364: Content Arms Dealer


00:00:00   [Intro music]

00:00:10   From Relay FM, this is Upgrade, episode 364.

00:00:14   And today's show is brought to you by Pingdom, TextExpander from Smile, and Hello.

00:00:20   My name is Myke Hurley and I'm joined by Jason Snow.

00:00:22   Hi, Jason Snow.

00:00:23   Hi, Myke Hurley.

00:00:24   It's good to hear you.

00:00:25   It's good to have you here on Upgrade.

00:00:27   It like normal.

00:00:28   Of course.

00:00:29   Always.

00:00:30   Mm-hmm.

00:00:31   #SnailTalkQuestion comes from instantiatethis who asks, "Jason, when you make hot tea, before

00:00:37   drinking the tea, do you cool it down with ice cubes or water or do you wait patiently

00:00:42   for it to cool down or can you just take burning hot tea?"

00:00:46   Wow.

00:00:47   What a question.

00:00:48   Mm-hmm.

00:00:49   Ice cubes.

00:00:51   I have done the ice cube thing very, very, very rarely.

00:00:54   It's generally when it's in a thermos or something where it's never going to get cooler.

00:00:59   But generally, well, first off, let me tell you again about the tea robot.

00:01:03   I have this Breville Automatic Tea Maker.

00:01:09   So what you do is you put in the water and then you put the tea in a little basket and

00:01:13   you press a button and it takes the water up to the target temperature and then lowers

00:01:18   the basket into the water for the target time and then it lifts the basket back out because

00:01:24   if you leave the tea in the water too long, it gets bitter and it's bad.

00:01:28   And it beeps.

00:01:29   And at that point, the tea is ready to drink but it's also, whatever, four minutes off

00:01:33   the boil.

00:01:36   I rarely get up the moment that the tea maker beeps in order to go get the tea when it's

00:01:42   that hot.

00:01:43   I'll usually leave it a little bit.

00:01:44   And it actually keeps it warm.

00:01:46   It's got its own threshold and if the tea goes below that point, it will actually warm it

00:01:50   back up to a nice hot temperature.

00:01:55   This is why I love the tea robot.

00:01:56   It's great.

00:01:57   It's certainly not a problem that the tea is the right temperature for me.

00:02:00   If I leave it too long, it will get too cool and I'll actually have to microwave it in

00:02:03   order to get it back up to an appropriate temperature.

00:02:06   But I have burned the roof of my mouth on tea that was too hot.

00:02:11   But generally, I guess the answer here technically is wait patiently but a lot of times I'm not

00:02:15   really waiting because I know that I can be as patient as I want and the tea will be a

00:02:19   good temperature when I get to it because of my tea robot.

00:02:22   That's my story.

00:02:24   - Have you ever considered one of those heating mugs like the Ember mug?

00:02:30   - I have and I gotta be honest, I drink my tea so fast.

00:02:39   It's very rare that I think, oh, the rest of this mug is cold.

00:02:43   I have to get distracted for that to happen.

00:02:45   And when that happens, I'll generally go out, put more tea in the mug and microwave it to

00:02:48   get it back up to temperature.

00:02:50   It's basically, it's solving a problem I rarely have.

00:02:52   And when I do have that problem, oftentimes I can solve it by, if I'm anticipating that

00:02:59   I'm gonna be keeping this tea for a while, the thermal mugs like the Relay FM one that

00:03:05   you guys sent to hosts.

00:03:07   - Oh, yeah, the Yeti one.

00:03:08   - The Yeti mug.

00:03:09   And when I visit my mom in Arizona, I bought a giant one of those that I brew my tea in

00:03:15   and then it's basically two plus mugs worth of tea in the giant one.

00:03:20   And because it's insulated, it just stays hot because then it's two cups worth of tea

00:03:27   that I'm drinking and it would cool down even more, but it doesn't 'cause it's insulated.

00:03:32   So it's just not a problem.

00:03:36   But this was a great question 'cause it allowed me to talk again about the wonders of the

00:03:39   tea robot, which seems like a ridiculous thing and yet I love it.

00:03:43   It is so great.

00:03:46   And we drink a lot of tea in this house.

00:03:49   Neither my wife nor I drink coffee.

00:03:52   So tea is the drink of choice every day.

00:03:54   I make at least one pot, sometimes two in the tea robot.

00:03:58   And it's nice, whoever gets up first in the morning, feeds the dog, lets the dog out,

00:04:04   starts the tea, and then generally comes back to bed and then we just let the tea make and

00:04:08   then at some point we get back up and the tea is ready.

00:04:10   So it's pretty great.

00:04:11   - If you'd like to send in a question to help us open an episode of Upgrade, just send out

00:04:15   a tweet with the hashtag SnowTalk.

00:04:16   We use question mark SnowTalk in the relay FM, members discord.

00:04:21   So I'm returning the favor today.

00:04:23   - Yeah, this is the summer fun, sorry, fun of summer reversal of what we did when I went

00:04:31   to Hawaii, which is you are going away.

00:04:33   - Yeah, I am on a, what has ended up being surprise last minute trip to Romania.

00:04:41   We've been trying to book, to go to Romania for the best part of a month and we've just

00:04:48   kept having flight after flight canceled on us.

00:04:51   And as it stands right now, when we're recording this, our flights are locked in and so I'm

00:04:56   gonna be away next week.

00:04:59   - This week.

00:05:00   - This week, this week as you're hearing this.

00:05:03   - Broadcast professionals.

00:05:04   - As we're recording it.

00:05:05   - Yes.

00:05:06   - Time, what does it mean?

00:05:07   - Because your wife's family is in Romania, your wife is from Romania.

00:05:10   It's not like you're just like, I've been desperate to take a vacation to Romania.

00:05:16   It's like, no, it's actually to see her family that she hasn't seen in a long time.

00:05:20   - So Jason was gonna take over the episode, I was gonna miss it all.

00:05:24   And then what I've forgotten about though is that Apple's earnings report came out.

00:05:29   Did you remember that this had happened?

00:05:31   I feel like everybody that I knew had completely forgotten again.

00:05:35   - Somebody in the Six Colors Slack posted a note on Monday that said, so what are we

00:05:39   thinking for Apple earnings?

00:05:40   And I was like, oh no.

00:05:42   - Good, so everybody forgot, which is good.

00:05:45   I like when everybody collectively forgets that a thing is happening.

00:05:49   There's something about the last year of earnings reports that for some reason, everyone just

00:05:54   keeps forgetting that they're occurring.

00:05:56   I don't know why that is, but.

00:05:57   - I put a note on my calendar for three months from like last week saying check for the results

00:06:05   date.

00:06:06   - Good, very good.

00:06:07   - So that I can remember to actually do that.

00:06:09   Usually I remember, but there's enough going on.

00:06:11   I think usually that alarm goes off inside my mind.

00:06:16   At the beginning of that month, I had a little internal timer that kind of goes, but I was

00:06:21   on vacation and so the old timers were snoozed.

00:06:24   Also timers were suppressed, so I just completely missed it.

00:06:30   So that was, yeah, that was a surprise, but it was fine.

00:06:32   It was Monday afternoon, so I had a whole day to prepare.

00:06:35   I did have a couple of things that I moved around because I didn't realize I was committing

00:06:39   to so many things on the day that I also was gonna be spending all afternoon and evening

00:06:43   working on Apple results stuff.

00:06:47   What I find charming about this is you like talking about the Apple results on upgrade

00:06:53   with me so much that you said, let's do the pre-record 'cause I don't wanna miss the conversation

00:07:01   about Apple's results, which is very nice.

00:07:04   It's not the topic, the recurring topic that I would have guessed is the one that would

00:07:10   make you put the brakes on your vacation in order to discuss with me, but it's very charming.

00:07:16   - This is not ironic.

00:07:17   - It's very nice.

00:07:18   - I genuinely really enjoy this time.

00:07:21   - If it was ironic, we would have had a laugh about it and then wouldn't have recorded this

00:07:26   episode.

00:07:27   So here we are.

00:07:30   I should be packing right now, but instead I wanna talk about Apple's third quarter earnings.

00:07:36   So these are the headlines, $81.4 billion in revenue.

00:07:40   So of course beating every expectation.

00:07:43   This is Apple's largest third quarter in their history by quite a margin.

00:07:47   This is 36% year over year growth for a third quarter.

00:07:53   This was primarily driven by iPhone sales at $39.6 billion for the quarter that is 50%

00:08:01   year over year.

00:08:02   I wanna come back to the iPhone in a minute 'cause there's obviously, there's some stuff

00:08:05   going on with that.

00:08:07   Mac sales, $8.2 billion, 16% year over year.

00:08:12   iPad 7.4, that's 12% year over year gain.

00:08:16   Wearables home and accessories, $8.8 billion, 36% up.

00:08:20   And services at $17.5 billion, that's 33% up.

00:08:26   This is tied as Apple's largest year over year growth from a services quarter with Q4

00:08:32   2017 being the last time they had this kind of growth.

00:08:36   And to put that into perspective, it's because of Apple Music.

00:08:39   Apple Music was taking off then and App Store growth as well was what did that all the way

00:08:43   back in 2017.

00:08:46   The iPhone accounted for 49% of the revenue, which is pretty normal these days.

00:08:51   It's like a little bit less than half.

00:08:54   Services is now 21, was 21% of revenue for the quarter, which is more than the Mac and

00:08:58   iPad combined, which was quite a scary thing, I think, to look, to see that.

00:09:03   It was quite surprising to me.

00:09:05   - They're comparable, right?

00:09:06   But it's, yeah, it's 21% for services and about 19% for Mac and iPad.

00:09:12   Or the other way you could do it is there's 49% iPhone, it's 30% wearables, home, accessories,

00:09:20   Mac and iPad, kind of the non-iPhone hardware business, and then 21% services.

00:09:29   - Apple are predicting that they will have some supply constraints for the next quarter

00:09:33   and growth may not be as large in some areas.

00:09:36   Yes, although at the same time, they gave, they refused to give guidance and then they

00:09:42   gave guidance, which is something that I mentioned in my story on Macworld about this, because

00:09:45   Macworld has me write a reaction story afterward every year.

00:09:49   - I love that story.

00:09:50   - It's a fun story.

00:09:51   I get to sit there and think, how do I write the same thing with different numbers every

00:09:54   time?

00:09:55   And it's always like, it's an interesting challenge mentally about that.

00:09:59   But here's the thing is they said they would have strong double digit year over year revenue

00:10:03   growth next quarter, and it would be less than this quarter's 36% year over year growth,

00:10:09   which to me sounds kind of like really broad guidance, which means next quarter is gonna

00:10:13   be between 71 and $88 billion.

00:10:16   Probably very strong double digit means it's above 71 billion by some amount.

00:10:21   But like, however you slice it, they're forecasting another record quarter next quarter, that

00:10:28   their fourth fiscal quarter will also be a record.

00:10:30   So for all of the things we're gonna get into about the ways where they sort of said, you

00:10:34   know, watch out, there are some shortages, they're still confident enough to predict

00:10:39   basically another record.

00:10:43   - So then they didn't predict any shortages for the Mac.

00:10:46   Seems like that the issues that they were having for Mac stuff has resolved itself,

00:10:50   which is interesting, especially because I guess at some point we're expecting new ones,

00:10:54   so they're shoring that up.

