Rich Greenfield, Partner at LightShed Partners: The War for Time and Attention

Rich Greenfield is a Partner at LightShed Partners. In this conversation, Rich and Anthony discuss new media models like Barstool Sports, The Athletic, & Substack, what’s going on in the streaming wars between ESPN, Disney+, Netflix, Apple, & Amazon Prime, the podcast world with Bill Simmons, Gimlet Media, Anchor, & Luminary, and what he thinks is going on with Twitter, TikTok, & Quibi. CRYPTO. COM-----The only all-in-one platform that allows you to BUY / SELL / STORE / EARN / LOAN / INVEST crypto all from one place. Join over 1 million users and download the Crypto.com app today to earn $50 USD using the code ‘pomp2020’ when you sign up for one of their MCO Visa Cards. TAXBIT-----Refund-maximizing, cryptocurrency tax software you can depend on. Visit taxbit.com/invite/pomp and receive 10% off your tax plan today by signing up for a free trial. TRAVALA. COM-----Travala.com is the world’s leading blockchain-based travel booking platform trusted by thousands of customers worldwide as their preferred online travel agency. Book over 2 Million hotels and accommodations and pay with 25 cryptocurrencies or credit and debit cards.

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

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:11Anthony Pompliano?

  Rich Greenfield is the co-founder and partner at Lightshed Partners. He's widely considered one of the best TMT analysts on Wall Street. In this conversation, we talked about new media models like Barstool Sports, The Athletic, and Substack. What's going on in the streaming wars between ESPN, Disney Plus, Netflix, Apple, Amazon Prime? What's happening in music with Spotify, Apple Music, and Prime Music? The podcast world with Bill Simmons, Gimlet, Anchor, Luminary, and others? And what he thinks is going on with Twitter, TikTok, and Quibi? We also touched on the Warner Music going public story, and how political ad dollars are going

• 0:54Anthony Pompliano?

  to shift as less and less people subscribe to cable bundles. I really enjoyed this conversation, and I learned a ton from Rich, so I highly recommend you take a listen. But before we get into the episode, I want to cover the three sponsors that made it possible. The first is Crypto.com. They're a pioneering payment and cryptocurrency platform that seeks to accelerate the world's transition to cryptocurrency. They have a vision to put cryptocurrency in every wallet, which is frankly why we are all here. The Crypto.com app offers a full range of financial products with competitive pricing, well-designed UX, and high security. It's the best place to buy, sell, and pay with crypto. These guys have been longtime supporters of Off the Chain, and they keep launching new product after new product, so do yourself a favor and go to Crypto.com

• 1:37Anthony Pompliano?

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• 2:19Anthony Pompliano?

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• 3:04Anthony Pompliano?

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• 3:45Anthony Pompliano?

  to anyone, anywhere, and offer censorship-resistant and peer-to-peer transactions, and build open-source technology controlled by software and governed by users. Go check out Travelala.com, that's T-R-A-V-A-L-A dot com, and book something today. Now, let's get into the episode with Rich. I hope you guys enjoyed this one.

• 4:07Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pom or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pom as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 4:33Anthony Pompliano?

  All right, guys. Bang, bang. I've got Rich here. He doesn't know I'm going to say this, but I think that you're probably recognized as the best TMT analyst on Wall Street. Is that?

• 4:45Speaker 02

  It's flattering.

• 4:46Anthony Pompliano?

  It's flattering, but is it true?

• 4:48Speaker 02

  Some people will say that. Some would say most hated, but you know, it just depends on your perspective in life.

• 4:53Anthony Pompliano?

  All right. I just wanted to get that out of the way, right out of the gate. I've got a whole bunch of stuff I want to talk to you about. First of all, let's just talk about your background and how did we get to Lightshed? Because you spent the last, what, nine years or so BTIG, but what'd you do before that?

• 5:08Speaker 02

  I mean, I've really spent 20, I guess this is 24 years plus analyzing media stocks. I started at Goldman Sachs right out of college. Love the media space. I mean, you know, Mike is in front of my mouth as I'm talking to you. I mean, I was running the college radio station up in Boston at Brandeis. I was calling basketball games. I almost went to Newhouse to do sports broadcasting and ended up in finance because that was my other passion was finance and sort of have combined the two of media, sports and finance all into one, which is, you know, covering the broad media tech space and started at Goldman, spent eight years there, have been in a couple of other firms in between. But the idea's always been about covering media and tech companies.

• 5:51Speaker 02

  And so I've been covering names like Disney going back to 1995. And so it's been a long history of looking at this space and seeing the evolution. I like to say that, you know, my first two months on the job at Goldman Sachs, Disney bought ABC. So just to kind of frame like just how far back in history you go and you look at the consolidation that's playing out now with Disney buying Fox and AT&T buying Time Warner. I remember when Time Warner bought Turner. So. I used to carry Ted Turner's bags to conferences. And so, you know, it's been a long evolution, but you know, the reality is I think it gives us really unique perspective on the space to look back over, you know, a 24 year plus period and see how this industry has evolved because there's been a lot of change.

• 6:32Speaker 02

  You know, we're sitting here on a podcast and you think like my first year at Goldman in 95, the only thing technologically going on in the media space was the creation of the DVD and the predecessor to DirecTV was pushing satellite television at the time. And that was technology in 1995. And now we could spend hours talking about technology's impact on the media space and really how technology is sort of infused and really colliding with media.

• 7:00Anthony Pompliano?

  Yeah, and part of what I think people really enjoy about your analysis, both kind of what you guys do professionally, but also just on Twitter is your understanding and kind of how you pay attention to both the public stocks and things you guys cover, but also your understanding of the private markets and a lot of what's going on there and those trends, et cetera. And you blend them together pretty nicely.

• 7:17Speaker 02

  Yeah, I mean, look, we met Evan Spiegel at Snapchat when it was 20 people and we really tried to understand where the world was going. I think you can't do that in the media space broadly without really getting into the early stage startups that are playing out. And we've seen that time and time again of how all of this disruption has impacted. I mean, look at what Netflix, I mean, you think about Netflix, which was a DVD company when I first started looking at it. And now, you know, you look at how every media company is evolving, you have to really spend a lot of time on the startup community to understand what's going to impact these big public companies, not just from what they're going to make acquisitions in, but just how it's going to impact their business.

• 8:00Speaker 02

  And I put everything from a, everything we do focuses around the consumer. What is the consumer doing? How is consumer behavior changing? And how do you make money off of that? And, you know, we, I've, you know, become an active angel investor. I think, you know, if things go well, we'll launch Lightshed Ventures over the course of 2020. But we have a lot of ambitions to be a lot bigger than we are now. But it all comes back to it's driving this kind of ultimate flywheel of you learn more from the private community. I think it makes you a better analyst in the public markets in terms of how do you analyze these companies and get smart on these companies. And you know, that also creates more windows into what are the things that are missing or what are the missing pieces or problems that the public companies are facing

• 8:43Speaker 02

  that the private sphere can address or try to fix. And I think you're seeing that flywheel really play out. And I think it's been from our research standpoint, I think it's been what really differentiates us because I don't think a lot of people focus on the private sphere sitting in my job.

• 8:56Anthony Pompliano?

  Absolutely. Couldn't agree more. Just so people know, Lightshed, just kind of what do you guys do as we get into some of the more nuanced topics, they've got that perspective?

• 9:04Speaker 02

  Yeah, so my whole career has been about covering stocks. So buy, sell, hold ratings on public media and tech companies. And I started Lightshed with two partners, Walt Pisick and Brandon Ross, who worked together with BTIG for a decade. The three of us and two other colleagues left in July and in September started up Lightshed. And Lightshed is essentially, in its initial creation, is a research platform. So we're writing research at lightshedtmt.com. We are building out our research subscription business. We will add, we were talking before the show, talking about we want to get our own podcast started in 2020. We want to build out Lightshed Ventures. But what you see today is essentially

• 9:48Speaker 02

  a content business focused on helping our clients, our subscribers, make money in the media and tech space.

• 9:55Anthony Pompliano?

  Got it. And most of those are all focused on public markets?

• 9:58Speaker 02

  I wouldn't say that, actually. There's plenty of people who are, you know, I think the value add of our content applies across a wide spectrum. And so, you know, the reality is, there's fewer and fewer investors today, even if their focus is public market investing. More and more of those firms are making private investment because, look, companies are going public later. You're seeing a lot of companies stay private for a long time. And you're seeing a lot of what you would think of as very traditional public market investment funds allocating a portion of their portfolio to private investing. And I think, you know, our access to private companies is a real value add for a lot of investors, no matter whether they're in the public sphere, private sphere, or across, across the two.

• 10:38Anthony Pompliano?

  For sure. Before we get into what I think is more of the mainstream topics, I want to talk about some of the new media models. That we're seeing, the first and probably the one that I think about the most is Barstool Sports. So for those that don't know, Barstool is a, we'll call it a sports blog is kind of how it started out. Originally as newspaper then.

• 10:57Speaker 02

  I would call it comedy more than sports.

• 11:00Anthony Pompliano?

  Characters for sure.

• 11:02Speaker 02

  But I think comedy really infuses and what what differentiates it is the comedic take on sports content. I don't think you could look, I don't think you can say sports without comedy. You know, if you wanted to say a sports comedy, fine, but I think it would be unfair to call it sports. It's not about going, it's not where you go to get the scores. It's not, it's not where you go to get the analysis of last night's game, the way an ESPN would break it down or a Bleacher Report would break it down. This is where you really go for kind of the comedic take on everything that's happening in the world, the wide world of sports globally, especially in the US.

• 11:32Anthony Pompliano?

  The more entertainment, which is definitely driven by the comedy. But what they've now morphed into, they took an investment from Churnin, then they brought in, you know, kind of professional leadership. They've really built a big business, about a hundred million dollars in annualized revenue now. And they just did the deal with Penn to kind of.

• 11:48Speaker 02

  Penn Gaming.

• 11:48Anthony Pompliano?

  Penn Gaming to push more into kind of the gambling component of that, that sports world. What's your general take on one, you know, that deal with Penn? And then also two, why no one's really kind of copied what they've been able to do? Is it driven by the people behind this or kind of what's that magic sauce that they have that others haven't been able to copy?

• 12:07Speaker 02

  You know, look, I think one of the real challenges facing digital media publishers is trying to build a brand that really means something. And I think, you know, this is not just go to college campuses. This would be walk into, you know, walk into a Wall Street trading floor, walk almost anywhere on, on the East Coast, Midwest and even parts of the West Coast. And, you know, you'll, you'll walk into a dorm room, girls and guys, and you'll see Barstool merchandise, Barstool posters, you'll see chicks in the office. Yeah, you'll see so much Barstool branding. You know, I don't, there is such a passion for the brand and I think that's what's really important is that. Dave Portnoy and Erica Nardini, the CEO,

• 12:51Speaker 02

  they've really understood that they have this passionate connection with the listener, with the watcher, with the reader. And that can translate into many things. And whether it's selling merch, whether it's tuning into a serious radio show, whether it's using the app, whether it's showing up. I mean, if Dave Portnoy told everyone to show up in Yin Square, New York City, at 5:00 PM tonight just because, there'd be a crowd of people not knowing why they were lined up, but they would go do it. That's something that's really powerful in the media world. And you think about what you can do with that passionate, loyal fan base. And there's lots of things. And I think one of the things, obviously, with the Pennsaw in this transaction, was the ability to drive them, instead of going to DraftKings or to FanDuel,

• 13:35Speaker 02

  drive them to Penn's apps to gamble. Especially as mobile gambling and mobile sports betting takes off over the next, you know, take a lot of time for legalization to play out across the entire country. But state by state, you're certainly seeing it in New Jersey. You know, obviously FanDuel and DraftKings have dominated this space. If you want to break in branding and being able to use a media business, a broad media business, to drive people from one to another. I mean, I think Portnoy is on record basically saying, in many ways, he helped build the FanDuel's and DraftKings, directing people to go there. Now he can direct people elsewhere. And I think he's got a loyal and a following where they're going to follow whatever he wants them to do, obviously within reason. But I think that that passion for the brand,

• 14:17Speaker 02

  and I also think what's really interesting about Barstool is they've rethought the model. You know, most media businesses that you and I have grown up with tend to rely on advertising. And this is one, especially digital media businesses. And I'm thinking, you know, if you think about historically, the Vices, the Refinery, 29s, I mean, you go through the list, they traditionally rely on advertising. And I think more and more of them are now converting into studio businesses. But if you see Barstool, they really, you know, from a very early on, it was commerce and transactional from a merch standpoint was a huge part of their business. And so really rethinking media models, I think is why the Barstool case study is so important for every media company, whether or not Not they like the content of Barstool is a whole nother thing.

• 15:00Anthony Pompliano?

  Yeah.

• 15:00Speaker 02

  Seeing how Barstool owns the customer, how they're able to use that or push that customer across their properties, leverage one podcast into another, leverage one event into another. People that actually mean, how many digital media brands do you actually want to wear the T-shirt? I mean, I think of wearing the T-shirt is a huge determination of success. Like, if you want to wear a T-shirt of a digital media brand, that really means something. And I think there's very few where you'd actually want to wear that brand and people would go, oh, my God, you're a so, you know, I'm a stoolie too.

• 15:33Anthony Pompliano?

  Yeah. So I looked at the deck that Penn Gaming put out on the acquisition and 31% and 32%. So about 63% of the total revenue of the business is in podcast advertising and merchandise. And to me, it was that it was so backwards compared to every other media company in the world, right? They were quick to get on podcasts. They've got a number of the top 50 podcasts in the world. And then the merchandise component, and I don't think that a lot of the mainstream media, right, can do merchandise because their brand promise is very different, right? It goes back to this kind of fanaticism that people have with the Barstool brand. The New York Times can't be pushing merchandise onto subscribers because it's just, it would violate that brand promise.

• 16:18Speaker 02

  I mean, look, I think ESPN had an incredible sports brand that people probably would have worn when I was growing up. I mean, I don't think it's, I think it's very different now. I think ESPN to most people now means a live sports event that they'd go to to watch a live game on, you know, a Saturday evening, a college football game or a college basketball game. I don't think they think of the brand in the same way that they used to. But I think a lot of media brands are like that. I mean, MTV doesn't mean what, you know, when I think about what MTV meant to me growing up and, you know, tuning in for the top 100 video countdown into New Year's.

