Upgrade - 364: Content Arms Dealer

Episode Date: August 2, 2021

Myke's headed off on vacation, but before he goes, he's made time to discuss last week's Apple financial results. Then Jason welcomes special guest Julia Alexander for a mega-Upstream about ScarJo v. Disney, the future of the movies, and the current state of affairs for streaming services.

from relay fm this is upgrade episode 364 and today's show is brought to you by pingdom text expander from smile and hello my name is mike hurley and i'm joined by jason snell hi jason snell hi mike hurley It's good to hear you. It's good to have you here on Upgrade. Like normal. Of course. Perfectly normal. As always.

Hashtag Snell Talk question comes from Instantiate This, who asks, Jason, when you make hot tea, before drinking the tea, do you cool it down with ice cubes or water? Or do you wait patiently for it to cool down? Or can you just take burning hot tea wow what a question um ice cubes i have i have done the ice cube thing okay very very very rarely it's generally when it's in a thermos or something where it's never going to get cooler yeah but generally well first off let me let me tell you again about the tea robot i have this um breville automatic tea maker so what you do is you put in the water and then you put the tea in a little

basket and you press a button and it takes the water up to the target temperature and then lowers the basket into the water for for the target time and then it lifts the basket back out, because if you leave the tea in the water too long, it gets bitter and it's bad. And it beeps. And at that point, the tea is ready to drink, but it's also, whatever, four minutes off the boil. I rarely get up the moment that the tea maker beeps in order to go get the tea when it's that hot. I'll usually leave it a little bit. And it actually keeps it warm. It's got its own threshold.

And if the tea goes below that point, it will actually warm it back up to a nice hot temperature. This is why I love the tea robot. It's great. So it's generally not a problem that the tea is the right temperature for me. If I leave it too long, it will get too cool

and I'll actually have to microwave it in order to get it back up to an appropriate temperature. But I have burned the roof of my mouth on tea that was too hot. But generally, I guess the answer here technically is wait patiently. But a lot of times I'm not really waiting because I know that I can be as patient as I want and the tea will be a good temperature when I get to it because of my tea robot. That's my story. Have you ever considered one of those heating mugs like the Ember mug? when I get to it because of my tea robot. That's my story. Have you ever considered one of those heating mugs like the Ember mug?

I have. And I got to be honest, I drink my tea so fast. It's rare. It's very rare that I think, oh, the rest of this mug is cold. I have to get distracted for that to happen. And when that happens, I'll generally go out, put more tea in the cold. I have to get distracted for that to happen. And when that happens, I'll generally go out, put more tea in the mug and microwave it

to get it back up to temperature. And basically it's solving a problem I rarely have. And when I do have that problem, oftentimes I can solve it by, if I'm anticipating that I'm going to be keeping this tea for a while, the thermal mugs, like the RelayFM one that you guys uh sent to

hosts like the yeti the yeti mug and and when i um when i visit my mom in arizona i bought a giant one of those that i brew my tea in and then it's basically two plus mugs worth of tea in the giant one and because it's it's uh it's insulated it it just stays hot because then it's two cups worth of tea that I'm drinking and it would cool down even more, but it doesn't because it's insulated. So it's just not a problem. But this was a great question because it allowed me to talk again about the wonders of the tea robot, which seems like a ridiculous thing. And yet I love it. It is so great. And we drink a lot of tea in this house. Neither my wife nor I drink coffee. So tea is the drink of choice every day. I make at least one pot, sometimes two in the tea robot. And it's nice. Whoever gets up first in the

morning, you know, feeds the dog, lets the dog out, starts the tea, and then generally comes back to bed, and then we just let the tea make, and then at some point we get back up and the tea is ready. So, it's pretty great. If you'd like to send in a question to help us open an episode of Upgrade, just send out a tweet with the hashtag SnellTalk, or use question mark SnellTalk in the RelayFM members Discord.

So, I'm returning the favor today. Yeah, this is the summer of fun uh sorry summer of summer reversal of what we did when i went to hawaii which is you are going away yeah i uh i'm on a what has ended up being surprise last minute trip to romania where we've been trying to book uh to go to romania for the best part of a month, and we've just kept having flight after flight canceled on us. And as it stands right now, when we're recording this, our flights are locked in. And so I'm going to be away next week.

Right. This week. This week. This week, as you're hearing this. Broadcast professionals. As we're recording it. Yes. Time. What does it mean? Because your wife's family is in romania your wife is from yes so it's not like you're just like i grew up in romania i've been just desperate to take a vacation to romania it's like no it's actually to see her family that she hasn't seen so uh jason was going to take over the episode i was going to miss it all and then i what i've forgot forgotten about though is that apple's earnings report came out uh did you remember

that this had happened i feel like everybody that i knew had completely forgotten again uh somebody in the six colors slack posted a note on monday that said so what are we thinking for apple earnings and i was like oh no good. Good, so everybody forgot, which is good. I like when everybody collectively forgets that a thing is happening. There's something about the last year of earnings reports that for some reason, everyone just keeps forgetting that they're occurring.

I don't know why that is, but- I put a note on my calendar for three months from like last week saying, check for the results date. Very good. So that I can remember to actually do that. Usually I remember, but there's enough going on. I think usually that alarm goes off inside my mind at the beginning of that month. I have a little internal timer that kind of goes, but I was on vacation.

And so all timers were snoozed. All timers were suppressed. So I just completely missed it. Um, but, uh, so that was, yeah, that was, that was a surprise, but it was fine. It was Monday afternoon. So I had a whole day to prepare. I did, uh, have a couple of things that I moved around because I didn't realize I was committing to so many things on the day that I also was going to be spending all afternoon and evening working on Apple results stuff. Um, I, I, uh, what I find charming about this is, uh, you like talking about the Apple results on upgrade with me so much that you said, let's do the prerecord. Cause I don't want to miss the conversation about Apple's results, which is very nice.

It's not the,'s not the the topic the recurring topic that i would have guessed is the one that would make you put the brakes on your vacation in order to uh discuss with me but it's very charming it's very nice i i genuinely i know really enjoy this this time if it was ironic we would have had a laugh about it and then uh wouldn't have recorded this episode so here we are i should be packing right now but instead i want to talk about apple's third quarter earnings so these are the headlines 81.4 billion dollars in revenue so of course beating every expectation this is apple's largest uh third quarter in their history by quite a margin this is 36 year over year growth for a third quarter this was primarily

driven by iphone sales at 39.6 billion dollars for the quarter that is 50 year over year i want to come back to the iphone in a minute because there's obviously some stuff going on with that. Mac sales, $8.2 billion, 16% year-over-year. iPad, 7.4%, that's 12% year-over-year gain. Wearables, home, and accessories, $8.8 billion, 36% up. And services at $17.5 billion. That's 33% up. This is tied as Apple's largest year-over-year growth from a services quarter,

with Q4 2017 being the last time they had this kind of growth. And to put that into perspective, it's because of Apple Music. Apple Music was taking off then, and App Store growth as well was what did that all the way back in 2017. The iPhone accounted for 49 49 of the revenue which is pretty normal these days it's like a little bit less than half uh services is now 21 was 21 of revenue for the quarter which is more than the mac and ipad combined which was quite a scary thing i think to look to see that i was quite

surprising to me. They're comparable, right? But yeah, it's 21% for services and about 19% for Mac and iPad. Or the other way you could do it is there's 49% iPhone. It's 30% wearables, home accessories, Mac and iPad, kind of the non-iPhone hardware business. And then 21 services apple are predicting that they will have some supply constraints for the next quarter and

growth may not be as large in some areas yes although at the same time they gave they refused to give give guidance and then they gave guidance which is something that i mentioned in my story on macworld about this because macworld has me has me write a reaction story afterward every year. It's a great story. I love that story. It's a fun story. I get to sit there and think, how do I write the same thing with different numbers every time? And it's always like, it's an interesting challenge mentally about that. But here's the thing is, they said they would have strong double-digit year-over-year revenue growth next quarter, and it would be less than this quarter's 36 percent year over year growth, which to me sounds kind of like really broad guidance, which means next quarter is going to be between 71 and 88 billion dollars. And probably, you know, very strong double digit means it's above 71 billion by some amount.

1 billion by some amount but like however you slice it they're forecasting another record quarter next quarter that their fourth fiscal quarter will also be a record so for all of the things we're going to get into about the ways where they sort of said you know watch out there are some shortages they're still confident enough to predict basically another record so then they didn't predict any shortages for the mac it seems like that the issues that they were having for mac stuff has resolved itself which is interesting especially because i guess at some point we're expecting new ones so that they're shoring that up i had a i had a thought about that which is i wonder if the reason that they're not expecting Mac shortages is because they know they're delaying some of their Mac products, right?

Yes. Like if we've got the story about the new MacBook Pros and how they had some constraints and they delayed them, let's assume that they delayed them into this next quarter or the quarter after, but they're building up demand or I mean, they're building up supply. So then it would not be out of balance, right? Because they feel like they're confident enough now that they can get enough of those that they would sell over

the next three months. Keeping in mind that we're in that quarter now, that's July, August, September. And that means that even if they came out, I mean, would they even come out with that laptop in that quarter? So maybe it's delayed until the following quarter and therefore there are no Mac problems. And also they have a run-up to maybe build those so that when they do release them, they'll have enough to sell through. So I'm not sure. And they may be thinking, right, that's one way you talk about staying uh in balance is you delay things and then they don't get released and then there's no demand for you to fail to fulfill supply it's it's you know there's a lot of tricks you can do with the way that you talk about there may be

reduced um uh they might be selling less because that people might be aware that sure it's on the horizon right which also lets you keep in balance, right? Because your demand drops temporarily because people are waiting for the new thing. And that's good because you're having trouble building and supplying anything. And the net result is that you're back in supply-demand balance for the Mac. But yes, so it's more complicated, but they didn't call out the Mac. They continued to call out the iPad, though, and they added the big one. They said that the iPhone is going to be supply constrained, at least somewhat, which is something.

You see, something that you noted in your article was potentially another October release, which could be what they're hinting at. However, my kind of feeling is if they think they're going to have year-over-year growth, I think that you will start seeing them on sale in September, but not in high numbers. This is my guess. If they're saying the iPhone is going to be supply constrained, one scenario that's pretty strong is that they're going to do their early September announcement, and they're going to ship them late September, which means that some iPhone sales will be in this quarter that we're currently in. And what they're saying is, you know, they won't be able to ship enough of them in this quarter. And so those will get pushed to the following quarter. And will they be supply constrained that quarter too?