00:10:57   I had a thought about that, which is I wonder if the reason that they're not expecting Mac

00:11:04   shortages is because they know they're delaying some of their Mac products, right?

00:11:12   Like if we've got the story about the new MacBook Pros and how they had some constraints

00:11:17   and they delayed them, let's assume that they delayed them into this next quarter or the

00:11:22   quarter after, but they're building up supply.

00:11:28   So then it would not be out of balance, right?

00:11:32   Because they feel like they're confident enough now that they can get enough of those that

00:11:35   they would sell over the next three months.

00:11:37   Keep in mind that we're in that quarter now, that's July, August, September, and that means

00:11:42   that even if they came out, would they even come out with that laptop in that quarter?

00:11:47   So maybe it's delayed until the following quarter and therefore there are no Mac problems.

00:11:52   And also they have a run-up to maybe build those so that when they do release them, they'll

00:11:56   have enough to sell through.

00:11:58   So I'm not sure, and they may be thinking, right, that's one way you talk about staying

00:12:04   in balance is you delay things and then they don't get released and then there's no demand

00:12:10   for you to fail to fulfill supply.

00:12:13   There's a lot of tricks you can do with the way that you talk about this stuff.

00:12:16   - There may be reduced, they might be selling less because people might be aware that the

00:12:23   new one's on the horizon.

00:12:24   - Right, which also lets you keep in balance, right?

00:12:27   Because your demand drops temporarily because people are waiting for the new thing and that's

00:12:31   good because you're having trouble building and supplying anything.

00:12:35   And the net result is that you're back in supply-demand balance for the Mac.

00:12:41   But yes, so it's more complicated, but they didn't call out the Mac.

00:12:44   They continued to call out the iPad though, and they added the big one.

00:12:48   They said that the iPhone is gonna be supply-constrained, at least somewhat, which is something.

00:12:52   - You see, something that you noted in your article was potentially another October release,

00:12:58   which could be what they're hinting at.

00:13:00   However, my kind of feeling is if they think they're gonna have year-over-year growth,

00:13:05   I think that you will start seeing them on sale in September, but not in high numbers.

00:13:11   - This is my guess.

00:13:12   So they're saying the iPhone is going to be supply-constrained.

00:13:15   One scenario that's pretty strong is that they're gonna do their early September announcement,

00:13:19   and they're going to ship them late September, which means that some iPhone sales will be

00:13:24   in this quarter that we're currently in.

00:13:27   And what they're saying is they won't be able to ship enough of them in this quarter, and

00:13:32   so those will get pushed to the following quarter.

00:13:35   And will they be supply-constrained that quarter too?

00:13:37   I don't know, maybe, probably.

00:13:41   It's interesting though, 'cause that is Apple trying to put a little bit of a limitation

00:13:46   on industry, Wall Street exuberance about iPhone sales, where they're saying, it's a

00:13:54   neat trick, 'cause it's really like, look, people want to buy the iPhone, but we may

00:13:58   not be able to get them the iPhone, so just be warned.

00:14:01   But we're still gonna break records.

00:14:05   So yeah, it's kind of a mess.

00:14:07   But I do think that it could possibly be true that they won't ship these iPhones until October.

00:14:13   It's also, like the truth is that unless you get an iPhone the first week maybe that it's

00:14:19   out if it ships in September, the rest of those sales are in the holiday quarter, which

00:14:23   is why the holiday quarter is so big.

00:14:26   It's you know, most iPhone sales are probably not in late September, they're in early October,

00:14:32   I would think, through the holiday.

00:14:35   Let's go back to the iPhone with the sales that they've just done.

00:14:39   When I saw the numbers, my initial reaction was like, oh yeah, of course, because the

00:14:44   iPhone was delayed, and then realized, oh hang on a minute, that was last quarter.

00:14:51   The demand wasn't necessarily for this quarter.

00:14:54   If you're, just to try and back up what I'm saying, because the iPhone came late, we knew

00:14:59   that there was gonna be a quarter where they were gonna have the majority of their sales,

00:15:03   so it was gonna be in the Q2 earnings, because that was when the iPhone was actually available.

00:15:08   Them having sold as many iPhones as they have right now, that 50% year over year, that isn't

00:15:15   what I was expecting.

00:15:17   Many people were expecting this to happen based on previous trends.

00:15:22   Ben Thompson wrote a really great post on trajectory in his daily update, where he was

00:15:26   kind of helping to frame this, because one of the places that they've seen such great

00:15:30   growth is in China, because for a couple of reasons.

00:15:35   One, this is a new design with the larger size, right?

00:15:38   So that's like, this is, it's got the flat sides, larger sides, that kind of thing.

00:15:44   But also in China, it's expected, it's been just being seen, that Apple is picking up

00:15:48   space left by Huawei.

00:15:50   Huawei was Apple's main competitor in China, but because Huawei cannot use Android anymore,

00:15:56   they're losing customers, and Apple seems to be picking them up.

00:16:00   And something, it was really interesting, especially because Ben's done so much in-depth

00:16:05   analysis about the iPhone 6, right?

00:16:08   If you'll remember, the iPhone 6 is when they introduced the big one.

00:16:10   That was when they had that huge explosive year over year growth, and then kind of felt

00:16:16   the pain of that for the years following, because it seemed like, wow, the iPhone's

00:16:21   just going to go bigger and bigger and bigger to the moon.

00:16:24   But then in previous years, it went down a bit again, because, and as we've always said,

00:16:29   if you take the iPhone 6 out of the year over year growth, you can see like a good curve

00:16:33   for the iPhone always going up, but that iPhone 6 here was an anomaly.

00:16:38   We could be in another one of those years right now with the iPhone 12.

00:16:42   It's possible.

00:16:43   I think what's interesting, and you're right, this is reminiscent of the iPhone 6, and Ben

00:16:47   is right.

00:16:50   What I find really fascinating is, you know, the holiday quarter always is huge for iPhone

00:16:53   revenue.

00:16:55   And so you end up with that quarter being, you know, 53.8 billion, 61.1 billion.

00:17:01   They had a 52 billion.

00:17:02   That was a quieter quarter.

00:17:04   That was the holidays of 2018.

00:17:08   It's the first quarter of 2019 for Apple, but then 56 billion and 65.6 billion.

00:17:13   What's really interesting to me is that I think we are seeing something that is like

00:17:20   the iPhone 6 spike, but because of COVID, it's flattened out.

00:17:27   And the reason I say this is because normally there's a much larger drop between the holiday

00:17:33   quarter in iPhone sales and the next three quarters than there was this year.

00:17:39   And I think what happened there is that some iPhone sales that would have happened in the

00:17:46   holiday quarter, people put off.

00:17:49   They're like, "I don't need a new phone right now."

00:17:51   But then the next two quarters, the next six months after the holidays, first half of 2021,

00:17:59   those quarters' iPhone sales were huge, like way bigger than your normal Q2 and Q3 are.

00:18:08   And so I think that's the truth of it, right, is that we are seeing a sales spike here.

00:18:13   It's just not quite as dramatic if you're just looking quarter to quarter and not realizing

00:18:19   that other than the year-over-year growth for those quarters.

00:18:23   Another way to frame this would be this was a 50% year-over-year increase and the previous

00:18:27   quarter was a 66% year-over-year increase.

00:18:30   So these are real outliers.

00:18:32   And I think the reason is that there are actually some sales that rolled over from the first

00:18:36   quarter.

00:18:37   So yeah, they have sold an enormous number of iPhones in the last three quarters.

00:18:46   So that opens up the questions.

00:18:48   Like iPhone 6 was great, but it also created kind of a hangover for Apple.

00:18:54   It reset the bar really high and Apple sells more iPhones.

00:18:58   It's peak iPhone.

00:18:59   It's like, "Wait two years and three years maybe."

00:19:02   And they're selling more iPhones three years later than they were that thing that looked

00:19:07   like an outlier, right?

00:19:08   Because the growth keeps going up.

00:19:10   But there is that question of like, is there going to be an iPhone hangover again where

00:19:16   everybody bought?

00:19:17   And in the call with analysts, Tim Cook basically said, "We think we have a lot of growth here

00:19:23   still ahead of us because of 5G and that there's a 5G rollout that's still in its earliest

00:19:30   days and we think 5G is going to drive people to buy new phones."

00:19:35   So the idea there is that it's not just that this is a new phone design that people like,

00:19:38   but that the 5G part of it is going to, you know, and there's a downside to that too,

00:19:43   right?

00:19:44   You know, they're excited about it now.

00:19:45   When 5G's rollout is sort of complete, they're going to be casting around for the next thing

00:19:50   and they will have sold a bunch of phones to people who hang onto their phones for five

00:19:53   years and they're not going to be able to get those sales again for five years.

00:19:56   And that's going to make the sales take a little bit of a hit and everybody's going

00:19:59   to go, "Oh no, iPhone sales."

00:20:02   But it's sort of fascinating to watch that little dance because they're selling a lot

00:20:08   of iPhones right now.

00:20:09   It's quite shocking how many they've sold in the last three quarters.

00:20:14   And it honestly was therein that the scales fell from my eyes and I understand why Apple

00:20:18   made such a big deal about 5G in the first place with the iPhone 12.

00:20:22   Yeah, they're—

00:20:23   Because they have identified that 5G could help them sell a lot more iPhones than a typical

00:20:29   feature would.

00:20:30   That's it.

00:20:31   And so now you need a new phone to get the new technology.

00:20:35   I'm sure that this is what they saw happen when we got LTE.

00:20:39   And now they're like, "Well, now all these customers have been holding onto their phones

00:20:42   for three or four years.

00:20:44   Maybe they're going to be inclined to get one in the next year or two."

00:20:47   And I think with that you understand why they've gone so ham on 5G.

00:20:52   This is the thing that's going to save Tim from needing to come up with another services.

00:20:57   Apple focused on services so much because of what happened with the iPhone 6.

00:21:01   That's how I look at that.

00:21:03   They were being asked time and time again, "Well, now the iPhone growth is stalling.

00:21:07   What have you got?

00:21:08   What have you got?"

00:21:09   And their answer was, "Services."

00:21:11   And if they have another one of these with this, if they end up having an iPhone 6 thing,

00:21:16   well, they're going to need another answer to, "Oh, iPhone sales are decreasing year

00:21:19   over year now because you had that big blip.

00:21:21   What are you going to do?"

00:21:23   But I think the answer this time is, "Well, the iPhone sales are going to continue, we

00:21:26   think, because of 5G."

00:21:28   Yeah, that's his answer.

00:21:30   We'll see.

00:21:31   There always has to be another one, right?

00:21:33   This will last for as long as it lasts and then they'll have to do it.

00:21:36   But that's his argument.

00:21:37   He also said in there that he thinks that some people in places where there aren't 5G

00:21:41   rollouts yet view an iPhone with 5G as a good, like a safe upgrade because they know that

00:21:48   it's already got the 5G built in, which I think is a good point, right?

00:21:52   We rarely see in the U.S. and the U.K. and in those core countries that get all this

00:21:57   stuff first, we rarely see that.

