TRASHFUTURE - Nut Flix Part 1 (feat. This Machine Kills)

Episode Date: November 24, 2020

It has come to our attention that Netflix has twice the market capitalisation of Boeing. How can this be? Well, it’s a byproduct of the 2008 crisis, an endlessly-expanding network fed by zero-interest loans and charter school zealots who believe that 100 million people can and will watch the next Orc Cop movie. We brought on Jathan Sadowski (@jathansadowski) and Ed Ongweso Jr (@bigblackjacobin) from This Machine Kills Podcast to discuss it with Riley, Milo, Nate, and Alice. If you want access to our Patreon bonus episodes and powerful Discord server, sign up here: https://www.patreon.com/trashfuture We support the London Renters Union, which helps people defeat their slumlords and avoid eviction. If you want to support them as well, you can here: https://londonrentersunion.org/donate Here's a central location to donate to bail funds across the US to help people held under America's utterly inhumane system: https://secure.givelively.org/donate/the-bail-project *NEW SHIRT ALERT* If you want shirts, you can order them on our new web storefront! Get it here: https://www.trashfuture.co.uk/shop *WEB DESIGN ALERT* Tom Allen is a friend of the show (and the designer behind our new site). If you need web design help, reach out to him here:  https://www.tomallen.media/ Trashfuture are: Riley (@raaleh), Milo (@Milo_Edwards), Hussein (@HKesvani), Nate (@inthesedeserts), and Alice (@AliceAvizandum)

Hello, loyal hogs and trash future listeners. It's me, Milo. As you're hearing my voice, you may be able to tell that there is something up, some news of some sort. No, Riley is not dead. What's happened is that we here at Trash Future have opened an online merch store so that now if you want to buy a t-shirt, there is absolutely no need to email me, and I cannot stress that enough. The merch store is live now at trashfuture.co.uk slash shop, and there will be a link in the description of this episode. We are currently taking pre-orders for a re-issue of the Black Johannes Vonk tour t-shirt, so if you missed out on those, you can order one of those. And also for our new shirt, the What If Your Robot Was Just

a Guy shirt designed by Rory Blank, which is also very cool, you can get your usual patron discounts via discount codes, which have been posted on the Patreon if you're looking for those. And also, you can get a £5 additional discount if you buy the two shirts together. If you buy the bundle, you get £5 off either the Patreon price or the non-Patreon price, depending on what price you're paying. Cool. Yeah, we're looking to... The shirt should be ready to ship in sort of December, and the pre-orders will be open until I think the 2nd of December on Tuesday. That's the day that the pre-orders are going to close, so at that point we'll be taking no more pre-orders. So get your orders in before then, and yeah,

enjoy your new merch. Cheers. Hello, and welcome back to this free episode of TF Part 1 of an exciting two-parter on nothing other than your favorite video platform that makes such unforgettable film content as, you know, Tiger King, Bird Box, Enola Holmes, the greatest stand-up show ever released, which I obliged to say if I ever want to have a career in comedy. That's right. We are talking about Netflix, and we are joined by our friends, Jathan and Ed from This Machine Kills podcast. Jathan and Ed, how are you guys doing? Ah, doing very well. I'm burning my podcast valour.

I like how like, how are you doing is answered with a noise that conveys, I just was... I had to read Barack Obama's memoir for work. Yeah. Oh, god. You know, I wish I didn't... I don't, I'm reading it for pleasure. This is what I get for tweeting angrily about it for the past week. My editors are like, hey, you want to tell us if he talked about drones, which he didn't, and if he talks about all the people he killed, which he didn't. So yeah, I'm feeling great.

He never tweet, never tweet. That's proof. Did he talk about all the people that Clinton's killed? He did, however, talk about some of his favorite films and movies, which over a course of eight autobiographies, it's just that, and then things that sound hilarious when you clip them from the audiobook. I think the thing about Barack Obama is he loves writing autobiographies, and everything he's done has been a way to connive writing more autobiographies. Yeah. My man's going to live eight lives just to write more autobiographies.

He's just like a revisionist. He never stops fucking rewriting his history. He would be a very prolific writer in some battle in the Soviet Union trying to rewrite the legacy. We, of course, uphold the legacy of Barack Hussein Obama is in here, the immortal science. I have a beautiful segue here, which is, do you know who gave Barack Obama a bunch of money to make some vibes-related content? Yeah, soft bank. Well, yeah, soft bank. Yes, because it is Riley Milo, Alice, and Nate.

Hussein will be returning with regularly scheduled programming next week. Yeah. Hussein, Barack, Kazvani. That's right. So we, by which I mean, I have decided to do a big deep dive on all the writing about Netflix, many of their corporate filings, and just some interesting facts about the founders. We're taking the eye, the big motorized eye that we all share out for a spin and parking it outside Netflix this time. So without further ado, we're talking about the N and Fangs,

that group of companies that is like what, 26% of the S&P 500 by concentration, where basically the economy growing depends on all of them continuing to be incredibly valuable all the time. And because they're an investment banker thing, they have to have a stupid fucking acronym. That's right. And crucially, if they're not growing in value all the time, then the economy goes into a recession and more jobs get automated. Not a problem. Cool. So fucking watch Emily in Paris, you son of a bitch. You have to.

Yeah, it's your Keynesian duty. If you don't want your postman to be the terminator, you have to watch Emily in Paris. I'm sorry. I love our great economy. I love the episode in there, the euthanasia of the rentier episode. I highly recommend that, you know, it's the ripe for the finale. So let's go. Reed Hastings and Mark Randolph started Netflix as an online DVD rental business in 98. I remember DVDs. And they got 700,000 subscribers by 2002, 3.6 million subscribers in 2005,

and then used that money to kick off a streaming service in 2007, initially only available in the US. Well, you can use it to stream stuff. And I've been sending off all these DVDs. Their first original series was debuted in 2013. It was House of Cards, which cost a record-breaking $100 million and Implant. It's where the Netflix ident sound comes from. They don't like talking about this because of House of Cards and Kevin Spacey, but like the bombom noise that plays at the start of every Netflix thing is

Kevin Spacey wrapping a like ring on the Resolute Desk. And also House of Cards, importantly, employed a record low number of pedophiles for a Hollywood production. A new record of only 96 percent. And season two, they started bringing extras from the island, and then, you know, then the numbers jumped up. There's a sign up in the office. It's like one of those, you know, days since last accident sign. It's like number of pedophiles currently employed.

And if it gets below 100, they're like, we're doing good. Well, it becomes a union issue if it gets below 100. The union requires at least 100 pedophiles. So from that basis, Netflix now has nearly 200 million paid subscribers worldwide. And that's up like 23 percent from 1.583 million in this time last year. But in only 8 percent of its subscriber additions came from the U.S. and Canada, down from 29 percent last quarter, which means it's basically, its growth is international. And that's going to be relevant later.

So Hastings said of the business, specifically its growth due to COVID. COVID, and this is from the FT, COVID could have been an internet virus taking down all the routers of the world and our business would be out and restaurants would be in, said Hastings. Damn. Yeah. Oh, well, you do. If there was no internet, you'd go to the restaurant with your dang friends. An internet virus. What if your phone was the virus? What if we're the virus?