• 16:52Anthony Pompliano?

  TRL.

• 16:52Speaker 02

  TRL, right. I mean, TRL was, you know, or, you know, think about the grind and South, you know, spring break with MTV that my friend Andy Shone helped build. And that's a brand that really meant something to an entire generation. Now, I think Spotify is. That type of brand, you know, for if you're thinking about a media brand or music brand in 2020, Spotify has far more kind of that cool factor that you'd want to wear the Spotify T-shirt far more than the MTV T-shirt. And I just think it's like a lot of these digital or a lot of these legacy media brands have not kind of stayed up with what is quote unquote hip and cool for the consumer.

• 17:29Anthony Pompliano?

  Yeah, we'll get to music in a second, but yesterday I tweeted a photo. I was in a Starbucks and it had a we're hiring kind of chalkboard that had all of their benefits outlaid. And one of them was you get a free online education from Arizona State University. You get, you know, 50% off the food. You get all these different things. And then one of it was a free Spotify premium account. And I literally tweeted and I said, I don't know if the free education or the free Spotify account was more valuable, right? But depending on the demographic, Spotify actually may be the winner.

• 18:00Speaker 02

  Spotify has an incredible brand and, you know, I think it's just, you know, it's hard to differentiate music services because they all have the same songs effectively. I mean, some have more than others, but effectively you have access to the world's music catalog. And so the underlying technology and the brand mean a lot. And I think that's what Daniel's been so smart to build is he's built a brand that constantly iterates. And I think it's that constant iteration is something that a lot of the traditional media companies struggle with is that they don't live in that cycle of constant iteration. And I think as they've tried to get into tech, it's been one of the real challenges they face is that they don't, they don't live on an every week refreshment cycle for a new feature. They live in months, if not a year cycle for, you know, planning things. And I think it hurts them as they try to break into tech.

• 18:44Anthony Pompliano?

  Yeah. So this is part of the Barstool magic sauce, right? Is there's something can happen. They can turn around T-shirts and merchandise, et cetera, within an hour and literally get it out. People are buying it, et cetera. They also added a subscription component. So people can actually buy in. One of the questions that I have is you talk a lot about the Barstool brand, but one of the things that they've done that ESPN I think did early on, but kind of got away from is Barstool has really kind of put these personalities on a pedestal, right? So whether it's Big Cat or PFT commentator, all these guys, et cetera. Can somebody else replicate Barstool's type of success with just the model and not have the personalities? Or do you think all of this kind of goes together hand in hand?

• 19:24Speaker 02

  Well, look, I think you're talking to a broader theme of like news as a category, right? You know, think of the innovation of Fox News. Fox News is not really about news. I mean, during its primary money earning period, which is prime time, it's not about news at all. It's all about talk. And it, you know, it's because so much of the quote unquote news and information has been commoditized by the internet that where you really differentiate yourself is in conversations like we're having, you know, the actual kind of personality driven side of the business. And I think that's what Barstool, obviously in a very different context than Fox News. But I think it's where, you know, they've really seen as a huge opportunity and exploited

• 20:05Speaker 02

  it is really defining the category of, you know, look, live sports is really expensive. And so getting in doing what ESPN does where you're spending billions of dollars, I mean, ESPN spends $2 billion for 17 Monday night football games. That's a very expensive business that requires, you know, tens of millions of people paying a lot of money in their cable bill every month. The Barstool model is obviously, you know, a very different cost model where you're able to do a tremendous amount with a, you know, relatively slim content budget.

• 20:35Anthony Pompliano?

  Well, during those live games, what are they doing? They're literally sitting in front of a phone basically propped up and they're filming themselves reacting to the game, right? Which is an amazing hack as to how you get around the licensing.

• 20:47Speaker 02

  Absolutely. I mean, I think Barstool's been very creative in how they, you know, play in the world of sports without having to absorb the, I don't want to say absurd, but the ever increasing costs of live sports broadcasting.

• 21:00Anthony Pompliano?

  So staying with sports, another new model is the subscription. And so you've got things like The Athletic that are popping up, which the data that was recently released after their last private round is incredibly impressive in terms of retention rates and monetization, et cetera.

• 21:16Anthony Pompliano?

  We've seen the New York Times, I think is the best example in the mainstream press, who's gotten, you know, five plus million subscribers now. ESPN Plus has started to actually get people to pay and they've got, I think, seven and a half million or so subscribers. Is this where all of media goes? Or is there still room for the non-subscription-based business model?

• 21:33Speaker 02

  Yeah, and look, let's, for a second, let's just push ESPN Plus to the side because I think it's a little bit of a unique case. I think if you look at the New York Times and The Athletic, they've both been great examples of, you know, when you put up a paywall and you basically tell people they've got to pay for something and you have content people want, people pay. Now, I mean, clearly, the New York Times is benefiting from, you know, adjusting how easy, it used to be very easy to get content for free. Now, they've made it harder and harder and they keep restricting how much content is free before they force you to pay. So, they've gotten technically smarter, understanding how to market, which people to go after. I mean, New York Times has really invested in the technology side of the publishing business and so that they really understand how to social market on, you know, digital

• 22:15Speaker 02

  marketing campaigns, how they figure out how the conversion looks like, what churn looks like. They've had to learn essentially this new business, but it really is underlaid by the idea that there is content that people will pay for. Maybe it's not as many people as were reading for free online, but that there's a business of people that will absolutely pay for these things. And, you know, look, you've seen lots of examples of audiences that will pay for something. You know, you look at a Crunchyroll that has several million subscribers for, you know, for, you know, for Japanese anime. The Athletic, you know, when you take the best writers in sports out of the publications they're reading and say, "This is the only place you can get those writers and we're going to give you those writers access to all," and not just those writers, you're

• 22:57Speaker 02

  going to get access to the best sports writers from the key publications all across the country that have left their jobs to come here. There's a group of consumers that are tribal. I mean, you know, sports is really tribal and if you want to read the person you've grown up with reading for the last 10 years, 15 or 20, 30 years, you're going to subscribe to The Athletic and the price point of, you know, call it, you know, $40 a year, I think, is what.

• 23:19Anthony Pompliano?

  I think 60.

• 23:20Speaker 02

  Yeah, but I think there's lots of people on promotions and discounts. So, probably the blend is probably in that, you know, 35, 40 plus range.

• 23:24Anthony Pompliano?

  It's a Costco membership. Right at Costco, I think 60 bucks a year.

• 23:27Speaker 02

  This is not expensive. This is not expensive. And I think they're, look, it may not be the scale. I mean, you have to separate when you think about subscription businesses, not everything is going to be Netflix with 160 million subscribers. Not everything is going to be, you know, Amazon Prime with, you know, their global subscriber base. You have to put kind of the lens of like, is this a good business? Can you create a successful business with a group of passionate loyal subscribers? And I think the answer is absolutely yes. And I think that, you know, I've been really impressed with the New York Times. I've been really impressed with The Athletic to date. I think what Alex has done, I mean, he's trying to prove people wrong day by day who never said this could be done. And, you know, he's going into new businesses, you know, putting podcasts behind the wall for subscribers and looking for ways of adding

• 24:11Speaker 02

  incremental value, expanding overseas. And now they have EPL content and going after the, you know, the English Premier League diehard fans who are probably even more passionate than a lot of US sport fans are about their sport. So I think he's been very smart in targeting the sports that have real tribal audiences and going after kind of the talent and locking up that key talent in an industry, you know, called traditional publishing, newspaper publishing, that's in, you know, secular decline. I mean, leave the Times aside, the rest of the entire industry is in deep trouble and it's not getting better. ESPN Plus, I just wanted to come back to you for a second. It's sort of in a different universe, you know, ESPN Plus is sort of the, the long-term subscription life raft for ESPN. I don't think,

• 24:53Speaker 02

  you know, most people, when you said the seven and a half million subscribers that ESPN Plus has, remember, most of those people were subscribing to a triple play bundle of Disney Plus and Hulu over the last quarter.

• 25:04Anthony Pompliano?

  Interesting.

• 25:05Speaker 02

  So before the triple play was announced, they only had three and a half million subscribers.

• 25:09Anthony Pompliano?

  And then Conor McGregor, I think, brought another million or so during the UFC fight.

• 25:12Speaker 02

  Right. So the point is, is that, you know, and that, we don't know what the longevity of that last million is, who came in for the McGregor fight. You know, you can come on and off these, you know, a part of the problem with a lot of these subscription businesses is that it's really easy. You know, it's the exact opposite of taking a day off from work and waiting for the charter service person to come to your house and disconnect your cable and then having to, you know, install it again and then sort of a painful and just waiting on hold to make that happen to get someone to come to your house or to go to your house is nearly impossible. So now you live in a world where in the time it takes me to say cancel, you could go on your phone and cancel one of these services. And so the churn dynamics are tremendously different in the direct to consumer world. And I think it's a real issue as all of these

• 25:55Speaker 02

  companies, everyone wants to be in the Netflix business. Everyone sees it and goes, oh my God, we should be doing that. It's hard to be in the direct to consumer business. And there's a reason why Netflix is creating as much content is that they need to keep you from leaving.

• 26:07Anthony Pompliano?

  Yeah.

• 26:07Speaker 02

  Because it's that easy to leave. And I think, you know, publishing businesses in many ways are naturally built because there's constant content that's coming out. You know, look, Disney's got a great brand and there's going to be a lot of people who just subscribe to Disney Plus because it ties to kids and people want to have that around as kind of a constant babysitter. But, you know, in terms of high profile content for an adult, there hasn't been anything new on Disney Plus since Mandalorian ended in December. There's a new show on Netflix every single day.

• 26:36Anthony Pompliano?

  Yeah. And it's very topical, right? I mean, everything from the Aaron Hernandez type documentary to the latest movie or their originals, et cetera. It kind of spans the gamut.

• 26:45Speaker 02

  Yeah. Well, I think it's an important reminder of if you're trying to build a mass audience product. And I, you know, when I think about mass audience, meaning something that can have upwards of 80, 90 million subscribers in the US and hundreds of millions of subscribers globally, you can't just reach one part of a household. I mean, take John Stanky who runs AT&T, you know, Warner Media within AT&T. And, you know, he's public on record talking about the fact that HBO didn't have enough breadth to it. HBO was really great for someone like me. I love the shows on HBO. But the reality is in order to expand HBO, their problem is something like Game of Thrones ends and you churn off.

• 27:25Anthony Pompliano?

  You leave, yeah.

• 27:26Speaker 02

  Not me, but lots, millions of people churn off when, when a big show ends because there isn't a show every single day. There isn't a show for your Kids, there isn't a rom com, you know, there have to be titles for everyone in the household. And so you may not care about, you know, to all the boys I love, you know, number two, or whatever the show is, but it's not for you. It's for someone else in your household. It's for your kids or whatever. And it's recognizing that in order to mitigate churn in the new world, you need to become important to everyone in the household all the time.

• 27:59Anthony Pompliano?

  Yeah, and this is actually what's so impressive about the athletic. The numbers at the last private fund raising, Bedrock Capital led the round, published a bunch of these numbers and the churn after year one. So if you get through year one into year two is actually staying above 90%. Or I'm sorry, the retention rate is staying above 90%. And so it's just because it's so easy. When you see people staying for multiple years in a row at these low price points, it goes back to this idea of like, who's winning? The people who are actually making things that people want.

• 28:28Speaker 02

  Look, subscription businesses are incredible. You know, you look at the cable bundle was incredible for a long time, right? I mean, think about how easy it was. You showed up to work and whether you were ESPN or Discovery or AMC or A and E or Lifetime or MTV or Nickelodeon, it didn't matter. Honestly, if nobody watched your channel the night before, money just rained down every single day. I mean, think about it, at the peak, 100 million people were paying over $8 a month for ESPN. And the viewership on a nightly basis was a fraction of that. And there was a more than probably half the base never even touched ESPN over the course of a year.

• 29:09Anthony Pompliano?

  Yeah.

• 29:10Speaker 02

  And yet you were paying a lot of money for it. And so the challenge that the traditional media, the legacy media world faces is that they'll never be a model as good as TV's legacy business model. I mean, you're never, nobody, you know, I always think about from a standpoint of Netflix, how many Netflix subscribers are there that don't want it? Like that literally pay for Netflix and don't want it. Number's got to be very small where there's lots of people who pay for a cable bundle. And there's lots of channels that they have no interest in, including the really expensive ones. I mean, when you realize that something like MSG Networks. That my colleague, partner Brandon Ross covers, like you're paying $8 a month for that. Yes, network, you're probably paying $6 to $6.50 a month for. Most regional sports

• 29:53Speaker 02

  networks, you're paying $4 to $4.50 for, whether you watch them or not. And so there's a lot of very expensive content that you're being forced to pay for because of the way the bundle was built and because these big media companies own so many channels and they don't want to let you choose FX without Disney. They don't want you to choose MTV without Nickelodeon. And so they kind of force the bundling together. And I think the reality is what's happening now is the consumer is saying enough is enough. All the best content or all the most ambitious content is going direct to consumer and consumers are just finding new outlets for entertainment. And I think those out, it's not just things like Netflix and video, it's also the athletic. Like you're reallocating your entertainment budget to a wider array of options than you've

• 30:37Speaker 02

  ever had. And not all of it is traditional video, the way we think of video. It may be something like Headspace, you know, or it may be com. I mean, I think there's a whole array of where you spend your time apps. They're going to go well beyond the traditional video watching experiences.

• 30:54Anthony Pompliano?

  For sure. One other new model that I've seen and have become a fan of is like the Substacks, the Morning Brews, kind of all of the email direct to consumer type content delivery businesses. What are you seeing there? How do you guys think about that?