I don't know. Maybe, probably. Um, it's interesting though, cause that, that is Apple trying to put a little bit of, uh, limitation on industry, you know, wall street, uh, exuberance about iPhone sales where they're saying it's, it's a neat trick. Cause it's really like, look, people want to buy the iPhone, but we may not be able to get them the iPhone. So just be warned, but we're still going to, we're still going to break records. So it's, yeah, it's kind of a mess. But I do think that it could possibly be true that they won't ship these iPhones until

October. The truth is that unless you get an iPhone the first week maybe that it's out, if it ships in September, the rest of those sales are in the holiday quarter, which is why the holiday quarter is so big. It's, you know, most iPhone sales are probably not in late September. They're in early October, I would think, through the holiday. So let's go back to the iPhone with the sales that they've just done. When I saw the numbers, right, my initial reaction was like, oh yeah, of course, because the iPhone was delayed. And then realized, oh hang on a minute, that was last quarter. The demand

wasn't necessarily for this quarter. If you're, just to try and back up what I'm saying, you know, because the iPhone came late, we knew that there was going to be a quarter where they were going to have the majority of their sales, so it was going to be in the Q2 earnings, because that was when the iPhone was actually available. Like them having sold as many iPhones as they have right now, that 50% year over year, that isn't what I was expecting.

Many people were expecting this to happen based on previous trends. And Ben Thompson wrote a really great post on Tritechery in his daily update, where he was kind of helping to frame this, because one of the places that they've seen such great growth is in China. Because for a couple of reasons. One, this is a new design with the larger size, right? So that's like, this is, you know,

it's got the flat sides, larger size, that kind of flat size, larger size, that kind of thing. But also in China, it's expected, and it's been being seen, that Apple is picking up space left by Huawei. Huawei was Apple's main competitor in China, but because Huawei cannot use Android anymore, they're losing customers, and Apple seems to be picking them up. And something, like, it was really interesting,

especially because Ben's done so much in-depth analysis about the iPhone 6, right? If you'll remember, the iPhone 6 was when they introduced the big one. That was when they had that huge explosive year over year growth and then kind of felt the pain of that for the years following because it seemed like, wow, the iPhone is just going to go bigger and bigger and bigger to the moon. But then in previous years, it went down a bit again. And as we've always said, if you take the iPhone 6 out of the year-over-year growth, you can see a good curve for the iPhone always going up.

But that iPhone 6 year was an anomaly. We could be in another one of those years right now with the iPhone 12. It's possible. I think what's interesting, and you're right, this is reminiscent of the iPhone 6, and Ben is right. What I find really fascinating is, you know, the holiday quarter always is huge for iPhone revenue. And so you end up with that quarter being, you know,

$53.8 billion, $61.1 billion. They had a $52 billion. That was a quieter quarter. That was the holidays of 2018. It's the first quarter of 2019 for Apple, but then $56 billion and $65.6 billion. What's really interesting to me is that I think we are seeing something that is like the iPhone 6 spike. But because of COVID, it's flattened out. And the reason I say this is because normally there's a much larger drop between the holiday quarter in iPhone sales and the next three quarters than there was this year. And I think what happened there is that some iPhone sales that would have happened in the holiday quarter, people put off.

They're like, I don't need a new phone right now. But then the next two quarters, the next six months after the holidays, first half of 2021, those quarters, iPhone sales were huge, like way bigger than your normal Q2 and Q3 are. And so I think that's the truth of it, right? Is that we are seeing a sales spike here. It's just not quite as dramatic if you're just looking quarter to quarter and not realizing that, you know, other than the year over year growth for those quarters Like, another way to frame this would be, this was a 50% year-over-year increase, and the previous quarter was a 66% year-over-year increase. So these are real outliers.

And I think the reason is that they're actually some sales that rolled over from the first quarter. So, yeah, they have sold an enormous number of iPhones in the last three quarters. And that's, so that opens up the questions. Like iPhone 6 was great, but it also created kind of a hangover for Apple. It reset the bar really high. And Apple sells more iPhones. They're like, it's peak iPhone.

It's like, wait two years and three years maybe. And they're selling more iPhones three years later than they were that thing that looked like an outlier, right? Because the growth keeps going up. But there is that question of like, is there going to be an iPhone hangover again where everybody bought? And in the call with analysts, Tim Cook basically said, we think we have a lot of growth here still ahead of us because of 5G and that there's a 5G rollout that's still in its earliest days. And we think 5G is going to drive people to buy new phones. So the idea there is that it's not just that this is a new phone design that people like, but that the 5G part of it is going to, you know, and there's a downside to that too, right?

You know, they're excited about it now when 5G's rollout is sort of complete, they're going to be casting around for the next thing and they will have sold a bunch of phones to people who hang onto their phones for five years and they're not going to be able to get those sales again for five years. And that's going to make the sales take a little bit of a hit and everybody's going to go, oh no, iPhone sales. But it's sort of fascinating to watch that little dance because they're selling

a lot of iPhones right now. It's quite shocking how many they've sold in the last three quarters. And it honestly was therein that the scales fell from my eyes and I understand why Apple made such a big deal about 5G

in the first place with the iPhone 12. Because they have identified that 5G could help them place with the iPhone 12. Because they have identified that 5G could help them sell a lot more iPhones than a typical feature would. Because now you need a new phone to get the new technology. I'm sure that

this is what they saw happen when we got LTE. Now all these customers have been holding onto their phones for three or four years. Maybe they're going to be inclined to get one in the next year or two and i think with that you understand why they've gone so ham on 5g right like this is the thing that's going to save tim from needing to come up with another services like apple focused on services so much because of what happened with the iphone 6 right like that's how i look at that like they were being

asked time and time again, well, now the iPhone growth is stalling. What have you got? What have you got? And their answer was services. And if they have another one of these with this, right, like if they end up having an iPhone 6 thing, well, they're going to need another answer to, well, iPhone sales are decreasing year over year now because you had that big blip. What are you going to do? But I think the answer this time is, well, the iPhone sales are going to continue we think because of 5g yeah that's his answer we'll see you know there always has to be another one right this will last for as long as it lasts and then they'll have to do it but that's that's his argument he also said in there that he thinks

that some people in places where there aren't 5g rollouts yet uh view an iPhone with 5G as a good, like a safe upgrade, because they know that it's already got the 5G built in, which I think is a good point, right? Like we rarely see in the US and the UK and in those core countries that get all this stuff first, we rarely see that. But in other countries, you have this ability to be like, well, we don't have 5G here yet. But if I buy this phone when it comes here, I'll be ready, right? And that can be a, it's a future-proofing of a sort for somebody in a country that doesn't currently have a 5G rollout, but it is coming in the next couple of years. And that can be enough to motivate someone to buy a new iPhone. Hey, Mike, remember when we used to watch the iPad numbers and just kind of like grit our teeth

and be like, it's coming back eventually. It's coming back eventually. They actually called it out in the call and they said that the iPad has reached, they didn't say all-time heights, but it's like heights not seen in a decade. Which is like, there was that initial huge iPad sales surge in like 2011, 2012.

2011, kind of. And that's where they are. It's the ipad sales even though it was 12 up year over year but it was up over a monster year over year quarter and like just the ipad is now kind of on a growth train it seems to me they're selling a lot of ipads now too so the ipad is gone from being sort of our sad like like, but I like the iPad. Why is nobody buying it? To kind of yet another Apple product machine. And I love that. Like, I love that I don't even have to think about it anymore.

Like, I don't feel like I need to use the revenue charts as a way to explain why the product's important. Like, it just continues to grow now. They've hit their stride again. And it's not this, like like these monster bumps, right? Like just they had that one, right? So Q2, but we all know when that happened. But if you look past the previous year, it's just been good year over year,

consistent growth with good products to show for it. And I'm very happy to see that because that's what you want to happen, right? That they put the work in and make the product better. They sell more of them. And it seems so simple. It doesn't always work like that. And I'm just happy that it did.

And on the Mac side, they called it out. I've been talking about this for the last couple of quarters, but it's now the last four quarters of Mac sales are the four highest quarters of Mac sales ever. So if you think about seasonality, you get that quarter where they do a lot of Mac sales usually where there's a bunch of new Macs coming out. And it varies. Mac is not seasonal in the same way that the iPhone is and the iPad to a certain degree. But you look at the charts and it's just four enormous quarters in a row, four quarters, way larger, not even a little bit, but like by more than a billion dollars larger than any Mac quarter before Q4. So of of 20 of 2020. Right.

It's just staggering that those four quarters. So the Mac, and what Apple does is just lays it all on the M1. They're like, people love the M1. Look at how awesome we are. We made the chip and everybody loves it. People love the M1. And even with the iPad, they're like, people love the M1 and the iPad too. The M1 is magic, basically, is what they're saying. But I kind of can't argue. They said this time they were rolling the new iMac sales were rolling into this and selling really well too. So, you know, just basically all happy news on Mac and iPad fronts on this. So it's nice. This episode is brought to you by Pingdom from SolarWinds. If you have a website, what purpose does it serve? Whether it's

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a problem with your website. You want to be the first to know, and it's so easy to get started. Just go to pingdom.com slash RelayFM for a 30-day free trial with no credit card required. Then when you're ready to buy, use the code UPGRADE at checkout to get a huge 30% of your first invoice. That's pingdom.com slash RelayFM for a 30-day free trial, and the code UPGRADE at checkout for 30% of your first invoice. Our thanks to Paydm from SolarWinds for their support of this show and RelayFM. Mike's gone, but Julia Alexander from Parrot Analytics is here. Julia is one of my favorite smart people on the internet to write about streaming media.

And Mike and I talk about that on our upstream segment all the time. And I thought I would go replace Mike with somebody who really has smart thoughts about this. She used to be at The Verge and Polygon and IGN. And now it's like you were already my favorite streaming media analyst and now it's your job. So welcome, Julia. Thank you so much for the kind words. It is a true honor to be here. It's great to have you. You were on my old download podcast and you've been on some other Relay podcasts over the ages. Rocket, I think, a few times. Yeah, yeah. Love the Rocket. A wild ride over there. I wanted to start by talking to you about this big news that's happened in this last week, which is Scarlett Johansson suing Disney, saying that Disney induced Marvel. I love it, Disney induced Marvel to break her

contract in terms of paying her, she gets money for ticket sales and theatrical releases, and they put Black Widow on Disney Plus in their $30 special access window. And the lawsuit basically says they are cheating her out of money by not releasing it properly in theaters exclusively. And this is, you know, there's been a lot of analysis out there that I think is interesting about, like, is it a strong case or not? She presumably had arbitration with Marvel. So they're trying to do like an end run around by suing Disney and also making a stink in public, I think. Disney and also making a stink in public, I think. And, uh, and this, but it's also fascinating, right? Cause this goes to the heart of the question of like, what a theatrical release is going to look like versus streaming. Does this completely invalidate how the talent involved in

Hollywood has gotten paid in the past? And, and so what do you think, what was your reaction when you saw this, uh, this lawsuit news come out immediately it just felt inevitable perhaps not necessarily scarlet being the person to take on disney the corporation but it felt inevitable in the sense that this has been a brewing battle with um arguably less public kind of guilds less public positions but the writers in hollywood have said for years that they are missing out on financial opportunities because of the way that streaming services work out the payment structure.