Yeah. What if instead of COVID, it was like an electromagnetic pulse and then Netflix wouldn't be as profitable, but restaurants would be very popular. What if the plot of golden eye happened? What if they had to go back to posting your DVDs? Yeah, exactly. They still have a line item on their Q10 about revenue from DVD by mail. Yeah, they still do DVD rental. I also love the idea that just in case this happens, they have an emergency bunker with

like episodes of Nanette on DVD, just in case you need them. It's like, you're going to get a copy of Bright in the mail in Canada you want or not. And it's going to come in the same like packaging as a humanitarian ration. It's going to be airdropped to you in a little red package, like a gift from the people of the United States. And it's a DVD of Nanette. Steve MRE info on packaging a damaged DVD disc at the lake house. Like, oh God, I don't even want to try this.

It's like the Seed Bank in Spar's Guard where they have in like the Arctic Circle. Yeah. Great. Oh, thank goodness. I have this aid package with the DVD of Marvel's Iron Fist. So basically, he carries on. Instead, tragically, the virus is a biological one. So everybody locked up gave us the greatest growth we've had in this year. Cool, cool, awesome.

The weird handshake meme between Trash Future and Netflix. So basically, it means that they had to pause a lot of content, but they've started production again. And their goal is fits and starts. They did manage to give everyone involved in the Witcher COVID, which is quite funny. Do you think that the shareholder letters from like refrigerated trailer and morgue manufacturers are this upbeat? Oh, we had a great quarter.

I mean, things have been picking up quite a bit for us. If this growth continues, oh boy. So that's a little bit of the history. Just so you know where it came from and when. Mark Randolph, who will talk about a small amount, is the great nephew of Edward Bernays, the inventor of advertising and PR. Once again, we got to kill Freud. We got to kill Freud.

We got to go back in time and get him. Is he also the inventor of the source? No. Is he one of those like Renaissance men who just like literally on the side? At the sauce with the best PR ever. So one day after inventing advertising, he was enjoying a steak. We go back and kill Edward Bernays. And then like we go back to the future and things are slightly worse because of an

ad man named Edmund Velute. Now Randolph quit the company in 2002 and now serves on the boards of Looker Data Sciences, which is a normal tech company thing, Gettable, Rafter, ReadyForce, and then a company called Chubby's Short. Awesome. Yeah, Chubby's Short is a company that will buy your house a fraction of the cost and rent it back to you. I'm pretty sure Chubby's is like Yeti thermoses that it's like a viral popular sort of like

Southern frat brand, like it's actually very popular. It just has a name that makes you think of hard on. Yeah. Well, it's perfect for the discotheca. I'm pretty sure it's a Rodney Dangerfield movie from the 80s. Whatever it is, Mark Randolph is on the board of it. I can't get no shorts. I'm too fat for these shorts.

No, he's a Hollywood producer trying to commission short films for his upcoming film festival, but he can't find any. Well, he had to quit Netflix to get the will, you know, get a property bequeath to him from the will of his great-uncle Joseph Thousand Island. So in the greatest game of things. So Reed Hastings, the more interesting one, he's the current CEO. He got to start serving coffee at theworldsfirst.com company, symbolics.com, and then tried to patent a computer foot mouse.

Well, I have student at Stanford. He tried to make the computer by pedal power. I've got to throw in an aside because it's just it's just a funny detail that has always just blown my mind. Tarek Ajami, famously known as the Hell Dude, mentioned that when he knew people from his undergraduate class who graduated probably in the early or mid 90s, who got jobs in dot-coms were literally they were making animated gifts and making $175,000 a year. It's like, that's what the Gen X economy was like.

I made animated gifts just to own British politicians and no one's paid me dog shit. Buy a house with that. And then he eventually made a small fortune with a software debugging company called Pure and he became a multimillionaire in 1995. You're telling me it wasn't the foot mouse thing? Hold on. Let me just let me let me navigate over to Wikipedia. Let me double check to see what I'm moving my computer cursor nowadays. You could sell the foot mouse.

There's enough horny feet people out there. Oh, that's true. They were funny. You would love be like a resale market for like ego foot mouse. Abby Shapiro playing like Dota using her feet or like like like a like a gaming stream with like one cam on the gamer girl and one on the foot mouse to watch the entire time. If we click random article on wiki feet, how long will it take to get the cock and ball torture? A joke from the conversation before the episode.

If you'd like to listen to that, go back in time and plant a bug in our office. Yeah. If you want to listen to that, go back in time, befriend us or befriend Edward and Jathan get on their podcast and you can do that. So basically in 1995 Hastings decided to use his wealth. I'm going to throw this out to Ed and Ed and Jathan. He's a billionaire. He's going to use his wealth to tackle a social issue. You guys, what wish you do you think he tackled? Don't don't don't. Any quality world hunger. Yeah, of course. Fem boys homelessness. No, no, no. I'll give you a hint. He wanted to revolutionize the way children go to school. Oh, my man's a charter school.

That's right. Reed Hastings is a huge charter school guy. He's devoted billions of dollars to try to in fact abolish the concept of an elected school board altogether in America. He is he considers teachers unions to be his greatest enemy and he is a registered and fanatical Democrat. People may not realize when it comes to big finance people and stuff like that is in states like New York and Connecticut, you can get a massive tax write off or donating to charities and charter schools are absolutely included in them. And so as a result, that's the big thing that a lot of the hedge fund people donate to is charter schools. And it's just like, well, weird how that would also overlap with hating all unions.

Yeah, it's interesting. The Pinkertons are now a charity. Remember back when Zuckerberg donated like, like millions and millions to Newark to just basically abolish the school system? Yeah. That's right. Remember when we were contained of a charter school? I do. So we school. It's nancing as a service. He says, I started trying to figure out why our education system was lagging when our technology is increasing at great rates. And there's great innovation in so many other areas, healthcare, biotech, IT, filmmaking, why not education? Imagine how upsetting it would be to find out you'd been drone-striked by a guy using a foot.

But indeed you say, well, you know, why not education? Because of course, startup brain doesn't distinguish between how these things are funded, who controls it, and so on and so on, doesn't consider that there are public goods, just that everything's a problem to solve. And we have to give ourselves the infrastructure to solve this problem. So of course, I'm going to use my billions to make it so that people have to use the Oscar Mayer Periodic Table of Elements. What if history class was on the blockchain? As an aside, just really quickly about charter school people, I don't know if you'd seen news that one of the people being considered in for Biden's cabinet for Secretary of Education is

Michelle Rhee, who was a huge charter school person. But famously, when she worked in a public school in Washington, D.C., she got so mad at her first graders for not talking in class that she taped their lips shut and the tape took the skin off their lips. Jesus. Cool. So basically, it's like, what if we could make the school from Matilda real? Yeah. Smash cut to the cake, don't come home. So when you or, you know, charter schools in New York, when you hear stories about kids literally getting expelled and like their parents getting visits from the cops because they asked to go to the bathroom too often, like that kind of stuff is so baked into that mentality.

