(Preview) Monday Mailbag: Netflix and Its Mike Tyson Adventures; WBD Settles with the NBA; Lessons from Building Passport

The Jake Paul-Mike Tyson fight and what might have gone wrong for Netflix on Friday night, a resolution of the NBA's months-long contract dispute with Warner Bros. Discovery, and Ben explains what Passport can do for creators and shares a few takeaways from his experience building the product over the past few years.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Andrew Sharp?

  Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing?

• 0:19Ben Thompson?

  Little worried about my ability to podcast today. I just have this song stuck in my head on a loop, hard to concentrate on anything else.

• 0:27Andrew Sharp?

  What song?

• 0:29Ben Thompson?

  The Bears Still Suck. Still suck. The Bears Still Suck.

• 0:35Andrew Sharp?

  I'm happy for you.

• 0:36Ben Thompson?

  An all time, an all time great hit. That one is very innovative, creative lyrics.

• 0:42Andrew Sharp?

  Well, and it has been about my entire life where the Bears have been awful. So I'm happy that you have that going for you. Again, we're not going to talk about the Milwaukee Bucks on this podcast, but a good weekend to be a Packers fan, you know?

• 0:56Ben Thompson?

  Yeah, well, the only one team can be good at a time. That's the reality of Wisconsin's sports. So that is what it is.

• 1:02Andrew Sharp?

  Okay, well, quick note to listeners. Next week's mailbag is going to be our Thanksgiving episode. It's the only show that we will do that week. So if you've got any fun questions you'd like us to hit, please send them to email at sharp tech.

• 1:17Ben Thompson?

  Particularly non-tech, non-tech questions. This is our, these are one of our dedicated, we can do.

• 1:22Andrew Sharp?

  Thanksgiving themed questions. Yeah, exactly. We're going to let our hair down for the holiday week. As for this week's mailbag, we're recording this on Sunday night, East Coast time. And normally we put the rundowns together on Friday. I put the rundowns together on Friday, East Coast time. And I reworked this episode on Sunday to account for a couple of things that happened over the weekend that were newsworthy. So thing number one was the Netflix fight with Mike Tyson and Jake Paul. Joseph says, Ben and Andrew, it's 10:55 Friday night in Chicago, and I'm fighting with Netflix to get the Paul Tyson spectacle on a reliable stream. Netflix has done live events before,

• 2:06Andrew Sharp?

  but tonight's stream has been a marked departure from the quality. I have come to expect from Netflix and even the quality from what Amazon manages for Thursday Night Football with two Christmas Day NFL games coming up. How much risk is Netflix under from having a technical stack and culture built for library streaming instead of live streaming? I'm sure this boxing event is designed to stress everything in advance of Christmas Day, but man, they've got work to do. So Ben, you watched this event over the weekend. I did not watch this event. Do you have any thoughts on the technical execution we saw from Netflix?

• 2:45Ben Thompson?

  Well, I mean, I think first we have to examine you. Mr. Man, I miss the monoculture. Why can't I just, why can't everyone enjoy the same sort of thing? And you're over here lording it over everyone. I don't have time for this. I'm going to watch NBA League Pass. What do you have to say for yourself?

• 3:03Andrew Sharp?

  Well, I mean, I think it's great that lots of people enjoyed it.

• 3:08Ben Thompson?

  I like how you're momentary speechless.

• 3:11Andrew Sharp?

  No, no, I'm not speechless. I just, I want to word it carefully. I'm glad that lots of other people enjoyed it. I don't want to ruin anyone's good time. My personal stance, I am a bit of an elitist here. I watch real sports, including real boxing, and I had no interest in participating in like the viral freak show that Netflix was putting together, but it seemed like everybody had a good time, at least once the stream started working for people.

• 3:39Ben Thompson?

  Yeah, I don't know if the fight was very much of a good time, to be totally honest. The, the, the, actually, the matches leading up to it were, were much more entertaining. It was, it was a little sad. It felt a little guilty watching it, to be totally honest.

• 3:54Andrew Sharp?