00:21:59   But in other countries, you have this ability to be like, "Well, we don't have 5G here yet,

00:22:03   but if I buy this phone when it comes here, I'll be ready."

00:22:06   And that can be a future-proofing of a sort for somebody in a country that doesn't currently

00:22:12   have a 5G rollout, but it is coming in the next couple of years.

00:22:15   And that can be enough to motivate someone to buy a new iPhone.

00:22:18   Hey, Myke, remember when we used to watch the iPad numbers and just kind of like grit

00:22:22   our teeth and be like, "It's coming back eventually."

00:22:25   It's coming back eventually.

00:22:26   They actually called it out in the call and they said that the iPad has reached, they

00:22:31   didn't say all-time heights, but it's like heights not seen in a decade, which is like

00:22:35   there was that initial huge iPad sales surge in like 2011, 2012.

00:22:41   2011 kind of.

00:22:43   And that's where they are.

00:22:45   Like it's the iPad sales, even though it was 12% up year over year, but it was up over

00:22:50   a monster year over year quarter.

00:22:53   And like just the iPad is now kind of on a growth train, it seems to me.

00:22:58   They're selling a lot of iPads now too.

00:23:00   So the iPad is gone from being sort of our sad like, "But I like the iPad.

00:23:03   Why is nobody buying it?" to kind of yet another Apple product machine.

00:23:08   And I love that.

00:23:09   Like I love that I don't even have to think about it anymore.

00:23:13   I don't feel like I need to use the revenue charts as a way to explain why the product's

00:23:18   important.

00:23:19   Like it just continues to grow now.

00:23:21   They've hit their stride again.

00:23:24   And it's not this like these monster bumps, right?

00:23:27   Like just they had that one, right?

00:23:29   So Q2, but we all know when that happened.

00:23:31   But if you look past the previous year, it's just been good year over year consistent growth

00:23:36   with good products to show for it.

00:23:38   And I'm very happy to see that because that's what you want to happen, right?

00:23:42   That they put the work in and make the product better.

00:23:45   They sell more of them.

00:23:46   And that's it seems so simple.

00:23:48   It doesn't always work like that.

00:23:49   And I'm just happy that it did.

00:23:52   And on the max side, they called it out.

00:23:55   I've been talking about this for the last couple of quarters, but like it's now the

00:23:59   the last four quarters of max sales are the four highest quarters of max sales ever.

00:24:06   So you think about seasonality, you get that you get that quarter where they do a lot of

00:24:11   max sales usually where there's a bunch of new max coming out and it varies.

00:24:15   Mac is not seasonal in the same way that the iPhone is and the iPad to a certain degree.

00:24:20   But like you look at the charts and it's just four enormous quarters in a row, four quarters

00:24:27   way larger, not even a little bit, but like by more than a billion dollars larger than

00:24:32   any Mac quarter before Q4 of 2020, right?

00:24:42   It's just staggering those four quarters.

00:24:45   So the Mac and what Apple does is just lays it all on the M1.

00:24:49   They're like, "People love the M1.

00:24:52   Look at how awesome we are.

00:24:53   We made the chip and everybody loves it."

00:24:55   People love the M1.

00:24:56   And even with the iPad, they're like, "People love the M1 and the iPad too.

00:24:58   The M1 is magic basically is what they're saying."

00:25:01   But I kind of can't argue.

00:25:04   They said this time they were rolling the new iMac sales were rolling into this and

00:25:08   selling really well too.

00:25:09   So just basically all happy news on Mac and iPad fronts on this.

00:25:14   So it's nice.

00:25:16   This episode is brought to you by Pingdom from SolarWinds.

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00:26:30   Myke's gone, but Julia Alexander from Parrot Analytics is here.

00:26:34   Julia is one of my favorite smart people on the internet to write about streaming media.

00:26:41   Myke and I talk about that on our Upstream segment all the time, and I thought I would

00:26:44   go replace Myke with somebody who really has smart thoughts about this.

00:26:49   She used to be at The Verge and Polygon and IGN.

00:26:52   Now, it's like you were already my favorite streaming media analyst, and now it's your

00:26:56   job.

00:26:57   Welcome, Julia.

00:26:58   Thank you so much for the kind words.

00:27:00   It is a true honor to be here.

00:27:02   It's great to have you.

00:27:03   You were on my old Download podcast, and you've been on some other Relay podcasts over the

00:27:08   ages.

00:27:09   Rocket, I think, a few times.

00:27:10   Yeah, yeah.

00:27:11   Love the Rocket.

00:27:12   The Wild Ride over there.

00:27:14   I wanted to start by talking to you about this big news that's happened in this last

00:27:18   week, which is Scarlett Johansson suing Disney, saying that Disney induced Marvel—I love

00:27:24   it—Disney induced Marvel to break her contract in terms of paying her—she gets money for

00:27:31   ticket sales and theatrical releases, and they put Black Widow on Disney Plus in their

00:27:37   $30 special access window, and the lawsuit basically says they are cheating her out of

00:27:43   money by not releasing it properly in theaters exclusively.

00:27:48   And this is—there's been a lot of analysis out there that I think is interesting about,

00:27:53   like, is it a strong case or not?

00:27:54   She presumably had arbitration with Marvel, so they're trying to do an end run around

00:27:59   by suing Disney and also making a stink in public, I think.

00:28:05   But it's also fascinating, right, because this goes to the heart of the question of

00:28:09   what a theatrical release is going to look like versus streaming.

00:28:11   Does this completely invalidate how the talent involved in Hollywood has gotten paid in the

00:28:17   past?

00:28:18   And so what do you think—what was your reaction when you saw this lawsuit news come out?

00:28:24   Immediately it just felt inevitable, perhaps not necessarily Scarlett being the person

00:28:29   to take on Disney, the corporation, but it felt inevitable in the sense that this has

00:28:35   been a brewing battle with arguably less public kind of guilds, less public positions, but

00:28:40   the writers in Hollywood have said for years that they are missing out on financial opportunities

00:28:46   because of the way that streaming services work out the payment structure.

00:28:50   We've heard producers kind of say similar things.

00:28:53   And now the next kind of big step in here was getting A-list talent who the public can

00:28:58   kind of sympathize with in a way because they know these people, they know these faces,

00:29:02   to say, "Hey, we are getting kind of screwed out of our money on the side of things because

00:29:07   we are no longer tied to the theatrical box office and the percentage that kind of comes

00:29:11   from those deals."

00:29:12   So my immediate reaction, other than this being inevitable in the sense that this is

00:29:16   where we were always headed over the last year, two years, was this is even more important

00:29:22   than this case is the ramifications that come from this case, right?

00:29:25   And like Johansson is the first real major celebrity to go up against a major studio.

00:29:31   She's going to be far from the last, but the floodgates, you know, that were once really

00:29:34   trying not to crack under this building pressure of a brewing battle between the talent and

00:29:39   the agencies and the unions against the studios have opened.

00:29:42   And so now we're in the dominant effect moment.

00:29:44   Right, because this is, you know, this goes back forever.

00:29:48   The idea of Hollywood bookkeeping, cheating directors and writers and stars out of money

00:29:55   that they are owed.

00:29:56   And, you know, famously the most successful TV shows and movies in history are on the

00:30:01   books as basically breaking even or taking a loss because that way they don't have to

00:30:05   pay people who have a profit percentage.

00:30:08   But with this, you know, if you figured that, okay, box office receipts, we can all agree

00:30:13   on that.

00:30:14   This is how we can compensate people as a share of the gross.

00:30:18   With streaming, not only does that upset the idea of box office receipts, but also it upsets

00:30:24   the idea that there's something that's public and verifiable about the success of anything,

00:30:30   right?

00:30:31   Netflix is more open than they used to be about streaming success, but essentially once

00:30:35   you're on a streamer, your success is invisible.

00:30:38   It doesn't mean that they don't know exactly how many streams there were.

00:30:42   It means that there's no third party to verify that they're paying you what you're owed.

00:30:46   And like, I don't, I'm not quite sure what the solution is here, but, but at least we're

00:30:51   going from a situation where the box office was more or less verifiable to a situation

00:30:54   where talent is going to have to trust the studios.

00:30:58   And I just don't think that's ever, they're never going to trust them.

00:31:01   No, and I think the most important kind of victor already in this very specifically PR

00:31:07   kind of approach to the lawsuit, which is to get it out there.

00:31:10   And to their goal, I assume Disney will try to settle at this point because it's a very,

00:31:15   it's very public at the same time.

00:31:17   Who knows?

00:31:18   You would have assumed they would have tried to settle already.

00:31:20   And I know there's been reports that they just didn't respond to Johansson and her kind

00:31:24   of contacts.

00:31:25   That's if that report is accurate, that's amazing, right?

00:31:27   That they, that they actually emailed her people and said, if we go to a digital release,

00:31:33   we will talk to you about compensation.

00:31:35   And then apparently radio silence.

00:31:37   That's amazing if that's what happened.

00:31:38   Right.

00:31:39   And then reports, which, I mean, I think a lot of people who work in the entertainment

00:31:42   industry, whether on the reporter side, especially have kind of heard these rumors and Matt Bellamy

00:31:47   reported it.

00:31:48   He used to be the Hollywood reporter.

00:31:49   He's got a great newsletter now for a puck.

00:31:50   He reported it last night about this idea that, you know, Kevin Feige and, and it's been

00:31:54   going up against Disney and saying he doesn't want day date.

00:31:56   Like he said that from the very beginning, he wants it for a stars to go into movies.

00:32:01   But the issue is while he has to answer to his talent side and creating what he's doing

00:32:05   on the Marvel side and to an extent, you know, report to the Bobs, Bob Chapek, the current

00:32:09   CEO and Bob Iger, executive chairman and former CEO, the Bobs have to appeal to the board

00:32:15   and they have to kill their shareholders.

00:32:16   And they, they got a grow Disney plus, they got to grow Disney plus bottom line, right.

00:32:20   And that's the bottom line.

00:32:21   And I think to your exact point where the box office was a tangible public form of success

00:32:26   or failure or, or missed a opportunity.

00:32:29   I think we could look at it and say, you know I think the domestic total is still 160 million

00:32:33   right now for black widow.

00:32:35   So you know that an F nine is much, it's been out much longer at F nine sitting 165.

00:32:39   So there's a conversation where if we did 90 days in theaters, would people actually

00:32:42   go and see black widow?

00:32:44   My analysis is that wouldn't be the case.

00:32:47   I do think black widow and day and day cannibalizes some of the theatrical revenue.

00:32:51   There's no doubt about that.

00:32:52   And I do think it leads to a much higher and easier form of piracy plus account sharing

00:32:58   and all that other stuff.

00:32:59   At the same time, if Disney, if having black widow and Disney plus led to additional revenue

00:33:03   and led to an increase in subscriptions that Disney feels competent enough to talk about

00:33:07   at their earnings call, which will make wall street very happy than Disney wins.

00:33:12   But what I think what we're going to see is the agencies get involved.

00:33:15   The unions will get involved and say, Hey, you want our talent.

00:33:18   The reason that talent likes the box office is because we can point to Leonardo DiCaprio

00:33:22   movie and say, Leo carried the movie.

00:33:24   You know, J Jennifer Lawrence is the reason people are going to see this Chris Hemsworth

00:33:28   Robert Downey Jr.