• 31:07Speaker 02

  Yeah, look, I'm an early angel investor in the skim. And I think if you were to look at things like the Morning Brew that have sort of, you know, taken that, taken a different spin on that model. I think it's, in many ways, it's a lot like what Barstool's proven out is that you have passionate audiences about a topic, lifestyle topic, that you can build real fandom around, real kind of habitual behavior and use that audience, use the passion of that audience for your content and do other things with. And so I think, you know, we're still really early in that evolution. But, you know, I think if you look at some of these brands that are trying to replicate that level of passion. And use it to monetize across a number of different ways, whether it's affiliate marketing, whether it's sponsorship, there's, you look, the challenge that brands face,

• 31:52Speaker 02

  I mean, this is a really serious problem, not just in the US but globally, is as linear TV viewership disappears, unless, I mean disappears is a harsh word, shrinks, but shrinks dramatically, right, I mean, there's already, there's 120 million households with televisions in the US, 40 of them don't have cable television, so there's 40 million homes that you can't reach on ESPN, or MTV, or A&E anymore, you literally cannot reach those homes, they don't subscribe, and so the challenge, as this number keeps shrinking, and even the people that still have it, they're watching less and less, so the challenge for marketers, how do you reach consumers in 2020 and beyond, I mean, forget about

• 32:35Speaker 02

  where we are today, but what about in five years, you know, when that 80 becomes 60, or that 80 becomes 50, how do you reach consumers, and so I think all of these brands are trying to figure out, yes, you can spend on Facebook, you can spend on Google, you can spend on Twitter, you can spend on Snapchat, but everyone's trying to figure out, how do you create a real, meaningful relationship with a consumer, and I think some of these passionate audiences, you mentioned The Athletic, you mentioned Barstool, you mentioned, you know, I mentioned The Skim, Morning Brew, I mean, all of these are trying to go after passionate audiences, and trying to figure out a way to connect brands, advertisers, in many ways, with consumers, and take advantage of that, some of them are ad-free, like The Athletic, we'll see whether ultimately there's opportunities for brands to play a role, but I think, you know, some of them are gonna shift into, I mean, obviously Barstool's done a great

• 33:19Speaker 02

  job of, you know, leveraging advertising on the podcast side, and then turning it into merchandise sales, I think everyone's gonna have to figure out new models, because, you know, the reality is advertisers are dying to figure out how do they reach consumers in 2020, because it's just getting a lot harder to get the same reach, they're paying a lot more, every year they pay more for less and less reach, and so the question is, how do you make up that gap, and it's a, I don't have any crystal ball, I mean, you talk, you know, you bring a CMO onto this podcast, this is a real fundamental challenge that all of these brands are facing, no one has the crystal ball. Right now have had to execute on that.

• 33:55Anthony Pompliano?

  Yeah, and one of the things to me, you know, when we were at Facebook and thinking about ad placements and kind of targeting and all these things is most people actually are okay with ads if they're good at. There are things that they want to see. They discover things, all this kind of stuff. But one of the hard parts about television, for example, is it's really hard to do kind of the micro targeting that a Facebook allows you to do, right? And so one of the things I've seen on the email side, have you seen this new one called Girls Night In? Or have you seen this yet?

• 34:20Speaker 02

  I have not.

• 34:20Anthony Pompliano?

  So my fiance started telling me about it and basically it's a woman who created an email. She sends it and it's kind of around the like self-care, right? So if you're a woman, you want to stay and you want to do your facials, paint your nails, all this kind of stuff. But it's perfectly built to suggest products and brands to people who are specifically interested in this. And so you see the

• 34:42Speaker 02

  You look at like what Michelle Phan built up on YouTube with her passionate fan base and then built Ipsy around it and you know, look, the reality is everyone is trying. I go back to what is, where do we center our research? It's all around the consumer. It's a war for time and attention, right? I mean, there's a fixed number of hours and minutes and yes, you can multitask and you can be listening to this podcast while you're sending a message or snapping a friend or whatever. But the reality is it's a war for time and attention and everyone is trying to capture in their ecosystem, whether it's Google, whether it's Facebook. The challenge that the media world uses is that the vast majority of the traditional media world, what I call the legacy media companies, and we're talking in this case,

• 35:23Speaker 02

  whether we're talking Viacom, whether we're talking Fox, whether we're talking, you know, go through the list of, you know, even HBO and for the vast majority of its subscribers and even Disney for most of its relationships, they don't know who you are. They don't know who I am, right? I mean, they don't have a direct relationship with us. They live in a world where they get Nielsen ratings and the data, you know, ABC puts a show up and they get a Nielsen report the next day and it's extrapolated from 40,000 homes of what we think people did the night before. Whereas Facebook knows exactly what I do. They know exactly what I'm interested in. And when Instagram serves me an ad like they did last week for Core Power Yoga, opening up on the Upper East Side, two blocks from where I live. You know, with a free first week, it's an incredibly, you know, not only interested in

• 36:07Speaker 02

  fitness and not only do I, you know, I'm, I am a Peloton user and I go to SoulCycle and I go to Rumble and like, it's an incredibly well-targeted ad, whether or not I end up actually going, the fact of just how good that targeting is versus compare going home tonight, turning on ABC and you're going to see the same ads that I see. Not to mention every single other person in New York State and other than the few local ads that are inserted, everyone in the entire country is seeing the same ads. Doesn't matter whether you have interest in those products or not. And so, TV in many ways is the exact opposite of the Facebooks. And I think the, the beauty of what Facebook's shown, especially with Instagram, is Cheryl and the team have really built essentially the holy grail of advertising, right?

• 36:50Speaker 02

  Where they've actually tied together advertising and commerce. Like, you actually want to buy the products on Instagram. It reminds me in many ways of the ads in InStyle that my wife would flip through and go, "Oh, I want to buy that." Like, you know, the ads are content. I think the ads on Facebook are content and what the beauty of that is, you can have an infinite ad load because you don't mind the ads. You actually like the ads, you actually want ads on Facebook.

• 37:12Anthony Pompliano?

  Yeah, you engage with them.

• 37:13Speaker 02

  Right. Whereas, what was the last time you saw an ad on TV that you go, "Oh, that was so awesome. I wish I could share that with a friend." I mean, yes, it happens. If I think about like the Beats ad that ran before the World Cup, you know, like, there are certain ads that you go, "That was awesome." But it's very few and far between.

• 37:28Anthony Pompliano?

  Absolutely. When we leave the ad world and we get into the kind of streaming wars that are going on, I had to make a list, I don't forget anybody.

• 37:35Speaker 02

  I hate that term, by the way.

• 37:36Anthony Pompliano?

  Okay, why?

• 37:37Speaker 02

  Well, I just hate the idea that it's a streaming war between each other when I think the reality is, is that what's actually happening is consumers are, are leaving traditional linear TV and they're embracing a wide array of streaming services. Like, I don't think Netflix's gains are Disney's losses and vice versa.

• 37:53Anthony Pompliano?

  It's not a winner-take-all type market.

• 37:55Speaker 02

  It will, it's because you have, essentially, consumers were spending five hours a day, you know, go back a few years, people were spending five hours a day watching linear TV. When you shift that, and they were spending, a household was spending upwards of a hundred dollars a month.

• 38:10Speaker 02

  And not to mention, they were buying DVDs. They were, you know, I mean, there were lots of other incremental spending on top of that.

• 38:15Anthony Pompliano?

  The Blockbuster.

• 38:16Speaker 02

  For sure. They were buying downloads on iTunes and on Amazon and all of that. And they were going to red boxes in Walmarts and renting movies. And now entertainment dollars are shifting to an array of streaming services, whether it's Netflix or Disney Plus or Hulu or Prime Video. And some of them don't even have incremental costs, right? I mean, you are a T-Mobile subscriber and, you know, the T-Mobile there gives you Netflix for free. You sign up for Verizon Unlimited plan and you're getting Disney Plus, at least for year one, for free. And so, you know, this idea that one's gain is another's loss is just a fallacy. I mean, consumers are going to have lots of these services. There may be three or four that are essentially core services. But consumers are going to have lots of these and it's so easy to go in and out of them.

• 39:00Speaker 02

  I think it's much less of a war against each other and much more of a war of, wait, why are you subscribing to television bundle? Like, why are you spending $80 on a video service that you really don't use except for live sports? And, you know, an antenna for most of your listeners does a pretty good job of getting them football, you know, live football. You know, for the ones that are diehard NBA fans or diehard MLB fans, yeah, they're probably going to have to subscribe to YouTube TV or Hulu.

• 39:30Anthony Pompliano?

  Hulu has live sports.

• 39:32Speaker 02

  Now, when you watch that Super Bowl spot and it's like, okay, the reality is those are great services, right? Think about it from the consumer standpoint. If you're just a fan of the NFL, you can sign up for Hulu Live or YouTube TV. You can sign up from August until February and then cancel. You don't need to be a subscriber for the full year. Whereas no one ever called up Comcast and canceled halfway through the year. So you have a whole new behavior of you can manage, not only do you pay less than you would pay for a video subscription on one of the big cable companies or satellite companies, but it's also easy to turn on and off. And I think, I mean, if you use the experience of YouTube TV, it is night and day versus spectrum. Like, it's actually hard for me to understand how anyone who's actually used

• 40:13Speaker 02

  or seen the YouTube TV product, why you wouldn't be using YouTube TV versus Spectrum? Because it's just a night and day experience. I mean, a cloud DVR and access across, I mean, the fact that I could watch YouTube TV right here, any of my channels, and the same thing if I'm in Los Angeles, versus my Spectrum, which is essentially tied to my house and is clunky even in my house. It's amazing, these things are still relatively small. You know, roughly, call it nine million of the 80 million homes with multi-channel television are taking one of these kind of over-the-top streaming bundlers of channels, which is still, I mean, look, it's big from zero, but it still seems small when you look at just how much better the experience is.

• 40:57Anthony Pompliano?

  For sure. How do you think about, when I think streaming, coming from somebody who doesn't spend all day thinking about it, I go right to like Amazon, or I'm sorry, Netflix, Hulu, etc.

• 41:07Speaker 02

  It's like Kleenex, right? Like, there's certain brands that matter most.

• 41:10Anthony Pompliano?

  Yeah, and just there, that's streaming to me. But then when you really dig into it, there's Apple, there's Amazon, there's others that are there playing. Like, what's your kind of view of the landscape when it comes to streaming, specifically around video outside of live sports? So, so don't forget about the live sports for a second. Just when you look at, you know, who's creating content, what are the platforms, what kind of, what's each one's angle, and how does that landscape kind of play out over time?

• 41:34Speaker 02

  Netflix, obviously, it's all they have, right? I mean, their entire business is, they need you to subscribe to Netflix for the video content, the bundle of video content that they're aggregating for you, increasingly their own content, but it's probably 50/50 theirs versus third-party, and it's moving more and more towards their own content over time.

• 41:54Anthony Pompliano?

  Which is a great model, because they have the data. They know what you want to see.

• 41:57Speaker 02

  They, you know, if you click on a rom-com, you're gonna get a lot more rom-coms. If you click on an international, you know, if you click on Roma, you're gonna get a lot of international content. The, you know, the beauty of Netflix is data begets more data, you know, because you can create a better experience, you can learn from it, you can try lots of things. I think the culture of testing and learning and experimenting is something that is so, is so powerful at Netflix, and it's just not built into the DNA of traditional media companies. And as they convert from, you know, linear TV into the streaming world, their greatest challenge is understanding that it's not just about putting a streaming application

• 42:38Speaker 02

  up, it's about learning and leveraging the data and evolving the model and seeing what people do and being willing to cancel shows because the price value doesn't make sense relative to the number of, you know, you actually know how many people are watching. Like, you know, theoretically, they know exactly how many people watched each episode, where they tuned out, where the problems were. That data is really powerful and is something that, you know, no company has ever, no one's ever had access to 160 million subscribers households, not just people, but 160 million households, figure three people per household, maybe even more with password sharing. There's a tremendous amount of data that's being aggregated. But again, it's not just having the data, you have to use it, right? Like capturing data is one thing, understanding how to use it. And I think that's the beauty of what Netflix has

• 43:22Speaker 02

  been successful at is using the data to inform decision making. It doesn't make any show better. Like it's not like they can say, they can't take a bad show and make it better simply by having data. But I think they can learn what types of shows people really like, what types of content, what genres to go into, where to go deep, how well is international content working in one market versus another, what's missing from the offering, where could they add more content? And I think that is really powerful. But to your question on like the landscape overall, you know, you've got Netflix by far the default kind of clear leader in the category. And you've got everyone else kind of realizing, you know, you've got, obviously, Amazon was there early as well. Hulu was there sort of as last night's television originally. And I think increasingly, as last night's

• 44:03Speaker 02

  TV sort of goes away, it's increasingly going to morph into more of an original programming story, much like Netflix. So you're seeing FX now, if you watch the Oscars last night, a bunch of ads for FX on Hulu, you're going to see more and more FX content flow into Hulu over the course of the next couple of years as it makes that transition. But I want to come back to the philosophy here of like, why isn't Amazon or Apple in this world? It's all about keeping you in the ecosystem for long. The war on time and attention. Yes, they want more of your time and attention. The more time you spend with Amazon, the more you're going to purchase. Like, the only reason they do Amazon Prime Video, I believe, is not because they like, think it's for the good of their heart, they

• 44:45Speaker 02

  want to give you, you know, free movies and TV shows like Mrs Maisel to watch. They actually believe that if you watch Mrs Maisel, that you'll end up, end up spending more time with Amazon and purchasing more. That's the reason, I mean, that's why they do this content. And so it's about keeping you in the Amazon ecosystem. Apple's doing it because they want, the more time you spend with Apple and Apple devices. And if you come into the Apple TV Plus app to watch the morning show or to watch, you know, pick, you know, any of the new shows that they've created, The Servant, which was, you know, very good. And you look at this content, you go, okay, I'm spending more time with Apple TV Plus. All of a sudden you realize, oh, I can subscribe to HBO through Apple. I didn't realize I could do that. Let me subscribe to HBO through Apple. So now I'm spending even more time on my Apple devices.

• 45:28Speaker 02

  And then I'm like, well, I'm even more wedded and, you know, not that churn is a problem for Apple, which my colleague Walt Pisces covers, but it just keeps you in the ecosystem and it creates a services layer on top of the equipment that Apple hasn't had before. And so it plays into this, how do you build this robust services layer? It's through great content and people, let's go back to where we started, with the cable bundle, people spend a lot of time and a lot of money on video. And so I think it's, the opportunity is to capture some of that time, attention, and in turn, wallet share for these companies in their ecosystems. And I think each of them is, you know, they have different goals. You know, one's to sell devices, one's is to kind of drive retail sales. But each of them is trying to keep you in that ecosystem longer and longer.