Well, what are you doing in the bathroom? Why you got to pee so much? Why is this about? I didn't realize that Rocky Balboa guarded the bathroom. So basically, this just like, this just, you know, a free affirms my, my conclusion that basically all senior Democrats are either a Silicon Valley, a zombie was to privatize libraries or different kinds of Ed Buck. I mean, they, they, they are Tories is the thing. I feel like for British audiences, it's easier to comprehend it that way. They're Boris, they're Boris Johnson as mayor of London Tories. They're Boris Johnson writing 72 virgins, Tories. They have that exact politics. Absolutely. So it makes me wonder though, like, like, how has Netflix not moved

into the education space? Right? How have they not tried to roll out like Netflix education? Well, they have. It's just, what was Tiger King, if not an educational broadcast? They have the damn, it's 2020 academies in and who's the teacher? It's Carol freaking basket. So can I 2020 anymore, Carol Baskin? So basically, he actually does want to use the Netflix type of sort of selection algorithm to quote, inject the startup mentality into the country's schools and replace human labor and disrupt things into schools that totally unsinister phrasing. Damn, that's not been tried since the Spetsnaz. So he essentially, he not only did he help found California's first charter schools,

he also basically wrote the law himself abolishing the law limiting California to 100 charter schools statewide quote, not only did a bill pass that essentially greenlit an unlimited number of charter schools, but the bill included a provision barely noticed at the time, certainly not for the unions, which is that a single board of directors that would have him on it, could oversee multiple charters. So that is Reed Hastings and then a person named Shalvy, who is the deputy director of the education at the Bill and Melinda Gates Foundation, launched Aspire Public Schools, which now operates 40 in California and Tennessee alone. They are now a school district. Yes, Netflix is a school district.

California and Tennessee is like a weird combo too. That's like a weird enough combo of states that it makes me feel like it's an underhanded combo of states. So he says, what we have to do is work with school districts to grow steadily and the work is really hard, because we're at 8% of students in charters in California, whereas in New Orleans, they're already at 90%. So we have a lot of catching up. All the public schools have been shut down and rich white kids go to private Catholic schools as a fan of the show and force from New Orleans informed me and everyone else goes to charter schools where you basically get rogocop ed 209 if you go to the bathroom. Yes, that's right.

Alice, did you just, did you get cut off? No, I was biting my tongue because like, yes. Nah, but I'll be sending my children to a private Catholic school of sorts here. That's correct. I don't know. I don't know exactly where I'm going with this bit, but I don't know. You really thought that the accent would just lead you somewhere. I made a lot of money from inventing chicken many years ago now. So if I could see it, if my answer is to Joseph Bernays could see me right now. Joseph do Bernays. I want to say really quick, I want to say really quick that I'm from Mississippi and I lived in

New Orleans for a really long time and my man just so offensive, so offensive. My dad is from Mississippi and whenever Milo does that accent, I'm like, you've got it. If you go from Louisiana and then go south to the lost city of Atlantis where no one spoke an English for 2000 years, that's the accent. Cajun people of the fog. So then what happened was he donated $9 million in 2018 to Ed Voice, which was basically a pack backing a charter school candidate Marshall Tuck for the state superintendent of public construction, which became the most expensive race ever for that position in history. Extremely healthy. In this case, Hastings as a donor joined Betsy

DeVos, multiple Obama administration alumni and the Hoover Institution. A bipartisan consensus. A bipartisan consensus to make children understand the atomic weight of bologna. Isn't the Hoover Institution like the super right-wing crank institution at Stanford, the one that was named after Hoover? How could that be right-wing or cranky? Yeah, 100%. I mean, if I remember correctly, and they're governed by a very weird structure that allows them to basically employ people who, like you said, trend anywhere from Eric Prince to full on Bitcoin freaks. That's their charter. Do you know who the current director of the Hoover

Institution is? Condoleezza Rice. Oh, fuck Ray. A reasonable Republican. You know what, vote everybody because it makes a difference. We set out to make a Netflix episode and within 15 minutes we're all like taping like bits of red string from one surveillance mostograph to another. So if you want to do red string, I have one more thing about Hastings before we get into Netflix itself, which is that it was recently revealed that he was building a mysterious 2,100 acre luxury ranch retreat in the Rocky Mountains. Now we can't speculate about the most dangerous game and what the identity of that game might be. Children's minds. Children's minds. That's right. You're actually right because this is a conference

and retreat facility run as a nonprofit institute serving the charter school movement in terms of training teachers. Let's just say you don't pay with money. Yeah. Now I can't use a drop at this point for legal reasons. However, you will know the drop that I cannot use. That's right. I just have an idea of it being like a heart of darkness or you know like a King Leopold's ghost sort of thing. They figure out the scam and they're like why is why are there all these H1B visas from Rhodesia? Why are there all these crossbows being imported? How did we get an H1B visa which is more recently introduced in the country of Rhodesia? Just doing the plot from the Yiddish policemen's union but for Rhodesia or something. So one group that's expected to use this state of

the art facility is the Pahara Institute which operates a well-known networking group and training program for charter school activists. Hastings also heavily fun. It's Al Qaeda from charter school. Basically, yes. He is the Osama bin Laden of the charter school movement. The Afghanistan charter school. It turns out it's this place that you have to jump over a small stream and then become a charter school activist. That's right. Everyone remember the Taliban training video? Man, that rules. They'll get down the internet. When you say everyone remember the Taliban training video, you make it sound like we all watched it together at Taliban camp. So that is Reed Hastings. What he's all about is trying to undermine one of the

last bastions of organized labor in the country as a woke Democrat who makes a product everyone loves. Yeah. So it's the end game here, just the scene in Clockwick Orange, whereas like your eyes are pried open and it's just Netflix original series being beamed into your brain. Yeah. And the sound. Yeah. It's great. Joe Exotic comes and teaches you common core. Mm hmm. I mean, that sounds dope, actually. So essentially what we have is loving someone doing it like a dictation with third graders like, all right, from the top, I am broke is shit. I just won't wear a suit. I never had a job. So what we have that let's talk about the company a little bit. So Netflix, like every other big tech company aims to be a monopolist

and it aims to do that in two ways. It aims to do that via a traditional movie studio style monopoly system. That's right. Thank you, Orson Welles, where the studio owns the create owns the assets of the films themselves, employs the actors that create them and then also owns the distribution channels where they're watched. Yeah, it used to be this thing that is grotesquely illegal. If you're a movie studio, it's highly legal isn't a movie studio just because it acts like a movie studio would and like makes movies and distributes those movies doesn't mean it's a movie studio. It's a tech company doesn't employ enough beta files to be movies. Yeah, they keep it under the level. Yeah, well, no, it's all sexless freaks that Netflix employs.