00:33:29   Scarlett Johansson.

00:33:30   And so when CAA or whomever's representing them in the act inside after and, and all

00:33:35   the other unions are going, we need this public thing to ensure that our talent is getting

00:33:41   paid the what they deserve.

00:33:43   That's what we're going to start seeing the studios really kind of come out and go, okay,

00:33:46   we'll figure out how to translate this into public demand because they have to appease

00:33:50   the studios.

00:33:51   The worst thing they could do is, is piss off SAG-AFTRA.

00:33:52   And then all of a sudden you've got no actors to work with.

00:33:55   Yeah.

00:33:56   And, and I, I think there's a way to look at this and say that the, this is really just

00:34:00   about negotiating what the new world is going to be.

00:34:04   Because I imagine if they went to Scarlett Johansson and said, here's what we're going

00:34:07   to do.

00:34:08   We're going to release this in theaters and simultaneously on Disney Plus, but we're going

00:34:11   to charge $30 a head per account to watch this, right?

00:34:15   Not, not per person, but per account and $30.

00:34:18   That's the equivalent of, you know, three or four, however you want to calculate it.

00:34:22   We could agree on a number of box office receipts.

00:34:25   And you know that by doing the premiere access on Disney Plus, we're going to lose week three,

00:34:32   week four, week five box office in theaters.

00:34:34   Cause it's going to be gone.

00:34:35   Everybody will just, those are people who are getting around to seeing it and instead

00:34:38   they'll just pay $30 and watch it on Disney Plus.

00:34:42   And then you agree, like how much money do you need a larger percentage of the theatrical

00:34:47   and what's your percentage and how do you, how do you kind of audit it for the premiere

00:34:53   access revenue?

00:34:54   Right?

00:34:55   Like, I feel like there's probably a negotiation to be had there to get everybody on the same

00:34:58   page.

00:34:59   The challenge here seems to be that they didn't have it.

00:35:01   Yeah.

00:35:02   I mean, this is exactly the chase, the Jason Kyler WarnerMedia debacle, right?

00:35:06   Like they were probably had to pay 200 million extra in backend because they were saying,

00:35:10   yeah, we know that we're cannibalizing some of it.

00:35:13   We know that your agreement with your producers and our team is to get some kind of percentage

00:35:18   ties to the box office or, or, you know, whatever, and it hits this level of, of box office revenue.

00:35:22   You get this amount of money.

00:35:23   So I think that that's just the big thing that's going to come out of this is it is

00:35:26   going to shift the way that contracts are negotiated, the way they are drawn up, the

00:35:31   way that they are agreed upon.

00:35:33   And if you're Disney, that's something that you're going to take into account pretty quickly

00:35:36   for any major studio, because if you have a non Marvel project, you have like a sleeping

00:35:40   beauty or whatever it may be, you want a very well-known actor in that role.

00:35:47   You want that to bring, cause that talent demand brings people into theaters.

00:35:51   It brings them into Disney plus premier access, but what you're going to do on forward is

00:35:54   you're going to go, yeah, no problem, we're going to put that to the contract and we negotiated

00:35:57   that way.

00:35:58   I think what was really interesting about the two sides was that scarred ScarJo's team

00:36:03   really did not touch upon COVID.

00:36:05   They addressed it.

00:36:06   They said, obviously there was a reason that we did it this way.

00:36:09   But they purposely said, you know, we were kind of guaranteed this theatrical release

00:36:13   and then we kind of got it, but not really.

00:36:15   And what Disney is going to try to do legally is say, Hey, we tried to the best of our abilities

00:36:19   under extreme situations where we were, you know, our, our shareholders were worried about

00:36:24   the revenue.

00:36:25   Wait, yeah, we did a whole bunch of things.

00:36:29   Here's our delays.

00:36:30   Here's, we're still putting it in theaters.

00:36:31   You're still on 1500 screens across the country.

00:36:34   We actually held up that end of the deal that whether or not the judge goes, yeah, you actually

00:36:40   did what you needed to do or, or, you know what, no, you probably should have had negotiations.

00:36:43   It'll be interesting.

00:36:44   But I think what Scarlett and the team want more than anything else is for this to get

00:36:48   to discovery in port.

00:36:49   They want the emails between Bob and Bob to come out or Bob and Kevin that say, yeah,

00:36:54   you know what, we'll just take the hit on, on this from the talent side and we need to

00:36:58   please our board.

00:36:59   So we'll see how that goes.

00:37:01   It seems to me that what's going to happen is that Disney is going to try to get this

00:37:05   sent to arbitration.

00:37:07   And if they fail, they'll settle because they do not want discovery to happen in a case

00:37:11   like this, right?

00:37:12   Those to get those emails out there, that is the worst case scenario for anybody in

00:37:15   the entertainment industry.

00:37:16   Well, look at what happened with Epic and Apple, right?

00:37:19   Was just, that's what that is.

00:37:22   Not good.

00:37:23   Not good.

00:37:24   I want to, I want to take a little different angle here because you mentioned what happened

00:37:28   with Jason Kullar and WarnerMedia and taking all of their movies and putting them on HBO

00:37:34   Max and having to, yeah, again, you're, you're compensating people based on theatrical receipts

00:37:39   that no longer exist.

00:37:40   How do you do that?

00:37:41   Because obviously what you're getting out of it is you're building your streaming service,

00:37:44   which is fine, but they, they aren't getting, you know, stock in WarnerMedia.

00:37:49   They need to get paid.

00:37:51   This is, and I used to talk about this when I did the TV Talk Machine podcast with Tim

00:37:55   Goodman.

00:37:56   I used to talk about this all the time, which is talent in Hollywood.

00:38:00   Like we act like money is everything and money is super important to them.

00:38:05   Don't get me wrong, but sometimes you get the sense that they also want love and appreciation

00:38:12   and that sometimes the relationships are founded on, on not just money, but also appreciation.

00:38:19   I bring that up because like Christopher Nolan was really sad about HBO Max and Tenet, but

00:38:27   like Christopher Nolan, you know, he was sad about the money, but he was also sad about

00:38:31   the movie theaters.

00:38:32   It was both.

00:38:33   And I hear this, Tim always talked about how people who made stuff for Netflix, one of

00:38:37   the problems is Netflix wants to pay you.

00:38:39   They pay you upfront so you don't have to worry about like how well it does.

00:38:43   They're just going to write you a check, but if it does really well, you don't get an upside,

00:38:48   right?

00:38:49   It's just you, you, we paid you, we're done.

00:38:52   And also the feeling that Netflix creates so much content that your stuff just gets

00:38:56   lost and not marketed.

00:38:57   And I wonder if part of what's going on with Scarlett Johansson is this kind of recalibration

00:39:03   of like how talent in Hollywood is valued beyond just cash, but also like how they're

00:39:10   treated and are they going to be under the thumb of these studios who are building 21st

00:39:18   century, you know, long-term 21st century value with these streaming services, or are

00:39:23   they going to be paid compensated for helping them build a value?

00:39:27   So I wonder, you know, how much of this is, is about that larger question of it's not

00:39:31   just the money, it is the money, don't get me wrong, but it's also the disrespect.

00:39:36   I think that is an inherently important part of the conversation.

00:39:39   I think it is the reason that if Christopher Nolan leads Warner Brothers, he's not likely

00:39:44   to go to a Netflix he's more likely to go to, even though they have less money, even

00:39:48   though they have a tighter budget restriction, go to a Sony where Tom Rothman can kind of

00:39:54   sell this beautiful romanticized idea of what Hollywood is, where Tom Rothman believes in

00:39:58   being a director's director and actor's actor and he really loves this idea of what the

00:40:03   industry is and could still be.

00:40:06   I think that ties into a debate that happened with executives, you know, a few years ago,

00:40:10   and it's still kind of ongoing, but really brought on by the MCU and kind of everything

00:40:14   that came out of that trend was this idea of do movie stars matter or is it IP, right?

00:40:20   And that conversation about if you put any person into a Marvel movie, will it still

00:40:25   make money because it's a Marvel movie versus did Iron Man work because they had Robert

00:40:29   O'Connor Jr. and Gwen Paltrow and that just made a lot of sense from an A-list star perspective.

00:40:35   So not to get all baseball on you for a minute, but in sports they have this concept in baseball,

00:40:41   especially of the replacement player, and that's kind of what you're saying here, which

00:40:44   is imagine a Marvel movie with no stars.

00:40:47   The only star is Marvel.

00:40:49   How does that movie do?

00:40:51   And then I put a star in it, how does that movie do?

00:40:53   And the difference there is the value beyond just, you know, doing the job, the value of

00:40:58   star power, of appeal, of having a headliner.

00:41:00   And it's kind of unmeasurable, but it's super important because, you know, Marvel will argue

00:41:06   Marvel is the star, right?

00:41:07   But if they tried to do that with Robert Downey Jr., they would not get very far.

00:41:10   Yeah.

00:41:11   And I think what you have from one end of the stick is people, and I don't know if this

00:41:16   is just my assumption, but you have people at Disney who are like, we are selling Marvel

00:41:20   or selling Star Wars.

00:41:21   You'll find actors that we like and who we believe in to put in those roles because someone

00:41:24   like Kevin Feige, who truly likes actors, he loves actors.

00:41:29   He believes in the importance of them to making the characters work.

00:41:32   And so if you're fighting that battle, if you're Scarlett Johansson, the demand for

00:41:37   Scarlett Johansson in a movie, it's the demand for Black Widow as a character is more important

00:41:42   to a lot of fans than, you know, insert kind of random new Marvel title, then Scarlett

00:41:47   goes, yeah, like I feel like after nine movies with this company and 10, 11 years, I should

00:41:53   not have had to deal with it this way.

00:41:55   But I think that's where you have the Jason and Kyler situation coming in where Jason

00:41:57   goes, we know basically we screwed up.

00:42:00   I mean, that's what the $200 million is.

00:42:01   He knows, he's talked publicly about saying, you know, I wish I could have gone back and

00:42:05   had given people more than 20 minute heads up saying we're going to do this thing.

00:42:09   I mean, in part because one talent does want to be in theaters.

00:42:12   They want to know that their movies are there.

00:42:14   That's why Martin Scorsese works with Netflix, but Netflix was like, we're going to put your

00:42:17   movies on a theater screen because we know you like that.

00:42:20   I think there are other directors, there are other actors who might not care about it as

00:42:25   much.

00:42:26   They just want the movie to be seen as widely as possible.

00:42:27   And in some cases, streaming.

00:42:30   And that's like,

00:42:31   that's why when I say they want to be loved, and I know that that sounds a little bit like

00:42:35   a joke, but I'm serious, but it's a bunch of things, right?

00:42:37   It's I want you to appreciate my art and put it where I want or it's I want people to see

00:42:42   it, and I need to know that people are seeing it or it's I want to have a good relationship

00:42:45   with the executive.

00:42:46   There are lots of it's a spectrum of I want to be loved.

00:42:49   But I think it's right like this is the I was blown away because Netflix is riding so

00:42:54   high and that Tim Goodman would say there are a lot of people who don't want to work

00:42:57   with Netflix because they'll take the check if they have to, but they'd rather work somewhere

00:43:01   that's going to show them love and that by love they tend to mean like marketing and

00:43:05   promotion and like things that maybe if you're just in the in the in the tube coming out

00:43:11   every week from Netflix you don't get and and you know they want their money but they

00:43:15   do want that attention and respect.