  Like, I told a couple people, mutual friends, that we, I was not watching the fight on Friday night and somebody came back and said, well, maybe it's a generational thing. Like Mike Tyson was the biggest thing in the world when we were growing up. We being like the handful of Gen Xers that are in our group chat. And I, again, didn't want to ruin the fun by arguing in that moment because the fight was about to start, but I'm sitting there thinking. Thinking to myself like I may not have been a Gen Xer, but I know who Mike Tyson was and how much he meant, but like Larry Bird was big in the late eighties and I don't want to watch Larry Bird play basketball today. So I'm happy that Mike Tyson got paid. You know what I mean? But I don't want to watch him fight.

• 4:37Ben Thompson?

  More commentary on how old we are.

• 4:40Andrew Sharp?

  Right.

• 4:41Ben Thompson?

  Yeah, it was. So anyhow, enough commentary about the fight itself. Yeah, the the overall. So I think just from a numbers perspective, if you talk about this fight, which Netflix, I think is reporting was 65 million concurrent streams worldwide. That's a lot more than a football game. Like this was an event. Like, like I think Amazon is in the mid teens as far as or 12 to 15 million or something when it comes to Thursday night football. For sure, Christmas Day will be more than that, but it's still like we're talking like less than half what was going on here. So this wasn't a dry run for Christmas. This was actually the worst case scenario, I think.

• 5:19Andrew Sharp?

  Astronomical. I mean, this is one of the most viewed events globally of the entire year. The presidential debate was a hair more popular with 67 million viewers on linear television. Granted, there were probably people watching on YouTube. Yeah, but.

• 5:34Ben Thompson?

  Well, that's 65 million in the US, right? This was worldwide. Netflix, I don't think has a US only number, but the.

• 5:41Andrew Sharp?

  Well, and just to put it in perspective, last January, Chiefs Dolphins on Peacock, NBC paid $110 million to air that game and averaged around 23 million viewers. It peaked at 27.6 million viewers. So this was literally more than twice as popular as an NFL playoff game. So yeah, Netflix should be okay on Christmas Day, but time will tell, I suppose.

• 6:05Ben Thompson?

  Yeah, I mean, the reality is, and this is sort of an interesting point, is that architecturally speaking, streaming is horribly suited to live events. And like, this has been one of my grumblings all along. I'm like, look, guess what's good about cable? Having a wire in the ground that is dedicated and all synced up with every household in the neighborhood delivering the exact same thing. Turns out that works pretty. Well, so if you if you sort of zoom out, right, you have all these sort of cameras in the arena that are go to a production truck. That production truck sends out one signal that, you know, sort of mixed onsite. That goes to a satellite dish that's onsite, goes up to the satellite, goes down to whatever this the central office was.

• 6:48Ben Thompson?

  And if you go back to traditional broadcasts, say it goes to ESPN headquarters, right, or NBC headquarters, or whatever it might be. That is then rebroadcast to satellite dishes all over the country that are at the sort of main base station for I have Charter or, you know, Spectrum in in Wisconsin. It'll go there and then from there it's distributed sort of to the houses in the area. And it's distributed like it's a one to many sort of broadcast. So you have this this link that gets it relatively local that it's sort of a one to many broadcast and sending out the exact same signal on the exact same frequency on like this set of wires and everyone watches it at the same time. And there's a bit if you go back.

• 7:32Ben Thompson?

  Yeah, I mean, even if you go back to like early Twitter. There was the assumption when you were watching stuff that everyone was seeing a play happen at the same time. And, you know, and honestly, there's the live aspect where the great things about watching live is the sort of touchscreen experience and you can have Twitter in your hand and be watching the game. And over the last few years, that's gotten a bit choppy because.

• 8:00Andrew Sharp?

  I mean, we see it with the Super Bowl every year where I think the last time we were all watching the Super Bowl, we being you, me and like 10 other friends. All in different locations, but sort of texting during the game. And I think if I recall correctly, the person who was just watching it on an antenna was seeing it like pretty much instantly. And the person who had like this tricked out stream in whatever 4K that like they were like 90 seconds behind or something ridiculous.

• 8:29Ben Thompson?

  Pretty rough.

• 8:30Andrew Sharp?

  So you end up tearing your hair out.

• 8:32Ben Thompson?