We've heard producers kind of say similar things. And now the next kind of big step in here was getting A-list talent who the public can kind of sympathize with in a way because they know these people, they know these spaces to say, hey, we're getting kind of screwed out of our money on the side of things because we are no longer tied to the theatrical box office and the percentage that kind of comes from those deals. So my immediate reaction, other than this being inevitable in the sense that this is where we're always headed over the last year, two years, was this is even more important than this case is the ramifications that come from this case right and

like johansson is the first real major celebrity to go up against a major studio um she's gonna be far from the last but but the floodgates you know that were once really trying not to crack under this building pressure of a brewing battle between the talent and the agencies and the unions against the studios have opened and so now we're in the domino effect moment. Right. Because this is, you know, this goes back forever. The idea of Hollywood bookkeeping, cheating directors and writers and stars out of money that they are owed. And, you know, famously the most successful TV shows and movies in history are on the books is basically breaking even or taking a loss because that way they don't have to pay people who have a profit percentage. But with this, if you figured that, okay,

box office receipts, we can all agree on that. This is how we can compensate people as a share of the gross. With streaming, not only does that upset the idea of box office receipts, but also it upsets the idea that there's something that's public and verifiable about the success of anything, right? Netflix is more open than they used to be about streaming success. But essentially, once you're on a streamer, your success is invisible. It doesn't mean that they don't know exactly how many streams there were. It means that there's no third party to verify that they're

paying you what you're owed and like i don't i'm not quite sure what the solution is here but but at least we're going from a situation where the box office was more or less verifiable to a situation where um talent is going to have to trust the studios and i just don't think that's ever they're never going to trust them no and. And I think the most important kind of Victor already in this very specifically PR kind of approach to the lawsuit, which is to get it out there and to their goal. I assume Disney will try to settle at this point because it's a very, it's very public at the same time.

Who knows? You would have assumed they would have tried to settle already. I know there's been reports that they just didn't respond to Johansson and her kind of contacts. If that report is accurate, that's amazing, right? That they actually emailed her people and said, if we go to a digital release, we will talk to you about compensation. And then apparently radio silence. That's amazing if that's what happened. Right. And there's been reports, which I mean, I think a lot of people who work in the entertainment industry, whether on the reporter side, especially have kind of heard these rumors and matt bellany reported it he used

to be the hall reporter he's got a great newsletter now over at puck he reported it last night about this idea that you know kevin feige and and it's been going up against disney and saying he doesn't want day and date like he said that from the very beginning he wants it for a star to go into movies um but the issue is well he has to answer to his talent side and creating what he's doing on the Marvel side. And to an extent, report to the Bobs, Bob Chapek, the current CEO, and Bob Iger, executive chairman and former CEO. The Bobs have to appeal to the board and they have to appeal to their shareholders. And they- They got to grow Disney Plus. They got to grow Disney Plus. Bottom line, right? And that's the bottom line. And I think to your exact point,

where the box office was a tangible public form of success or failure or missed opportunity. I think we could look at it and say, you know, I think the domestic total is still 160 million right now for Black Widow. So, you know, that an F9 is much, it's not much longer than F9 sitting 165. So there's a conversation where if we did 90 days in theaters, would people actually go and see Black Widow? where if we did 90 Days in Theaters, would people actually go and see Black Widow? My analysis is that wouldn't be the case. I do think Black Widow and Day in Day cannibalizes some of the theatrical revenue. There's no doubt about that. And I do think it leads to a much higher and easier form of piracy, plus account sharing and all that other stuff. At the same time, if having Black Widow and Disney Plus led to additional revenue and led to an increase in subscriptions that Disney feels confident enough to talk about if their earnings

fall, which will make Wall Street very happy, then Disney wins. But what I think what we're going to see is the agencies get involved. The unions will get involved and say, hey, you want our talent. The reason that talent likes the box office is because we can point to a Leonardo DiCaprio movie and say, Leo carried the movie. You know, Jennifer Lawrence is the reason people are going to see this, Chris Hemsworth, Robert Downey Jr., Scarlett Johansson. And so when CAA or whomever's representing them in SAG-AFTRA and all the other unions are going, we need this public thing to ensure that our talent is getting paid what they deserve. That's when we're going to start seeing the studios

really kind of come out and go, okay, we'll figure out how to translate this into public demand because they have to appease the studios. The worst thing they could do is piss off SAG-AFTRA and then all of a sudden you've got no actors to work with. Yeah, and I think there's a way to look at this and say that this is really just about negotiating

what the new world is going to be because I imagine if they went to Scarlett Johansson and said, here's what we're going to do. We're going to release this in theaters and simultaneously on Disney+, but we're going to charge $30 a head per account to watch this, right? Not per person, but per account. And $30, that's the equivalent of three or four, however you want to calculate it.

We could agree on a number of box office receipts. And you know that by doing the premier access on Disney+, we're going to lose week three, week four, week five box office in theaters because it's going to be gone. Everybody will just, those are people who are getting around to seeing it and instead they'll just pay $30 and watch it on Disney+. And then you agree, like how much money, do you need a larger percentage of

the theatrical? And what's your percentage? And how do you how do you kind of audit it for the premier access revenue, right? Like, I feel like there's probably a negotiation to be had there to get everybody on the same page. The challenge here seems to be that they didn't have it. Yeah, I mean, this is exactly the Jason Kyler, WarnerMedia debacle, right? Like this was why they were probably had to pay 200 million extra in backend because they were saying, yeah, we know that we're cannibalizing some of it. We know that your agreement with your producers and our team is to get some kind of percentage tied to the box office or, you know, whatever.

And it hits this level of box office revenue. You get this amount of money. So I think that's just the big thing that's going to come out of this is it is going to shift the way that contracts are negotiated, the way they are drawn up, the way that they are agreed upon. And if you're Disney, that's something that you're going to take into account pretty quickly if you're any major studio, because if you have a non-Marvel project, you have like a Sleeping Beauty or whatever it may be, you want a very well-known actor in that role. You want that to bring, because that talent demand brings people into theaters. It brings them into Disney Plus

Premier Access. But what you're going to do going forward is you're going to go, yeah, no problem. We're going to put that to the contract. We negotiate it that way. I think what was really interesting about the two sides was that Scar Jo's team really did not touch upon COVID. They, they addressed it. They said, obviously there was a reason that we did it this way. But they purposely said,

you know, we were kind of guaranteed this theatrical release and then we kind of got it, but not really. And what Disney is going to try to do legally is say, Hey, we tried to the best of our abilities under extreme situations where we were,

you know, our, our shareholders were worried about the revenue. Delayed of the year. Wait, yeah, wait, we did a whole bunch of things. Here's our delays. Here's we're still putting it in theaters. You're still on 1500 screens across the country. We actually held up that end of the deal that whether or not the judge goes,

yeah, you actually did what you needed to do, or, or, you know what? No, you probably should have had negotiations. It'll be interesting. But I think what Scarlett and the team want more than anything else is for this to get to discovery in court. They want the emails between Bob and Bob to come out or Bob and Kevin that say, yeah, you know what?

We'll just take the hit on, on this from the talent side and we need to please our board. So we'll see how that goes. It seems to me that what's going to happen is that Disney is going to try to get this sent to arbitration and if they fail they'll settle because they do not want discovery to happen in a case like this right those to get those emails out there that is the worst case scenario for anybody in the entertainment industry i mean well look at what happened with epic and apple right it was just that's what that's not not not good not good i want to i want

to uh take a little different angle here because you mentioned what happened with Jason Kalar and WarnerMedia and taking all of their movies and putting them on HBO Max and having to, yeah, again, you're compensating people based on theatrical receipts that no longer exist. How do you do that? Because obviously what you're getting out of it is you're building your streaming service, which is fine, but they aren't getting stock in WarnerMedia. They need to get paid.

This is, and I used to talk about this when I did the TV Talk Machine podcast with Tim Goodman. I used to talk about this all the time, which is talent in Hollywood. Like we act like money is everything and money is super important to them. Don't get me wrong. But sometimes you get the sense that they also want love and appreciation and that sometimes the relationships are founded on not just money, but also appreciation. I bring that up because like Christopher Nolan was really sad about HBO Max and Tenet. But like Christopher Nolan, you know, he was sad about the money, but he was also sad about the movie theaters.

It was both. And I hear this. Tim always talked about how people who made stuff for Netflix. One of the problems is Netflix wants to pay you. They pay you up front. So you don't have to worry about like how well it does. They're just going to write you a check. But if it does really well, you don't get an upside right it's just you you we paid you we're done and also the feeling that netflix creates so much content that your stuff just gets lost and not marketed and and i i wonder if part of what's going on with scarlett johansson is this kind of recalibration of like how talent in Hollywood is valued beyond just cash, but also like how they're treated.

And are they going to be under the thumb of these studios who are building 21st century, you know, long-term 21st century value with these streaming services, or are they going to be paid compensated for helping them build a value so i wonder you know how much of this is is about that larger question of it's not just the money it is the money don't get me wrong but it's also the disrespect i think that is an inherently important part of the conversation i think it is the reason that

if chris for nolan leaves warner brothers he's not likely to go to a Netflix. He's more likely to go to, even though they have less money, even though they have a tighter budget restriction, go to a Sony where Tom Rothman can kind of sell this beautiful romanticized idea of what Hollywood is, where Tom Rothman believes in being a director's director and actor's actor. And he really loves this idea of what the industry is and could still be um i think that ties into a debate that happened with executives you know a few years ago and it's still kind of ongoing but really brought on by the mcu and kind of everything that came out of that trend uh was this idea of do movie stars matter or is it ip right and that that conversation about

if you put any person into a marvel movie will it still make money because it's a Marvel movie versus did Iron Man work because it had Robert Downey Jr. and Gwyneth Paltrow? And that just made a lot of sense from an A-list star perspective. So not to get all baseball on you for a minute, but in sports, they have this concept in baseball, especially if they're a replacement player. And that's kind of what you're saying here, which is, imagine a Marvel movie with no stars. The only star is Marvel. How does that movie do? And then I put a star in it. How does that movie do? And the difference there is the value beyond just doing the job, the value of star power, of appeal, of having a headliner. And it's kind of unmeasurable, but it's super important because Marvel will argue

marvel is the star right but if they tried to do that with robert downey jr they would not get very far yeah and i think what you have from one end of the of the stick is people um and i don't know if this describes my assumption but you have people at disney who are like we are selling marvel we're selling star wars we will find actors that we like and who we believe in to put in those roles because something like kevin feige who truly likes actors like he loves actors he believes in the importance of them to making the characters work um and so if you're fighting that battle if you're Scarlett Johansson the demand for Scarlett Johansson in a movie so the demand for Black Widow as a character is more important to a lot of fans than, you know, insert kind of random new Marvel title. Then Scarlett goes, yeah,

like I feel like after nine movies with this company and 10, 11 years, I should not have had to deal with it this way. But I think that's where you have the Jason and Kylo situation coming in where Jason goes, we know basically we screwed up. I mean, that's what the $200 million is. He knows he's talked publicly about saying, you know, I wish I could have gone back and had given people more than 20 minute heads up saying, we're going to do this thing. I mean, in part because one talent does want to be in theaters.