• 46:11Speaker 02

  Even Disney Plus, I mean, look, the reality of Disney Plus is probably to, you know, take for the first time ever to mine data for Disney so that they can, hopefully in success, we haven't seen it yet, but hopefully in success, they're sending out to their members, their subscribers, and they're saying, you know, would you like to come to the parks? We can offer members a discount or we can get in early to the parks or, you know, what are the membership has its privileges, benefits of being part of the Disney Plus Club? We haven't really seen that yet. Right now, it's just about content on the service. But I imagine over time that this will go far beyond just simply, you know, a subscription fee of 590 or 699 a month.

• 46:46Anthony Pompliano?

  Yeah, so two things. One is the membership model obviously drives revenue. And in the short term, you can easily see, hey, I'm gonna look at data. I'm gonna use that to create new content and give people what they want, et cetera. But what you just hit on is kind of this connection between the subscription to receive digital content and everything else in an ecosystem. Whether it's Apple giving discounts for products, whether it's Disney getting you in early or discounted pricing, whatever, to their parks, to showings in person, whatever it is. I don't think that a lot of people have done that yet, not just Disney, but just across the entire landscape. It doesn't seem like that's something that they're pushing. Is it because you need to build up critical mass first and then you kind of pull that trigger? Or is it something else that's kind of holding them back from kind of jumping

• 47:30Anthony Pompliano?

  into that that connection of subscriber to other types of services and experiences?

• 47:39Speaker 02

  It's a really good question. I mean, if I think kind of holistically about the question you're asking, I mean, certainly a company like Disney has been the best at making use of it, right? I mean, you create movies and then you build theme park rides around them. So

• 47:52Anthony Pompliano?

  And then sell stuffed animals and clothes

• 47:55Speaker 02

  Princess dresses for Halloween, right? And so there's no doubt that there, you know, when you build brands or you build IP, that there's lots of ways to monetize them. When Stranger Things came out, there were lots of people buying Christmas, you know, Stranger Things, you know, sweaters and Christmas lights. And there is no doubt that there are ways to extend successful brands, just as we were talking about when you were in the Barstool conversation. Everybody's trying to create IP that can be leveraged above and beyond the core business. You know, this is not just about the video subscription business. It's about understanding the customer. You know, look, for a company like Amazon, it may be enough to just know that, you know, this is one more reason you don't leave the

• 48:36Speaker 02

  prime ecosystem, which has a lot of value to Amazon in terms of purchase behavior. But they're also probably learning a lot. I mean, we haven't gotten to music yet, but when you think about, you know, what you listen to in music, what you watch on video probably says a lot about who you are and what types of products you're interested in. I think you can learn a lot about people from their media life. And so that, you know, that information, that data can be very powerful when harnessed properly.

• 49:04Anthony Pompliano?

  A friend of mine recently brought up, he said to me, you want to know how valuable Netflix is? And I said, how? And he goes, what's it cost per month? And I said, $9.99. That's what I signed up at, right? No, they've had like two price increases. I don't even remember that they moved it, right?

• 49:17Speaker 02

  $12.99.

• 49:18Anthony Pompliano?

  Yes, $12.99 now, right? And he basically was like, that's how you know a product has really served its purpose for somebody is, they remember the price that they probably paid initially, but if that price is moved up, you don't see kind of a higher degree of churn, you don't see the elasticity, etc.

• 49:32Speaker 02

  Yeah, look, Netflix grew slower this year. And they cited the price increase, actually, as the key driver of why they grew slower.

• 49:38Anthony Pompliano?

  Grew slower, but not increase in churn.

• 49:41Speaker 02

  Definitely an increase in churn.

• 49:43Anthony Pompliano?

  Okay, there was an increase.

• 49:43Speaker 02

  There was an increase in churn, but they didn't lose subs. How many businesses can raise price by 20% and still grow subscribers? Yes, churn picked up, and so they had to have more gross ads to mitigate the churn. But they actually, with a 20% price increase, Disney Plus and Apple TV Plus launching. And remember, Disney added 26 million, probably 22 or 23 million of them in the US alone in the fourth quarter, and Netflix still added 400,000 subscribers at that 20% higher price than it was a year before. And so, you know, this is all about becoming so important in your daily life that you can't imagine disconnecting. Again, the beauty of Netflix, right, is it's easy to cancel. There's no contracts. You're not locked in.

• 50:28Speaker 02

  If you want to cancel Netflix while we're talking on the laptop that's sitting in front of you, it's really easy to do. So you have to believe that the beauty of Netflix is the price value is so good. There are no, I mean, $1,299 is nowhere near the right price. I mean, just think about what they're doing now. If you, whether or not you watched the Oscars last night, multiple Netflix movies were nominated, some of them won. But remember, what does a movie cost you? I mean, you go to the movie theaters in Manhattan, a movie costs, what, at a minimum, $13 or $14?

• 50:58Anthony Pompliano?

  Oh, it's more than that, yeah.

• 50:59Speaker 02

  Most movies you're paying $16, $17, 3D you're spending over $20. Netflix is, and again, the movie ticket average, just to level set the whole country listening to your podcast, movie ticket price on average is $10 per person.

• 51:10Anthony Pompliano?

  Okay.

• 51:10Speaker 02

  Across the whole country, matinees included, and all of that, kids, etc. But still, $10 per person for a movie before popcorn, before babysitting, before gas to get there, whatever, pick your, you know, pick your whatever it is, $10 a person. Here we're talking about $1,299 for the entire month for your whole household for...

• 51:30Anthony Pompliano?

  Unlimited.

• 51:31Speaker 02

  Unlimited, I mean, there's a movie a week on Netflix, let alone a big movie probably every month, lots more to come, they're just getting started in their movie, you know, let alone all of the TV series, so yeah, they're losing friends, but there's like so much stuff that like, you know, I mean, try to go somewhere right now without someone talking to you, especially someone a little bit younger than the two of us, try to go somewhere where people are not talking about Cheer. Everyone's talking about Cheer, like every single person's talking about Cheer, a show that wasn't even on my radar screen a few months ago, and now it's like part of memes and everywhere you go, people are talking about Cheer and they're talking about you. A show that failed on A and E, literally was, you know, it was a joint venture of Warner

• 52:11Speaker 02

  Brothers and A and E, and now is literally blowing it out on Netflix where all of the content moved, and I think it just shows you, consumers want to watch in this new model, and, you know, enabling people to binge has been transformative to how people watch television, and I think a lot of the legacy and they're still trying to force you to watch week to week even as they do streaming. People want to binge, and people want to be, it's not even as much as they want to binge, people want to be in control of their viewing experience, and I think that's really the opportunity, but I think you go back to this, when you love something so much, and the price value seems so compelling, even when the price goes up, you don't leave.

• 52:50Anthony Pompliano?

  Yeah, how does that look through that perspective for Disney Plus, right? So they came out with a much lower price point, they got a ton of subs right out of the gate, I think some people were surprised by how low the price point was, like how do you think about that?

• 53:02Speaker 02

  $6.99 is an absurd price point for the product.

• 53:05Anthony Pompliano?

  But $6.99 literally is comical for what they're providing.

• 53:10Speaker 02

  Well, when you think about one new Disney, you know, if you wanted to, you know, buy Blu-ray version of Frozen 2 when it comes out in a few weeks, you know, that's probably a $20 product, you know, when that movie hit streaming, it would go on to Netflix, which again costs far more than $6.99, and so to put all of their kind of streaming movies and all of the catalog, Disney Channel and all of that content for only $6.99 was an amazing price value.

• 53:48Speaker 02

  The price point was certainly lower than than we and and you know, a little bit lower than we thought. I think definitely lower than than Wall Street thought overall. The flip side is is they didn't have a lot of content, right? In terms of fresh content. And so it's a very library-heavy service. The good news is kids like watching lots of library. They don't mind watching the same Mickey Mouse clubhouse show over and over again. They don't mind watching, you know, Frozen One. You probably could show to some, you know, five and six, seven-year-old girls, like, boys and girls, like, they could watch that over and over and over and over again.

• 54:21Anthony Pompliano?

  They know the songs.

• 54:22Speaker 02

  So I just think of like, you know, I think of my youngest and how much how much she watched Frozen, the original back in the day. At that point, you know, a digital version or probably a Blu-ray version, but like, the the the amount of rewatching enabled Disney to have a lot more value add to the consumer on day one. Now, the question, I think, really becomes, how long does that, you know, how long before, because not everybody, obviously, is a family. When you have 26 million subscribers that quickly, and now, I think, 28.6 if you include what they did in January. The question is, is it is really easy to churn and, you know, Mandalorian ended in December. Do all 28.6 million stick around until Mandalorian comes back or until there's a Marvel series in August? It's gonna be really interesting to see. The

• 55:06Speaker 02

  price point may be low enough where churn, I think that speaks to why is the price point so low? It was to mitigate churn as much as possible until they could build up enough original programming. And they'll never be Netflix. So I'm not sure the price point will ever be, you know, $15 or $16. But I think it was recognition that there wasn't a lot of kind of adult skewing fresh content and that they were really relying on kind of the library, at least for the first 12 to 18 months, to carry them.

• 55:32Anthony Pompliano?

  Yeah. I don't have kids, but is this a no-brainer have-to-have for parents? Disney Plus?

• 55:39Speaker 02

  I think if you have kids under the age of 10, this is a very high price value. You know, if you were in the mode of having to buy one of these things, I don't even mean to buy it on DVD or Blu-ray, but if you had to buy one of these titles, you know, Disney generates roughly $2 billion backward looking on home entertainment. So that's the purchase either digitally or physically of movies and television shows. If you were spending, you know, to buy even just one of these titles, you know, getting Disney Plus, you know, the annual plan is, you know, call it $69.99. The price value is pretty compelling, you know, instead of what you were doing before.

• 56:19Speaker 02

  You know, if your kids aren't into Disney princesses or Lucas Films or Marvel, no, I mean, there's not enough original programming above and beyond, and maybe you're a Nat Geo fan, or, you know, look, I'm sure there's some people who bought it just because it has the entire Simpsons catalog available at a click of a button. Look, the number two show on Disney Plus right now is and has been, has been Simpsons.

• 56:40Anthony Pompliano?

  That's crazy.

• 56:41Speaker 02

  Now, there's a lot of episodes.

• 56:42Anthony Pompliano?

  Yeah, that's true.

• 56:43Speaker 02

  But, but, you know, it's sort of ironic that the number one thing on Disney Plus isn't even a Disney title. I mean, they bought Fox to get the Simpsons, but I think it just shows you of, you know, they're, they're what, this is a very library-heavy offering, at least initially. I think they've got, you know, we always thought that they had 20 to 30 million homes in the US was their addressable market. They got there just

• 57:04Anthony Pompliano?

  Four months.

• 57:06Speaker 02

  Shocking how fast they got there.

• 57:07Anthony Pompliano?

  Yeah.

• 57:08Speaker 02

  I think the question now is if you want to move the price point up, or you want to have a far bigger addressable market, do you have to diversify the content? I don't think they're going to go there. Or the other big lever that Disney has ultimately at its disposal is, look, there's no reason why a movie comes out in the movie theaters today and it doesn't show up on Disney Plus for six to seven months. That legacy windowing of the movie business doesn't make sense to a consumer in 2020. And so I think the ultimate tool, and I don't think Disney's going to talk about it anytime soon. I don't think they're going to do it, but the ultimate weapon in their arsenal is to shrink windows. And I think it's, you know, ultimately very consumer-friendly, because remember, you go to the movie theaters, they don't know who you are either. Like, they don't know that you went to

• 57:52Speaker 02

  see Avengers. They don't know that you went to see Rise of Skywalker. They don't know that, you know, they don't know that you tuned out, or, you know, I would assume most people don't walk out halfway through the movie. You might have really been disappointed in it. But imagine you were a subscriber to Disney Plus and that movie was available two weeks after it came out and after the first half of the movie, you actually just stopped watching. That would be incredibly data informative to Disney. But they don't get that data because they live in a world of movie theaters where, you know, they don't have any relationship with you, the end customer. And so I think ultimately that the quest for data is going to drive everyone to move more and more in this direction. Netflix is starting it, obviously, you know, just as they did with binging. They started, you know, movies direct to consumer without kind of skipping

• 58:36Speaker 02

  the theatrical window and sometimes they're forced to do short theatrical windows. But ultimately, the goal is to get you movie content far sooner than they ever wise could.

• 58:44Anthony Pompliano?

  Yeah, let's switch gears, go to streaming music. I think we've seen a huge push by Spotify in recent months, but obviously Apple Music, Prime, etc. How do you guys think about kind of music in the lens of that like war on time and attention?

• 59:01Speaker 02

  You know, it plays into this overarching audio thesis, actually. It goes beyond music is musics or audio has become so accessible, right? I mean, we're all walking around with kind of, you know, almost like computers in our ears with AirPods. I mean, everywhere you go, you see people with, you know, AirPods in, you see smart speakers in people's homes. You see them, you know, I mean, the price point for these things is like almost free. I mean, like, there's so many things you sign up for now and they send you a smart speaker as part of signing up for something. Like, it's hard not to have a Google Home device or an Amazon Alexa or, you know, pick your service. Then you add in.

• 59:34Anthony Pompliano?

  Siri on our phones, etc.

• 59:35Speaker 02

  Siri on our phones and then take the, where is two hours a day of audio listened to? The car and between Android Auto, CarPlay, you know, Alexa's getting into the car. You know, it's getting easier and easier to voice control in the car and these interfaces are getting better and better. That the time spent with music, it's just easier. You've taken all the friction away from listening to audio content. And if you think about audio, it's not just music, right? I mean, what do you listen to? You listen to, you listen to music, you listen to news, you listen to talk, you listen to weather. I mean, Sometimes you even listen to sports. I think it's fairly natural that all of these activities are moving from kind of a linear terrestrial radio world into a digital world.

• 1:00:19Speaker 02

  You know, the, the beauty, I think of podcasts much the way I think of talk radio, right? I mean, if you wanted to listen, you know, I think of back in the day, you'd listen to Howard in the morning and you know, the reality is now you can listen to this podcast whenever you feel like it. You don't have to be at certain place at a certain time, just, just like the same innovation as video, right? Like I don't have to tune in at eight o'clock on Tuesday. I can watch that show whenever I want to watch it because it's available on demand to stream on any device, anywhere I go. You walk into a Starbucks and you see someone streaming The Crown. It's no different than someone walking around with all the music, both, you know, music and talk news content that podcasts enable. And so I think if you think about this, this experience, it's, it's taking what was a lot of friction.

