(Preview) The Murky Future for the NBA, A Variety of Notes on Apple and AI, In Defense of Tech That Removes Friction

A question about the future of the NBA as the league sees record revenues and declining ratings, several emails about Apple's continued adventures in AI, and follow-ups to last week's episode on Formula 1, Amazon, chatbots as the AI UI, and tech that removes friction.

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

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Ben Thompson?

  If everyone's talking about it, you feel like I need to watch it to sort of be part of things. And if you can't do that, then you're just filler and filler is useful, but it's just not worth that much. The, it's the bifurcate, it's the peacock strategy. We'll pay a lot for the NFL and we'll have a bunch of reality TV shows that don't cost us anything to make. Yep.

• 0:28Andrew Sharp?

  Yeah. Well, and all, I mean, as somebody who hosts an NBA podcast, like shortening the season would also help eliminate a lot of the dumber meta conversations around the league.

• 0:39Ben Thompson?

  Like, I know, but you realize that'd be bad, that'd be bad for your business.

• 0:43Andrew Sharp?

  That's true. Maybe it would be bad for podcasting. Everybody would just be like, I don't need podcasts anymore. I'm going to actually watch these games because I care about the games now.

• 0:50Ben Thompson?

  Well, this is what's so interesting is it, I put this thesis forward. I think Derek Thompson wrote an interesting thread after the Super Bowl where he didn't consume any Super Bowl content, but of course watched hours of it. Meanwhile, he was listening to a gazillion NBA podcast because the Luca trade had just gone down and didn't watch any basketball games. And there's this, you know, where there's a forecast, I think of, of one of the final questions in the rundown here, but in addition to this FOMO and filler dichotomy, there's two ways that value can be generated from things like sports. Number one is the actual rights value, which is watching the game. And number two is the cultural value that

• 1:32Ben Thompson?

  goes along with it. The NBA still generates a lot of cultural value and folks like Mark Cuban back in the day would be happy to talk about, oh, we dominate social media. The problem is the NBA didn't capture any of that value. The only way it captures value is through the sports rights and you and Ben Golliver made a great living, have a great product with a few, you know, with, with thousands of, of listeners and it's great for you, but the NBA doesn't capture any of that and all the other sort of podcasts out there. And there's a bit where they're only capturing one portion of it. Netflix with like Drive to Survive. It was, you know, I talked to Greg Peter. He's like, yeah, we missed the boat on that one.

• 2:13Ben Thompson?

  In that they generated huge cultural value for F1 and they captured that by having Drive to Survive. What they didn't capture was the huge value or the huge increase in the rights value. That that cultural development drove. And so, you know, it's sort of a missed opportunity, which I think they're, you know, as I mentioned, the Women's World Cup. Yeah, yeah, like they, the reason they got the Women's World Cup rights for a long time is they're going to try to generate a lot of cultural value. And not just capture that value, but also then capture, oh, now we have more value than we paid for the actual rights to the games. Because we created it and we're going to capture it.

• 2:55Andrew Sharp?

  Well, and as far as Netflix is concerned, you mentioned in your interview with Michael Nathanson, an idea that I floated in the past, like as RSNs become fully extinct. Does a league like the NBA put all of its regular season inventory, anything that's not sold to NBC or ESPN? All the random regular season games that would have gone to RSNs. Do those then make sense on a streamer where they, A, it gives the NBA a way to reach a larger audience. So customer acquisition is what those games are about from the league side of things. But then also maybe it has more value to a streamer like Amazon or Netflix as like a churn mitigation tool.

• 3:40Andrew Sharp?

  Um, do you think that's a possibility?

• 3:43Ben Thompson?

  That's a possibility. There's teams like the Jazz don't have an RSN deal anymore. They put it on local broadcast TV. And they make way less money by doing so, but they'll argue we're making more fans, like the ratings are significantly up. Yeah. So they have more viewers, but make less money. And that's a trade off that is, that is going to happen. I think ideally, the, the problem with all this stuff is you could zoom out and what's an ideal format? An ideal format is you're generating fans or, and keeping long-term ones, but then you're, you're generating FOMO for the big matchups that you have to pay to get. And the problem is. How you get from here to there is not at all clear because that's kind of the inverse of how it's worked. Everyone had access to the big games because everyone had cable.

• 4:26Ben Thompson?

  And and then, you know, the hardcore fans could wa- watch what's extra. It's it's not clear. Um, again, we could, to your point, you warned at the beginning. We could do a whole podcast about this, but I like Brandon's analogy. And and again, I would, I think it's an analogy that extends far broader than just Intel or the NBA. And it is something to think about.

• 4:49Andrew Sharp?

  Yes, and there are no easy answers to where the NBA will be in 10 years. Where the NBA will be in two years, for the love of God, just cut down on some of the replay at the end of games.

• 5:02Ben Thompson?

  I I'm just gonna say, great call by me. I was anti replay from the very beginning. The moment it came out, I've been anti replay. It was, my view on replay, it's a very simple rule. If your game naturally includes stoppages, replay is great. So replay is great in the NFL, it's great in tennis, where probably one of the all time great implementations. There's a break between, it's not like they're stopping a set in the middle to do a replay, do it afterwards, right?

• 5:28Andrew Sharp?

  Exactly. No, that's the difference. Tennis and football, it's perfect, but everything else, it's like the rhythm of basketball is the selling point.

• 5:36Ben Thompson?