They want to know that their movies are there. It's why, you know, Martin Scorsese works with Netflix, but Netflix was like, we're going to put your movies on a theater screen. Cause we know you like that. Um, I think there, there are other directors, there are other actors who might not care about it as much. They just want the movie to be seen as widely as possible and in some right streaming and that's like that's why when i say they want to be loved and i know that that sounds a little bit like a joke but i'm serious but it's a bunch of things right it's i want you to appreciate my art and put it where i want or it's i want people to see it and i need to know that people are seeing it or it's i want to have a good relationship with the executive. There are lots of, it's a spectrum

of, I want to be loved, but I think it's right. Like this is the, I was blown away because Netflix is riding so high and that Tim Goodman would say, there are a lot of people who don't want to work with Netflix because they'll take the check if they have to, but they'd rather work somewhere that's going to show them love. And that by love, they tend to mean like marketing and promotion and like things that maybe if you're just in the tube coming out every week from Netflix, you don't get. And they want their money, but they do want that attention and respect. Well, I think that's the word I was just going to use.

It's the lack of respect. Again, this is like hardly the first case of this. You had John Krasinski and emily blunt who were in negotiations with um paramount but what happened with a quiet place part two where that went straight after 45 days and that wasn't part of the deal um you've got you've got these conversations happening with writers and directors who are and then you know you've got this conversation happening with um uh i'm bringing the studio legendary legendary who was going to sue warner brothers at lunch according to deadline because they were like you can't just do this a bunch of what we promise our actors is tied into

what goes out in the box office it's how we value ourselves we like to have our big blockbusters on a big screen so you have june and you have um i forget the other one they had a godzilla it's like they want to be in theaters the executives i get where they're coming from they're in the middle of pandemic they are losing billions of dollars they need something to show shareholders that everything is going to be okay so even though disney plus or hbo max is far from profitable they can point to it and go we've got you know if you're disney we've got 100 plus million subscribers across our suite of movies, streaming services, excuse me, we're going to put movies there. We're going to draw people there.

They throw around terms like ARPU and all of a sudden we're building shareholder value. You know, that's the most important thing right now, except if you're the talent making the movies and you're, you're, you know, you don't get the shareholder value out of it. You just get your, your pay for your box office receipts. And that's exactly what I think this moment is. This was the moment everyone was waiting for. It was like, who will be the first person to really take on a major studio? So not just a tinier studio that's going like, oh, well, they're maybe a little bit boutique and they can't really

afford it. No, this is Disney. They're a massive, massive massive conglomeration this is a a-list celebrity uh and so i think we will see more of these follow suit pretty quickly i want to ask uh a little bit broader question about this um and and in a little bit i want to kind of do a streamer check-in and just ask about all the streaming services and where you where you think they are right now because you've got some fascinating research and you've written some interesting things about it. But while we're on the subject of this big change to what is a movie and day and date and streaming and all of that, we got a question a few weeks ago from a listener about why Pixar's movies got booted to Disney Plus just straight up while Black Widow and Mulan were premier access. And I'm curious if you've got

any insight into sort of like why they've taken some movies and just kicked them directly onto the service. Obviously that builds shareholder value. And is it the contracts that my initial thought was like, maybe it's just that those contracts weren't as big a deal to pay the people off who made the movie versus what they do for something like Black Widow. And then, you know, brought more broadly, like, where do you think movie releases are going to end up in terms of do you do a hybrid? Do you do a premiere access kind of hybrid? Do you do a shorter window? But why don't we start with Pixar? You have any insight into sort of like, why was it easy for them to take what two or three Pixar releases and just kick them onto Disney Plus for free? Yeah, I mean, so I think there's a twofold answer. One is 100% contractual. There's always the legal answer, which is, can we do this without very little

ramification? Okay, great. Pixar's contracts are probably pretty limited in terms of people getting a percentage of the gross, right? Since it's mostly the creative team is just a Pixar employee, and then they've just got voice talent, which is probably a lot easier to negotiate, I would think. Yeah, but I think the second and the more important and the more, you know, kind of bluntly obvious thing is Pixar does not, you think of a Pixar movie that's not a sequel, so it's not a known IP.

And the idea is that are people going to pay 30 bucks for that maybe are they going to go to theaters maybe but will people pay for a thing like mulan will they pay for a cruella will they pay for um any of these kind of movies known quantity versus taking a flyer on a random pixar movie yeah so i mean i think i think you know the the really interesting one was uh, The Last Dragon, because that was Premier Access and they tried it out.

It was not a known entity. It was a new Disney animation movie. They put it on Disney Plus and it did pretty well, if I remember correctly, based on the trade reporting for Disney.

And I think that was something that Bob Chapek had spoken to when he said, you know, we're not displeased by any means with what we're seeing on Premier Access. Whether or not that means they're over the moon, we don't know.

But I think it was enough of an experiment for them that they could go, yeah, we're seeing how things play out. And I think he said perfectly for Disney, and to answer that question in his earnings call, when he said, it's an experimentation for us, all of Premier Access is all of Disney pluses, they're figuring out from their data, what works what doesn't so i imagine part of them went pixar movies are the type of movies that will get parents to watch things with their kids and then re-watch and so that increases engagement puts it in the library the beauty of disney plus is having that library all the pixar movies are there we like the engagement we like what you know what streaming companies love to look at is will this movie lead to you watching other movies versus you leaving the service after

just watching it so they go cool we put this on here something like soul is a perfect christmas movie why charge $20 there it is and that's how they kind of wrap it up in marketing uh versus yeah we have a 200 million dollar movie in new london we've got 150 million dollar movie in cruella right big stars we want to put this in theaters and those contracts are probably much harder to renegotiate and the money i tried to explain this to somebody who said who asked me like why don't they just put everything on streaming in the future and the answer is they could do that and maybe they will do that the problem is you can't make a 200 million dollar movie and just drop it on streaming the you're gonna covet aside right and that changes things like the economics these are these are problem is you can't make a $200 million movie and just drop it on streaming. COVID aside,

right, that changes things. Like the economics, these are priced, these are budgeted for an enormous theatrical release and an enormous theatrical box office. And, you know, if you want a Marvel movie that's direct to Disney+, it's going to be like those TV shows. It's going to look nice, but it's not going to be a $200 million product. So I guess my question for you, and I know this is, we're still in the midst of COVID stuff. Where do you think this is going to end up in terms of what is your standard theatrical release look like? And how is that different post COVID, but also post everybody having their own streaming service? Is it just they're going to narrow the window? Or do you think that they're going to try this hybrid approach of like, well, you can watch it in your home if you want, but it's just going to cost a lot of money it's going to

cost what it would cost for you to go out and see it yeah there's going to be two big changes and then one smaller change that we won't even notice the biggest change that will see the actual theatrical experience is that it will go from 90 day exclusive to 45 which sounds like a lot except that when you actually run the numbers, I did this recently for Marvel, but it's true across the board. If you take something like Marvel, which has 23, 24 films, 96 point something percent of those movies make the majority of their revenue. And I mean, 98% of their revenue within three to four weeks. So they're going, yeah, we're going to be in theaters for 45 days, which is exactly when we would make 98% of our money.

And then we're going to put it on Disney plus, or we're going to put it on Amazon prime video first. We're going to try to go out there for 20 bucks in rent. And then once that's done, we'll come to Disney plus and figure out what we do there, whether or not they move that around, who knows, but the theaters and the studios are basically going acknowledging what they acknowledge, which is their 45 days is exactly when people are going to go see a movie. If they're going to go see a movie for the most part so it's the act from a theater perspective you go okay how do we fill in the blanks if we no longer have this playing for 90 days i think that's what you're seeing with amc right now in the specialty theaters like alamo which is when they're doing ufc events they

partner with other people they do like grand prixs they do the world cup they go yeah have the communal experience of a movie pay for this rent a theater to watch something. We have that. The second thing that we're already seeing is that, you know, people like to kind of publicly criticize this and I get where they're coming from and the shift will happen. We just won't hear about it. Is this idea of going, okay, this movie that we made, it was supposed to have a theatrical release is now going streaming exclusive, no real extra pay, but it's going streaming exclusive. This will continue to happen. We just won't hear about it and the difference is they're going to make these kind of mid-tier budget movies that would be independent type films for the most part coming from the studio arms that are not just like Warner Brothers not just you know Disney proper and those will be

available for free and they'll still get marketing play but they won't cost as much and then they'll bring you into your streaming service or they'll keep you there. And we're seeing it happen. I mean, like Warner Brothers started a line and then they closed it, but they're basically doing it to make 10 to 12 mid-tier budget movies a year. Disney will take their kind of live action remakes that weren't really going, like that were maybe risky and they'll move that to Disney Plus and they'll find other stuff. There's a world in which um disney makes

kind of lower i don't say lower end but just less costly marvel type movies or star wars type movies that are not tv shows maybe they're a one-off and they exist there um and they just play into that world and then you end up with these this tiered system of you've got your big blockbusters that you got to go see in the theater and you got kind of a mid-tier that's like it'll be in a theater but you'll be able to see it pretty easily on streaming well i think what we often forget is that the theatrical business was not doing super well pre-covid right attendance down overall the interesting right the kind of juxtaposition is that attendance was down overall the last you know kind of per capita and like uh concurrently over year over year but revenue was actually a bit higher for the movies

and all that tells us is that people are willing to go to theater still but they're only going for certain movies like the and we can guess what those are going to be because we saw disney in 2019 and disney owned like 55 of the box office food box and so they went yeah people are going to go watch uh joker and avengers and star wars They will go pay money to go do it. Godzilla. And I think everything else goes, if we're not going to make the money that we need to make on this, and to your point about transparency, if we're going to be slammed in Variety and The Hollywood Reporter and Deadline for, you know, kind of coming in low, why don't we just send to Disney Plus? We can put out a press statement saying it did really well. It broke records without actually saying what those records are. And all of a sudden their streaming

looks even better to Wall Street and their shares go up. And they avoid all the kind of embarrassment that comes with it. So I think what we'll see is we'll still put 10, 12, 15 movies in theaters. They will be very specific movies. They will only be there for 45 days and they'll come off. And I think the company, you know, the industry that really loses out on that is the theatrical business. But I don't think the theatrical business is going away. I think it's just going to have to shift in the way that Barnes and Noble has shifted or GameStop is shifting. Yeah. I was thinking, you mentioned Alamo, Drafthouse, and I was thinking that I feel like the movie industry was already kind of going there and COVID has accelerated it for no other reason than people have really gotten comfortable watching things in their homes even more than they already did.

