(Preview) YouTube Shall Inherit the Earth, NBC’s Peacock Strategy Then and Now, The Grim Future for Cable Networks

Surveying the streaming landscape in 2025, including YouTube’s opportunity to solve problems for millions of frustrated entertainment consumers, Peacock’s murky future, HBO and the Max mess, and lots more.

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?

  That's when we went over the edge and now it's just figuring out who's going to land intact and then who's not.

• 0:13Andrew Sharp?

  And who's not, I mean, that's what I've always enjoyed about this space over the last couple of years talking to you is it's just so chaotic. And there are so many people lighting money on fire that I find it all pretty entertaining. So it's nice to be back, you know, and I'm going to use insights from Michael Nathanson to help frame some of these questions as we take a look around the landscape. At one point in your interview, he said, every time I get really worried about our long alphabet call, which is like every other quarter because alphabet underperforms meta. I keep thinking that YouTube is this phenomenal asset that has futuristic implications that no one's thinking through yet.

• 0:55Andrew Sharp?

  And then he also said that YouTube TV now has over nine million customers and that in two years' time YouTube will be bigger than Comcast and.

• 1:03Ben Thompson?

  YouTube TV specifically, yeah.

• 1:04Andrew Sharp?

  Yeah, YouTube TV.

• 1:07Andrew Sharp?

  So I'm curious because that's the other shoe that has yet to really drop like YouTube just taking over the world. What should the future look like for YouTube and YouTube TV? And maybe I misspoke there because YouTube is probably today already way more dominant than a lot of people realize.

• 1:25Ben Thompson?

  You stole my segue, which is no, YouTube has already taken over the world. So there's a couple, a couple of points on this and I did realize probably through a conversation, oh yeah, I did actually write about this one too a long time ago. Sorry, ah, just sprained my shoulder, patting myself.

• 1:40Andrew Sharp?

  Okay, there's the douchey. I was going to give you credit, look, just for people keeping score at home. Ben's take on never binge watching TV and being holier than thou, that's kind of douchey, but then he saved it by saying that, yeah, I do waste a lot of time on reels. Now we're back to douchey Ben takes here.

• 2:00Ben Thompson?

  Yeah, I just gotta go full circle. It's like, it's like one of those memes, we're just going to spin around faster and faster. No, YouTube is really, so number one, what is the number one streaming service in the world?

• 2:09Andrew Sharp?

  Uh, I would have said Netflix before.

• 2:12Ben Thompson?

  But you know, I'm setting you up. Yeah.

• 2:15Ben Thompson?

  YouTube is, uh, and not just when you take devices broadly. It's like, oh yeah, people watch each other on their phones or iPads. No, the number one streaming service on TVs is YouTube.

• 2:25Andrew Sharp?

  That is what astonished me. I can't believe that's real.

• 2:29Ben Thompson?

  Yep, no, it's, it's, it's, it's real. It's been real for a while and they're, you know, the weed, I think continues to grow because, and this is a really interesting way to think about things and, and what's happened to the entertainment industry broadly. People in the industry will think about it in the context of the industry, which is people paying money to build, build shows. And in that world, Netflix is this big dominant sort of thing. But this gets into the whole like jobs to be done framework. The, the, the consumer wants to sit on their couch and watch something on TV. To them, it's not constrained to the professional Hollywood content. It's constrained to whatever's on your TV screen. And this is where things like video games come in, but the big kahuna, the one that really matters is YouTube content comes in.

• 3:13Ben Thompson?

  And so what this does is it gives YouTube this just fundamental advantage compared to anyone else because they have exclusive rights to YouTube content. I mean, it sounds obvious, but, and this is where the payoff is of user generated content in general. They don't pay for that content. Now they pay a lot as far as how much ad revenue they share and the cost of serving YouTube, which by the way, they don't disclose and I think is a violation of SEC regulations, but I've been on that drum for ages and ages. But they have exclusive access to YouTube specific content. And you can envision this world. What are some of the complaints as we've, we're having this breakup of the cable bundle, right? Like, and this is going to be a big issue for the NBA next year.

• 3:54Ben Thompson?

  Like where they have some games on Peacock and some games on NBC and some games on ESPN and Amazon. And you can't go to your, what would you do if you're an NBA junkie, say, or, or you, or you just have a huge hard drive on your DVR? You could go in quick, record NBA games. They would record all them or you could do, record the Bucks.

• 4:15Andrew Sharp?

  Yeah.

• 4:15Ben Thompson?