• 1:01:04Speaker 02

  You know, you had to go out and buy an individual album, usually only wanted a song or two. And it's moving from an ownership model to an access model. And it's, it's really very similar to the same thread that you saw in video where, you know, you'd buy a DVD and it would sit on your shelf collecting dust. And now, you know, you could, how many people bought Friends DVDs, never really watched them. And then you look at Netflix where there was non-stop watching of Friends on these platforms because it was just so easy. Yeah. So you take all the friction out of the business model or out of the consumer experience and people use it more. And so music, I think, has never been listened to more than we have right now. The economics of the business are just beginning to get better.

• 1:01:45Speaker 02

  You know, it took a long time, you know, if I, you look at consumer spending on music in the, in 2019, essentially we're back, it was up a lot, you know, up mid to high teens in terms of overall consumer spending, but you're back to levels of like 2004, 2005. Like it's, it's taken a long way to build, you know, you. Yeah. It collapsed, you know, I think of, you know, in 2000 is where things really started to get ugly. By 2000, 2080, it got really ugly, you know, declines of, you know, 20 plus percent of consumer spending on CDs and it's taken a long way to build out of it. But the model of access that, you know, Spotify, and I think Daniel Ek deserves a lot of credit. It never would have happened without, you know, the perseverance of, of one entrepreneur

• 1:02:28Speaker 02

  who just literally wouldn't give up in the face of incredible odds and incredible pushback. And look where we are now.

• 1:02:35Anthony Pompliano?

  Yeah, a lot of people don't know how much pushback that they actually went through and kind of the legal threats and all the things that kind of.

• 1:02:41Speaker 02

  Bands were pulling songs and albums and I mean, it was brutal. I mean, think about Taylor Swift was in, you know, I don't want to say an enemy of Spotify, but certainly was pushing back. And I mean, we've gone through multiple iterations of talent having to get comfortable that that this world is far better than the old world. And, you know, I look at it now and I go, we're just, you know, Spotify's got 100 million subscriptions, Apple's got over 60 million. There's a bunch of other services out there from Google and Amazon. And you've even got things like, you know, even TikTok trying to do subscriptions in certain developing markets. Music's, I mean, music's going to have hundreds and hundreds of millions of paying subscribers all over the world. And obviously, price points are still really low, but there's a tremendous opportunity because you're spending, you

• 1:03:25Speaker 02

  know, people are spending so much time on these streaming services. And I think going back to your point you made before about Netflix, as you spend more with these services, as you know, it's not just about music, as it's podcasting, as it takes on more of your your day, your pushback on pricing disappears.

• 1:03:43Anthony Pompliano?

  Disappears, yeah.

• 1:03:43Speaker 02

  And we haven't seen, you know, Spotify's raised price in one market so far. They tried it in Scandinavia, it went very well. They haven't done it yet, but at some point Spotify's going to raise price.

• 1:03:52Anthony Pompliano?

  Of course.

• 1:03:53Speaker 02

  In major markets and especially family plan subscribers, you know, people who are spending $15 a month. I mean, I have five people on my family plan in my household. And I mean, there's no chance whether they were charging 15 or 17 would matter. You know, that's a very sticky customer because they love it. And I think the brand really matters. I think Spotify's done a great job of building out what it means to be a subscriber to that brand. And everyone else is playing catch up. Everyone wants to be in that pole position.

• 1:04:20Anthony Pompliano?

  What's interesting is there's been a couple of attempts. You mentioned Taylor Swift, Jay-Z with Title. I think Drake at one point was very kind of, hey, my content's going to be available one place and not another. I think Kanye's done that, etc. Every single one of them has caved at some point, right? Because ultimately, what ends up happening is the artist seems to realize having my content in as many places as possible is actually better for me than me trying to play.

• 1:04:43Speaker 02

  Function of the music model, right? So in video, you don't go touring, right? Like, the ultimate goal of a Brad Pitt is not to go on a tour, right? Like, I mean, he may write a book and go on tour, but like, it's not about touring, right? Like, the ultimate-

• 1:04:57Anthony Pompliano?

  They're usually trying to get out of, get away from people, right?

• 1:04:59Speaker 02

  Right, right, right. So, but my point is, like, I don't mean to make it funny, but like, you know, the goal of the movie business or the TV business is to make money in that business, to get the next product, right? So, the exclusivity, I mean, you're used to things being, Game of Thrones was exclusive to HBO, and we're kind of used to that. In the music world, you essentially wanted to be on every radio station, you wanted to be on, you know, you wanted to be at every retail store for some people to buy your cassette, then CD. Now, the idea of like, you want to be everywhere and as visible as possible, because ultimately, you want to go on tour, and that's where you make the real money, right? Like, where you keep 95% plus of the ticket sales if you're, you know, a telephone-

• 1:05:43Speaker 02

  might make 99% of ticket sales when she goes on tour. That's the incredible, you want to be in that Live Nation ecosystem, touring all of those venues all over the world. That's where the real artist money is. And so, from that standpoint, limiting yourself to one service or another doesn't make a lot of sense. If your goal is reach, it doesn't make sense to be on one service. I think it's, in many ways, it's why the NFL, if you think, go back, you know, the NFL has sort of shied away from making any of its content exclusive to the streaming world, and has really pushed, not even for the cable, they've wanted to really basically be on broadcast TV, because they want reach, right? It's all about reach, and I think if you're an artist, you really live in the world of reach, and you want to be available. I mean, the beauty of what Spotify does, even versus an Apple, right?

• 1:06:27Speaker 02

  Is that you don't even need to pay a subscription to be on Spotify. There's a free version that's ad-supported, and you can literally hit, you know, essentially, anyone on planet Earth with a phone can listen to Spotify. Similarly, you know, you look at Amazon Prime, you know, most people are not paying for the premium Prime subscription for music. They're just literally, they have an Alexa device, or they have some form of smart speaker, and there is all the catalog, meaning stuff that's six months or older, is just available to stream on demand as part of an Amazon Prime music subscription. And so, that reach element, I think, is really important in the music space, and I think is a large reason why you haven't seen these exclusives, by and large, haven't worked.

• 1:07:08Anthony Pompliano?

  What's the ad models look like in terms of like dollars compared to the subscriptions? So for Spotify and Amazon, et cetera, is the ad component of their revenue material? Or not really?

• 1:07:19Speaker 02

  It's starting to be, you know, I think Spotify-

• 1:07:21Anthony Pompliano?

  Oh, it's actually increasing?

• 1:07:24Speaker 02

  Meaningfully. I mean, I think, and I think Spotify, a few years ago, didn't, I think, advertising, first of all, the labels wanted to kill it.

• 1:07:31Anthony Pompliano?

  Yeah, of course.

• 1:07:32Speaker 02

  Right? So they wanted to go, hey, look at the Apple model. Can't you be more like Apple? Why are we having a free product that you don't have to subscribe to? I think Spotify's done a really good job of proving to people mathematically that if you get people in the free funnel, they love the product, you get them addicted, they up-convert at a very healthy rate from free to paid over time. Doesn't happen instantly, but it happens over time. Spotify's proved that out and you don't hear labels, or I don't hear labels the way I did a few years ago, trying to kill Spotify free. If anything, I hear the reverse of, wouldn't it be great if Apple had a free funnel to drive even more people into the Apple Music paid product? Now, Apple doesn't do ads, you know, they're not really big on data usage, and so I don't think it's ever gonna happen, but I think it's interesting that the music industry's

• 1:08:14Speaker 02

  sort of gone full circle of, we hate the ad-based product, and now that's a great driver of the paid conversion. And so, I think Spotify's really taking the advertised, the ad-driven product far more seriously now than they did a few years ago. If a lot of, you know, they iterated it a lot in 2018, started to bear some fruit in 2019, and you're starting to really see them talk about how much momentum. You're seeing, you know, for a company of Spotify's age, for monthly users to literally be re-accelerating, shows you something's, something's working, right? Like, that that free funnel is really starting to take off, and they're adding more paid users than they did the year before. So, sort of that kind of flywheel is really kicking in, and I think the labels get it.

• 1:08:59Speaker 02

  And I think the labels, obviously, they're seeing their valuations go up. I mean, Universal sold a 10% stake at an incredible valuation to Tencent, now, you know, which was, you know, Vivendi sold a 10% stake in Universal Music. Now Warner Music's trying to go public. I mean, we're, music is hot again, and it's been a long time since music was hot, and I think that's really interesting in terms- You know, the idea of shifting proof of as you shift from an ownership to an access model, you can actually make a lot more money.

• 1:09:25Anthony Pompliano?

  All right, we got to talk about Warner Music because I didn't realize this, but when they announced recently that they were going to try to go public, it was bought, it was brought private for about $3.3 billion within the last decade. And now the latest private valuation was $33 billion. So 10x in terms of multiple appreciation. Who knows what they'll end up going public at? But is this a?

• 1:09:48Speaker 02

  I'm not going to speculate.

• 1:09:49Anthony Pompliano?

  Okay, is this a Warner is hot and Warner has a great business and therefore this is a good time for Warner to go public? Or is this more of a function of frothy public markets? This is a great time if you're a private company to go public if you've got a good enough business that the public markets want?

• 1:10:04Speaker 02

  You know, you have north of 200 million people subscribing at some price point to music. If we one posit believe that people are going to spend more, which I think both of us do, that you're spending enough time on these things, maybe not all of them, but the good ones you're going to spend more money on per month. And then the question is, is just how big is the TAM? You know, the total addressable market? How many people worldwide could be spenders of music? You know, I think that number is still, you know, if we're somewhere between probably between 200 and 250 million households paying now, could that number be double or triple? The universe that's currently paying apps, when you look globally, how early Spotify and Apple and Amazon are and so many and Google Music, YouTube Music, I think there's a long

• 1:10:46Speaker 02

  way to go. And so, you know, I see why people are excited. There is a real opportunity to, you know, first of all, leverage the data in a very different way. So you actually know. And the other thing to remember is when these companies, to your point on going private, these companies were quote unquote fat, right? Like they were cost fat. So now because of the change in the business, they've been forced to get skinnier. They fired a lot of people, just to put it in plain English. They fired a lot of people. They've become much leaner organizations than they were a decade ago. And the revenue is starting to explode. And subscriptions are much, you know, as we, you know, subscriptions are very good predictable business. And I think it's one that investors, you know, if I look at the long history of the cable

• 1:11:29Speaker 02

  industry, people and even how people think about Netflix, people love investing in subscription economics and music's essentially being driven by a subscription economics. And so I think it makes that content increasingly valuable. And, you know, in a media space where a lot of the media ecosystem is sort of collapsing, you know, so much of the ecosystem is built around the cable bundle and cable networks and publishing and you, you know, you look so many problems. Here's a bright spot because music's already gotten killed. They're on the comeback trail. Video, we were talking about videos going from 100 million people who were subscribing to cable television in the U.S. We're down to 80. Remember, the last time we were at 80 was 2000. So, you know, we just, we're retrenching back.

• 1:12:13Speaker 02

  Now we're going to go towards what 60 million, 50 million. I'll ask you, like, how many households in this country have a, have at least one diehard sports fan? Like where you need, I don't just mean you need NFL, but you need everything. Like you need ESPN, you need Fox Sports, you need the regional sports networks. Like, how many homes is that?

• 1:12:31Anthony Pompliano?

  Well, I'm going to flip the question just a little bit in the sense of not only do you have to have a diehard, but also your diehardedness is not served by seeing the highlights on Instagram or something else.

• 1:12:43Speaker 02

  It's great. I totally agree. And that's the problem, right? Like, there's a whole generation growing up with YouTube highlights and Twitter highlights is more than enough.

• 1:12:49Anthony Pompliano?

  I haven't watched SportsCenter literally every single morning. I would wake up early and watch and I would try to walk out of the door right after top 10 at the end of the hour. Right? And that was kind of our, okay, let's go to school, my brothers and I. I have not watched SportsCenter in at least seven years. Right? I've seen every single highlight on Instagram.

• 1:13:05Speaker 02

  Right.

• 1:13:06Anthony Pompliano?

  House of Highlights, all these things.

• 1:13:07Speaker 02

  So the question, so the question is, is, is that number, I know it's not 80 million.

• 1:13:13Anthony Pompliano?

  Oh, yeah. It's probably closer to 50 than it is to 70.

• 1:13:16Speaker 02

  Is it 50? Is it 40? Is it 30? I mean, you know, I think a lot of the, a lot of companies that I talk to believe it's somewhere in the 40 to 50 million range. But that means the current universe of households paying for multi- Channel television is going to have.

• 1:13:28Anthony Pompliano?

  Yeah.

• 1:13:28Speaker 02

  So, so cut in half with a lot of the costs that we're talking about, meaning sports costs fixed. So you think about what that means and you go, video is on the way down. That's why everyone is shifting and trying to jump into the direct to consumer streaming market, the, these so-called streaming wars that we talked about before. Music's coming out of it, right? They've gotten destroyed. They took their pain. That's why those sales to Len Bovatnik, you know, happened for Warner Music. Like this industry got destroyed.

• 1:13:53Anthony Pompliano?

  Yep.

• 1:13:54Speaker 02

  Got leaner and now is benefiting from not so willingly, but finally embracing the access model of what Spotify pioneered. And now they're starting to realize like how much bigger this business can be. And, you know, you, you look at something like, you know, take TikTok, right? I mean, look at the amazing use case for music. And so, you know, TikTok and Facebook and Snapchat, all of these companies are starting to pay for music, right? Cause all of their products, they're not music streaming services, but they all need music to function. And so as music becomes more embedded in, you know, in, in other applications, it creates new revenue opportunities that didn't exist before for the music industry. So there's just more and more ways to make money than ever before.

• 1:14:38Speaker 02

  I mean, who would have thought that, you know, artists like Lizzo, you know, blow up on TikTok? And, you know, it's, it's sort of just amazing what's happening in the ecosystem. And, you know, in terms of, you know, where there is so much creativity. And I think that's what makes music exciting right now.

• 1:14:54Anthony Pompliano?

  Yeah. Tangentially related to that is a podcast, which still plays into this whole.

• 1:14:58Speaker 02

  Like what we're doing right now.

• 1:14:59Anthony Pompliano?

  Yeah. But well, here's part of it, right? So it's a mix between kind of the trends in music, but also kind of that talk radio being replaced by more of on-demand, put the listener in control. All, all those elements are there. But we've seen two big things happen. So one is the anchor and Gimlet type acquisitions that Spotify is doing. And they're really kind of making a big play and consolidating. But then also we've seen the Bill Simmons of the world, et cetera, where these are legacy media folks who are realizing there is a new medium and they're trying to go.