00:43:17   Well, I think that's the word I was just confused the it's the lack of respect when we again

00:43:22   this is like hardly the first case of this you had John Krasinski Emily Blunt who were

00:43:27   in negotiations with Paramount but what happened with a quiet place part two where that went

00:43:32   straight after 45 days and that wasn't part of the deal you've got you've got these conversations

00:43:38   happening with writers and directors who are and then you know you've got this conversation

00:43:41   happening with a brand the studio legendary legendary who was going to sue Warner Brothers

00:43:47   at large appointed deadline because they were like you can't just do this are a bunch of

00:43:52   what we promise our actors is tied into what goes out in the box office it's how we value

00:43:58   ourselves we like to have our big blockbusters on a big screen so you have June and you have

00:44:02   I forget the other one they had Godzilla it's like they want to be in theaters the executives

00:44:07   I get where they're coming from they're in the middle of pandemic they are losing billions

00:44:11   of dollars they need something to show shareholders that everything is going to be okay so even

00:44:16   though Disney Plus or HBO Max is far from profitable they can point to it and go we've

00:44:22   got you know if you're Disney we've got a hundred plus million subscribers across our

00:44:25   suite of movies right assuming services excuse me we're gonna put movies there we're gonna

00:44:29   draw people there they throw around terms like ARPU and all of a sudden yeah we're building

00:44:34   shareholder value you know that's the most important thing right now except if you're

00:44:38   the talent making the movies and you're you're you know you don't get the shareholder value

00:44:42   out of it you just get your your pay for your box office receipts and that's what I that's

00:44:47   exactly what I think this moment is this is I think this was the moment everyone was waiting

00:44:51   for it was like who will be the first person to really take on this major studio so not

00:44:56   just a tinier studio that's going like oh well they're you know maybe a little bit boutique

00:45:00   and they can't really afford it it's no this is Disney their massive massive conglomeration

00:45:05   this is a A-list celebrity and so I think we will see more of these follow suit pretty

00:45:10   quickly I want to ask a little bit broader question about this and and in a little bit

00:45:17   I want to kind of do a streamer check-in and just ask about all the streaming services

00:45:20   and where you where you think they are right now because you've got some fascinating research

00:45:24   and you've written some interesting things about it but while we're on the subject of

00:45:27   this big change to what is a movie and day and date and streaming and all of that we

00:45:32   got a question a few weeks ago from a listener about why Pixar's movies got booted to Disney

00:45:39   Plus just straight up while Black Widow and Mulan were premier access and you know I'm

00:45:46   curious if you've got any insight into sort of like why they've taken some movies and

00:45:50   just kick them directly onto the service obviously that builds shareholder value and is it the

00:45:56   contracts that my initial thought was like maybe it's just that those contracts weren't

00:45:59   as big a deal to pay the people off who made the movie versus what they do for something

00:46:04   like Black Widow and then you know brought more broadly like where do you think movie

00:46:10   releases are gonna end up in terms of do you do a hybrid do you do a premier access kind

00:46:15   of hybrid do you do a shorter window but why don't we start with Pixar you have any insight

00:46:19   into sort of like why was it easy for them to take what two or three Pixar releases and

00:46:24   just kick them onto Disney Plus for free?

00:46:26   Yeah I mean so I think there's a two-fold answer one is 100% contractual I there's always

00:46:32   the legal answer which is can we do this without very little ramification okay great.

00:46:37   Pixar's contracts are probably pretty limited in terms of people getting a percentage of

00:46:41   the gross right since it's mostly the creative team is just a Pixar employee and then they've

00:46:46   just got voice talent which is probably a lot easier to negotiate I would think.

00:46:50   Yeah but I think the second and the more important and the more you know kind of bluntly obvious

00:46:55   thing is Pixar does not you think of a Pixar movie that's not a sequel so it's not a known

00:47:02   IP and the idea is that are people gonna pay 30 bucks for that maybe are they gonna go

00:47:07   to theaters maybe but will people pay for a thing like Mulan will they pay for a Cruella

00:47:13   will they pay for any of these kind of known quantity quantity versus taking a flyer on

00:47:20   a random Pixar movie?

00:47:21   Yeah so I mean I think I think you know the the really interesting one was Ryan the Last

00:47:25   Dragon because that was premier access and they tried it out it was not a known entity

00:47:30   it was a new Disney animation movie they put it on Disney Plus and it did pretty well if

00:47:35   I remember correctly based on the trade reporting for Disney and I think that was something

00:47:39   that Bob Chapek had spoken to when he said you know we're not displeased by any means

00:47:43   with what we're seeing on premier access whether or not that means they're over the moon we

00:47:47   don't know but I think it was enough of an experiment for them that they could go yeah

00:47:51   we're seeing how things play out and I think he said perfectly for Disney and to answer

00:47:56   that question in his earnings call when he said it's an experimentation for us all of

00:48:00   premier access is all of Disney Plus is they're figuring out from their data what works what

00:48:05   doesn't so I imagine part of them went Pixar movies are the type of movies that will get

00:48:10   parents to watch things with their kids and then rewatch and so that increases engagement

00:48:14   puts it in the library the beauty of Disney Plus is having that library all the Pixar

00:48:20   movies are there we like the engagement we like what you know what streaming companies

00:48:23   love to look at is will this movie lead to you watching other movies versus you leaving

00:48:27   the service after just watching it so they go cool we put this on here something like

00:48:31   soul is a perfect Christmas movie why charge for $50 there it is and that's how they kind

00:48:36   of wrap it up in marketing versus yeah we have a 200 million dollar movie in luang we've

00:48:42   got 150 million dollar movie in Cruella right big stars we want to put this in theaters

00:48:47   and those contracts are probably much harder to re-negotiate and the money I tried to explain

00:48:52   this to somebody who said who asked me like why don't they just put everything on streaming

00:48:56   in the future and the answer is they could do that and maybe they will do that the problem

00:49:00   is you can't make a 200 million dollar movie and just drop it on streaming the you can

00:49:03   cove it aside right and that changes things like the economics these are these are priced

00:49:08   these are budgeted for an enormous theatrical release and an enormous theatrical box office

00:49:14   and you know if you want a marvel movie that's direct to Disney Plus it's going to be like

00:49:18   those TV shows it's going to look nice but it's not going to be a 200 million dollar

00:49:21   product so I guess my question for you and I know this is we're still in the midst of

00:49:25   COVID stuff where do you think this is going to end up in terms of what's what is your

00:49:30   standard theatrical release look like and how is that different post post COVID but

00:49:36   also post everybody having their own streaming service is it just they're going to narrow

00:49:40   the window or do you think that they're going to try this hybrid approach of like well you

00:49:44   can watch it in your home if you want but it's just going to cost a lot of money it's

00:49:48   going to cost what it would cost for you to go out and see it yeah there's going to be

00:49:51   two big changes and then one smaller change that we won't even notice the biggest change

00:49:56   that we'll see it's the actual theatrical experience is that it will go from 90 day

00:50:00   exclusive to 45 which sounds like a lot except that when you actually run the numbers I did

00:50:05   this recently for Marvel but it's true across the board if you take something like Marvel

00:50:09   which has 20 through 24 films 96 point something percent of those movies make the majority

00:50:15   of their revenue and I mean 98 of their revenue within three to four weeks so they're going

00:50:19   yeah we're going to be in theaters for 45 days which is exactly when we would make 98

00:50:23   percent of our money and we're going to put on Disney plus or we're going to put it on

00:50:26   Amazon Prime Video first we're going to try to go out there for 20 bucks and rent and

00:50:30   then once that's done we're coming to Disney plus we'll figure out what we do there whether

00:50:33   or not they move that around who knows but the theaters and the studios are basically

00:50:37   going acknowledging what they do acknowledge which is their 45 days is exactly when people

00:50:42   are gonna go see a movie if they're gonna go see a movie for the most part so the actual

00:50:46   from a theater perspective you go okay how do we fill in the blanks if we no longer have

00:50:49   this playing for 90 days I like that's what you're seeing with AMC right now and especially

00:50:53   theaters like Alamo which is when they're doing UFC events they partner with other people

00:50:57   they do like Grand Prix they do the World Cup they go yeah have the communal experience

00:51:01   of a movie pay for this rent the theater to watch something we have that the second thing

00:51:06   that we're already seeing is you know people like to kind of publicly criticize this and

00:51:11   I get where they're coming from and the shift will happen we just won't hear about it is

00:51:15   this idea of going okay this movie that we made it was supposed to have a theatrical

00:51:18   release is now going streaming exclusive no real extra pay but it's going streaming exclusive

00:51:23   this will continue to happen we just won't hear about it and the difference is they're

00:51:27   gonna make these kind of mid-tier budget movies that would be independent type films for the

00:51:31   most part coming from the studio arms that are not just like Warner Brothers not just

00:51:35   you know Disney proper and those will be available for free and they'll still get marketing play

00:51:40   but they won't cost as much and then they'll bring you into your streaming service or they'll

00:51:45   or they'll keep you there and we're seeing it happen I mean like Warner Brothers started

00:51:49   a line then they closed it but they're basically doing it to make 10 to 12 mid-tier budget

00:51:53   movies a year Disney will take their kind of live action remakes that weren't really

00:51:57   going like that were maybe risky and they'll move that to Disney Plus and they'll find

00:52:01   other stuff there's a world in which Disney makes kind of lower and also lower end but

00:52:08   just less costly Marvel type movies or Star Wars type movies that are not TV shows maybe

00:52:12   they're a one-off and they exist there and they just play into that world and then you

00:52:17   end up with these this tiered system of you've got your big blockbusters that you got to

00:52:20   go see in the theater and you got kind of a mid-tier that's like it'll be in a theater

00:52:23   but you'll be able to see it pretty easily on streaming

00:52:25   well I think what we often forget is that the theatrical business was not doing super

00:52:30   well pre-COVID right down overall the interesting right we kind of juxtaposition is that attendance

00:52:37   was down overall glass you know kind of per capita in like concurrently over year over

00:52:42   year but revenue was actually a bit higher for the movies and all that tells us is that

00:52:47   people are willing to go to theater still but they're only going for certain movies

00:52:50   like the end we can guess what those are going to be because we saw Disney in 2019 and Disney

00:52:54   owned like 55% of the whole box office between food box and so they went yeah people are

00:52:59   going to go watch Joker and Avengers and Star Wars they will go pay money to go do it Godzilla

00:53:06   and I think everything else goes if we're not going to make the money that we need to

00:53:10   make on this and to your point about transparency if we're gonna be slammed in variety in the

00:53:15   Hollywood Reporter and deadline for you know kind of coming in low why don't we just send

00:53:20   to Disney Plus we can put a press statement saying it did really well it broke records

00:53:25   without actually saying those records are and all of a sudden they're streaming looks

00:53:28   even better to Wall Street and the shares go up and they avoid all the kind of embarrassment

00:53:33   that comes with it so I think what we'll see is we'll still put 10 12 15 movies in theaters

00:53:37   they'll be very specific movies they will only be there for 45 days and they'll come