  And it's funny, like it just totally varies. I'm watching in Taiwan over my cable in the US and I was well ahead of a lot of people. It's like, what's going, I think I was actually, yeah, so it's, it's kind of a mess. And the problem is this sort of one to many bit breaks down with streaming. So the way Netflix works is Netflix is actually pretty interesting because they have all these, they push out so much data. And you know, there's been disputes with them and cable companies over the years, something I wrote about a long time ago. But today, what Netflix does is they actually have like servers inside of ISPs. So if you go to your local spectrum

• 9:13Ben Thompson?

  facility in Madison, Wisconsin, or wherever it is, there is like a bunch, there's a server there with a bunch of hard drives that holds all the Netflix content. And Netflix is actually just pushing it relatively locally. And then there's also like CDNs and stuff is pushed out, but Netflix actually takes this to another level where they're actually pushing their content out into these areas. But even if you're a centrally broadcasting thing, you have to push it out to a CDN. A CDN is a similar idea. It's basically servers in ISPs that all over the world, like Cloudflare, one of the biggest CDNs. They have points all over the world inside ISPs. That's a part of their business proposition is putting this hardware everywhere that mirrors

• 9:57Ben Thompson?

  the content from the central data. I mean, even we're gonna talk about Passport later, a huge challenge with what we do is our CDN management, particularly doing customized content. But we push out, say a podcast you want to download, it has to be on a CDN, which means it's distributed all over the world. And then you access it and you pull down your content. And the problem is everyone is doing that on an individual basis. That works fine when you're watching shows on demand, or you're watching Netflix library content. And it's better. You get exactly what you want. And they've worked through a lot of technical challenges. So you can get that content and it can be seamless and it starts up quickly and it's smooth and all and everything else that you would expect.

• 10:38Andrew Sharp?

  Library content, is that what they're sending to like the ISPs? That it's

• 10:42Ben Thompson?

  Yeah.

• 10:43Andrew Sharp?

  Reliable.

• 10:43Ben Thompson?

  That's right. So it's pretty local to you and you're you're connecting to it. And it's not going over sort of the public internet. The problem with a live event is you can't do that. It has to be pushed out live. And so it's going over these satellites. It's being broadcast. And then you're still using the the CDN layer, however it is sort of architected. I don't know the exact details. But the problem is that everyone is talking about it. You're delivering this monocultural moment. This is ideally the benefit to your business.

• 11:14Andrew Sharp?

  Right.

• 11:14Ben Thompson?

  Which is people sign up because everyone's talking about this event. And then once they're signed up, maybe then they're all I've, you know, there's shows I've been wanting to catch up to. They were doing promos during the fight for the football game on on Christmas. And there are other shows and you get the regular Netflix experience. I think that's how they're thinking about this. Is it's a customer acquisition tool. It's not like. It's not evergreen content like I'd I I would.

• 11:41Andrew Sharp?

  You haven't thought about the Mike Tyson Jake Paul showdown for the last.

• 11:45Ben Thompson?

  Yeah. You don't need to go back and watch it. I mean, yeah, next year, I'll go back and rewatch this, the seminal moment in time. No, the entire value of it was it's happening right now. Everyone else is watching it. That's the reason I watched it.

• 11:58Andrew Sharp?

  Right. Well, and it's.

• 11:59Ben Thompson?

  I felt compelled to participate in the monoculture moment.

• 12:02Andrew Sharp?

  Yeah. That makes sense. And I'm glad you explained the technical differences between streaming library content. That's like already stored remotely all over the country. Versus one live broadcast that goes everywhere. Because one, that's really interesting. And two, as a consumer, I was pretty surprised when I heard about the streams failing on Friday night. Just because everything else Netflix does has always been executed flawlessly from a tech standpoint. Like Netflix in particular, relative to its peers, has always just been really good.

• 12:37Ben Thompson?

  I think this might be connected.

• 12:40Andrew Sharp?

  All right, and that is the end of the free preview. If you'd like to hear more from Ben and I, there are links to subscribe in the show notes, or you can also go to sharptech.fm. Either option will get you access to a personalized feed that has all the shows we do every week, plus lots more great content from Stratechery and the Stratechery Plus bundle. Check it out, and if you've got feedback, please email us at [email protected].