• 1:15:30Speaker 02

  I would say Barstool is the same way, right? I mean, Portman was publishing a pamphlet in Boston.

• 1:15:34Anthony Pompliano?

  He's got the.

• 1:15:35Speaker 02

  But he goes into podcasting. Like I think everyone's realized.

• 1:15:38Anthony Pompliano?

  Thirty plus percent of his revenue comes through the advertising.

• 1:15:40Speaker 02

  What's amazing about podcasting is it's so intimate, right? Like you have, you have us in your ear right now. I mean, and most people are literally, they have a little device in their ear and they're listening to us in their ear. I mean, it's so personal and you get to know the host, you get to know the conversation. There is, you know, I don't care whether it's a, you know, host like you or whether it's storytelling like you see on something like Serial, you know, full disclosure, I'm a Wondery investor, but like, you know, listen to the shrink next door. I mean, there's just incredible audio storytelling. This is like, you know, we're still at the early stages. I mean, this is a $1 billion revenue business in advertising.

• 1:16:17Anthony Pompliano?

  And that $1 billion, the numbers I recently just saw, Rogan, 30 million just on the advertising of the podcast. There's a true crime or something like that that did about 15 million. And then Dave Ramsey, $10 million a year just on the advertising, but what was shocking to me, that second one, I forget the name of the podcast. They did $15 million in advertising via their podcast. And the report I saw was they did 40 live shows last year, where people paid to come show up, you know, a couple of hundred people at each one. And then they also have a $40 a year annual membership where 55,000 people are subscribed to get special episodes, behind the scenes, AMA, etc.

• 1:16:58Anthony Pompliano?

  When you start to look at that, that starts to look a lot like a Disney with the IP and monetizing it through different channels, etc. But it's all audio based and creating characters or stars or personalities.

• 1:17:08Speaker 02

  Yeah, I mean, like, I think, you know, podcasting is going to be a natural place where people look for IP creation. And so, you know, I went to the Peacock, which is NBC's, you know, their version of their streaming service that they're launching. It'll be out in, you know, soft launch in May and bigger launch around the Olympics later this year. But one of their big launch programs that they profiled was Dr. Death, which is a Wondery show, you know, Wondery murder show that they're turning into a TV series. And, you know, I think, you know, you're seeing podcasts permeate culture. I think, you know, I don't, whether podcasting becomes super successful simply because of the ad dollars that are behind it or the subscription, higher end subscription premium services, you know, you look at a company like glow.fm is trying to make it a lot easier

• 1:17:53Speaker 02

  to sign up for these premium subscriptions that podcasters launch, like you mentioned. Or does it become just IP monetization through, you know,

• 1:18:02Anthony Pompliano?

  Other things.

• 1:18:02Speaker 02

  Books and TVs and who knows? I don't think we know yet. All we know is that there's a lot of great brands being created. People love listening to podcasts. They love that they can do it on their own schedule. Any free moment of their day, they can, you know, plop one on and start and stop whenever they want. And the ad load is reasonably light and, you know, you can skip the ads if you don't like the ads. And ultimately the ads are going to get more and more. I think, you know, one of the things you'll really see innovation wise, starting with Spotify is starting to make much more dynamic ad insertion. So you're hearing ads that you care about. Right now podcasts, basically the ads have been baked in and oftentimes are not relevant to me or you. That's going to change over the course of the next 12 months. And I think Spotify is kind of planting a beachhead. Like this is a category that they know they need to win. People listen to a lot more than just music.

• 1:18:47Speaker 02

  Why would you want to just be, when you think about the radio in your car, when you get in the morning drive, like you're not just listening to you. You know, even if you were listening to Z 100 back in the day in the Z Morning Zoo, right? It wasn't just for the music. You were listening to the hosts and the banter and like there, it's far more than just music. I think that's what Spotify realizes that it's, you know, you want to provide a complete audio experience. You know, they dabbled in video for a while. I think they realized that that's not where they're, that's not where the expertise is where Spotify really can excel. Especially as you think about taking the advertising side of the business more seriously. It's a natural place to play in and go after podcasting. And I look, I think these podcasts, it reminds me of the early days of, of radio. Because you have the ability to have this relationship.

• 1:19:32Speaker 02

  You know, we, it's funny how we were talking about Barstool as we started this off. When you think about podcasting, it's that relationship with the host. I mean, think about Howard. When I think of Howard Stern, I think of Snapple to this day. Like I just think of Snapple. I don't know if you do, but I always think of Snapple.

• 1:19:46Anthony Pompliano?

  It's Joe Rogan and Cash App.

• 1:19:48Speaker 02

  Sure. And so brands become so attached to the, to these hosts. And it's such a personal relationship. And they have such kind of passionate audiences, just like Portnoy and what he's able to do. I think that's the power of this podcast, Mina, is that you have this passion and it's going to get easier and easier. I mean, I think it'll get easier and easier to monetize that fandom over time. In terms of the ad experience where you'll be able to save the ad or learn more about it just using your voice, I mean, all of that's going to get solved over the next several years. It'll take time, but podcasts as a medium is still in the very early days with a lot of growth potential. And it's a category that right now, I think the hardest thing about podcasting, I don't know about you, but it's finding the ones to listen to.

• 1:20:32Anthony Pompliano?

  Yeah, the discovery elements, yeah, is really hard. Well, and here's another thing, right? If you look at like Joe Rogan, who's the highest earning podcaster on earth as far as been reported. But I wonder if he makes more money doing the UFC commentating and his comedy shows, etc., or through the podcasting?

• 1:20:50Speaker 02

  I don't know. I mean, look, I just invested in a company called Podchaser that's trying to solve this issue of discovery. I mean, I think everyone's trying to-

• 1:20:56Anthony Pompliano?

  It's analytics.

• 1:20:57Speaker 02

  Well, basically, they want to basically be the IMDb of podcasting, basically help you find lists and what you should be listening to. I think it's a real challenge of like, how do you find podcasts that you're interested in? Most of it's word of mouth. It reminds me a lot of, you know, it reminds me a lot of like, the video space, right? Like, there's, hey, go watch this show, or go watch this show. Now, it's like, my wife gets told, go listen to Oprah's podcast, or go listen to Katie Couric's podcast. Like, it's, this is all word of mouth. And I think there's gonna, you know, there's a real opportunity to help the consumer find all, because there's lots of content you don't even know exists. I mean, we all know Joe Rogan. There's all, you know, there's a few that we all know.

• 1:21:34Anthony Pompliano?

  Yep.

• 1:21:34Speaker 02

  But there's such a huge tail of great content, finding it and surfacing it is still really hard. And I think Spotify's trying to, I mean, all of these companies are trying to tackle this challenge.

• 1:21:43Anthony Pompliano?

  So, so one of the things that I've thought a lot about just having a podcast is the ad model has been pretty much 100% of the market. Like, we've seen in video, Netflix, etc. We've seen consumers start to pay in a subscription model. There's a couple of people who are trying it with podcasts, Luminary, etc. Their whole model has been raise a bunch of money, go get a bunch of talent, put them behind a hard paywall, and then upsell people into it.

• 1:22:06Speaker 02

  Right. And the challenge is, is just, again, go back to your musician issue. People, most podcasters are not doing it purely for the fee they get for the podcast. They're trying to build their media brand. And so, you know, I think the- In some ways, does it make sense that there should be a subscription service for podcasts? That's ad free? Sure.

• 1:22:28Anthony Pompliano?

  Yeah, theoretically, that makes sense.

• 1:22:29Speaker 02

  The challenge is-

• 1:22:30Anthony Pompliano?

  But the consumer behavior's been different.

• 1:22:31Speaker 02

  Theoretically, the challenge right now is that most podcasters I know wanna be as famous and visible as possible. And paywalls don't help them. Like, even the, you know, the reality is, yes, Spotify has a paywall, but there's a free version that you can get access to every podcast that they offer for free. I mean, there may be a couple of exclusives that have like a staggered release, but essentially everyone can get access. Luminary, I think, look, Luminary's gonna have to prove that they can get an aggregate enough audience to make it worth it so that podcasters put their best stuff behind the paywall. And look, they just brought in new management. Simon comes from HBO. He certainly understands premium content. You know, he just lowered the price. First thing he did in the door was lower the price.

• 1:23:14Speaker 02

  My guess is to get the number of subscribers up because you, in order to entice talent, you need a much bigger net to entice talent.

• 1:23:21Anthony Pompliano?

  Yeah, because it's almost like, and I think some of the numbers they were paying people were pretty hot, like seven-figure type deals to go behind that paywall. But you can only do that for so long. And two, even the money doesn't speak as much as if you have, if you're Spotify, right? And you've got 100-plus million people, whatever, listening.

• 1:23:37Speaker 02

  Yeah, I think it's less about the content behind the paywall than it's what catches zeitgeist, right? Like, you want, you know, if the content that's behind the paywall is the zeitgeist-y content, that's amazing. And people will come in and I think people would absolutely pay. The, you know, right now, I mean, what Spotify's trying to do, right, is they're trying to create content that's only available on Spotify as a way to get you off of, because the main platform where everyone listens to podcasts, I'd say, I assume 60-plus percent of your audience is right now listening on an Apple Podcast application.

• 1:24:10Anthony Pompliano?

  It's 55 to 60%, I think, yeah.

• 1:24:12Speaker 02

  Fine. So, the vast majority of people are using the Apple Podcast app that hasn't evolved much over the course of time, doesn't allow for sort of any fancy form of monetization. And so, I think the real opportunity that Spotify sees is how do we get you off of Apple Podcasts and into Spotify? And we're gonna- Use, you know, exclusive content to the Spotify platform. But again, exclusive still means everyone can access it across the world. But we're going to try to use that, those exclusives to get you off of Apple.

• 1:24:42Anthony Pompliano?

  Yeah.

• 1:24:42Speaker 02

  It's still early days. Their market share is clearly building. They also have a younger audience. So I think a lot of the younger skewing podcasts are doing better on Spotify than some of the older skewing podcasts, where people are more embedded in the Apple podcast ecosystem. And that's the same thing that Luminary is trying to do. And, you know, again, I think it's really early days. Let's see what Simon can do.

• 1:25:01Anthony Pompliano?

  What, um, what's your thoughts on the Bill Simmons deal? So he sold to Spotify. I think he-

• 1:25:07Speaker 02

  We don't know the number yet, so I, you know, it's hard-

• 1:25:09Anthony Pompliano?

  The report was he wanted 200 million. I doubt he got it, but that's, that's what they were saying he wanted.

• 1:25:13Speaker 02

  Uh, you know, I think until we know the number, it's a little, you know, I don't want to say it's silly. It's hard to speculate on kind of, you know, how big a deal this was. I think thematically though, for Spotify, they are trying to aggregate enough podcasts to be a major player in owned and operated inventory where they control the ad inventory. They control the experience and they can, you know, show the market what you can do. When you move from, you know, whether it's host read ads or embedded ads and move to, you know, imagine you, the host of this show, recording seven different ads and Spotify picking the one that targets me the best and only serving me the ads that I care about. Making, A, going back to where we were talking about with Instagram, making the experience better, making it where you actually want to buy the products, where you could actually sell the products.

• 1:25:57Speaker 02

  I mean, there's, there's so much opportunities from improving the ad experience, making it feel more like content. They're not there yet, but I think that's the, that's the rationale behind doing this. Not to mention, while I don't think any of Bill's podcasts that matter today will go exclusive or behind the paywall. I think there'll be new podcasts where they try to create some unique content that tries to draw people from the Apple podcast platform over to the Spotify platform. I mean, it's all about trying to move market share and give you reasons. Most people, I would assume, don't realize that they can listen to almost every major podcast on Spotify. I just think it's not where they, historically, they just, they listen to podcasts on, most of

• 1:26:39Speaker 02

  them on Apple, some of them on Overcast, or you know, some of them on, you know, pick your application, but it wasn't Spotify. And so I think a big part of this is education and having some really big deal, high performing podcasts helps people become aware of Spotify as a major player and major destination for podcasts.

• 1:26:58Anthony Pompliano?

  Yeah, I thought it was interesting, too, at least the reports I read, they're gonna leave the Ringer's written sites, they're gonna keep those and keep running them. I'm assuming that that has nothing to signal for Spotify's kind of grander ambitions, and they'll just let the Ringer team do it, but it was still interesting.

• 1:27:12Speaker 02

  Look, I think you certainly could imagine there being a lot of cross-promotion, right? So, I mean, there's no reason why on the Ringer website it can't, you know, if you want to listen to a podcast, I assume it'll be a Spotify embed versus, I don't even know which player the Ringer uses today, but I would assume it'll be a Spotify player embed just to, again, to hammer home to people that when they go to the Ringer and they're reading an article about whoever, that, you know, they see that the podcast is available on the Spotify platform. So I think, again, just as a barker for what, helping introduce people to Spotify as a podcast player, I think it makes sense. You know, again, I don't know the cost of running the non-podcast part of the business, but I assume those are not very expensive, you know, operations relative to, you know, the scale of Spotify.

• 1:27:57Anthony Pompliano?

  I want to talk about three social content platforms, Twitter, TikTok, and Quibi. Let's start in reverse order, Quibi.

• 1:28:06Speaker 02

  Well, Quibi, I wouldn't really put as social yet. I mean, there will be a social layer to it. I mean, to me, Quibi sort of fits in the middle of the video subscription platforms that we talked about before, a little bit of the advertising component that we talked about before, and this reality that every single person you and I know is living more and more of their daily waking life on mobile devices. And Spotify, or, and sorry, and Quibi's basically going, "Look, we spend lots of time with gaps, whether it's waiting in the lobby before you came and got me, whether it's waiting for the subway, or even on the subway. There's lots of kind of limited moments of time where, right now, you know, you can consume content on Snapchat Discover, you can consume content,

• 1:28:51Speaker 02

  you can flip through your Instagram feed, or your Facebook groups, or whatever it may be, chat with someone on iMessage, or WhatsApp, all over the world. And I think it's just recognizing that we have lots of white spaces in our day, and if we can create some compelling content, just like you watch YouTube, right? I mean, you think about, you know, the earliest start of YouTube was very short form. I mean, now you get content that's 20, 30, 40, 50, you mean, and you can get really long content on YouTube, but originally YouTube was really short content. I think it's recognizing that we have lots of these gaps in our day, and would we pay a modest fee, that may even be included if you're things like a T-Mobile subscriber, you know, would you pay a modest fee for really good content on your mobile device? Look, no one's ever tried it. You know, some people think Jeffrey's crazy. The

• 1:29:34Speaker 02

  reality is, I don't think people know what they don't want yet, or what they want. I think if, if the content's really good, and the service is really easy to use, I think people will come. We'll see.