And they already were, right? But it just, then you're inside for a year and a half and this happens. That Alamo Drafthouse, like a theater like that, there's an experience. An IMAX theater, it's an experience. It's like more, it's going to get you out of your house because there's more there. And I feel like exclusivity, whether it's for 45 days or 90 days or whatever, that's good. But like, that's not enough. The old theater industry was very much like, we have an exclusive. So you're going to come in our terrible theater with our terrible seats and our, you know, terrible screen and our terrible popcorn because we've got the Avengers. And I'm not sure that attitude is going to work. And the theaters that are, like this is what I said about the comic book industry and the bookstores are like this too,

which is, you know, the good comic book shops, a lot of good comic book shops and bookstores survive. Not all of them, but a lot of them did. The really bad ones that hated their customers, they all died immediately, right? Because they didn't care and they're the first to go. And I feel like movie theaters are going to be like that. The movie theater chains that hate their customers are going to not make it. while watching it.

And I think that is like a whole thing that the pre-show that they do is phenomenal. But I think the other conversation that's going to come out of both the lawsuit and kind of this move with theatrical to day and date, if you take something like Marvel, which has a rabid fan base, one that I'm part of, so I don't use rabid negatively,

who will go see a movie over and over and over again in normal times. They'll go four or five times with their friends over the course of a few weeks. If it's available on Disney+, you still might get them in for one movie. You might get them in for two movies to go to theaters. But the question then is how many of them are then just buying the movie and re-watching it 10 times at home? How many are sharing it with friends? How many are pirating it? And I think that conversation, which we don't have the information on yet,

is the most interesting. It's the repeat viewing, which is already kind of low, but it's for something like Marvel, something like DC, where it's the difference between $150 million and maybe $175, $180 million. It might not mean much to Marvel or Disney as a corporation. It's $30 million. If you're a star and that's the difference between whether or not you hit your cap for what you can then you get this bonus compared to this bonus. It's going to be a big conversation driver.

Yeah, I was thinking about the premier access thing on Disney and how the way they've structured it is you're basically getting access to that movie forever on Disney Plus when you pay $30. And that's different than renting it, right? Like they could have structured it as a 72-hour rental or something or even a one-week rental but it would be like this is going you know it's temporary you don't get to just watch this forever because that's not what it's for and they chose not to do that and i i'll i'll be honest i bought black widow on on the premiere access and i loved it i loved that we were watching that movie and we didn't have to go to a movie theater because we were not kind of comfortable doing that. And I would love, in the long run, I think I have a big TV and a nice sound system. I would love to be able to do

that and just never go to the movie theater anymore. And we don't have any very good movie theaters near me, which is why I say that. But I'm kind of resigned to the fact that that business model is not actually going to make those movies exist. So for the big budget movies i'm still going to need to go see it in the theater if i don't want to wait a month and a half to see it yeah but to your point i mean i did i went uh kind of opening night went to go watch the movie came home bought the movie again on disney plus uh and i've watched it you know kind of a few times um since then so you know that's if i've watched i think three or four times on premiere access, that's like 60 bucks in tickets, right. From one personal loans going like, Oh, I'm going to watch, I have a friend over, you haven't seen this yet. At least just throw it. I have it. Let's

throw it on. Um, and I think, you know, for Disney, the idea of having premier access and then to your point is the idea of you owning it is that encourages them to then spend $8 a month regardless. Um, and if you're a family, if you're someone who is maybe not someone with kids who disney plus is an automatic purchase for if you're not someone who's a diehard marvel or star wars fan but you're like oh you know i'll sign up for this movie that is maybe the difference in going like okay if i cancel after one month after i have this movie i lose access to it but if i keep it i at least have this movie i bought for 30 it's It's the difference, I think, in Disney going, yeah, we're going to retain some subscribers who are potentially going to leave.

Yeah, that's true. That's a good point. All right, well, Mike is gone, so I get to be the person to say that we have to take a break. This episode of Upgrade is also brought to you by Text Expander from our friends over at Smile. Text Expander removes the repetition from your work

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about a little streamer check-in. Let's just do a little kind of go around the horn and talk a little bit about each of these streamers and sort of what's going on with them. And since this is Upgrade, we're going to start with Apple TV+. Ted Lasso just launched. You had a piece about how

that it's a surprisingly in-demand show. And that I think what you said was Apple TV Plus started off as what's the point and is sort of turning, you know, turning into something that's a little bit more on the right path. Is it our interpretation here has been that they kind of want to be what HBO used to be, which is, you know, focus on their originals, have them be high quality and have it be just sort of a destination for good content. And they're not worried about their catalog. They're just worried about, like, getting enough stuff that they get some critical like HBO was like we program Sunday night and it's going to be really great. And that's all that matters. And I feel like Apple TV Plus, that's sort of the game that they're playing up to now yeah i mean you're the apple expert uh but i you know the thing the fun thing about apple tv plus is they are literally stealing the hbo playbook by you

know teaming up with richard suckler who was you know for a very long time they are working with the sony guys who very much admire what hbo has, and they sold high quality shows to their distributing partners. I think the fascinating thing about Apple TV Plus is considering it's only been around for not even two years, and considering that there is not, I think they have one piece of like licensed content, but even then,

if you look at their library, which is very small, the overall demand, which just means like how much are people kind of at this point willing to pay because they want to, which just means like how much are people kind of at this point willing to pay because they want to see that show or how much are they willing to seek out that show is incredibly high across the entire catalog. Like compared to even Disney Plus's catalog across, it's much higher. And I think to Apple's, you know, to those executives credit

over Apple TV Plus, they're picking their shows very specifically. They know what they're trying to build and it's working for them. I do think if they want to scale it to be a proper streaming service, they will have to acquire some kind of a library because they don't have what I like to call snackable television. Snackable television is what you put on before you go to bed or when you're on, you're working out, you're watching, you're making dinner. It's what you have on the background.'s familiar comfortable lots of it like this my daughter

was visiting us and she put the office on right like just put it on exactly it's it's the snackable thing that makes hulu and netflix really work uh beyond kind of the originals um apple doesn't have that you know the question i get i have this conversation with my old boss um you know nila patel is our editor-in-chief over the verge and his and i we always can just debate because it was like does apple need apple tv plus what do they need it for is it actually helping with their overall services bundle is it actually you know kind of keeping people within that walled garden ecosystem is it helping people choose to upgrade to apple products um and the nice thing about apple like amazon is that it doesn't matter right now because they have so much money that it's like,

this is an experiment still for us. And on the experiment side, it's actually going pretty well for them. So I think Apple TV Plus was so easy to write off. And the one thing that is still easy to write off about Apple TV Plus is that we do not know how many are paid subscriptions. We, right, they're still going to put up free trials trials like we have no idea how many people are actually willing to pay for this stuff um but in terms of the overall demand in their shows and what they are producing in their originals compared to other people they're actually doing pretty well and i think that bodes well for them i think to get people to say i'm going to pay five dollars a month or ideally for apple i'm going to pay 20 bucks a month for apple one uh they need a little bit more and that i think that will come in the form of an acquisition of some library similar to what hands-on is doing

with mgm i mean they've got more content than they did when they launched in that they've got two years of content but it's still not a lot you're absolutely right. Okay. Netflix. They're the big, they're number one. But I mentioned them earlier about like they just have this pipe of content that just kind of outflows and it's enormous. And is that their strategy is just we make it up in volume and also we have games that we are going to put on your phone or something like I wonder Netflix is so big that on one level they seem unassailable and on another level they seem so boring and not like I wonder if if they're like the tortoise in the hair kind of thing where the big entertainment they're so far ahead. And yet Disney is coming for them and there's going to be other competition too. And Amazon's got all the money. So what's your take on where Netflix is right now? They're at a very interesting point.

So Netflix has hit saturation in, you can, which is United States and Canada. They are only going to ever lose or gain very little subscribers. And all that means is that they're losing those recurrent and the ones coming back are probably reactivating for something. They've hit saturation point, which is an interesting moment because it means that they are no longer the core kind of country or region that they're looking at. Their whole region that they're trying to grow is EMEA, which is kind of Europe. They're trying to grow the reliefs. They're trying to grow Latin America.

They're trying to grow APAC. And I think what the challenge that lies ahead for them, which is a pretty exciting challenge, I imagine, if you're on that team, is how do you get your big Spanish shows, your big French shows, your big, not Russian, your big Mexican series to travel to the realm of the world to the point that you're going, okay, yeah, no matter where I am, no matter what region this content's coming from, I'm interested in it. That's one challenge. The second one they have that as much as Ted Sarandos, who's their co-CEO is their head of their content for a long time, likes to play this down. It's very hard to make franchises. It's,

it's not easy. Disney bought their big franchise. They acquired Lucasfilm, they acquired Marvel and they said, cool. And they ended up working really well for them warner brothers acquired dc um netflix is not necessarily in the business of acquiring a lot of studios but it's not what their game is and their whole thing is we'll acquire licensing rights we'll acquire titles we'll acquire the rights of things we'll build it and i think what you're seeing now is them really trying to figure that out where they have the witcher they've got a bunch of other video game stuff they're doing pokemon they're trying to do anime adaptations they're trying to figure out

what they can take and go okay we'll turn this into something that is new for us while investing in original series and all that says to me is that they're trying to chase their big big franchise they only need a game of thrones to but it's easy much easier said than done if everyone would have a star wars everyone would have a star wars um so I think that's their big thing is what's our big franchise? What is worth the amount of money that we're going to invest into it? And on the other side of things, they're losing their licensed content and they need it. I think there's a reason people get really excited when Twilight or 30 Rock or Friday Night Lights goes back on the service. It's not because it's like people have forgotten about it and they're like, oh, if I can finally watch the show, it is the difference between, oh, I will keep Netflix because I can watch 30 Rock and go to bed at night.

It's fine. And just not being able to watch 30 Rock. And I think the perfect example of this, just to end my kind of rant, is everybody thought The Office Women of the lack of kind of Peacock paying subscribers has shown us really any even kind of active usage subscribers is that people weren't watching. The office was not the number one show on Netflix because it was the number one show that people want. It was number one show on Netflix because 200 million households were like, oh, I will watch the Netflix. I will watch the office when I have Netflix and when I'm hanging out and it's just easy to watch. And so I think Netflix is going to have to start picking out what it wants to license and really hold onto those and fight for them.