Yeah, that's right. So basically, right. The system is because Netflix is a tech company. That's how it gets around paying writer's guild. So it plays a lower guild salaries in the contracts than actual movie studios do because it's a tech company or a new media company and also is exempt from the rules that were created in 1954 around which was the US versus Paramount, where you cannot own a movie theater if you are a movie studio. A fine piece of antitrust law where you simply say, yes, this kind of corruption is very, very illegal if you're a movie studio and behind you an enormous sign is being trucked in that reads not a movie studio and you're like, well, this is fine. They're not a Courtney running Netflix and just be like, I'd like to stress

for legal purposes that this is a movie studio. I do not have a permit for this cinema. So it also wants to become a monopoly in the more normal tech tech platform way, which is that it wants to aggregate the watchers of stuff and the creators of stuff and then charge a fee basically on both ends for delivering that content between them. Now, Jason and Ned, you guys talk about this kind of, this is a very standard kind of tech monopoly. Like before we sort of dive in, what's your sort of the skinny as if you will on Netflix from your end? Yeah, I mean, this kind of vertical integration is definitely a huge part of the monopolism, right? Where it's about controlling the entire market and that point that you just got to

about being these middleman, inserting them in, I mean, that's just a classic kind of rentier activity, right? They want to extract rents from both the watchers and the creators and so that they can kind of control both ends of the demand and supply side. A studio system. Now, right now, they don't extract rents from creators yet because what they're trying to do is get everyone on side with them. So they actually pay twice what almost anyone else does or all the old classic studios. They will outbid anyone for everything because they will also buy or they'll option everything. Which they can option this. Yeah, it's partly why there's so much weird shit on Netflix is because Netflix will try to buy almost anything

that is up for sale. SAS Ultimate Force with Ross Kemp is on Netflix and they keep recommending it to me and I'm like, I've already watched it. Remember, remember that Richie Rich is on Netflix or the show Flaked and he also owns Netflix weirdly or the Full House sequel Fuller House or Chelsea does. All of this great stuff is on Netflix. Things that Marseille, stuff that you remember that they spent tons and tons of money on. Not even existing stuff exclusively either. They will commission stuff. They will buy new scripts and stuff just on the basis that well better that we own it with this mountain of money than like I don't know, Disney or whoever else. Tune in next year on Netflix for a jerk van de Klerk goes

into railing. I think that's the main point there that you hit on Alice is that it's better for it's better for we Netflix to own it than for anyone else to have any access to this IP. And I mean, that's just classic like landlord behavior, right? Where it's like I want to squatting. Yeah, I want to squat. I want to own all the properties so I can enclose it and then charge access to it. That's right. And so we're going to talk a little bit about sort of the technology that makes this possible. So mostly what they do is yes, they are a tech company in a couple of ways. They're a tech company in the sense of well, they're just a movie studio, but they have like they've paid Amazon web services a basically unlimited amount of money to store all their films

and deliver them. They also have a recommendation algorithm which was designed in a contest in 2009 for prize money of a million dollars. Netflix has since claimed it saves a billion dollars per year and retains subscriptions since then. Wow. Yeah, I'm sorry. Did you say algorithm? The network execubots are coming. Oh, dear God. That's right. Netflix has its own network execubots that it apparently has made a if I do some quick maths here, 11,000% return on executive program to roll dice to determine the fall schedule. More reality shows. So 80% of people's content choices. Again, all of this is what Netflix claims. So I'm assuming it's lies because it's just a tech company

reporting its own internal metrics. They claim to have saved that much money. Who knows? That's a fact for investors. They also claim that 80% of content choices are pushed by that algorithm. They count two minutes as a view though, meaning Netflix is able to count views for movies like Spencer Confidential as as popular as like Avengers or whatever. And with exactly the same amount of cultural impact, let's all go around and say who our favorite character was from Spencer Confidential. Yeah, mine was confidential, actually. I'm still not positive you're making this up as a bit, Riley. I looked at a list. It was extinction. Everyone's favorite character from extinction. Yeah. Yeah. I think the silence afterwards, that was mine.

Or your favorite character from the movie Bird Box. Now, I believe one person here is Watch Bird Box. I thought it was pretty good, Ashley. I thought it was decent. They claim 98 million people watch Bird Box. The entire population of Japan just watching Bird Box. They claim that 85 million people watch Spencer Confidential. Not so confidential. The only place with more view inflation than that is YouTube. That's right. Wasn't there something recently where was it one of these or was there a really absurd number where they said that something had gotten billions of views? It's stuff like this. Yeah. They wouldn't have said billions because they only have like 200 million subscribers. But yeah, they say like half their subscriber-based

watch like extinction in Bird Box, but they count in segments of two minutes. So if you watch a movie for two minutes, that's a view. I love the idea that's actually not a pre-real demo or preview of it that it's showing when you hover over on the Netflix thing. That's actually counting as a view. I don't know if that counts as a view. I tried to look into this and I do not know. I only watch movies the same way I watch porn, as long as it takes me to not. That's right. So the better the movie, the shorter I watch. So the following is with all of that in mind, right, that this is basically a company that says we can churn out incredible blockbusters because we have the data essentially to do it. More reality shows.

We can make everything a hit because we have the data to back it up and we also are already in people's homes. It seems like an incredible investment opportunity. So the following though is a blind item. So we all know Hollywood blind items published by anti-lawyer, who's a fantastic blog, Twitter, podcast, strongly recommend, says the scheme goes like this, buy up as much talent in town as quickly as possible and then it'll all pay off later. Doesn't matter how much you have to pay, you say to your investors, trust us, the financials will work out nicely in the future because we simply chase everyone else out of the game. Just give us a lot of money so we can make sure that everyone else will go bust before we do and it will only take us a few years to make

that happen. Then we'll be the only option in town. We'll control everything. We can squeeze all that money we paid for talent back down while charging our customers a ton of money. And this scheme was run by every single major studio. It was run by Paramount, RKO, everyone, Universal, everybody has done this. And the difference with Netflix is they say, yes, all of those people failed, but we have the algorithm. We have the network executable. This will mean that like sitting down to the same poker table every night for a year and trying to bust out everybody with nothing is going to pay off for us in year two. That's exactly right. Yeah. So by read Hastings' own logic, then it's like,

one, algorithm, two, COVID-19, three, question mark, question mark, four, monopoly. That's correct. Yes. So here's the other interesting thing though. And then I'm going to get into how they actually get their company valued, which is that if you look at the actual distribution of watches of things Netflix releases, they end again, this is not analysis I did this. I'm just pulling a couple sort of very good sources here. This is from entertainment strategy guy. He's incredibly insightful about this stuff. He runs a lot of numbers. He actually said, look, the logarithmic distribution of returns is wildly proven in entertainment. That means for about one out of every 86 movies is going to be a massive blockbuster hit. And the concept of

Netflix was we will use the algorithm to excise the idea of needing a blockbuster because everything will be a blockbuster because everyone's going to the same theater, but the theater is only showing what they want. And that's how you get Spencer confidential. That's how you get Spencer confidential. You know, it's we bought the bought an audience. We've made it cheap. We bought the talent. We bought the writers. We've for some reason bought a wet market in Wuhan. Some reason we have this ancient stone circle with a blood gutter in it. You know, one thing, one thing I really dislike about this though is that it all feels so bloodless. In the original studio system, you would have the whims of some insane tyrant,

right? Who would be like, yeah, no, fuck it. We're doing Westerns this year. I don't give a shit. We're making this happen. Whereas here, like, okay, the algorithm is unpredictable, but it's not interesting. There's no personality to it. It's just more game shows or whatever. I don't expect that Netflix is going to wind up making a movie that takes three years of them being going completely insane in the Philippines, you know, and basically like having it and declaring at the end of it that this is not a movie about the Vietnam War. This is the Vietnam War, which to me is like when I think of the insane studio system and like it's sort of bizarre apex in the 70s, like obviously there was shit way earlier, I think before, but obviously like that

still continued on drowning a bunch of your extras in the tank. That's not going to be a movie, but that is something that will be taking place on a larger state in the Northwest. Yeah. Why does satellite footage of this estate in Colorado reveal a precise replica of DW Griffith set for intolerance? I was going to say something more along the lines like that. No, they actually have a bunch of team building exercises for people to learn to be better at charter schools. And one of them is this awesome helicopter scene that Max directed. I love this map of schools in the morning. We're what we're going to do is we're going to get all the teachers together. We really see the divide between who got that joke.