• 1:29:43Anthony Pompliano?

  My, my whole thing has been, other than Jet.com, I tweeted this the other day, I don't know very many companies that have raised a ton of money pre-launch and been successful. And the part that just, kind of made me cringe a little bit when it came to Quibi was, they ran a Super Bowl ad, right? Pre-launch, running a Super Bowl ad. I don't know if they've ever, if we've ever seen a company be successful doing that, but doesn't mean that they can't be the first, but still, just, you know, the hype, and kind of all of the ad spend, etc. We're just gonna see when they launch, if it actually translates to revenue.

• 1:30:13Speaker 02

  Yeah, I, I remember walking through CES, six or seven years ago, I mean, probably even five years ago, that wasn't even that long ago. And I remember running into someone who goes, "The content on Netflix is horrible. There's nothing to watch."

• 1:30:26Anthony Pompliano?

  Hmm.

• 1:30:27Speaker 02

  And, you know, look, I still get people that say that, "There's nothing on Netflix." And then you go, like, "What are you talking about?" People are spending, households are spending two hours a day.

• 1:30:37Anthony Pompliano?

  Yeah.

• 1:30:37Speaker 02

  That's the median. I mean, like, there's probably households spending three or four hours. I mean, there's more to watch than you can physically consume ever. So, look, the reality is it's all about the content. I mean, that's really I'm going with this. If the content is something that people find compelling, if people get addicted to short-form storytelling. And again, there's no, there's really not a lot of historical context to prove Katzenberg right or wrong. We know that, you know, people went from watching movies to watching TV. We know that, you know, there's lots of examples of short-form content and, you know, look, look at the whole gaming space. I mean, Candy Crush is sort of a time killer between meetings or you're bored at work and it's a way to kill time.

• 1:31:17Speaker 02

  How many people have you walked by their desks in a, in a big office building are watching YouTube videos that they find funny? It's all about kind of filling those gaps in your day and your daily life. I think if the content's good, it'll work. If the content's no good, this will be a failure.

• 1:31:32Anthony Pompliano?

  Fair enough. TikTok?

• 1:31:34Speaker 02

  Just, you know, it's, the creativity is amazing. Like, it's literally amazing. I'm, I'm amazed. It reminds me of, you know, I remember talking to Jeff Dorsey, sorry, Jack Dorsey, early on.

• 1:31:48Anthony Pompliano?

  Jeff is Jack's lost brother.

• 1:31:52Speaker 02

  I remember talking to Jack Dorsey and I remember him saying that the, the why Vine was so creative is that with YouTube, you know, you, you potentially hit record, just like we're recording this conversation. And not that we're not creative, but when you're forced to hold the screen and you're actually forced to compose something, in that case, six seconds, TikTok, 15 seconds, it forces you to be super creative, like. And I'll see my daughter, I mean, I'll see one of my daughters who will spend sometimes two hours to compose a 15-second TikTok.

• 1:32:20Anthony Pompliano?

  Really?

• 1:32:21Speaker 02

  Absolutely. Where they'll just practice and, you know, two or three of them will practice for hours trying to get something just right. I, I think the, the-

• 1:32:29Anthony Pompliano?

  Like dance-type stuff?

• 1:32:30Speaker 02

  Correct. But you see the same thing with comedy and other categories. And I think it's also aging up, which is really interesting, but it's the creates, I, I think it's the, the short form, and this may even go back to Quibi as well, shorter form does force a level of creativity. Creativity, you have to, you know, it can't get good after 20 minutes. It has to get good really fast. Like if that, if it doesn't get good quick, you're not going to watch, you're not, you know, you're going to tune out. And I think the TikTok, you know, in 15 seconds, you're forcing incredible virality, but it's also the participatory nature, right? You watch something, then you can take the music and create your own and try to copy it with all of your friends. And then, you know, it sort of just virally takes over. And the speed at which people are becoming quote unquote TikTok famous reminds me of,

• 1:33:13Speaker 02

  you know, when people were, you know, when being a YouTube influencer was like the be all end all, and now it's like being a TikTok influencer. I mean, like YouTube should be a little worried that like TikTok has gotten this big this fast, because I think a lot of the elements of what are working on TikTok, music and comedy, were kind of early kind of drivers of the YouTube story. And not that YouTube's going anywhere and they're, it's a huge business doing, as we know now, $15 billion a year. It's a huge business. But I just think from a creativity standpoint, I think they should be a bit concerned that you're seeing such momentum out of TikTok.

• 1:33:47Anthony Pompliano?

  Yeah. The part to me that is really crazy is when Vine first came out, all of the Vine influencers all moved into the apartment.

• 1:33:54Speaker 02

  Yes. I knew some of them.

• 1:33:56Anthony Pompliano?

  Right? And this is where you get the Logan and his brother and all stuff. But recently I saw on TikTok, there's a family based here in New York, the D'Amelio family, which is-

• 1:34:09Speaker 02

  Orwell, Connecticut, I think. Somewhere in Connecticut.

• 1:34:11Anthony Pompliano?

  Two daughters, teenage daughters, and then the mother and the father. And they put the same playbook where, hey, the girls started to get famous on TikTok, then they started bringing their parents in, tagging their parents' accounts. Next thing you know, they're like, the father's got like a million followers on TikTok.

• 1:34:25Speaker 02

  UTA just signed the whole family, not just them, they signed the whole family. My friends at UTA, the talent agency. And, you know, you know, you look at the, I'm a big, I'm a big fan of Famous Birthdays, the website in terms of just what's happening in teen youth culture. And Charlie's number one on the list.

• 1:34:43Anthony Pompliano?

  Really?

• 1:34:45Speaker 02

  So, you know, when you look at kind of who's popular and who's, you know, I mean, you know.

• 1:34:51Anthony Pompliano?

  Fifteen year old is top of the list.

• 1:34:53Speaker 02

  Top of the list. Literally. Number one.

• 1:34:56Anthony Pompliano?

  Wow. In a Super Bowl commercial? Right? For, uh, what was it? Tostitos or something?

• 1:35:02Speaker 02

  Sabra, no, Sabra. Sabra hummus for OK Boomer. So, look, I, you know, I, I think it is an incredibly powerful platform that's, again, very early in its monetization, you know, they're just starting to get really serious about advertising. They just hired, um, and Blake came over from Facebook to, to run revenue in the US. Vanessa's been building a team who came over from YouTube. I mean, there is, um, it's really exciting, uh, you know, just as a platform of creativity and, and, you know, I think that, again, this is just one more thing that takes away time spent from watching linear television, you know, this, this, go back to where we started this whole conversation. It's the war for time, right? War for time and attention. And, you know, if you're a brand marketer, you're looking at TikTok and going, you better have a TikTok strategy, right? Like, you better be figuring out, like, how you participate.

• 1:35:47Speaker 02

  Like, the NFL was early. I mean, you know, the NFL got early into, you know, pretty early into TikTok realizing we need to be there. So, you started the season, they launched, you know, they launched on TikTok and they've been, you know, pushing content all throughout the season, building up their brand presence. And you're seeing more and more, the Washington Post was even earlier. I mean, you, you know, you're seeing publishers realize they have to be there. And I think that, you know, same thing with advertisers, where eyeballs go, brands follow.

• 1:36:13Anthony Pompliano?

  Yeah. What about, uh, Twitter? We all spend way too much time on Twitter talking about time and attention, uh, and they've actually done pretty well, still growing, et cetera, but there's plenty of-

• 1:36:24Speaker 02

  Grown faster than they've ever grown, actually. And I think it's, it's largely due to product changes, right? I mean, I think the product side of Twitter's just gotten way better. I mean, you go back four years ago and you actually, it was reverse chronological, right? Like-

• 1:36:37Anthony Pompliano?

  Reverse chronological on one eighty character, or, uh, one forty characters.

• 1:36:41Speaker 02

  But, I mean, like, if you weren't actually watching the site at that moment in time, you missed the tweet and you never saw it. Now, the tweets that I should see, if I open up my Twitter account right now, it's showing me things I should see. And the next level of this is, you know, it's, it's sort of silly that you should have to know Rich Greenfield to care and follow media investing, um, which is what you have to do. Like, you'd have to find Rich Lightshed right now and follow me to get my tweets.

• 1:37:09Speaker 02

  As we, you know, Twitter really breaks into 2020, the big initiative is topics. And so you should be able to follow, you know, media investing. And I don't think that topic exists yet, but conceptually, you know, more and more topics like you can follow Fortnite. You can follow, you know, certain, pardon my take is now a topic you can follow. And so it doesn't have to be a tweet from that account. It can be, you know, I follow the New York Giants topic. And so now I see tweets, not just from the New York Giants accounts, but from, you know, beat writers and even interesting people who are writing something that, that, that goes viral about the New York Giants. I'm now seeing in my feed. And so in many ways, Twitter was sort of awkward, right? Like it was an interest based network that forced you to follow people. And the hard part was.

• 1:37:53Anthony Pompliano?

  Finding them.

• 1:37:54Speaker 02

  Discovery, no different than our podcast discussion, right? In terms of how difficult discovery was the biggest, figuring out who to follow was one of the biggest challenges Twitter had. When you signed on, you're like, oh my God, what do I do? Like, what, what do I follow? Do I choose this and how do I decide? And if you didn't follow the right people, you actually had a bad experience and you were less likely to come back every day. The, the easier they make, the, the easier they make it be to find the content you care most about. And they can populate your feed successfully. I don't care whether we're talking Spotify and making sure that you see the music you should see, all of that. The, the more, same thing with Netflix, right? Like tailoring the experience so that you have a good experience is ultimately what causes you to come back time and time again, and creates that addictive behavior.

• 1:38:37Speaker 02

  And I think that's what, in many ways, what Twitter has been successful. A lot of investment in machine learning and AI, obviously shifting away from reverse. I mean, if you look at what was the demarcation line, and it's funny because Facebook was the first, right? I mean, Facebook.

• 1:38:52Anthony Pompliano?

  Coming from Facebook, it was like a no brainer for them to do, right? At Twitter to go to the ranked feed.

• 1:38:58Speaker 02

  But Instagram, when you first started using, remember the uproar? Remember what happened with Instagram when they shifted away from?

• 1:39:04Anthony Pompliano?

  Twitter was the same thing. They, there's always the user backlash and then they realize, oh wait, this might be better. 140 to 280 characters, same thing.

• 1:39:12Speaker 02

  Right. And actually, most people don't even use the 280.

• 1:39:14Anthony Pompliano?

  Yep.

• 1:39:15Speaker 02

  Most people are not tweeting 280 characters, but it, you know, it does create sometimes much better content, having that flexibility.

• 1:39:22Anthony Pompliano?

  Absolutely.

• 1:39:22Speaker 02

  So like, I think, you know.

• 1:39:25Speaker 02

  The key takeaway from that whole theme or thread, right, is letting machine learning and AI take over is what creates trusting the computers to give you the right answer or the right content is what becomes critical. And that's what Twitter has done a much better job. And I think it's why people are enjoying the experience. And that's why they, you know, I mean, it's, you know, it's sort of amazing that, you know, Twitter, which was growing in the low single digits just a few years ago, when, you know, when Jack kind of came back into the company, they just grew 21% in terms of, you know, daily active users. So I mean, actually, daily active users on the platform up over 20%, sort of an incredible story.

• 1:40:05Anthony Pompliano?

  Absolutely. One of the last things I want to talk about. So Jack has made a very kind of

• 1:40:13Anthony Pompliano?

  big stand on no political advertising on the platform. Facebook has taken a different toll, but I saw you recently tweeting about political ad spending being something that is going to have to change because of the drawdown viewership on television, the popularity of social, etc.

• 1:40:31Speaker 02

  I mean, it's a great question. You're basically putting me in a box, right? Like TV's dying.

• 1:40:37Speaker 02

  Where does that ad spend go?

• 1:40:38Anthony Pompliano?

  What happens?

• 1:40:40Speaker 02

  Well, the good news is Facebook will still take it.

• 1:40:42Anthony Pompliano?

  Well, let me let you out of the box in the sense of politicians will always spend, right? They'll find somewhere to spend money because they think that's what's going to end up getting them elected, etc. How do you view revenue for these various platforms, especially from the political side in the political seasons, if all of a sudden their main source for that marketing goes away, or at least gets cut in half, or drastically draws down?

• 1:41:09Anthony Pompliano?

  I feel like I asked you like a really hard.

• 1:41:12Speaker 02

  No, it's just a really, no, it's a, you know, I mean, it's sort of the same question of like, you know, even if you're a brand, like, you know.

• 1:41:18Anthony Pompliano?

  Yeah. Where do you go?

• 1:41:19Speaker 02

  Yeah, I mean, like, think about the car commercials that run on TV, or the, forget about a car commercial, because maybe, you know, like, think about a Dove soap commercial. Like, what does a Dove soap commercial look like when no one's really watching linear TV? Like, it's just, all of these things are really hard intellectual questions.

• 1:41:38Speaker 02

  Of you know, kind of how do you reach consumers? And I think politicians are no different than a brand. Linear TV is dying. It's still a great way to reach lots of people. So even today, especially older people, right? I mean, the people that are cutting the cord and moving the fastest away from the linear TV bundle are younger. They're not young, but they're only younger. You know, and so you can still reach lots of people through linear TV, which is why you're seeing this incredible ad spend on, you know, in terms of the current presidential race. But it is an interesting conundrum because brand marketers can certainly spend on Facebook as they love doing and Instagram and Tik Tok and all of these platforms. But to the extent that you can't advertise on, on these sites, it really creates the ultimate conundrum of like, what are you supposed to do?

• 1:42:23Speaker 02

  If you can't reach people on TV, where are you supposed to reach people? And it really becomes an interesting problem. Look, I think in many ways, you know, I mean, Facebook's still taking political ads.

• 1:42:37Anthony Pompliano?

