy Timian to negotiate with the software. So, Jack, what's the takeaway for our buddies over in anyone who rents their home? This is really annoying.

But is this illegal? Yet he's, it's actually not. clear. Like, this smells like collusion, but is it collusion? This isn't naturally rising prices. No, it's not. But is it an illegally manipulated price for us? Right. So, like, technically, the landlords aren't coordinating prices directly with each other. No, they're coordinating prices with a third-party tech platform. That's the middleman. We're talking about yield stock. So it is illegal for landlords to coordinate prices, but is it illegal for a software to do the coordinating for them? It's not totally clear if this scheme is illegal. No, it's not. So the DOD,

and the FTC are looking into it. But if it is illegal, then Yield Star would be breaking the number one commandment of economics. The first commandment, thou shalt not collude. Now a word about our sponsor, Robin Hood. You know, honestly, your salad, it says so much about you. Nick, you like to blaze your own trail at the salad bar. I'm ordering a salad. I go off menu, man.

Like a combo of kale and croutons that has never been made before. Me? I'm not reinventing the wheel. I like to go classic. If Sweakerian thinks it's a good combo, Jack's not going to change that. Kind of like investing strategies. Some want to build a custom portfolio of stocks, crypto, and options. Others don't want to reinvent.

Just give me the most standard ETF. Whether you're tweaking your one-of-a-kind portfolio every day or prefer a more hands-off approach, Robin Hood has the tools. If you're not investing on Robin Hood yet, to get started, go to robin hood.com slash t-boy to choose your free stock. That's robinid.com slash T-B-O-I. Limitations apply. Stock's offered by Robin Hood Financial LLC. member SIPC. Crypto offered through Robin Hood. All investments involve risk. By the way, this podcast is not owned or part of Robin Hood and we are not employees of Robin Hood. For our third and final story, the biggest new relationship on Wall Street, it's Krispy Cream and McDonald's.

Crispy is making donuts and they're making a new business bottle. Okay, Yetis, Jack and I have a present for you. We've been working on a list of like recession-proof products. We're trying to whip one up. We've been working on a list of affordable splurges. Yeah, the first on our list was lipstick. Another thing you can splurge on even in a recession, a donut. Yeah, affordable splurge, five minutes of fried happiness. It's a buck or two. Treat yourself.

Jack, it's like a bagel with a personality. Like, no one's that happy after a strawberry. You're very happy spending on a donut. It's a cupcake in disguise, Nick. Which leads to the news, yes. Crispy Creeves next move is to sell donuts at McDonald's. Crispy cream is selling their donuts within McDonald's restaurants. Yeah, like this is only starting at nine Louisville locations of McDonald's,

but this means that the Krispy Cream brand is going to be in the McDonald's brand. You're going to walk in for your usual Egg McMuffin and a coffee. Classic McDonald's. But you're going to walk out with a couple of Krispy Cream glazed donuts instead. Hey, Ronald, sit down, stand up, and sit back down again. Now, Yeties, that is interesting. That is interesting. But here's what we find even more interesting.

Krispy Cream's unique business model. They have a hub and spoke business model. And this revealed that model. Because every fast food chain, yeah, they make their own food on location. Papa John's is served at Papa John's by Papa John. Yeah, in Papa John's house. Jack, you want that whopper? What are you going to do?

It's going to be flame broiled right there behind the cashier in the kitchen at the Burger King. But Krispy Cream, it's different because Krispy Kreme uses a hub and spoke model. Get this. They said hub and spoke? 132 times in their IPO paperwork. They're obsessed with the hub and spoke model. And here's how it works. Each Krispy Cream is a hub.

Which makes the donuts for that Krispy Cream store. But each hub also makes donuts for a bunch of other chains where the donuts are distributed to. And that is the Spoke. Like a paper boy, Krispy Cream is up early to distribute those hot donuts from the hub to the entire region. Boom, they're dropping off the donuts at a gas station, a drug store, a grocery store. talking a bunch of other chains. Even McDonald's. Yeah, each Krispy Cream location, it's not just a retail store. It is a factory, baby. It's a neighborhood donut kitchen. Yeah, it is.

It is a kitchen, yeah. Now, McDonald's doesn't have donut machines, so they're trying out some crispy cream with this deal. And if this goes well in Louisville, maybe we'll be seeing more crispy creams at every McDonald's. We haven't seen this. Maybe this is thinking too much, but could we see Darlene stick a Kris cream donut into a Dunkin' Dunkin' Dunk? And then put that in a Burger King? I think that might be too far, actually.