00:53:41   off and I think the company you know the industry that really loses out on that is the theatrical

00:53:46   business but I don't think the theatrical business is going away I think it's just going

00:53:50   to have to shift in the way that Barnes and Noble has shifted or gained is shifting

00:53:55   Yeah I was thinking you mentioned Alamo Drafthouse and I was thinking that I feel like the movie

00:54:01   industry was already kind of going there and and COVID has accelerated it if for no other

00:54:05   reason than people have really gotten comfortable watching things in their homes even more than

00:54:08   they already did and they already were right but it just then you're inside for a year

00:54:12   and a half and this happens that Alamo Drafthouse like a theater like that there's an experience

00:54:18   an IMAX theater it's an experience it's like more it's going to get you out of your house

00:54:23   because there's more there and and I feel like exclusivity whether it's for 45 days

00:54:28   or 90 days or whatever that's good but like that's not enough the old theater industry

00:54:32   was very much like we have an exclusive so you're going to come in our terrible theater

00:54:37   with our terrible seats and our you know terrible screen and our terrible popcorn because we've

00:54:41   got the Avengers and I'm not sure that attitude is going to work yeah and and the theaters

00:54:47   that are like this is what I said about the comic book industry and the bookstores are

00:54:50   like this too which is you know the good comic book shops a lot of good comic book shops

00:54:55   and bookstores survive not all of them but a lot of them did the really bad ones that

00:54:59   hated their customers they all died immediately right because they didn't care and they're

00:55:04   the first to go and I feel like movie theaters are going to be like that the movie theater

00:55:06   chains that hate their customers are going to not make it yeah I mean I think that's

00:55:10   exactly to your experience point uh I mean I probably there's not a lot of alamodes where

00:55:14   I go for almost 100 of my movies is you know like if I'm going to see Green Knight I would

00:55:18   very much like an old-fashioned while watching it and I think that is like a whole thing

00:55:22   that you that the pre-the pre-show that they do is phenomenal but I think the other conversation

00:55:26   that's going to come out of both the lawsuit and kind of this move with theatrical today

00:55:31   and date if you take something like Marvel which has a rabid fan base one that I'm part

00:55:35   of so I don't use rabid negatively uh who will go see a movie over and over and over

00:55:40   again in normal times they'll go four or five times their friends over the course of a few

00:55:43   weeks if it's available on Disney plus you still might get them in for one movie you

00:55:49   might get them in for two movies to go to the theaters but the question then is how

00:55:52   many of them are then just buying the movie and re-watching it 10 times at home how many

00:55:56   are sharing it with friends how many are pirating it and I think that conversation which we

00:56:00   don't have the information on yet uh is the most interesting it's the repeat viewing which

00:56:05   is already kind of low but for something like Marvel something like DC where it's the difference

00:56:09   between 150 million and maybe 175 180 million mommy might not mean much to marvel or Disney's

00:56:16   corporations 30 million that if you're a star and that's the difference between whether

00:56:21   or not you hit your cat your cat for what you can then you get this bonus compared to

00:56:25   this bonus it's going to be a big conversation driver yeah I was thinking about the premier

00:56:29   access thing on Disney and how the way they've structured it is you're basically getting

00:56:33   access to that movie forever on Disney plus when you pay $30 and that's different than

00:56:39   renting it right like they could they could have structured it as a 72 hour rental or

00:56:45   something or even a one-week rental but it would be like this is going you know it's

00:56:50   temporary you don't get to just watch this forever because that's not what it's for and

00:56:54   they chose not to do that and I I'll be honest I bought Black Widow on on the premier access

00:57:00   and I loved it I loved that we were watching that movie and we didn't have to go to a movie

00:57:03   theater because we were not kind of comfortable doing that but and I would love in the long

00:57:07   run I think I have a big TV and a nice sound system I would love to be able to do that

00:57:12   and just never go to the movie theater anymore and we don't have any very good movie theaters

00:57:16   near me which is why I say that but I'm kind of resigned to the fact that that business

00:57:21   model is not actually going to make those movies exist so that for the big budget movies

00:57:25   I'm still going to need to go see it in the theater if I don't want to wait a month and

00:57:28   a half to see it. Yeah but to your point I mean I did I went kind of opening night went

00:57:33   to go watch the movie came home bought the movie again on Disney plus and I've watched

00:57:37   it you know kind of a few times since then so you know that's if I've watched I think

00:57:43   three or four times on premier access that's like 60 bucks in tickets right from one person

00:57:47   alone who's going like oh I'm gonna watch I have a friend over you haven't seen this

00:57:50   yet at least just throw it I have it let's throw it on and I think you know for Disney

00:57:54   the idea of having premier access and then to your point is the idea of you owning it

00:57:57   is that encourages them you to then spend eight dollars a month regardless um if you're

00:58:01   saying if you're someone who is maybe not someone with kids who Disney plus is an automatic

00:58:07   purchase for if you're not somebody's a die-hard Marvel or Star Wars fan but you're like oh

00:58:12   you know I'll sign up for this movie that is maybe the difference and going like okay

00:58:15   if I cancel after one month after I have this movie I lose access to it but if I keep it

00:58:20   I at least have this movie I bought for 30 dollars it's the difference I think in Disney

00:58:24   going yeah we're gonna retain some subscribers who are potentially going to leave yeah that's

00:58:29   true that's a good point all right well Myke is gone so I get to be the person to say that

00:58:34   we have to take a break this episode of upgrade is also brought to you by text expander from

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01:00:01   of relay FM all right I would like to talk to you now about a little streamer check-in

01:00:08   let's just do a little kind of go around the horn and talk a little bit about each of these

01:00:11   streamers and sort of what's going on with them and and and since this is upgrade we're

01:00:16   gonna start with Apple TV+ Ted Lasso just launched you had a piece about how that it's

01:00:25   a surprisingly in-demand show and that I think what you said was Apple TV+ started off as

01:00:31   what's the point and is sort of turning you know turning into something that's a little

01:00:36   bit more on the right path it is it our interpretation here has been that they kind of want to be

01:00:43   what HBO used to be which is all you know focus on their originals have them be high

01:00:47   quality and have it be just sort of a destination for good content and they're not worried about

01:00:51   their catalog they're just worried about like getting enough stuff that they get some critical

01:00:57   like HBO was like we program Sunday night and it's going to be really great and that's

01:01:01   all that matters and I feel like Apple TV+ that's sort of the game that they're playing

01:01:04   up to now yeah I mean you're the Apple expert but I you know the thing the fun thing about

01:01:10   Apple TV+ is they are literally stealing the HBO playbook by you know teaming up with Richard

01:01:15   Butler who was you know granted for a very long time they are working with the Sony guys

01:01:19   who very much admire what HBO has done and they sold high quality shows to their distributing

01:01:25   partners I think the fascinating thing about Apple TV+ is considering it's only been around

01:01:30   for not even two years and considering that there is not there's I think they have one

01:01:35   piece of like licensed content but even then if you look at their library it's very small

01:01:41   the overall demand which just means like how much are people kind of at this point willing

01:01:46   to pay because they want to see that show or how much are they willing to seek out that

01:01:49   show is incredibly high across the entire catalog like compared to even Disney+'s catalog

01:01:56   across it's much higher and I think to apples you know to those executives credit over Apple

01:02:02   TV+ they're picking their shows very specifically they know what they're trying to build and

01:02:06   it's working for them I do think if they want to scale it to be a proper streaming service

01:02:12   they will have to acquire some kind of a library because they don't have what I like to call

01:02:17   snackable television snackable television is what you put on before you go to bed or

01:02:21   when you're on you're working out you're watching you're making dinner it's what you have on

01:02:24   the background it's familiar comfortable lots of it but it's my daughter was visiting us

01:02:29   and she put the office on right like just put it on exactly it's it's the snackable

01:02:34   thing that makes Hulu and Netflix really work beyond kind of the originals Apple doesn't

01:02:39   have that you know the question I get I have this conversation my old boss you know Neil

01:02:45   I tell his editor-in-chief over the verge and his and I we always can just debate because

01:02:50   it was like does Apple need Apple TV+ what do they need it for is it actually helping

01:02:54   with their overall services bundle is it actually you know kind of keeping people within that

01:02:59   walled garden ecosystem is it helping people choose to upgrade to Apple products and the

01:03:03   nice thing about Apple like Amazon is that it doesn't matter right now because they have

01:03:07   so much money that it's like this is an experiment still for us and it's and on the experiment

01:03:13   side it's actually going pretty well for them so I think Apple TV+ was so easy to write

01:03:17   off and the one thing that is still easy to write off what Apple TV+ is that we do not

01:03:21   know how many are paid subscriptions we write they're still gonna free trials and we have

01:03:26   no idea how many people are actually willing to pay for this stuff but in terms of the

01:03:31   overall demand in their shows and what they are producing in their originals compared

01:03:35   to other people they're actually doing pretty well and I think that bodes well for them

01:03:41   I think to get people to say I'm gonna pay $5 a month or ideally for Apple I'm gonna

01:03:44   pay 20 bucks a month for Apple one they need a little bit more and that I think that will

01:03:49   come in the form of an acquisition of some like yeah similar to hands-on thing with MGM

01:03:54   I mean they've got more content than they did when they launched in that they've got

01:03:57   two years of content but it's still not a lot you're absolutely right okay Netflix

01:04:05   they're the they're the big the number one but I mentioned them earlier about like they

01:04:11   just have this pipe of content that just kind of outflows and it's enormous and is that

01:04:16   their strategy is just we make it up in volume and also we have games that we are gonna put

01:04:21   on your phone or something like I wonder Netflix is so big that on one level they seem unassailable

01:04:29   and another level they seem so boring and not like I and I wonder if if they're like

01:04:37   the tortoise and the hare kind of thing where they the big entertainment they're so far

01:04:41   ahead and yet Disney is coming for them and there's gonna be other competition too and

01:04:46   Amazon's got all the money so what's your take on where Netflix is right now they're

01:04:51   at a very interesting point so Netflix has hit saturation in you can which is United

01:04:56   States and Canada they are only going to ever lose or gain very little subscribers and all

01:05:03   that means is that they're losing those are current and the ones coming back are probably

01:05:06   reactivating for something they've hit saturation point which is an interesting moment because

01:05:11   it means that they are no longer the core kind of country or region that they're looking

01:05:15   at their whole reason that they're trying to grow is amino to you know kind of Europe

01:05:19   they're trying to grow on the release they're trying to grow Latin America they're trying

01:05:22   to grow a pack and I think what the challenge that lies ahead for them which is a pretty

01:05:28   exciting challenge I imagine if you're on that team is how do you get your big Spanish

01:05:32   shows your big French shows your big Russian your big Mexican series to travel to the realm

01:05:40   the world to the point that you're going okay yeah no matter where I am no matter what region

01:05:45   this content is coming from I'm interested in it that's one challenge the second one

01:05:49   they have that as much as Ted Sarandos who's their co-ceos they're head of their content

01:05:53   for a long time likes to play this down it's very hard to make franchises it's not easy

01:05:58   Disney bought their big franchises they acquired Lucas and they acquired Marvel and they said

01:06:03   cool and they ended up working really well for them Warner Brothers acquired DC Netflix