Cause that's the difference between people going to Hulu and dropping Netflix or people staying on Netflix and dropping Hulu or whatever else. Now, speaking of blockbusters, let's talk about Amazon prime video. And, and I'm glad I had it in my notes to say this, and you said it already, which is Amazon, like Apple, is not quite playing the same game as entertainment companies are because the service is sort of a part of their overall strategy, which means that they can spend money kind of without expecting to get it back. That is a tough opponent if you're their opponent because they don't value money like you do, and that's a problem. But they have invested with their new leadership. They seem to have found a better place than the old leadership did. But they also got this sort of seeking a blockbuster.

They made the big Lord of the Rings deal. That's in progress. So where is Prime Video right now, do you think? Yeah, I think just to kind of reiterate what you just said, in the way that Apple very much wants services to do well, it's why Luca kind of points out earnings, like we have 700 million paid subscriptions across all of our services. In the way that Apple wants to make sure that's going well,

they very much want you to stay in that iPhone ecosystem and upgrade or, or Mac, whatever, maybe Amazon would like you to watch Lord of the Rings. And then, you know, once you're there, please buy toilet paper or Lord of the Rings book or Lord of the Rings shirt from us. Cause all their, their prime is their whole thing. Having the subscription to your prime, having the retail businesses still are core. I think what Amazon knows is that, okay, if we don't want to not just not lose customers,

if we want to build our subscriber base, one of the best ways to bring that in is having a blockbuster TV show where people sign up. And then all of a sudden, once you've signed up for Amazon Prime Video and you have access to Amazon Prime, I would imagine, and I'm sure their data shows this, that people are spending a lot more time shopping on Prime. They're kind of I would imagine, and I'm sure their data shows this, that people are spending a lot more time shopping on Prime. They're kind of going like, oh, I'm already here, or I'm seeing an ad, I'm seeing a commercial, and it's like, sure, I'm just going to go, right, I have to buy dog food. And so I think Amazon's whole play with having a deeper catalog of content, MGM, and then they can turn that into bigger franchises that maybe bring people in,

and then actually spending the money in the big battles to acquire the rights to projects. They kind of know when people bring people in is that it's just that it's to get people into prime and then keep them there and bring in new customers who might be opposed to Amazon. But they really do want to watch Lord of the Rings, whatever it may be. Amazon, but they really do want to watch Lord of the Rings, whatever it may be. I think it could work for them, but money does not equate to success. There's, you know, if you could buy a Lord of the Rings or if you could buy something that seems like Lord of the Rings, kind of based on Lord of the Rings, most people would just take Lord of the Rings. I think we saw that with Jupiter Ascending, which was Netflix flying. We can kind of do a cool superhero show. And people were like, this isn't what I want a cool superhero show. And people were like,

this isn't what I want in a superhero show. This is like, I have Marvel and DC. I don't need this from you. I think this is Lord of the Rings, but it's not the main series. It'll be interesting to see what they do with it. But it's hard to say that Amazon Prime Video is in a bad position because they belong to Amazon.

Amazon Prime Video potentially being spun out, depending on FTC rulings, may be more of a concern. But until I think that happens, they're part of a very big, powerful machine that lets them continue to be in experimentation mode and hopefully grow. As a Prime member, I often find myself going, oh, right, Prime Video.

The challenge that they have there is that they're not quite a destination, but when there's an original that pops up. Also, I'd say that they've got an interface problem, which is they want to be a store to sell or rent you things, and they want to provide you with free things. And as somebody who's really used to having all my apps show me what I already get, I find that very confusing. Like, oh, this isn't actually on Prime Video. This is a for rent from Prime. Well, I think, Jason, if I can just add to that really quickly, I think you just hit the nail on the head, which is the biggest issue that's going to face the streaming services, aside from content, because content is king and then distribution is king.

So you have shows, great. It's easy to access cool the lack of uh a good ui and ux and streaming services whether it be hbo max just not loading or not running it would be amazon being impossible to browse whether it be you know disney plus search and hulu search being terrible it's like people, I think a lot of entertainment companies getting into it forget that they have to also be on the tech side. The advantage to Netflix was that Netflix came in at the tech side and then

hired entertainment guys and were like, okay, you guys have a list. Disney bought BAM Tech. They kind of have that, but everyone else is like, you got to team up with the Silicon Valley teams. You need the good tech. I had a extended rant over several episodes of Upgrade about Paramount Plus. And it's a terrible interface. And I was trying to find like an episode of 60 Minutes.

And they had sorted them all by episode title over 25 years or 50 years of content. It was like it was impossible to find anything. And they did fix that. But I heard from some people who have inside knowledge of Paramount and CBS who are like, yeah, they, you know, basically they don't prioritize the tech stack and you've got all this money you're spending on content and you kind of need to pay attention to your technology or it's if you can't stream it or you can't when you drop Game of Thrones or whatever the next Game of Thrones is and it's high demand, your stream better not die.

And you be, people need to find stuff and you need to do autoplay when they want and not when they don't and let them skip around and it's like table stakes stuff for a good piece of software and yet some of these incredibly large companies just didn't care they were so focused on programming the shows which is important but delivery is important too right well the Well, the advantage to cable, right, was you would go on, unless there was a blackout. Just turn on the channel. There it is. And I think now all these companies are making really, really great television and great films. And it's just, if you want people to see it, because you know that there's a demand

to watch it, that the people will pay you, you have to be able to then deliver on the easy accessibility. Easy accessibility does not mean that it just transformed to easy availability. And I just, that pipeline, I think needs to be better sorted. Yeah. We talked a lot about Disney Plus, but I wanted to at least mention, you know, that machine keeps cranking. I saw the, they had a first look photo of, of Hawkeye, the Hawkeye series that's coming this fall with Jeremy Renner and Haley Stanfeld on it. And I've been struck watching Loki, which Mike and I talked about last week,

Loki and WandaVision both, that I think one of the big, and The Mandalorian, I'll throw that in here too. One of the big questions with Disney Plus was, can they really execute a TV strategy with their film properties and do a good job? And I got to say, I think the answer is yes. I think we've seen with two seasons of The Mandalorian and with those two of those three, I didn't love Falcon and Winter Soldier, but that felt like a Marvel movie turned into a TV show. But Loki and WandaVision both made me think, oh, this is serious. Like they got Marvel Studios and Lucasfilm to get on board and deliver like TV shows that work and that people want to see.

And that makes Disney Plus even more dangerous, right? Yeah, I mean, I think the best thing Disney did was on the Lucasfilm side, you've got Dave Filoni and on the TV side, under Kevin Feige, you've got like Michael Waldron who oversaw Loki, who helped with WandaVision. Right. Jack Hickory at WandaVision was kind of around for Loki, was letting kind of TV gods do their thing. You know, there's a joke that Dan Harmon kept saying, we kept losing our talent to to marvel but how can you be mad they're going to marvel and the smartest thing marvel did was go we want to do kind of cool sci-fi superhero stuff that really lands with people in the weird absurdist way we're going to tap the rick and morty team like like that's just that makes a lot of sense um and lucasfilm had dave bologna who

created like the greatest star wars thing of all time in the fun wars uh and so it's like this perfect thing where they're going, yeah, we want you to do what you're doing. No limitations, increased budget. You're going to hire whoever you want. And we're just going to put on Disney Plus. I think, you know, the other thing that Disney has that's really going for them is Netflix or whomever has to look out and go, okay, how can we make sure that all of our new series that might not have a strong IP, might not have a strong brand recognition, really play into each other. And for the most part i think they they're figuring out you know witcher might play into stranger things and something that plays into another show that comes back that people love

they'll get there i have no doubt kind of about netflix succeeding i don't think netflix is going to fail at by any means yeah but disney's big advantage is disney goes you know every six weeks yeah new marvel show new star wars show new pixar show that uh both teenagers adults who kind of grew up with pixar so monster university right and kids really love and on top of that they're like here's a movie like here's stuff uh that we're gonna put here so disney plus has the beautiful advantage of um programming slots like they're just like okay we're gonna give marvel three shows a year or four shows we're gonna give star wars three shows a year you guys figure out what're going to give Star Wars three shows a year. You guys figure out what you want to do, and we'll just slot it in.

You're always watching something on Disney+, and that's what they want. It's nice. Even if you're not watching something, which I think is absolutely an issue that they're probably going to run into, outside of families, I think there's never a reason to unsubscribe. And I think that for them is great because they can go, if we're a necessity in your home, then we can charge you more every year and you're just going to pay it. That works out for them. So in other parts of the world, Disney has started putting essentially what is Hulu under a tab in the Disney app called Star after their Star service that they bought that was big in India and is big in some other places too. In the US, we still have Hulu. Hulu has its own app.

What's going to happen with Hulu? Is Hulu just playing out the string and will ultimately be swallowed by Disney Plus? Or is there value for Disney in having Hulu be this kind of standalone thing with different kinds of content that reach a different audience that they can bundle with ESPN plus and make a super bundle, or is it all just going to be in Disney plus? Yeah. The big question that the answer to that question will happen after Disney pays out the rest of the Comcast 10% until they pay out Comcast and anything

they do with Hulu that affects the valuation of what they'd have to pay out to Comcast is going to be under massive scrutiny. And so I think their whole thing right now is like, we're going to invest in Hulu, which they're doing a little bit of. I would not say they're investing too much, but they are definitely investing and they're definitely supporting it. They're using FX to make it kind of a destination for that kind of prestige programming for fans of John Landgraf and what he does. So Hulu's being taken care of. I think until Comcast gets paid out, Disney's in this kind of hold pattern where they're still developing originals. They're still figuring out what they want to do. But if Disney went, yeah, we can take Hulu in the U.S.