We're going to get all the teachers together. We're going to have them portage a steamship across a hill. That's right. And then one of the locals is going to kill Klaus Kinski. Just for reference, just because I feel like it's a funny thing to bear in mind, we think about insane Hollywood stuff. Max Lannis' father, John Lannis, directed, I think it was an episode of the Twilight Zone that involved like a Vietnam sequence in a helicopter and it was super dangerous. They did it in any way. The helicopter crashed and killed like a famous actor and two children. Unlike any other helicopter. Yeah, it was two children on a helicopter with a famous actor. Well, they were supposed to they're playing the role of Vietnam orphans and

they wound up killing them in real life. Yeah, the US was Vietnam war. So yeah. So basically with Netflix, we have this grandiose claim that we are more technically enabled to do this kind of thing. And it's going to make everything a blockbuster program to underestimate middle America. It's funny, but is it going to get them off their tractors? It will play in Peoria. So basically we have this. But again, if you look at the numbers, that's it's quite it's reported to be quite averagely successful. It just has the sheen of technology across it, where all those random decisions that are taken by network executives underestimating America are taken automatically with technology. Yeah. So then what? So let's

talk a little bit more then about how Netflix is a creature of its environment because and this is a section I've entitled quote, at least when people make jokes about late Soviet tractor production, they acknowledge that they at least produce tractors. Netflix is a creature of the 2008 financial crisis, essentially. Comrade, we have made excellent film called Confidencial Need Spencer. So where essentially again, I think we've thought we mentioned this on Quibi on the Quibi episode where when if you have to solve a crisis, if you're Ben Bernanke and Obama says we're not going to do any kind of redistribution, etc. etc. We are essentially going to do a supply side recovery. When that means is reducing interest rates, printing money,

giving that money to the banks and the banks lend it to businesses they think will be profitable. But when the banks have infinite free money, they don't lend to say, I don't know, hard scrabble podcasts or mom and pop, you know, I don't know. Well, they are also. Yeah. Well, I would say something too is that when you think about, I mean, I remember Netflix, I was in college when the DVD service was really popular. It was kind of the only game in town aside from because streaming wasn't a thing yet, you know, aside from like Blockbuster or like other video rentals. And so like in a way, it was great because, you know, if you wanted movies that weren't the things you'd get at Blockbuster, you were able to get them in something that was like

very conveniently priced and like the whole postage thing was free. And so it was great, right? Yeah, you didn't have to talk to a clerk who would be like officious about your taste in movies. Yeah, exactly. No one is getting mad at me that I'm renting Fern Gully the Last Rainforest for the ninth time. But the thing is, is that the you can see that moment, like you're saying rather that inflection point, at least to me, where like once they got this much money dumped into them, like that's where like all the megalomania has taken over, like because it really is unrecognizable when you think about like, it's the it's the joke about the Milwaukee Bucks logo from the 1960s of like the cute

cartoon deer. Now it looks like like the logo on like some kind of fascist military unit, like it's genuinely like it went from being this this nice thing that was convenient with the internet and movies to like the charter school death camp you're describing and things along those lines. Like it's just it's it's gotten the I don't know it's I've never seen trouble is the teachers unions ruin death camps. They need to be run by small business people. Like I guess I sort of wonder if if you gave like infinite quantitative easing to any company if they would go this insane or if there's just a particular special sauce yeah well no it's not because this is what happened with zoom they had their idea for a pizza van and then they

basically got an infinite amount of Saudi oil money and then tried to become the Amazon of food and ended up going bust without doing it kind of by this point is like example after example of basically whatever business you want to do whether that's like ambulances or making pizzas or whatever that like once you turn the cheat code on it's really going to produce some weird results. And so right what happens basically is you if they move to solve the crisis right that has caused like living standards to just crater and I don't know if anyone here notices but like people have stopped calling America like even conservatives have stopped calling America the best country in the world and as they have with with the UK as well like no that's not credible

anymore but like people are just dying earlier their lives are shorter and stupider and governed by more cruelty and it's too obvious now to look away from it. There are food deserts expanding out everywhere like fentanyl's hollowed out the middle of the country this is all so obvious and all of this is because there was a crisis that they were ideologically not able to recover from and so well like you have to understand that all the starvation and stuff that's one side of that coin Netflix being what it is is the other side of that coin those are fundamentally related propositions. They can't disentangle them. There's a weird inflection point as well around that same time do you guys remember in like 2011 they tried to spin off the DVD service as quickster spelled

with a Q and so they like announced that in like September of 2011 and then they abandoned it less than a month later because their stock price had plummeted nearly 30% and they shed like 800,000 subscribers when they were trying to do this rebranding. Yeah I mean that's it's unsurprising right it's the because it's not just the finance it's not just the pure sort of finance end which is basically governed by interest rates right it's also the idea that we have given up essentially on anything but a kind of sort of caution not cautiously but fervently optimistic technological wiggism to large to basically get us out of this problem that we're in. Yeah it's like it's a slight modification of the kind of facile but basically correct like Occupy Wall Street thing about

the banks got bailed out but not the people well what the banks did was the banks were delegated this bailout and what the banks did was Netflix you know. Yeah well because when you have a zero interest rate the implication is that no project you lend to has a chance of succeeding that's what a zero interest rate means and the closer you get to zero the less like sort of odds of success you have which means that if you have money that's been loaned to you for free the only rational thing to do with it is to try to lend all of it to one monopolist essentially. And we talk a lot about this on This Machine Kills as well that like the 2008 financial crash was the real cataclysm moment because immediately in the aftermath you see Uber and Airbnb were

founded you know a lot of the the companies that were now so preoccupied with and they're quite literally writing the laws of the you know of the state they were all founded in that immediate aftermath because of this zero interest policy. Yeah I was thinking about this too a recommendation from a fan I was checking out this lecture earlier by I don't know I've never heard this guy before and I wouldn't pretend that I was super clued into this stuff but there's an academic named Gaspar Tomas who's a Hungarian guy and he was talking basically about post-Soviet post 1989 in Eastern Europe but something he said that really struck me was talking about like what is the sort of failure of liberalism and it's just that there is this contradiction now

where governments still have to kind of make these motions as if to pretend that they're going to try to solve the problems of the weakest people in society but they don't they actually just are not going to that we are just going to abandon this we are not going to have employment or care for people we are not going to better people's outcomes like it doesn't that there is the charade that it's going to get better but that everyone has resigned themselves to that contradiction and like I'm not trying to get super like wonky about this but it does strike me when I think about what you said earlier Riley I mean I'm from I mean I grew up in the Ohio Valley which has been completely gutted by deindustrialization and by opiates at this point and it's just one of

those things where looking at this stuff always I'm reminded of the fact that we as a country as Americans have more resources than I pretty much any country in the history of humankind to solve these problems if we wanted to we have we have the global reserve currency we have this enormous amount of resources and space and population everything we could we could solve all these problems in terms of people's quality of life earnings etc protection security of the state all these things if we wanted to we just choose to live this way and it's like so you get that fucking rule it just it's a code America got it fucking rules doesn't it like I said you can get Orc cop the movie a hundred times but like you will never ever have single-payer health care