  And as if you had the cable bundle in the state of Wisconsin and covered by the Bucks Regional Network, you're going to get basically every Bucks game with very little work. There's no solution for that now because some of them are not going to be on the regular cable bundle. They're going to be spread out. So this is a problem to be solved. I'm pretty sure we did a podcast about this, like, like, you know, the how ESPN wants to do something here, the idea that there needs to be an aggregator for sports, something that sits on top of all the supply, where users can go, because what do aggregators solve? They solve discovery. They don't solve distribution, they solve discovery. The internet takes care of distribution. And so you need to

• 4:56Ben Thompson?

  discover the distribution channels which exist, and someone needs to build that. Well, the the trouble is the pushback against ESPN, say, building an app to be, which they've talked about. I don't think they've ever actually launched it, but of course, they could serve ESPN content, but they could point you to others. Well, if you're pointing to others, you need to subscribe to those other ones.

• 5:17Andrew Sharp?

  Yeah.

• 5:17Ben Thompson?

  If you're going to subscribe, you need to have a billing relationship. Who's able to have that billing relationship? Whoever owns the core device, that could be your cable provider, it could be your smart TV, or more likely, it's the operating system on there, which maybe is Android OS, or it's Roku, or it's an Apple TV.

• 5:34Andrew Sharp?

  Apple, yeah.

• 5:35Ben Thompson?

  Or Amazon, with, you know, the Kindle Fire Sticks are much larger than Apple TV, even though like, you know, you want me to be a douchebag again, say, why would you not, you know, an Apple TV? Actually, Apple TV has lots of problems. It's non-standard, so you get a bunch of oddities, but the processing power, it's much more powerful, works better.

• 5:51Andrew Sharp?

  Well, I would also add, Apple TV's remote is really small and easily lost, particularly if you have a toddler, so.

• 6:00Ben Thompson?

  And annoyingly, does not have the Find My built into it. So I did get a, I did get this, this rubber case that puts the Find My chip within the case, and it both makes it bulkier, and also makes it so you can find it. So there's my, there's my, my purchase recommendation of the day.

• 6:16Andrew Sharp?

  Yeah. Well, and that's my only complaint as an Apple TV customer, because otherwise, it is a fantastic piece of hardware that has. Improved by entertainment experience over the last two years.

• 6:27Ben Thompson?

  Right. Just don't tell that to a lot of developers because it drives them bonkers because it's like it's all totally like custom, different than what they do, all these sorts of things. But that's their problem, not ours. Sorry, developers. Anyhow, so you.

• 6:38Andrew Sharp?

  So within that context, what's the YouTube opportunity? They could be the aggregator that makes this easy for everybody. And I will add that it also applies to non-sports fans. I mean, right now, the landscape that we have, it's all atomized and it's super expensive and confusing for people to navigate. And it seems like the current spot is ripe for disruption and ripe for somebody to come and solve problems in an intuitive way. And so should that be YouTube?

• 7:08Ben Thompson?

  Well, I have bad news for everyone. Uh, the expensive part is not, is not going away. Like the, and this is, this was one of those things. It was sort of like Uber back in the, everyone's anchored on like Uber prices of the 2010s. And they complained about how, how expensive it is. It's like, yeah, that was, uh, VCs funding your rides. That doesn't, they have to actually make money now because they're a business and now you're paying much closer to the real costs. Sorry, that's the way it is. That happened with streaming. You had these like, streaming was way too cheap for basically way too long and everyone got in their head, oh, I could, Netflix is only $10 a month. This is amazing. Look at all this content you got. Well, guess what? That, that you, people were paying a hundred dollars for their TV, uh, you know, in the what night, late 90s or early 2000s.

• 7:53Ben Thompson?

  You add inflation to that, uh, or you like, guess what? You're paying $250 or $300 now, or whatever it might be. That's just the way it's, it's going to be. And, uh, and it was an aberration that basically entailed a lot of companies setting money on fire in the meantime. And by the way, it was amazing for consumers. It was cheaper. And by the way, they were spending a gazillion on content and we'll get, we can get to the content question a little bit. But, uh, it's definitely one of those, the amazing period of, of T, golden age of TV. Yeah. It's gone. That, that's.

• 8:26Andrew Sharp?

  Everything might've been better in 2012, but I think my point is I can even tolerate all of this getting more expensive.

• 8:35Andrew Sharp?

  But if it's getting more expensive while getting like way less convenient to navigate, that's a problem that seems like it should be solved. Yeah.

• 8:43Ben Thompson?