and make it a tab on Disney Plus. We increase this to, you know, five bucks, six bucks a month. It's now on Harvard HBO Max. We're getting so much out of it um maybe they do that that might be something they do but i think right now everything that i uh back when i was reporting everything that i heard from inside at disney was that they're stressing the bundle very hard but they like the bundle the bundle for them you know kind of is a great move on their part it's just it has people in an ecosystem you talk about a walled garden it has people in there and they talk about a walled garden it has people in there and they're happy to be in there for or if they're not they feel like they have to be in there um so i think hulu will be uh tbd i think we have to see what happens with comcast

what disney really wants to do with it post that and then who will become a very interesting part of the conversation again yeah one of the things that always stopped me was the whole like well disney plus is family friendly and and hulu isn't but with star they've shown that they basically have a thing that says for these users you can set up a lock you know and not show that content and it's not if they want to do it they can do it but you're right there's strategy questions and there's contractual questions hbo max has uh sesame street right and it's like the sopranos so yeah like their whole thing is like we know we don't you don't want your two-year-old watching user profiles and you got to make it work um peacock so i don't want to mention here as well like

peacock's done some originals they've had they were supposed to launch with the olympics last year the olympics got moved they've got the olympics this year um i'm going to do a minor olympic rant here just to say that i appreciate that nbc has put almost everything on somewhere but i think they really blew it with the olympics this year and i think it's because it's so um dysfunctionally uh like broken up into little pieces that are in different places and like there's like five or six universal NBC cable channels that have stuff. And then there's the NBC sports app, which has some stuff from broadcast and cable and some stuff that's original. And then there's stuff on Peacock. And then even on something like Peacock, where you'd expect Olympics on demand, you end up that you can't get a lot of

it on demand. It's organizational structure is really weird. And the part that really blows me away is they have these live streaming shows that are actually pretty good and you can't watch them after the fact. They're live on Peacock and then they disappear and you can't get back to them. You can't back up to the start of the show. And so on one level, I find what they're doing kind of admirable. And yet I think they blew it because we live in an on-demand world. And it goes back to our conversation earlier about uh u ui and and technology is that you know if you're watching on tv plus two different streaming apps or if you're an over-the-top kind of cord cutter like me now three different apps um and you can kind of find

it but it's it's just so much work and if you want to find a very particular thing you can't tell is it in this app or that app or on this channel or that channel and and like i don't know so that's that's my minor nbc rant is i appreciate that they've got the olympics and they're using it to help launch peacock but um there's got to be a better solution to what they're doing oh yeah and uh katie keck who's a early reporter over at the verge she wrote kind of about this and broke down just the insanity of it all. And I think I don't have any insight into this, but I imagine what happened with the Olympics Peacock was NBC had the race to the Olympics a long time ago. NBC did not have Peacock that long ago.

And all of a sudden went, we can use Peacock to bring people to watch. We use the Olympics to bring people to Peacock. And I imagine there were some advertisers who were like we don't want to be there we think more people will watch at a bar or whatever maybe uh at home whatever maybe on nbc where you don't need a cable like you just have nbc playing or on the sports app you're doing that um and so they went okay cool we'll figure out how we can do kind of original programming with the panels and also what kind of olympic stuff we can bring over we'll negotiate and we'll make it a hub can do kind of original programming with the panels and also what kind of Olympic stuff we can bring over. We'll negotiate and we'll make it a hub. The mix,

the thing they did was their promotion for it was just like Peacock will be the place, the destination to watch everything. And it wasn't, at one point I had to watch me on USA and I was like, USA is an actual cable, like you'd need cable to watch whatever this is. It's, it's a hellscape. It's the word I use another day to talk about it. It is a hellscape. And I get that NBC needs to have stuff on Peacock and, and, you know, there's this overall demand for the Olympics and they want to spread it out. They want to bring as many people into wherever their ecosystem is.

I get that. But I think you're just making people frustrated. And that doesn't lead to any good. That does not leave good taste in people's mouths. I will say the thing about Peacock specifically is it has a great, great, great catalog. And if we kind of look at the demand share of the, of the, the entire catalog. So basically how much people are interested in the shows across it,

not just original series that are coming, that Peacock is launching. Ranks pretty high. Like it's, it's pretty good, which is not surprising. Are you like, okay, Jimmy Fallon, people like to watch, you've got Law & Order, you've got all the Bravo shows, you've got all these things that NBC makes good television. Where they don't really have much demand for is originals. They haven't had an original that's really stuck. And the number one rule with streaming is that

you kind of knew, highly anticipated new movies and TV shows lead to mass acquisition of subscribers. Every catalog stackable content retains your subscribers. They have everything to retain people, but they don't have anything to bring people in. So my curiosity is to see where the Peacock subscribers end up post Olympics next quarter or the quarter after that. subscribers end up post Olympics next quarter or the quarter after that. I would love to know how many of those new subscribers that are coming in for the Olympics stay to watch whether it's originals, to watch new license programming, to watch library programming. I think that's where NBC struggles is there's no reason to sign up for Peacock

because if you really want to watch Law and Order, it's also on Hulu because Comcast also has deals. Like it's, so I think Peacock right now is, it's not a necessity to be a part of this game. You have to be a necessity. I think right now they're an option. Yeah. I was thinking about how,

I wonder if the NBC programming philosophy is a little bit too powerful at Peacock right now and that they're programming it like a network a little bit more than they should. Because like, okay, I think there's good originals on Peacock. I think it's weird, like AP Bio was one of their first and that was literally, it's a great show, but it's literally canceled by NBC and then saved the next day by another part of NBC. Very strange. And again, if it's got canceled on NBC, it's probably not a must watch on Peacock, but I'm glad they did it because it's a good show

and it'll be a catalog and people will find it in 10 years and say, oh my God, why didn't I know about AP Bio? But like they did Rutherford Falls. That's from Mike Schur. They did Girls 5 Eva. That's basically from Tina Fey and the Tina Fey content machine. So you've got the Mike Schur content machine and the Tina Fey content machine.

So you've got the Mike Schur content machine, the Tina Fey content machine. These are go-to NBC creators. And the shows are fine, but they didn't hit either. And I wonder, is it that an NBC-style sitcom is not what you want to do to have a must-watch thing on a streaming service? I don't know. But that's the part that I find befuddling is um it's not like they haven't done some decent originals it's that nobody cares i mean this is there's a there's a point that um the netflix executives finally started making their earnings reports

which we had known for a while and then they finally acknowledged it officially which was not only are we the home for your next favorite original series so much we are the home of discoverability which is a very key word for them. We are the home where you find out about Schitt's Creek or you find out about whatever it may be, which is a broadcast show that Netflix goes, there's an audience here for it. We have 200 million homes. People are finding it and they're liking it. You know, I think had Rutherford Falls, had Girls 5 ever landed on Netflix for a season, right? And it had 200 million homes open to it possibly

it gets more reception than peacock or if peacock is just people are not looking at it i think the other thing that comes into play with peacock specifically is nbc uni and uh nbc uni various parts of it still have deals with netflix where they distribute a lot of shows to netflix and they're like also you can have some of our you you know, I think good girls was one of them, um, where that would, the Netflix kind of exclusively internationally, they have the global rights to it. Um, that show ran three seasons and, and, you know, finally got canceled, but it did like decently, I believe for Netflix, uh, where it was a global kind of, um, rights, even if it was in the U S it was not. And I think those are going to be

interesting questions that come up with Peacock as it goes international, as it tries to find new originals, is like, what do we sell, right? What do we keep? What do we try to make Peacock original? And if you're still licensing a bunch of stuff, you're not necessarily putting everything into your own streaming service. And that's almost understandable because you need to still show revenue. I think, you know, we have Netflix who's all in on themselves. You've got Peacock, you've got Warner Media, sorry, you've got NBC Universal, Warner Media, and ViacomCBS to an extent, all within their own streaming services, but still big, big licensing kind of partners. And then you've got the Sonys who are like,

we don't have any interest in launching a streaming service. We're going to charge 10 times what we want because you want our content. And so I think it's a very interesting game to see where they are. So the Netflixes and the Disneys, pretty happy. They get to be like, yeah, for the most part, we're exclusive. Disney does some licensing, but we're happy. Your Sony, you're pretty happy. We're licensing out.

You're charging more for it. The other three is like, well, when do you go all in? When do you pull back? And how do you balance that? It's hard to say no to all that money but you are trying to also build for the long haul okay so real quick hits before we go um hbo max where are they now they you know they had their launch it was a little shaky but they've also had all those uh they've had a bunch of originals that have gotten

some award nominations and they've done their movie rollout this year so where what are you thinking about them right now growing their their price uh I still think they're on the up. I'm still very much a bull on HBO Max. I think they will continue to grow. I think Kyler has been great for that company. I think he knows what he's doing. That team I know somewhat well, and they are doing phenomenal things. I do think that price point is going to hurt them until Netflix hits 15, at which point they can then market it as we are the same price as Netflix to an extent, or we are actually, maybe they go down a dollar, we're cheaper than Netflix. I think that will happen. Netflix's most popular plan is $14 in the US right now. It's only $1

less than what HBO Max is. I think ads are going to help them a lot, bringing in new subscribers who don't want to pay and are fine with watching an ad or two. But I think it's hard to bet against HBO right now because of that exact thing where, you know, even if you sign up for HBO specific shows, you sign up to watch White Lotus, you sign up to watch whatever they're doing. There's still a group of people who watch White Lotus and go, I want to watch the new Gossip Girl, which is HBO Max exclusive. I want to watch the Pretty Little Liars reboot. I want to watch, you know, I want to watch the new Gossip Girl, which is HBO Max exclusive. I want to watch the Pretty Little Liars reboot.

I want to watch, you know, Slimmy Gomez cooking show. And so I think they're fine. I think them partnering with Discovery and whatever that ends up becoming, whether it's a bundle, whether it becomes, you know, HBO Discovery Max, whatever it is, I think is going to be an undeniable bundle. But we'll see when that happens.bo max i'm still very bullish on i think it's easy to to say like i don't know if they can succeed i i can absolutely agree with and see all the points against them but for some i just think it's hard to bet against hbo right now i think it's gonna be hard to bet against hbo in five years how about Paramount Plus? Yeah, Paramount Plus is, I think,

kind of the one that I'm least sure about. I think ViacomCBS has an amazing library, arguably one of the best libraries out of all of them. They have Nickelodeon, which is a huge asset. They have BET. They've got MTV. They've got programming that people want. I just think if they want them on other streaming services,

you know, and I don't think if ViacomCBS wants Paramount Plus to succeed, then what they really need to do is amp up their originals and bring people in and then keep their library to retain. And I think that's figuring out what is coming up on the deals block, what they can license and acquire the rights to in order to do what they need. And they're just not there yet. All their focus is on their brands, but their

brands are not Star Wars and Marvel. Nickelodeon is kind of a sell, but Nickelodeon is a sell. Well, SpongeBob's on Netflix. I might watch SpongeBob. Teenage Mutant Ninja Turtles is on Netflix. I'll watch that there. I don't know many people who are going to sign up for Paramount Plus just for that. They might sign up to watch something new and exciting and then that keeps them there. But I think until Paramount Plus starts to even, you know, Peacock doesn't have many originals that are very in demand, but there are some and they're growing. I think until Paramount Plus gets there and that, you know, they're the latest to it to an extent or arguably the earliest. They were CBS All Access. Now with the, now that mom and dad are back

together with Viacom and CBS. I was going to say, I mean, they do have one franchise, which is Star Trek, and I pay for Paramount Plus because of Star Trek, and that's it. And that's fine, but that's not enough. That is a nice piece as part of a larger strategy that does not exist.