I think the real opium crisis is netflix right opium masses am I right yeah well so another famous stanford alumnus or stanford resident Neil Ferguson out there trying to cyber bully students who call him a loser so if you want to look at that one step further it's that not only does netflix have an incentive to make bright and an incentive to say that every single man woman and child in America watched bright and loved it I did because then what they do is they take those numbers back to their investors or lenders and they say everybody love bright give us money to make bright too it is kind of weird to me that they made bright too

that this process is repeated itself in the same way actually yes oh man I am reminded though that the similar phenomenon took place with facebook that facebook basically juked all of the stats on video views and then basically every newsroom in america was like a video fired all their journalists and then it turned out that that was not that these video metrics were massively inflated like I'm yes I'm not surprised that netflix has done the same thing but it's just when you think about like you know the economies of several regions of the world's worth of money is involved in these decisions and it's all just basically made up yeah like well it's it's made up because a platform makes money on the number of transactions that's one of the core ways a

platform makes money which means that they just need to keep putting stuff on there and also if you're already a monopolist or if you're trying to become a monopolist or you're spending in a zero-rate world then you don't just and you if you have the difference is the people who have access to the zero-rate money and the people who don't if you do have access to the zero-rate money then of course you're going to make bright too because all your money is free I'm just reminded of something that like there was a movie that I didn't had recommended to me that was like some Italian movie from the 50s that I wanted to watch and I couldn't find it on netflix or any streaming service or amazon anywhere I couldn't find it on torrents the only place I could find it was some

like niche dvd rental service like that's the problem still exists but you're this is never going to be addressed because ultimately like the numbers say bright two through bright infinity that's what you need to make absolutely and the thing is right the end game of any anyone who's trying to be a monopoly will either get to the point where they become a monopoly and then they can raise their prices and then or but they pay to competitive for their suppliers or they crash and burn and go bankrupt and netflix I think they're realizing that they're in the end game now because they are raising their prices and like I said well they're reporting subscriber growth if you actually look at where those subscribers are coming from most of those subscribers are in

countries like india and malaysia where that's a three to four dollar subscription not a 17 dollar subscription so netflix but they all loved spencer confidential which often high people could not get enough of it down there yeah and and these numbers show out in the q3 financials too so I was looking through netflix's recent financials and and and they report that the largest contributor to their paid membership growth this quarter was the asia pacific region and it was 46 percent of their growth with like a you know 66 percent rise in revenues from that region and so they they are you know in the letter to shareholders they're saying you know that we've achieved double-digit penetration in broadband homes in both south korea and

japan got to the kingdom well this is encouraging we still have much work to do and we're working hard to replicate the success in india and other countries so they're they're basically abandoning the like us like canada market um saying we know we're overly saturated there so now we need to go we need to become globalist in uh read Hastings own words and that success in asia is in large part down to the hundred person choreographed dance sequences in spencer confidential spencer confidential now is just sort of a black box movie it's whatever we think it is designed by the algorithm it's like bollywood combined with bright combined with i don't know the tiger king it was just carol baskin with a moustache dancing when when the

algorithm pulled the information that was the number one boy's baby name in in america so like it's just me and me spencer it's a cultural spencer yeah so basically these days have been mohammed confidentials i might so uh black confidential absolutely thanks oh wait read hastings bas yeah i'm starting i'm starting a netflix if you don't like it is it do yeah basflix yeah i think i watched mohammed confidential at taliban training camp basflix just only has the films of ray winston on it that's right so um you might say that they are uh saturated in their high value markets and only growing with a relatively high cost of sales in relatively low value markets which let's move on to their balance sheet that's right yeah that's good you

want that uh so their balance sheet is a get is very interesting and um i know i'm saying that is the host of an entertainment podcast it's time for max the nitty gritty event yeah that's right now this uh it's always that time it sort of is so basically get out your tracksuit your branded calculators you know economics famously called the exciting science yeah riley's wearing a croupier visor the fun science um so this is from the ft which is that netflix subscriber grow for the third quarter of 2020 disappointed wall street falling short of the companies and falling short of the company's own expectations of itself uh and they added to that gloom by pointing out that it expects subscriber growth to decline on a year by year basis in the first half of 2021

and there are concerns that that growth may have already hit a peak now listen they're gonna dig themselves out of this with bright three yeah exactly bright three confidential yeah we're we're spencer confidential the orc cop have to work together exactly yeah why not to form a bollywood dance street to win a dodgeball competition to keep the bollywood dance center open peter griffin where did you come from so it's all just the simpson spinoff special yeah i'm going to i'm going to india yeah thank you mark mark peter griffin wallberg well peter griffin so um basically right their approach to bringing all these dance sequences to baston they're yeah boston would their approach to a horror way he stands for that's the

what's dead for boston um the netflix so we're full if you don't want to make a netflix movie out of this episode of this podcast you could also make boston would a bollywood movie said in boston that's right um don't don't like that we're gonna stop yeah we're gonna stop the marathon bombing with the dance yeah so their approach to their approach to growth has been basically debt fueled as i mentioned due to zero interest rate problem um and they essentially what they do is they borrow i think 19 billion was their last content the content spends they'll borrow like like 10 14 19 billion at a time amortize that so expense it over a few years um and they borrow in both europe and the us they borrow as a junk bond in europe but they only pay three percent

or as you'd ordinarily expected triple b rated bond to pay six percent which means basically that the ratings agencies do not understand this company so like and that's in itself a problem that ratings agencies don't understand business models because maybe on another episode we can talk about how like banks banks stability relies on owning certain asset classes and certain not just certain asset classes but also certain like a certain grades of asset rated triple a triple b blah blah blah dear standard and pause pay this podcast to consult you so netflix is rated as a junk bond but borrows more cheaply than other established uh higher rated players in the game because everyone wants to lend to them because they want them to be a monopolist so even though

their financials are dog shit the investment case is if you like high value low likelihood of six it's it's a high value it's high risk play so it's it's basically the same shit as like uber and all these other people it's like yeah we just lose money hand over fist but at some point we're going to make money and no you cannot see the calculations but it's a real realistic really nice investment vehicle called a collateralized net obligation episode title i think my favorite with these sorts of companies is one is also when they present the metrics like you know one of uber's favorite things is to use adjustments and you read the fine print and the adjustment it's like um we're going to take out 38 percent of our expenses and we're going to put them in

this corner and then as you now can see the line is going up and now if we turn the graph around when you factor in vibes yeah well the um the arabian b released there because most of these will release an adjusted ebitda and so arabian b's adjusted for how we're feeling about it yeah i love i love a case of like money adjusting so basically what they did was they said we've adjusted our ebitda to include not just taxes that we pay on like capital and stuff but taxes we would pay as parts as parts of transactions to municipalities in case they charge us as a like a hotel basically so if they do what barcelona did so they have basically their ebitda is just a measure like their official it's a non-gap measure but it's an official reported number is