  Right. So the, and this is how aggregators come up because there are, there are genuine problems to be solved. People are like, oh, why would you, you know, we had a question like this about the drone stuff. I think, you know, in a previous podcast, why would, why would they just build their own? Because you have real costs. You need to get customers. Aggregators aren't these evil entities that come in and just take over the market. They solve problems. They solve problems for consumers around discovery and they solve problems around monetization for suppliers because they bring them consumers. They like, they, they exist for good reasons. I mean, this is one of my critiques of the, you know, the, so the overly aggressive in my estimate, sort of anti-trust advocates that framed the rise of companies like Google

• 9:28Ben Thompson?

  or Facebook in these very mallevolent tones. No, Google solved a problem. That's why they got powerful and, and it wasn't because of government policy is because people couldn't find stuff on the internet and Google did a really good job of that. So anyhow, enough, enough side of this. Imagine a service, like just zoom out, drop YouTube for a moment. Imagine a service where you can go there and you can say, I want to subscribe. I want to watch every Bucks game. So I'm going to press this button and it's going to give you every Bucks game. And then it's going to pop up, say, hey, there is six games of the Bucks that are going to be on Peacock. Would you like to subscribe to Peacock? And oh yes, I want to make sure I don't miss it. Oh, there's 10 games that are on Amazon Prime. Do you want to subscribe to Amazon Prime? Like, oh my God, I'm going to subscribe to,

• 10:13Ben Thompson?

  or maybe there's a button there says, you're going to have to subscribe to XYZ services.

• 10:16Andrew Sharp?

  Link your Amazon account. Yeah.

• 10:17Ben Thompson?

  Right. Or you pick your Amazon account or hey, you're already, you know, or it doesn't even tell me because I'm already subscribed. It's sort of not an issue. From a user perspective, now of course you're going to get people saying, well, we used to have that in the DV, we did. Too bad it's gone, right? Get in a time capsule, go to Hollywood 20 years ago and tell them how stupid they're being and how it's going to be bad for consumers and bad for them. But sorry, too late now. You basically had, the, the channel guide was the default aggregator. And that was amazing for everyone because it was a situation where the suppliers got to dictate terms to the aggregator because just the way the dynamics of the industry worked and, and everyone wanted to leave it. Who knows why? But now, so now.

• 11:00Ben Thompson?

  Someone needs to solve this problem. And so the people who can solve that problem is basically Disney or YouTube. And for Disney, it's leveraging Hulu TV. They also have a, because some of your games are still going to be on regular cable presumably, right? Or especially if you have broadcast TV and then you have, oh, there's going to be the ESPN app, X, Y. So you need someone that has access to all the channels to aggregate a consumer, an interface for consumers that can discover what they want to watch. So we're already down to only two that are actually capable of doing that because they operate a storefront for other streaming services. Or, sorry, only one.

• 11:45Ben Thompson?

  YouTube has the storefront for streaming services. And by the way, they're very late to this. Amazon's been making money selling subscriptions to streaming services for years and years and years. Apple got into the game like a decade ago. Suddenly like two or three years ago, it's like, this is Google in a nutshell. They have so many advantages just falling out of their pockets that they pick up years later. This is why it's terrifying to pick against them. Cause it's like, just pick one of the 47 golden eggs at your feet and do one of them, would you? And so like two, three years ago, when they got Sunday Ticket, they're like, oh, yeah, we should start selling subscription services. Yeah, of course you should. What have you been doing the rest of the time? Anyhow, they're now selling them. So basically it's actually only Google. They have a cable bundle.

• 12:28Ben Thompson?

  If you want access to all the games that are on TV. They have a storefront to sell access to all the other streaming services. And as a trump card, they also have all the exclusive YouTube content. They're the only entity who can walk in and provide this unified interface to consumers and say, remember the old days when you could easily find what you wanted to watch? We've solved that problem. And this is the great thing about this market. It's filled with such dummies and people doing the wrong thing that Google comes in looking like this savant that just like we're the, we move fast, we're the product maestros.

• 13:07Andrew Sharp?

  And it's funny because-

• 13:08Ben Thompson?

  Like YouTube comes out with this, like the quad TV, people's minds are blown. It's, it's really funny.

• 13:12Andrew Sharp?

  And it's really high quality. I mean, that's the thing. YouTube TV executes better than anybody else in the space also. Uh, but alongside all the dummies-

• 13:21Ben Thompson?

  The bar is just buried so darned far in the ground.

• 13:24Andrew Sharp?

  It's really low. It's really low. A lot of people in this space have bad ideas. YouTube TV though, this idea has been sitting there. I mean, you and I have mooted this a couple of times on the podcast in the past.

• 13:36Ben Thompson?

  I know for a long time. Yeah.

• 13:36Andrew Sharp?

  So complacency is the challenge with YouTube TV, but eventually it seems like they have to grab this low hanging fruit.

• 13:47Andrew 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 Stratechery and the Stratechery Plus bundle. Check it out. And if you've got feedback, please email us at email at sharp tech.fm.