  Soccer is the worst. Because the the the issue with soccer is on one hand, you have more motivation to get it right because a goal is such a big deal. On the other hand, the best part about soccer is you're enduring the ball just going back and forth and nothing happening for so long.

• 5:56Andrew Sharp?

  For that one moment.

• 5:57Ben Thompson?

  Just for the release and the culmination of a goal, which has been completely destroyed and diminished, right? Oh, we gotta wait for VAR. Uh, I, yeah, and we're going to get a, but every time I bring this up, we're gonna get a bunch of emails and I'm sorry, you're all wrong.

• 6:13Andrew Sharp?

  I actually don't think so. The tide has turned.

• 6:16Ben Thompson?

  Soccer people hate the idea, but the the the basketball people, I think, are coming around to our side.

• 6:21Andrew Sharp?

  Yeah, people get it at this point. Uh, well, hopefully the NBA will get there.

• 6:26Ben Thompson?

  And like you said. Nothing is better for conversation and FOMO generation than a missed call controversy. Like, like what?

• 6:35Andrew Sharp?

  It's good for business. It's an entertainment business at the end of the day, and it's good for the entertainment product. So figure it out, NBA. Also, cut down on some of the complaining to officials, maybe cut down on the threes over the next couple of years. But we can continue spitballing.

• 6:51Ben Thompson?

  Every team should get one timeout in the last two minutes, and there should be no replays. If we want to get really radical, we could also cut down on the intentional fouling. You can choose to get the ball side out of bounds instead. So you have to actually try to steal the ball and play defense instead of foul. Maybe that's a bridge too far. People will come around to my side in a few more years on that one. But, but.

• 7:11Andrew Sharp?

  Give it time. You'll be on the right side of history eventually.

• 7:14Ben Thompson?

  Oh, and no live ball timeouts. That's another great thing in FIFA.

• 7:17Andrew Sharp?

  Mmm, FIBA. You keep saying FIFA. Yes, just adopt the FIBA rules whole scale and call it a day.

• 7:25Ben Thompson?

  Bring in all the FIBA officials, like, let's reset here.

• 7:28Andrew Sharp?

  Yeah, the FIBA officials do not take any guff from any player, no matter how famous they are. We need those guys over here. All right. Well, to keep it moving, and speaking of the European continent, Nick says, greetings from rainy London. Greetings, Nick. The latest iOS beta is out this week, and it comes with Apple Intelligence in a whole bunch of European markets, fully translated and available, as far as I can tell from the news coverage. So what has changed? Why can Apple suddenly do that? I thought with all the bad AI regulations, the EU shot itself massively in the foot. Ben, do you have any answers for Nick there?

• 8:07Ben Thompson?

  Yeah, Apple hasn't fully shipped Apple Intelligence. The, the, the, the core problem with Apple Intelligence relative to the EU's, I believe this is with the DMA, which is the core problem. Is there is it's forbidden for a I can't remember the actual nomenclature or for a dominant company to leverage its control in one area to launch into another area. So this is so the Apple intelligence specifically is less about, I think, the AI stuff and more about the Apple's whole theory of the case is we have exclusive access to a lot of important data to you. So we're the only ones that can apply AI to that and deliver

• 8:48Ben Thompson?

  an interesting product. And they uh they haven't done that yet.

• 8:53Andrew Sharp?

  Twenty five, twenty six.

• 8:54Ben Thompson?

  Whatever that comes. Yeah. Uh, it does seem to be most of these products do seem to watch the EU eventually. I don't know. I I'm guessing there's some sort of negotiation that happens with regulators and then they okay it. And so it ends up manifesting more as a delay than anything else, uh, in in some cases. But the Apple one specifically, the core crux of the problem with Apple intelligence in the EU is, I believe, is actually a DMA issue, not a AI act issue. And that issue at the crux is not available in the US either. So.

• 9:28Andrew Sharp?

  Hmm. Yes. Well, thank you for the email, Nick, because it made me look back and smile at all the grave warnings. And it's now a year later, it's like, oh, the horror. What will the folks in the EU do without summaries of their text messages and everything we've seen from Apple over the last couple of months? Uh, but.

• 9:47Ben Thompson?

  Again, everything being generous.

• 9:48Andrew Sharp?

  Something more impressive eventually. Yeah, everything, the handful of morsels that Apple has put forth thus far. Speaking of which, Anthony says, Ben and Andrew, the news broke last week that Apple is delaying its updated Siri product with Mark Gurman leaking that some folks at Apple are advocating rebuilding it from scratch. Given the embarrassing state of Siri, at what point should Apple consider an acquisition of an LLM company? I get the sense Apple wants to own the entire LLM versus leveraging an open source one like Llama. But given how far behind they are, do you think buying versus building

• 10:29Andrew Sharp?

  will make sense? And who might be good acquisition targets? What do you think, Ben?

• 10:37Ben Thompson?

  So the Apple situation.

• 10:39Andrew Sharp?

  Pregnant pause, oh boy.

• 10:40Ben Thompson?

  Yeah, there's a pregnant pause because there's a lot to say and think about this. I am going to write about this this week.

• 10:47Andrew Sharp?

  So we'll talk about it more on Thursday.

• 10:49Ben Thompson?

  Well, I haven't I haven't written it fully yet, so this is both a preview and I'm subject to change as I fully flesh out my argument. But I thought last week was really interesting from an Apple perspective.

• 11:00Andrew Sharp?

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