how well can we avoid tax cool and it's amazing that scc is like nice nice cool awesome it would be really funny if netflix managed to avoid tax by getting itself classified as a hotel somehow and then was immediately put out of business by oyo my son to the rescue their net profits are actually up from 0.6 billion in 2017 to 1.9 billion in 2019 higher in 2020 but they're burning cash even faster so your profits are your profits can include non-cash items so like assets as well and so their free cash flow is followed by over 1.3 billion between 2017 and 2019 so it's basically like we technically we lost money but if you say that this golden arm is made with 14 billion dollars then actually we made money yeah because we've made it vital for ourselves to like spend and spend

and spend constantly on everything all the time that's right i just i'd someday wish that something that i'm involved in could be enter into the class of thing that can be granted vibes ebitda because it's just like it would be amazing like you just don't have to show any kind of solid fundamentals here it's just more like an hour accountant would not go for this and when people do point out the fundamentals you can yell at them and say that they're just being negative and they don't really understand how how important and you know energetic your company and they would understand it better if they'd gone to a charter school if you had learned maths in a charter school you would know that this is good actually right back do you want to voucher any fundamental

analyst of companies like this has missed the point that it is politically essential that they survive and the politics of the politics of monitorism basically say that they will survive of course because it doesn't because they are still just around the corner from being a monopolist they're going to make you a ton of money until they fail but it was probably going to take them a long time to fail right so any so any netflix bear just like the tesla q people they're just trying to apply the laws of normal economics yeah fundamentally different beast this coyote can't be like running in air he has to fall down at some point so and and because what you're looking at is essentially you're looking at organizations that exist almost from like

central bank patronage rather than say any kind of fundamental bottom-up analysis it's what happens when you do a top-down recovery you have a top-down economy and that's what netflix is a part of that's why i love to have a command economy but instead of building tractors we're building sequels to the or so basically the cash spending grows every single year because they always need to make new content they need to make new content for new areas and because they constantly need to keep people like watching and it has worked like they have as much they have more than an order of magnitude more than the next biggest streaming service and again that's according to end repayment strategy guy but like again how do they keep those how and how do they keep that

growing when they saturate because of high-quality entertainment of spencer confidential yeah and also if i'm wrong but a lot of the things you talk about they're like propensity towards optioning everything but some of those options for things like say for example friends when they optioned it like those are incredibly expensive didn't option friends they bought the they were allowed they basically bought the rights to show it for a very short period of time and then because everyone realized how valuable all their properties were the people that actually own the rights to friends are not going to sell them to net we're not going to lease them to netflix again instead that's just going to go on the you know nbc peacock stream or whatever same thing with all the marvel

movies disney plus is now disney's pivoting to streaming so how's netflix going to going to pay for the new adventures adventures all the other people around this poker tape was suddenly realizing holy shit this guy's been sitting here every week for a year just going all in i don't think he's fucking got anything so essentially because netflix they have to get enough money to get good or it's basically they're just trying to fake it by swindling everybody out of their like low-cost classics like friends or whatever to or it's always sunny in philadelphia to then basically um push on so that they can um they can get enough of an original content library that as they lose the rights to stuff like the marvel movies people still have your own friends

you have your own marvel movies yeah why is my brain stuck in the gear of imagining a bunch of guys in like the late fifties sitting around in the cia headquarters like in shirts leaves and glasses like smoking in this like fogged up room going so the russians have been developing something highly dangerous that we cannot compete with it's called spencer confidential it's all spencer the russians have orc cops they have orc cops and so yeah the formula is essentially that you that you go to a european like lender who's just got money from the ecb or you go to you know the the american lender who just has infinite fed dollars they give you a you know 14.6 billion dollars you then give 80 billion each to the obamas and like harry and meghan the sussexes

and then like they basically just sit down and talk about like their perfect sunday keeping up with the sussexes yeah and the grants came in they're like well you know you really is sad the society is racist towards orc cops you know i think you should make more movies about this um and the interesting thing here though right is that netflix has a market capitalization of what a couple hundred billion um hang on i'll look at netflix's actual market cap it is total enterprise value uh to increase it yeah i think it's um about 200 billion um give me you know yell at me if i'm wrong about that i do love the idea that netflix while ubiquitous and a large company is basically valued the same as like bowing like the idea is just conceiving of

that the dvd mail for every man yeah i just i just looked it up riley it's 230 billion is their market cap so they're they're vying with walt disney so we're we're gonna talk i'm gonna talk a little bit now about how that market cap how we get to that market cap because an enormous amount of that is investor goodwill which is just like the amount of money above it's the earnings multiple of the stock price like the amount of money over their earnings and assets that invest a goodwill hunting now that's right uh that's what's called in the balance sheet um so uh basically you calculate the value of business by looking at all the value of all of its assets versus liabilities that's the stuff it owns the plants and property it owns versus the it debts it owes

the vibes yeah you adjust it for the vibes so netflix will spend money on a movie and then unlike a normal like movie studio which amortizes like the depreciates that investment over like i don't know a few months maybe a year it depreciates its investments between four and ten years which is astonishingly long yeah because you can go back and watch spencer confidential anytime you want you can't in my case every day yeah it's not being pulled from theaters and obviously your demand to watch an old movie is gonna remain constant forever hmm their calculations are based on some like mass amnesia event where everybody forgets yeah and so option the men in black ray 100 million people a day hover over the

spencer confidential icon on the netflix app that's the same as the opening of titanic in 1997 that's right yeah so essentially what happens is because as they depreciate their films over a long period of time regulators and ratings agencies don't understand if that's correct to do or not so they just let them do it and so then netflix is well i guess we have no choice but allow you to do this because we do not know every regulators are just drill like we cannot tell if it's good or not it's not even drill it's the mike fossey tweet that's like check this out motherfucker and i slide onto the floor and it's not even clear what kind of move i was trying to do that's the same shit with perdu pharmaceutical though the same fucking shit that happened with

with fentanyl patches and stuff people were like wait aren't opiates addictive like no we have magic coding they're not addictive anymore and people were like okay cool i'm sure that's true so of netflix's netflix's valuation is based partly on its calculation of its assets and what those will be worth at a certain time so therefore it is this is a this is a deductive syllogism at this point netflix's valuation is based at least in part on the assertion that tiger king will be a worthwhile property after the next us election well it sure will be when joe exotic wins yeah i really think that tom cotton is just like carol baskin yeah that's right i think actually carol baskin will be the next us president damn

that is this 2020 on the phone yeah baskin baskin robbins 2024 aren't tim robbins why is reid hastings donating millions of dollars to joe exotics 2024 run i'm very excited when a bunch of like you know normie journalists and low follower account people start treating in 2024 ah damn 2024 could this be any more carol baskin god they love talking about her anyway so but that's so that's like an independent analysis like it has shown that those watches plummet after a few weeks plummet not with spencer confidential that is as addictive as fentanyl and because most people only know what netflix recommends them they only and this goes for investors too investors are very stupid they'll make decisions just based on what they see on

netflix they see stuff they like they don't see the gigantic amount of shit netflix commissions like disjointed or whatever that nobody watches that fails you only see its successes so it looks great but the fat all of these accounting tricks the reality of what it actually spends money on and then how it represents itself as the success to the rest of the world appears to me or a might appear to a reasonable observer you could say that i would like an explanation as to how this is not smoke and mirrors i mean i sound like greg's greg stewby in front of congress complaining about how people don't like his posts but i have noticed that that if you say you want to watch a fit like a film like a hollywood film or something like a major studio film on netflix it does strike