01:06:08   is not necessarily the business of acquiring a lot of studios but it's not what their game

01:06:12   is and their whole thing will acquire licensing rights will acquire titles will acquire the

01:06:16   rights of things will build it and I think what you're seeing now is them really trying

01:06:19   to figure that out where they have the Witcher they've got a bunch of other video game stuff

01:06:23   they're doing Pokemon they're trying to do anime adaptations they're trying to figure

01:06:26   out what they can take and go okay we'll turn this into something that is new for us while

01:06:31   investing in original series and all that says to me is that they are trying to chase

01:06:35   their big big franchise they only need a Game of Thrones to but it's easy much easier said

01:06:40   than done if everyone could have a Star Wars everyone would have a Star Wars so I think

01:06:45   that's their big thing is what's our big franchise what is worth the amount of money that we're

01:06:48   going to invest into it and on the other side of things they're losing their licensed content

01:06:53   and they need it I think there's a there's a reason people get really excited when Twilight

01:06:57   or 30 Rock or Friday Night Lights goes back on the service it's not because it's like

01:07:02   people have forgotten about it and they're like oh I can finally watch the show it is

01:07:06   the difference between oh I will keep Netflix because I can watch 30 Rock and go to bed

01:07:10   at night it's fine and just not being able to watch 30 Rock and I think the perfect example

01:07:15   this just to end my kind of rant is everybody thought The Office for Me to Peacock would

01:07:19   make Peacock the biggest therapist right and what it proved with the lack of kind of Peacock

01:07:24   paying subscribers has shown us really any even kind of active usage drivers is that

01:07:29   people weren't what The Office was not the number one show on Netflix because it was

01:07:32   the number one show that people want it was number one show on Netflix because 200 million

01:07:35   households were like oh I will watch the Netflix I will watch the I'll watch The Office when

01:07:40   I have Netflix and I when I'm hanging out and it's just easy to watch and so I think

01:07:44   Netflix is going to have to start picking out what it wants to license and really hold

01:07:49   on to those and fight for them because that's the difference between people going to Hulu

01:07:53   and dropping Netflix or people staying on Netflix and dropping Hulu or whatever else

01:07:57   now speaking of blockbusters let's talk about Amazon Prime Video and and I'm glad I had

01:08:04   it in my notes to say this and you said it already which is Amazon like Apple is not

01:08:09   quite playing the same game as entertainment companies are because the service is sort

01:08:13   of a part of their overall strategy which means that they can spend money kind of without

01:08:18   expecting to get it back which is that's that is a tough opponent if you're if you're their

01:08:23   opponent because they they don't value money like you do and that's a problem so but they

01:08:27   are they have invested you know that with their with their their new leadership they

01:08:31   seem to have found a better place than than the old leadership did but they also got this

01:08:38   sort of seeking a blockbuster they made the big Lord of the Rings deal that's in progress

01:08:45   so where where is Prime Video right now do you think yeah I think just to kind of reiterate

01:08:50   what you just said in the way that Apple don't very much want services to do well that's

01:08:55   why you know Luca kind of points out earnings like we have 700 million paid subscriptions

01:08:58   across all of our services and the way that Apple wants to make sure that's going well

01:09:03   they very much want you to stay in that iPhone ecosystem and upgrade or Mac whatever may

01:09:07   be Amazon would like you to watch Lord of the Rings and then you know once you're there

01:09:13   please buy toilet paper or Lord of the Rings book or Lord of the Rings shirt from us because

01:09:18   all their Prime is their whole thing having the subscription via Prime having the retail

01:09:22   business is still their core I think what Amazon knows is that okay if we don't want

01:09:27   to not just not lose customers if we want to build our subscriber base one of the best

01:09:33   ways to bring that in is having a blockbuster TV show where people sign up and then all

01:09:37   of a sudden once you've signed up for Amazon Prime Video you have access to Amazon Prime

01:09:42   I would imagine and I'm sure their dad shows this that their people are spending a lot

01:09:46   more time shopping on Prime they're kind of going like oh I'm already here or I'm seeing

01:09:50   an ad I'm seeing a commercial and it's like sure I'm just gonna go right I have to buy

01:09:53   dog food and so I think Amazon's whole play with having a deeper catalog of content MGM

01:10:00   and then they can turn that into bigger franchises that maybe bring people in and then actually

01:10:04   spending the money in the big battles to acquire the rights to projects they kind of know bring

01:10:10   people bring people in is that it's just that it's to get people into Prime and then keep

01:10:16   them there and bring in new customers who might be opposed to Amazon but they really

01:10:20   do want to watch Lord of the Rings whatever it may be I think it could work for them but

01:10:26   money does not equate to success there's you know if you could buy a Lord of the Rings

01:10:32   or if you could buy something that seems like Lord of the Rings kind of based on Lord of

01:10:36   the Rings most people would just take Lord of the Rings I think we saw that with Jupiter

01:10:40   ascending which was Netflix going we can kind of do a cool superhero show and people were

01:10:44   like this isn't what I want in a superhero show this is like I have Marvel and DC I don't

01:10:48   I don't need this from you I think this is Lord of the Rings but it's it's not the main

01:10:53   series it's it's it'll be interesting to see what they do with that but it's hard to say

01:10:58   that Amazon Prime Video is in a bad position because they belong to Amazon. Amazon Prime

01:11:04   Video potentially being spun out depending on FTC rulings may be more of a concern but

01:11:09   until I think that happens they're part of a very big powerful machine that lets them

01:11:15   continue to be in experimentation mode and hopefully grow.

01:11:18   As a Prime member I often find myself going oh right Prime Video like it's the challenge

01:11:25   that they have there is that they're not quite a destination but when there's an original

01:11:29   that pops up also I'd say that they've got an interface problem which is they want to

01:11:33   be a store to sell or rent you things and they want to provide you with free things

01:11:39   and as somebody who's really used to having all my apps show me what I already get I find

01:11:45   that very confusing right like oh this isn't actually on Prime Video this is a for rent

01:11:50   from Prime it's

01:11:53   Well I think Jason if I could just add to that really quickly I think you just hit the

01:11:56   nail on the head which is the biggest issue it's going to face the streaming services

01:11:59   aside from content because content is king and then distribution is king so you have

01:12:04   shows great it's easy to access cool the lack of a good UI and UX in streaming services

01:12:13   whether it be HBO Max just not loading or not running it would be it was done being

01:12:17   impossible to browse whether it be you know Disney Plus search and Hulu search being terrible

01:12:22   it's like people I think a lot of entertainment companies getting into it forget that they

01:12:27   are have to also be on the tech side then advantage to Netflix was that Netflix came

01:12:32   in at the tech company and then hired entertainment guys and we're like okay you guys have a list

01:12:37   you know Disney bought fan tech they kind of have that but everyone else is like you

01:12:41   gotta you gotta team up with the Silicon Valley team it's like you need the good tech

01:12:44   I had a extended rant over several episodes of upgrade about Paramount Plus and it's terrible

01:12:51   and interface and I was trying to find like an episode of 60 minutes and they were all

01:12:54   they had sorted them all by episode title over 25 years or 50 years of content it was

01:12:59   like it was impossible to find anything and they did fix that but I heard from some people

01:13:03   who have inside knowledge of Paramount and CBS who are like yeah they you know basically

01:13:08   they don't prioritize the tech stack and you've got all this money you're spending on content

01:13:12   and you kind of need to pay attention to your technology or it's if you can't stream it

01:13:16   or you can't when you drop Game of Thrones or whatever the next Game of Thrones is and

01:13:19   it's high demand your your stream better not die and you be it people need to find stuff

01:13:25   and you need to do autoplay when they want and not when they don't and let them skip

01:13:28   around and it's like table steak stuff for a good piece of software and yet some of these

01:13:34   incredibly large companies just didn't care they were so focused on programming the shows

01:13:40   which is important but delivery is important too right the advantage to cable right was

01:13:46   you would go on unless there's a blackout you turn on the channel there it is and I

01:13:50   think yeah I think now all these companies are making really really great television

01:13:55   and great films and it's just if you want people to see it you know that there's a demand

01:13:59   watch it that the people will pay you you have to be able to then deliver on the easy

01:14:03   accessibility easy accessibility does not mean that it just transformed to easy availability

01:14:08   and I just that pipeline I think needs to be better sorted yeah we talked a lot about

01:14:13   Disney Plus but I want to at least mention you know that machine keeps cranking I saw

01:14:18   the they had a first look photo of of Hawkeye the Hawkeye series that's coming this fall

01:14:23   with Jeremy Renner and Hadley Stanfield on it and that's that I've been struck watching

01:14:30   Loki which Myke and I talked about last week Loki and and WandaVision both that I I think

01:14:38   one of the big and the Mandalorian I'll throw that in here too one of the big questions

01:14:42   with Disney Plus was can they really execute TV a TV strategy with their film properties

01:14:48   and do a good job and I gotta say I think the answer is yes I think we've seen with

01:14:54   two seasons of the Mandalorian and with those two of those three I didn't love Falcon Winter

01:14:59   Soldier but that felt like a Marvel movie turned into a TV show but Loki and WandaVision

01:15:03   both made me think oh this is serious like they got Marvel Studios and and Lucasfilm

01:15:11   to get on board and deliver like TV shows that work and that people want to see and

01:15:16   that makes Disney Plus even more dangerous right yeah I mean I think the best thing Disney

01:15:21   did was on the more on the Lucasfilm side you've got Dave Filoni and on the TV side

01:15:27   under Kevin Feige you've got like Michael Waldron who oversaw Loki who helped with WandaVision

01:15:32   right Jack

01:15:37   maybe gods do their thing you know there's a joke that Dan Harmon kept saying we kept

01:15:41   losing our talent to Marvel but how can you be mad they're going to Marvel and the smartest

01:15:45   thing Marvel did was go we want to do kind of cool sci-fi superhero stuff that really

01:15:50   lands with people in a weird absurdist way we're gonna tap the Rick and Morty team like

01:15:54   like that's just that makes a lot of sense and Lucasfilm had Dave Filoni who created

01:15:59   the greatest Star Wars thing of all time in the Clone Wars and so it's like this perfect

01:16:04   thing where they're going yeah we want you to do what you're doing no limitations increased

01:16:08   budget you're gonna hire whoever you want and we're just gonna put on Disney Plus I

01:16:12   think you know the other thing that Disney has that's really going for them is Netflix

01:16:16   or whomever has to look out and go okay how can we make sure that all of our new series

01:16:20   that might not have a strong IP might not have a strong brand recognition really play

01:16:24   into each other and for the most part they they're figuring out you know Witcher might

01:16:27   play into Stranger Things and something that plays into another show that comes back that

01:16:31   people love you'll get there I have no doubt kind of about Netflix succeeding I don't think

01:16:35   Netflix is going to fail at finding these yeah but Disney's big advantage is Disney

01:16:40   goes you know every six weeks yeah new Marvel show new Star Wars show new Pixar show that

01:16:44   both teenagers adults who kind of grew up with Pixar so Monster University right and

01:16:49   kids really love and on top of that they're like here's a movie like here's stuff that

01:16:54   that we're gonna put here so Disney Plus has the beautiful advantage of programming slots