I don't say this as a negative thing i think i've said this on other podcasts and and people always see it as like a negative or like i'm dunking and i i don't i don't mean it i think it's a positive i think there are going to be a few companies who in five to six years will take a step and back and go do we want to invest the money that goes into keeping up and running a streaming service or are we the best of what we or do we do what we do best make very good tv shows and good movies and license them out to everyone else who wants to buy it's a seller's market everybody wants to buy content i think it's really telling

also that i look at paramount plus and like they they have they claim to have some global aspirations but the truth is star trek is a great example of that that and this goes all the way back to the less moonvis era you know they they they built that for North America and they sold it to the world on Netflix. And then they also sold like Picard went to Amazon. But basically, they funded their shows by selling all of the streaming internationally to someone else. And, you know, it's not a far step from that to just say, well, why doesn't that show just always go on Netflix? But you would have to abandon your hope of your own streaming service. And I think you're right. I don't know who it is. And maybe it's Paramount Plus, maybe it's not. But it seems unlikely that all of these services are going to make it right. Like it doesn't. I just don't see it. And so somebody is going to have to fold up their tent at some point or be bought. Yeah. And again, I don't think it's inherently a negative thing. I think Sony is a very fascinating company. Sony, we have television, writes a bunch of stuff.

We have movies. We have Spider-Man. We have all these things. We don't need a streaming service because we know you need content to compete with all the other guys. Right. I think at the end of the day, if there's three kind of, you know, companies that create as enough demand for a streaming service alone by their own content, I think Disney is undeniable if you have kids

and people always have kids. And also for just Star Wars, Marvel adult fans. So Disney Plus, undeniable. Netflix is just the amount of money they're pouring into it and the hits they are creating and the library that they do have makes them easy and to your point just now the international stuff they're doing the the locals things they're picking up and going okay we can distribute this internationally and now it's a netflix original very important and i do think i think i think hbo max partnered

kind of with discovery whatever that ends up becoming whether it's a bundle internationally whether it's one streaming service that's pretty undeniable because it's just got your perfect batch of like prestige entertainment, teen entertainment, and unscripted stuff that people love. Everything else is a potential. I'm not saying that Peacock and Paramount Plus can't take off. They absolutely could. I just also think NBCUniversal and ViacomCBS have made a ton of great shows, same with Warner Brothers Television, for other companies.

And that's fine. I think if you can continue making your great shows and owning sports on linear for however long that happens and figuring that stuff out, becoming a content arms dealer is not a bad situation. I just think they need to have the room to experiment and not fail. I don't like that term, but to experiment and realize, you you know what we don't want to upkeep a streaming service like i think these companies are going to figure out you know when when it was when cable was number one thing when broadcast was number one thing you were selling your content you don't have to worry about how it got to people that was comcast who now owns in at&t and they're going yeah we'll take care of it like don't worry now they're going crap we have to up we have to make sure that our AWS is down.

That means we're down. Like, what does that mean? What's going on? We'll see. I think the hassle will be a lot for certain companies. And if the revenue is just not there and the promise of revenue is not there, strategically, it just makes more sense to become the content arms dealer. Right. Sell to the highest bidder.

Well, Julia, thank you so much for spending some time. We broke it all down. We solved it all. Yeah. Figured it out. It's all good. Scarjo, call us. We know what's going on. So thank you so much. Where can people find you and your stuff on the internet? Yeah. So I'm on Twitter at Loudmouth Julia, and I write, you know, kind of still pretty frequently for paired analytics. So I have posts that go out from time to time, but mostly Twitter. The Twitter, your great Twitter follow if you're interested in this stuff. And if you're still listening to this, you are.

So thanks again. Thanks for being here on Upgrade. Thank you so much, Jason. I really appreciate it. Hey, Jason. Hey, Mike. Hi, Jason. Are you back from your vacation already yes okay well since

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some lasers i have way more lasers wow you know well you've got them stored up that might be the first time i've ever done that and it felt really really good I guess it means that it's time for hashtag AskUpgrade? Yes. The first comes from Myth Digital, who asks, Do you think that it's going to be a big iPhone upgrade year or a small iPhone upgrade year? As someone who has an iPhone 8 Plus, should I wait for the new iPhone or snag a deal on an iPhone 12? I have a theory. I think we talked about this a couple weeks ago. 12 i have a theory i think we talked about this a couple weeks ago i think this is going to be that classic thing where apple changed the outside last year and so this year it won't

look every different any different and people be like oh that's boring and on the inside it's going to have some wild stuff that's like way better internally in terms of camera or processor or who knows what else, sensors, what other stuff they're going to do. So I feel like that's not a bad prediction to make, to say that I think it will look the same and actually be way better on the inside because it's sort of a different set of motivations. Some people are motivated by looks. Some people are motivated by specs. They can't change the look every year. They can change the specs every year, more or less. So that's my guess. What do you think about the great philosophical question of, do I get a deal on an iPhone now, if you can find a deal, or if you wait and pay full price for the latest and greatest i think for this year if you could imagine or if your budget would allow that you would be getting a pro phone i think it's going to be a big upgrade yeah

because i think that the pro motion display which is very likely to come to this year's phone it would be what i would be flabbergasted if they didn't make it work this time right uh i think that's going to make a big big big change to the iphone experience maybe always on display too right that's a exactly that could be a really nice feature and probably on the pro phone yeah i think you're right if you're if you're looking for a just a 12 and you can get a deal and you're not really going to buy in the pro line you know if you're if you're coming down on that side of the fence of features and uh price i i think you could probably just go ahead i think it would be worth getting the deal because the difference will probably just be like better camera and like the camera is always better if you're coming from an eight plus

the camera is going to be so much better for you going to the 12 that i would just go to the 12 but if you think that you would be tempted to go for a 12 pro like that and that might be in your budget i reckon i reckon even 11 pro sorry 12 pro to 13 pro or whatever it's going to be yeah i think that's going to be a pretty big upgrade even this year with that screen i think it's going to be awesome. Yeah. Ragad asks, many people believe that the M1 in the iPad Pro creates a perception that it is a grown-up computing device. What are your thoughts on the perception the M1 in the iPad... Wait, hold on.

Can I give another go on that? Yes. Many people believe the M1 in the ipad creates a perception that it is a quote grown-up computing device do you think it makes the mac wait what hang on does the mac line make the ip oh yeah this is a confusing question isn't it i i misunderstood what this question was asking me and now i don't understand what this question means so i think i'm just gonna write my own oh well for the question so here's what it is the idea we've said that the by putting the m1 in the ipad it makes it seem like a grown-up computing device because it's using a mac chip and regard is asking the reverse which is does

having it in the ipad give any kind of like cachet to the mac or vice versa all right cool i got it hey everybody welcome to interpreting ask upgrade questions with mike and jason third time's a charm many people believe that the m1 in the ipad creates a perception that it is a grown-up computing device what are your thoughts on the perception that the m1 and the ipad creates a perception that it is a grown-up computing device what are your thoughts on the perception that the m1 and the ipad would then give towards the mac so like the question being i guess does it make the maxine better or worse because it shares cooler with the ipad or modern cooler or not right like it's i i could imagine some people uh going oh this is just an ipad chip or this is just an iPhone chip.

I bet there are people that are like that. I think that there – if we take this question as being does the iPad rub off favorably on the Mac as well, I think the answer is yes. Apple has spread that out over time. time but if you remember when the uh you know apple has used like the macbook rolled out and they said the that 12-inch macbook and they're like this is from the people who who who made the ipad right and they've been trying to bring ipad like features to their laptops especially and i mean the imac is like a giant ipad too when you look at it, right? Like, I think that, I think that yes, uh, regard here has, has come up with a good way of looking at this, which is what Apple's trying to do is have the M1 and the iPad be like, oh, it's serious. It's like, uh, like a Mac chip. And on the Mac side,

I think maybe not with the chip so much, but more broadly, Apple does try to have it be like, we want to use what we've learned in the iPad and that kind of attitude and the cachet, if there is any, with the criteria we use to judge mobile devices on Macs, especially laptops, which I think is good, right? Because I think that smartphones and tablets have really raised our expectations for what a mobile device is. And I find myself more and more getting frustrated. I love my M1 MacBook Air. I think it's really great. I do think it benefits from being more iPad-like in terms of battery life and things like that. But there are still things that it doesn't do that the iPad does that frustrate me. Like, why does it do it this way? And the answer is always because computers used to do that.

And so I think that Apple, philosophically, Apple wants the Mac and especially the MacBook line to be more iPad-like, not in the way you're thinking, which is make it an iPad, but in the way it behaves thinking, which is make it an iPad, but in the way it behaves in terms of some features. So like the one that I always complain about is on my iPad, if I close the cover and put it to sleep and I'm listening to music in my headphones from the iPad, the music still plays. And if you close your MacBook Air, the music stops. Well, why is that? Well, that's how sleep works on computers. And the answer should be, shouldn't work like that anymore, right? Why? Why? Why, other than that it's been that way for more than a decade, is that the way it is? And so, like, I think the iPad and the

iPhone have really good influences on the Mac. I don't think necessarily it's, to answer this question, it's the M1 that's doing that. But I do think that there are some really positive influences that the iPad and the iPhone make on the Mac. And Patrick asks, which body part, Jason, would you trade for an iPadOS version of BBEdit? I would love to see an iPadOS version of BBEdit. Not that much. But the truth is, there are a lot of other text editors. The great thing about BBEdit is it's a text editor. I can use other text editors to do what I want on iPadOS.

I might have given up the last knuckle of my pinky finger on my left hand for it early, early on in the iPad days. But at this point, you know, between OneWriter and Drafts and some of the scripting tools that are over there, I'm okay. I'd love to see it because I think that having more connection between BBEdit on the Mac and on the iPad would be nice, like syncing settings and having some more of the features that are built into BBEdit that I miss in some of those apps. But I wouldn't trade a body part for it, Patrick, at this point. It would be great, but it's not enough. There are other options, while lesser, that are good enough for this. If you'd like to send in a question for us to answer on the show, just send out a tweet with the hashtag AskUpgrade, or you can use question mark AskUpgrade in the RelayFM members

Discord, which you can get access to if you sign up for Upgrade Plus. Go to GetUpgradePlus.com and you'll get longer ad-free versions of every episode of Upgrade. If you'd like to find Jason online, you can go to SixColors.com, and he is at Jason L, J-S-N-E-L-L. I am at jsnl j-s-n-e-l-l-i-m-i-k-e Thanks to Hollow, Smile, and Pingdom and also whoever Jason's guest was. Yes, it was Julia Alexander. Summer of fun!

We'll be back next time. Until then, say goodbye, Jason Snell. Say goodbye, Mike Hurley. Goodbye, Mike Hurley.