me that more often than not you will not find it but you will find dozens and dozens of series as you've never heard of like it's just like yeah called smoke and mirrors like it does it does strike me yeah that like they do produce a lot of stuff that i can't imagine very many people watch and i'm always just blown away by the fact that none of it is it's not like youtube original movies it's like high quality like it's it's clearly high budget and you're sort of like at some point the shoe's gonna drop right like yeah you hope yes yeah so but also it does seem to have like kind of almost brainwashed people to an extent like recently i was chatting to a girl on a dating app and she without a shred of irony said to me that she thought the greatest season

of television she'd ever watched was the first season of money heist it's supposed to be pretty good to be fair it's fine but it's like the greatest season of television you've ever watched maybe this will be a good company it's like the only season of television she's ever watched but so netflix's content the library is valued at only one tv series you're supposed to like and that's the fucking sopranos it's the only one with podcast the cache that's right right so anyway that is the financial wizardry behind this this company like it's too it's obviously too extreme to call it a pyramid scheme like it's a monopoly play it's going for a monopoly it could work why is this monopoly piece the shape of a pyramid yeah you know they might they might

pass go and collect two hundred billion dollars or they might end up in jail and no one can say which one of the two will be and i think one of the but and so like it's in that sense it's quite a normal tech company i think some of the ways that they do balance sheet magic is really interesting balance sheet magic and i think that uh one of the most interesting questions that when we have it discussed yet but one that i think we must is the implications for like art and cultural production right because as an example uh bloomberg has tracked the average life of shows it shows that in 25 shows that in 2015 they lasted for 2.8 seasons by 2018 that number was down to 1.8 and by 2020 it's even lower and again this is on the basis of mercy unless you can take it to

adult swim yeah apart from spencer confidential which will run and run like the mousetrap for 50 years absolutely um it's the new extenders baby so so then we have to ask right what are the implications of art made essentially by algorithm when things are impossible are we living in the world of the movie bob there's going to be a lot more people getting stuck in things spencer confidential but you're stuck in the washing machine so i mean ed and jay thin at tmk crew like what do what do you think happens when when when our algorithms decide what cultural production we can consume i thought that was going to be a much more metaphysical question i thought you're going to be like what do you think happens when we die well so um what can you answer

the question i asked and then later we can talk about the question there's definitely um concerns you know we've talked a bit about uh political imagination and just imagination in general so there's the usual thing which is like you know if we get if the cultural comments get a clutter with more shit half of it no one sees and half of it it's just like bright 76 that's going to have like a poisonous effect on the sort of world that we can build and or interested in building uh and what we think about the world that we live in today but i think also there's just the um uh the the fact that i think it is going to you know part of it is training people it feels like it's training people right to want um to want that sort of shit and to also

seek it elsewhere and so the whole entire uh until the whole entire market gets run by the racism computer essentially um and i don't know you know i think just uh the large concern is you know what it does on imagination on political imagination how uh it's limited like are people going to be interested in solving certain problems or are they going to think that they're inevitable locked in because for some reason the racism computer is telling us that you know that's the way the things are yeah i mean to me the just to take an example i mean take something like the social dilemma documentary right which according to netflix has been viewed 38 million times and they see that as a big success and so those are the kinds of documentaries

that they're going to be putting out there right and it's no accident that they happen to option you know a a tech criticism documentary that is just completely vapid and shallow and by one of the biggest grifters in this area tristan harris and that crew uh and so i mean the netflix is not some kind of like neutral arbiter of taste right they are a production company they are making culture and they're going to make the kind of culture that they want it to be right they're not going to reflect it as much as read hastings talks about how netflix is against this like steve jobs model of the the top down you know creator the god entrepreneur or whatever and that kind of gets into what we'll talk about in the next episode but at the end of the day they

are making uh like highly value-driven decisions about what culture ought to look like and and and the and the question then comes to right to because i think with a with a tech company you always end up sort of asking the same types of questions which is to what extent are they malicious to what extent does their algorithm work actually like to what extent are they are they just repeating the same kind of cynical network executable decisions to what extent are they being politically cynical with what they commission sort of like why are they stupid and naive yeah exactly like it's a lion eyes and the obamas and trying to present the problems of um you know facebook is about mods while being a a charter school guy it's basically the perfect you know

company for the joe biden era of america um and i just recently read as well that you know that the weird dumbass fleets that twitter is rolling out yeah that was that was a product of elliot management telling twitter it needs to be innovative by doing this thing so that the how good friend elliot management i do true yeah the guy who tried to reign in softbank yeah to mr hess's management a son elliot um my mortal enemy no one tries to reign in masayoshi's son and his brilliance i think it's i think i can't i think it was either alice or nate you said it earlier which is a command economy that's just completely disconnected from even trying to represent reality yeah it's a command economy of nonsense i love i love our

child kings it's like the uh gospel and two is or similar to the gospel and two point oh thesis that uh f t alphaville editor puts out that the other day she was like in an argument with uh with some mmt people saying that we live in actual communism disguised as uh the as you know state capitalism um and one of her large arguments was you know that like yeah we also live in the command economy that is like you know wildly removed from reality but somehow also uh communist and no one really owns anything and private property is gonna yeah it's basically like we live in the soviet union if all of their budget went to mas film and the nkvd nkvd officer is my favorite movie protect protecting confidentially spencer as he goes

about his important movie business um and i mean i think there there are a lot more of the sort of the implications for art that we can still really get into in the in part two i mean part two will be will be discussing their like completely psycho work culture and then i think that because i really want to drill more into like this idea of the implications for cultural production and the limits on imagination that you get when you centralize all of this under the control of an algorithm created by some of the most like just vampiric lifeless bloodsuckers in this entire world right more reality shows uh alice you're getting better at those um you know when you centralize and productionize all the synonyms cynicism of hollywood in one company you know

that that does have profound implications for the imagination but not as many of the paedophiles usually and when and when all of that and when you have a company that does that it has to be famously insane which netflix is so tune in not only to this machine kills podcast hosted ably by edward and jaython but also tune in to part two on the patreon where we will be exploring netflix's famously psycho work culture which can only be explained like as silicon valley feel good mawism join us on the confidential feed tune in to see the real reason riley brought us on which is to like the the management consultants in office space we'll be running the keeper test on every member of the tf crew what would you say you do here well what i would say i what i would

say i do around here is i say thank you very much to ed and jaython for coming on today ah thanks for having us uh our reminder to all the listeners thank you for listening to listen to tmk to also subscribe to our patreon where you're here part two of this episode later this week later this week later this week and the good that's right and spencer confidential we should watch spencer confidential for like a bonus episode why not part three we watch spencer confidential yeah um all right do it on the twitch stream do it on the twitch stream yeah absolutely i think that's tos anyway um thank you everyone for listening do we have the online store up yet by the time this comes out on tuesday uh well you have the design we'll try we'll try

well maybe the online store will be out but the most important thing is stop email about the shirt please do not do not email do not email with my host yes do not we will have an online store uh that will be released soon through which you can buy shirts do not email milo yeah please do do not um yeah i'd listen to well there's your problem isn't a hell of a way to die listen to the russian podcast listen to take a post yeah listen take a post yeah we have a we have a patreon now for the russian podcast which is you know it's a fledgling patreon we have a patreon now for tf oh yeah we do if you don't know about that uh all right later everybody bye see you you