  For now.

• 1:42:37Speaker 02

  Yeah, but I mean, I think, but like in some ways, it's part of the answer to your question. Like, well, if this is the platform that reaches 2 billion people on the planet earth.

• 1:42:45Anthony Pompliano?

  And they'll take our money, then of course we're going to go spend.

• 1:42:47Speaker 02

  Well, no, but also shouldn't we let them reach? I mean, if this is today's medium, it used to be TV, it used to be radio. But if today's medium is this thing called the internet, shouldn't we allow them to, and the number, the largest aggregator of eyeballs on the internet globally is Facebook, you know, Facebook and Google. Should we not let them be there? And I think it's a really tough challenge that, you know, I think, look, obviously politicians in each country are going to need to put rules around it. And I think that's what Mark certainly wants is rather than stop it, force governments to put rules around it. But I think it's a really hard question. I, you know, I think it's easy to just say, no, we don't want any political ad spend. You know, I'm not sure that solves the societal problem that you're sort of raising,

• 1:43:30Speaker 02

  which is how do you stay informed about, you know, people used to pick up the paper.

• 1:43:34Anthony Pompliano?

  Yep.

• 1:43:34Speaker 02

  Right, like.

• 1:43:36Anthony Pompliano?

  Well, and this goes, so I'm gonna bring it full circle here, two things. One is, I saw recently, there was a politician, doesn't matter which one, that was starting to pay influencers to talk about them. And the first reaction I had was like, what exactly is an influencer gonna say that like makes somebody change their vote? And then we saw the Joe Rogan comment about Bernie Sanders, and it was like, you know, half the country hates him all of a sudden, half the country supports him, and you get all of the kind of political controversy that follows something like that. But if you kind of take that even a step further, if media starts going behind paywalls, right, so take the New York Times, etc., I saw a study that showed, kind of, the left-leaning language has exploded with the New York Times, once they went behind the paywall.

• 1:44:19Anthony Pompliano?

  And a lot of it is, just unconsciously, you begin to write for the subscriber, right? And you change the way that you present information, because they can leave easily, right? And it's almost, you create these echo chambers to some degree, which ends up being bad for society, because the business models are forcing that? Or is that something where theoretically, the fear mongers, you know, talk about it, but actually, that's in reality, not what ends up happening?

• 1:44:47Speaker 02

  You know, I've never done the analysis to actually know whether.

• 1:44:51Anthony Pompliano?

  Yeah, of course.

• 1:44:52Speaker 02

  You could quantifiably actually prove what you just said.

• 1:44:54Anthony Pompliano?

  Yep.

• 1:44:55Speaker 02

  It may or may not be true, and I'm not gonna debate the point. I think, look, the good news is, is there's still, you know, even if you can't run political ads on Twitter, there's certainly lots of places to reach consumers, and, you know, there's certainly the ability to build your following. You know, each politi-, I mean, I think, look, what has Trump done really well? He's learned how to build a following.

• 1:45:16Anthony Pompliano?

  Absolutely.

• 1:45:17Speaker 02

  Follow his Twitter account and Instagram followers, from the time, six months before he became president, till now. You know, I mean, you know, FDR, if you think about what he did, right, he pioneered the use of radio to reach consumers, right? It was a way to reach, use mass reach mediums to reach consumers.

• 1:45:33Anthony Pompliano?

  AOC does it, so it's not on either side of the aisle, right? AOC and Trump have both done very well.

• 1:45:38Speaker 02

  Maybe it's not, you know, maybe unfortunately, it's not gonna be through paid media, it's gonna be through organic media, and you're gonna have to build your own following.

• 1:45:45Anthony Pompliano?

  Maybe that's better.

• 1:45:48Speaker 02

  I don't think we, I don't think we know the, the ultimate answer.

• 1:45:51Anthony Pompliano?

  Yeah.

• 1:45:52Speaker 02

  Obviously, you know, there, it is not easy to build mass followings and obviously sometimes those, you end up sort of moving towards the edges to build that, you know, aggressive, you know, to get heard through the noise on these platforms. But, you know, I'd say that the ability to reach people through the internet, what's been enabled through all of these different social media platforms is unparalleled to anything before. I mean, you can reach a lot, I mean, the, the reach of some of these politicians' social media accounts pales the number of people that ever, literally ever, paid for a newspaper or paid for television. And so the ability to reach people all over the world is unprecedented. And that, and that's really the opportunity.

• 1:46:35Speaker 02

  Obviously, there's fact checking and lots of other issues that, you know, we could get into that, that become problematic and, you know, what is okay, what is not okay. I mean, we, just in the last couple of days, we've come into the problem of, you know, before it was you can't, you can't, you shouldn't disseminate things that are knowingly false or that change the meaning of somebody. Now the question is, is if you change the order that something happened in, is it okay? You know, even if all of the events actually happened, can you, if, if you change the order of those things to distort the ultimate implication, is that bad? Or, you know, who sets the rules? And you're seeing Twitter and everyone is trying, you know, like, the internet's moving, as we know, the internet moves at, at incredible speed. Regulation, not just in this country, but all over the world, moves at a much slower pace.

• 1:47:18Speaker 02

  And it's just, it's very hard to understand how, who sets the rules for these, these applications. And I, and I have no good answers.

• 1:47:25Anthony Pompliano?

  Yeah. Well, I think that's a good enough answer by itself. Before we wrap up, I always talk about two things. One is Bitcoin and one is aliens. Any thoughts on Bitcoin?

• 1:47:36Speaker 02

  I think the payments overall, you know, I just think about payments overall for.

• 1:47:44Speaker 02

  Any form of media, making it easier to transact, especially on a cross-border, especially, you know, think about developing countries, countries that may not have stable currencies. I think there are certainly interesting potentials and you look at why Facebook's doing Libra and, you know, why companies like Spotify have been interested in it. And I think there's, the world's a big place. And as you look to grow from what we think of as a very kind of US-centric view of the world of media and realize that, you know, just look at last night, right? I mean, look at what won the Academy Award in Parasite. There's a massive world of incredible content, music, audio, and everything and beyond, and gaming. The ability to shift to some form of universal currency is really interesting across all of these forms of media. And I don't think like, I think we're

• 1:48:29Speaker 02

  still a ways away from this being common. And but it's, you know, it has the potential to solve, you know, real challenges. You know, if you, if I think about, you know, even the early days of Netflix, one of their greatest challenges when they expanded outside the US, they went, you know, their first market they went to was, was Latin America, South America. And, you know, dealing with credit cards and payment processors and all of that was really complicated and challenging. And, you know, I think, again, in the ultimate success story of crypto in general, hopefully you solve a lot of those issues. And I'm definitely not the expert, but I'm certainly thinking about it from that lens of like, how do you solve real world business problems to make it easier for the world's population to transact?

• 1:49:10Anthony Pompliano?

  Yeah, that's one of the most rational answers from somebody who's not in the crypto world I've heard. So that was, that was good.

• 1:49:16Speaker 02

  And then Aliens, I mean, look, I love the movie Aliens. Sigourney Weaver was onstage at the Oscars, and I absolutely love the movie Aliens. Will I comment on the presence of aliens? I have no idea, but I really hope there's life outside of our solar system.

• 1:49:30Anthony Pompliano?

  Why do you hope that there's life out?

• 1:49:31Speaker 02

  I just think it's hard to believe that we're the only ones in the entire solar system that, you know, have evolved into, you know, humans. But, you know.

• 1:49:39Anthony Pompliano?

  I think that's fair. I end each one letting you ask me one question. What, uh, what do you got for me? It's been fun.

• 1:49:46Speaker 02

  What's your favorite? What are you watching right now?

• 1:49:50Anthony Pompliano?

  What am I watching? So?

• 1:49:54Anthony Pompliano?

  I don't watch anything religiously.

• 1:49:56Speaker 02

  What's the last series you binged?

• 1:49:59Anthony Pompliano?

  Uh, so two of them. One that I chose to watch, then one that I was forced to watch.

• 1:50:04Speaker 02

  So this is your fiance forced you?

• 1:50:07Anthony Pompliano?

  Uh, Cheer. She was obsessed.

• 1:50:09Speaker 02

  Forced you? Right, so here's the point. Everyone is watching Cheer. Like, everyone listening to this podcast knows somebody, if they're not. And it speaks to this whole thing. When people say there's nothing to watch on Netflix or nobody's watching the content.

• 1:50:20Anthony Pompliano?

  Bullshit. Complete bullshit.

• 1:50:21Speaker 02

  Exactly.

• 1:50:21Anthony Pompliano?

  Yeah, yeah, yeah.

• 1:50:22Speaker 02

  Exactly.

• 1:50:22Anthony Pompliano?

  And here's what's crazy. If she was here, here's what she would tell you.

• 1:50:25Speaker 02

  Yeah.

• 1:50:25Anthony Pompliano?

  When she first started watching, I was like, "I don't want to watch. This is stupid." You know, I'm like playing on my phone, all this kind of stuff. By the end, I'm like, "Yo, Ladera, stop screwing around."

• 1:50:34Anthony Pompliano?

  Right? So you get sucked in. And then, what is, the only show that I watch...

• 1:50:39Speaker 02

  That you wanted to watch?

• 1:50:40Anthony Pompliano?

  Well, just religiously, every season. What is it? Axe Capital?

• 1:50:45Speaker 02

  Billions.

• 1:50:45Anthony Pompliano?

  Billions, yeah, yeah. So, and you want to know how I watch it?

• 1:50:48Speaker 02

  I do.

• 1:50:49Anthony Pompliano?

  I...

• 1:50:49Speaker 02

  Don't tell me you steal it.

• 1:50:50Anthony Pompliano?

  Have Amazon Prime.

• 1:50:51Speaker 02

  Okay.

• 1:50:51Anthony Pompliano?

  No, I sign up for Showtime. I watch it, and then I cancel Showtime. Right? And then I wait. And then the other thing I do is...

• 1:50:58Speaker 02

  Do you watch it week to week live, or do you wait for it to end?

• 1:51:00Anthony Pompliano?

  I was just gonna say, I wait for it to end, and I binge it usually... I try to do it in a weekend. It usually takes kind of four days.

• 1:51:06Speaker 02

  Right, so you're the definition of why media, as a broad business, is in so much trouble, is that you move, you know, even Showtime, which tries to space out a show like Billions over, you know, whatever, 10 weeks.

• 1:51:17Anthony Pompliano?

  I just wait.

• 1:51:18Speaker 02

  The reality is, most content doesn't need to be watched live. Like, you don't really need, you know, maybe, you know, Game of Thrones probably was pop culture enough where you wanted to be part of that conversation the morning after. I would say there's probably, on one hand,

• 1:51:33Speaker 02

  that many shows that exist that are so important to pop culture now that you need to watch week to week live. And the reality is, everything else... I mean, I know lots of people who are just starting you, and it came out two years ago. Like, so this whole idea that, you know, that whole change of behavior is a huge problem, because you're a horrible Showtime customer, because you signed up for a month. Whether you pay the whatever, you know, $10, doesn't matter. There used to be you being a full year subscriber.

• 1:52:01Anthony Pompliano?

  Oh, yeah. They make more money off of me than HBO and all the other subscriptions because I don't subscribe to any of those. But they definitely.

• 1:52:07Speaker 02

  But relative to what they are used to in a subscriber, you're a bad customer.

• 1:52:10Anthony Pompliano?

  Absolutely.

• 1:52:11Speaker 02

  In there and a problem that the only way to solve it is to add a lot more content and diversify. And that's why HBO is going from HBO to HBO Max because they need a lot more content to prevent you from doing that.

• 1:52:24Anthony Pompliano?

  The other thing too, that I don't know enough about how TV series used to get produced, but like something like Friends or whatever. To me, it seems like it was much more persistent, like every single week, week in, week out, and there were seasons.

• 1:52:37Speaker 02

  Well, seasons were 22 episodes because they had to get you from September through May.

• 1:52:41Anthony Pompliano?

  Yeah.

• 1:52:41Speaker 02

  Right? They had to get you there and.

• 1:52:44Anthony Pompliano?

  And that only leaves what, June, July, only 90 days off of the year.

• 1:52:47Speaker 02

  Correct. But now the idea is let's create shows that are sometimes as few as six or seven episodes. And the beauty of that is it allows for movie stars who wouldn't normally take breaks from shooting, didn't have time for 22 weeks, but might have room for eight weeks to film, you know, a six or seven episode series. And so it actually is, the creative loves it. I think the consumers like it because you're not kind of forcing overly long seasons where, you know, I mean, look, I think seasons are going to be shorter. Like you don't, I mean, how many shows need five or six seasons? Most things get pretty bad after, I mean, the first few seasons of shows are generally the best and then it gets really hard to keep it creative.

• 1:53:26Anthony Pompliano?

  Kill off so many characters, right?

• 1:53:28Speaker 02

  Look, I think there's probably a lot of people, even on Game of Thrones fans who would go, I wish it had ended a year sooner. Like, you know, they could have condensed it a little bit and ended it sooner. Like, I think that's one of the other things you're seeing now is episode orders are going to be shorter. Content's going to be more condensed. You're hopefully going to try to make better, shorter series, both in episodes and seasons, to keep people interested.

• 1:53:51Anthony Pompliano?

  Where can people find Lightshed?

• 1:53:53Speaker 02

  We are, I mean, on Lightshed, I'm [email protected]. The website's lightshetmt.com. We're a subscription site. But on Twitter, we're just Rich Lightshed. Anyone can follow us. My colleagues, Brandon Lightshed and Walt Lightshed. We're all on Twitter. We're pretty active. We'd love to engage with your audience in this dialogue and hope to come back.

• 1:54:15Anthony Pompliano?

  I can say this, he can't, but I probably, there's two people I learned the most about media, business, investing, etc. You and Matthew Ball. So you guys are killing it. So I appreciate all the things you put out on Twitter.

• 1:54:28Speaker 02

  And we debate actively.

• 1:54:29Anthony Pompliano?

  Well, but that's part of the value of it, right, is you guys go at it. So it's awesome. But thanks so much for coming to do this and we'll have to do it again.

• 1:54:36Speaker 02

  Thank you.

• 1:54:37Anthony Pompliano?

  Hey, everyone. Pop here. If you liked this episode of Off the Chain and want to help us take crypto to the top of the apple, Spotify and other podcast charts, please do us a favor and rate, review and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.