Dahlene's not doing crispy. Dahlene ain't pumping crispy, Jack. So what's the takeaway for our buddies over at Krispy Kreme? You don't have to give up control. Every entrepreneur wants control. But you're told that in order to grow, you must give up control. Control and scale are seen as mutually exclusive. It's hard to grow fast while remaining independent.

You often have to let someone else distribute your thing for it to grow. But Krispy Kreme may have proven that principle wrong with their hub and spoke model. and with this deal. Yeah, because this hub and spoke concept, it has grown Krispy Cream while letting Krispy Cream keep control. It turns out the Hub and Spoke is not only growing revenues fast,

it's also their profit puppy. Yeah, one kitchen makes all the donuts nonstop, gazillions of glazed donuts. And that one Krispy Cream kitchen, it feeds an entire area with those donuts. It would take McDonald's like 10 stores to cover that whole region. As Krispy Cream put it,

we maximize the opportunity while maintaining control. Krispy Cream, they cracked the coat, on control. Jack, can you whip up the takeaways for us for the new Friday? Netflix just defended their model of bingeable seasons. The deluge or the drip, Yetis, who you got? Our second story is Yield Star. They're helping landlords ruthlessly raise the rent.

It's really annoying, but is it illegal? For our third and final story, Krispy Cremes donuts are coming to nine Louisville, Kentucky area, Mickey Dees. And that hub and spoke model, it cracks the code on control. Now, time for the best-fellers. Yet, this one sent in by Federico Lee in lovely Los Angeles. It's not every day that platinum-winning musical artists have to join the military. Yeah, that's why a lot of Yetis were interested about our story about BTS in South Korea.

The Korean pop band is taking a break, starting right now, for mandatory national military service. But Feddy points out that South Korea has some interesting military exceptions. For instance, if you're an athlete competing in the Olympics, you don't have to serve in the Army. And Jack, if you're a classical musician in the national orchestra, you don't need to serve in the Army. In fact, South Korea's top soccer player, Sun Hungman, plays in the Premier League in Europe. And didn't have to serve in the military. Well, BTS isn't getting an exception. No, BTS, serving like butter.

There's no exception for boy bands. Yeties, you look fantastic today. And if you see a donut, treat yourself. And if you see a friend, ask them H-Y-H-T-O-W. Have you had the best one yet? That's how we grow the pod. If you know, you know. Nick and I, we'll see you tomorrow.

Can't wait. And before we go, congratulations to Yeti's Henry Lopez and Brandon Hughes, who've been married for five years in Washington, D.C. And congratulations to the prestigious Dr. Shari Barkett, who just got inducted to the National Academy of Medicine over in Virginia. And, Jack, we got some birthdays. Happy birthday to Jing Wei-Zang over in Brooklyn. And happy birthday to Valner Puppy Teddy over in Oak Park, Illinois.

P-U-P-P-P-Y. Puppy. Yeah. This is Jack. I own stock of Amazon, Netflix, and Krispy Kreme, and Nick and I both own stock of Robin Hood. Now, a word about our sponsor, Robin Hood. Okay, so Jack and I both worked in finance for a while.

And we know the six-monitor Bloomberg jockey, with charts, numbers, balances, and more charts. They got coffees in both hands while they're executing some complex trade on a soybean future. Well, we're not trying to impress with our mission control trading center. Just give us an app, please. Robin Hood, with its mobile first, and intuitive design. It lets you trade with just a few quick taps on their app.

And even if things still don't seem easy, Robin Hood has your back 24-7 with its live and robust customer support. If you're not investing on Robin Hood yet, to get started, go to robin hood.com slash T-Boy and choose your free stock. That's robin hood.com slash T-B-O-Y. Limitations apply. Robin Hood Financial LLC, member SIPC, all investments involved for us. By the way, this podcast is not owned by or part of Robin Hood, and we are not employees of Robin Hood. I do think it worked out nicely.

The best part is you kind of like visually turn into a cartoon, like your eyes kind of become cross-eyed from it. You're like, cookie crisp. Your whole anatomy gets into it. Dude, I didn't see the video. It's like,

it's almost as if you're trying out for the role of the cookie crisp dog. Do my eyeballs come out of my head? You know, like this whole thing. Like central casting. They're like, can you give us a cookie crisp with a little more? And you're like, you're like this, like this, like this. Yeah, dude, it's a full body sport.