01:16:59   like they're just like okay we're gonna give Marvel three shows a year or four shows we're

01:17:03   gonna give Star Wars three shows a year you guys figure out what you want to do and we'll

01:17:07   just slot it in you're always you're always watching something on Disney Plus and that's

01:17:10   what they want the nice oh and even if you were not watching something which I think

01:17:14   is absolutely an issue that they're probably gonna run into outside of families I think

01:17:19   there's never a reason to unsubscribe and I think that for them is great because they

01:17:23   can go if we are unnecessary if we're necessitating your home then we can charge you more every

01:17:28   year and you're just gonna pay it that works out for them so in other parts of the world

01:17:34   Disney has started putting essentially what is Hulu under a tab in the Disney app called

01:17:41   star after their star service that they bought that was big in India and it's big in some

01:17:46   other places too in the US we still have Hulu Hulu has its own app what what what's gonna

01:17:52   happen with Hulu is Hulu just playing out the string and will ultimately be swallowed

01:17:57   by Disney Plus or is there value for Disney and having Hulu be this kind of standalone

01:18:02   thing with different kinds of content that reach a different audience that they can bundle

01:18:06   with ESPN Plus and make a super bundle or is it all just going to be in Disney Plus yeah

01:18:11   the big question that the answer that question will happen after Disney pays out the rest

01:18:17   of Comcast 10% until they pay out Comcast and anything they do with who that affects

01:18:23   the valuation of what they'd have to pay out to Comcast is going to be under massive scrutiny

01:18:28   and so I think their whole thing right now is like we're gonna invest in Hulu which they're

01:18:31   doing a little bit of not I would not say they're investing too much but they are definitely

01:18:34   investing in they're definitely supporting it they're using FX to make it kind of a destination

01:18:38   for that kind of prestige programming for fans of John Len graph and what he does so

01:18:43   who's being taken care of I think until Comcast gets paid out Disney's in this kind of hold

01:18:49   pattern where they're still developing originals they're still figure out what they want to

01:18:52   do but if Disney went yeah we can take Hulu in the US and make it a tab on on Disney Plus

01:18:59   we increase this to you know five bucks six bucks a month it's now on Harvard HBO Max

01:19:03   you're getting so much out of it maybe they do that that might be something they do but

01:19:08   I think right now everything that I back when I was reporting everything that I heard from

01:19:12   inside at Disney was that they're stressing the bundle very hard but they like the bundle

01:19:17   for them you know kind of is a great move on their part it's just it has people in an

01:19:23   ecosystem you talk about a walled garden it has people in there and they're happy to be

01:19:26   in there for or if they're not they feel like they have to be in there so I think Hulu will

01:19:32   be TBD I think we have to see what happens with Comcast what Disney really wants to do

01:19:37   with it post that and then who will become a very interesting part of the conversation

01:19:41   again yeah one of the things that always stopped me was the whole like well Disney Plus is

01:19:46   family-friendly and and Hulu isn't but with star they've shown that they basically have

01:19:50   a thing that says for these users you can set up a lock you know and not show that content

01:19:55   and it's not if they want to do it they can do it but you're right there's strategy questions

01:19:59   and there's contractual questions HBO Max has Sesame Street right and it's right the

01:20:05   Sopranos so yeah it's like their whole thing is like we know we don't you don't want your

01:20:08   two-year-old watching user profiles and you got to make it work Peacock so I don't want

01:20:15   to mention here as well like Peacock's done some originals they had they were supposed

01:20:19   to launch with the Olympics last year the Olympics got moved they've got the Olympics

01:20:22   this year I'm gonna do a minor Olympic rant here just to say that I appreciate that NBC

01:20:28   has put almost everything on somewhere but I think they really blew it with the Olympics

01:20:33   this year and I think it's because it's so dysfunctionally like broken up into little

01:20:39   pieces that are in different places and like there's like five or six universal NBC cable

01:20:45   channels that have stuff and then there's the NBC Sports app which has some stuff from

01:20:50   broadcast and cable and some stuff that's original and then there's stuff on Peacock

01:20:55   and then even on something like Peacock where you'd expect Olympics on demand you end up

01:20:59   that you can't get a lot of it on demand its organizational structure is really weird and

01:21:02   the part that really blows me away is they have these live streaming shows that are actually

01:21:06   pretty good and you can't watch them after the fact they're live on Peacock and then

01:21:09   they disappear and you can't get back to them you can't back up to the start of the show

01:21:14   and so on one level I find what they're doing kind of admirable and yet I think they blew

01:21:18   it because we live in an on-demand world and and it goes back to our conversation earlier

01:21:23   about you UI and technology is that you know if you're watching on TV plus two different

01:21:30   streaming apps or if you're an over-the-top kind of cord cutter like me now three different

01:21:35   apps and you can kind of find it but it's it's just so much work and if you want to

01:21:41   find a very particular thing you can't tell is it in this app or that app or on this channel

01:21:46   or that channel and and like I don't know so that's that's my minor NBC rant is I appreciate

01:21:51   that they've got the Olympics and they're using it to help launch Peacock but there's

01:21:56   got to be a better solution to what they're doing oh yeah and Katie Keck who's a brilliant

01:22:01   reporter over at the verge she wrote kind of about this and broke down just the insanity

01:22:06   of it all um and I think I don't have any insight into this but I imagine what happened

01:22:11   with the Olympics Peacock was NBC had their AC Olympics a long time ago NBC did not have

01:22:16   Peacock that long ago and all of a sudden went we can use Peacock to bring people to

01:22:20   watch we use the Olympics to bring people to Peacock and I imagine there were some advertisers

01:22:25   who were like we don't want to be there we think more people will watch at a bar or whatever

01:22:31   maybe uh at home whatever may be on NBC where you don't need cable like you just have it

01:22:35   and see playing or on the sports app you're doing that um and so they went okay cool we'll

01:22:40   figure out how we can do kind of original programming with the panels and also what

01:22:43   kind of Olympic stuff we can bring over we'll negotiate and we'll make it a hub the mix

01:22:48   the thing they did was their promotion for it was just like Peacock will be the place

01:22:53   the destination to watch everything and it wasn't at one point I had to watch me on USA

01:22:57   and I was like USA is an actual cable like you'd need cable to watch whatever this is

01:23:01   um it's it's uh hellscape it's the word I use another day to talk about it it is a hellscape

01:23:06   um and I get that NBC needs to have stuff on Peacock and and you know there's this overall

01:23:10   demand for the Olympics and they want to spread it out they want to bring as many people into

01:23:15   wherever their ecosystem is I get that but I think you're just making uh people frustrated

01:23:21   and that doesn't lead to any good that does not leave good taste in people's mouths I

01:23:26   will say the thing about Peacock specifically is it has a great great great catalog and

01:23:30   if we kind of look at the demand share of the of the entire catalog so basically how

01:23:35   much people are interested in of the shows across it not just original series that are

01:23:40   coming that Peacock is launching ranks pretty high like it's pretty good which is not surprising

01:23:45   are you like okay Jimmy Fallon people like to watch you've got Law and Order you've got

01:23:48   all the Bravo shows you've got all these things that NBC makes good television um where they

01:23:54   don't really have much demand for is originals they haven't had an original that's really

01:23:58   stuck and the number one goal with streaming is that uh um you kind of new highly anticipated

01:24:05   new movies and tv shows lead to mass acquisition of subscribers every catalog stackable content

01:24:10   retains your subscribers they have everything to retain people but what they don't have

01:24:15   anything to bring people in so my my curiosity is to see where the Peacock subscribers end

01:24:20   up post-olympics next quarter or the quarter after that I would love to know how many of

01:24:26   those new subscribers that are coming in for the Olympics stay to watch whether it's originals

01:24:30   to watch new license programming uh to watch library programming um I think that's where

01:24:35   NBC struggles is there's no reason to sign up for Peacock because if you really want

01:24:38   to watch Law and Order it's also on Hulu because Comcast also have deals like it's so I think

01:24:44   Peacock right now is it's not a necessity and to to be a part of this game you have

01:24:50   to be a necessity I think right now they're an option yeah I I was I was thinking about

01:24:54   how um I wonder if the NBC programming uh philosophy is a little bit too powerful at

01:25:03   Peacock right now and that they're programming it like a network a little bit more than they

01:25:09   should because like okay I think I think there's good originals on Peacock um I think it's

01:25:14   weird like AP Bio was one of their first and that was literal it's a great show but it's

01:25:17   literally cancelled by NBC and then saved the next day by another part of NBC very strange

01:25:23   and again if it's got cancelled on NBC it's probably not a must watch on Peacock but but

01:25:28   I'm glad they did it because it's a good show and it'll be a catalog and people will find

01:25:32   it in 10 years and say oh my god why didn't I know about AP Bio but like they did Rutherford's

01:25:37   Falls that's from Myke Schur they did Girls 5 Eva that's from um basically from Tina Fey

01:25:42   uh and and the Tina Fey content machine so you got the Myke Schur content machine the

01:25:46   Tina Fey content machine these are go-to NBC creators and the shows are fine but they didn't

01:25:52   hit either and I wonder is it that an NBC style sitcom is not what you want to do to

01:25:58   have a must watch thing on a streaming service I don't know but that's the part that I find

01:26:04   befuddling is um it's not like they haven't done some decent originals it's that nobody

01:26:09   cares I mean this is there's there's a point that um the Netflix executives finally started

01:26:15   making their earnings reports which we had known for a while and then they finally acknowledged

01:26:18   it officially which was not only are we the home for your next favorite original series

01:26:23   to watch we are the home of discoverability which is a very key word for them we are the

01:26:27   home where you find out about um Schitt's Creek or you find out about whatever it may

01:26:31   be which is a broadcast show that Netflix goes there's an audience here for it we have

01:26:35   200 million homes people are finding it and they're liking it you know I think had Rutherford

01:26:39   Falls had Girls 5-O landed on Netflix for a season right and it had 200 million homes

01:26:44   open to it possibly it gets more reception than Peacock or if Peacock is just people

01:26:50   are not looking at it I think the other thing that comes into play with Peacock specifically

01:26:55   is NBC Uni and uh NBC Uni various parts of it still have deals with Netflix where they

01:27:00   distribute a lot of shows to Netflix and they're like also you can have some of our you know

01:27:05   I think Good Girls was one of them um where that was the Netflix kind of exclusively internationally

01:27:10   they had the global rights to it um that show ran three seasons and and you know finally

01:27:16   got cancelled but it did like decently I believe for Netflix uh where it was a global kind

01:27:20   of um rights even if it was in the US it was not and I think those are going to be interesting

01:27:25   questions that come up with Peacock as it goes international as it tries to find new

01:27:28   originals is like what do we sell right what do we keep what do we try to make a Peacock

01:27:33   original and if you're still licensing a bunch of stuff you're not necessarily putting everything

01:27:38   into your own streaming service and that's almost understandable because you need to

01:27:42   still show revenue um I think you know we have Netflix is all in on themselves you've

01:27:46   got Peacock you've got Warner Media sorry you've got NBC Universal Warner Media and

01:27:51   uh Viacom CBS to an extent all within their own streaming services but still big big licensing

01:27:56   kind of partners and then you've got um the Sony's who are like we don't have any interest

01:28:01   in like launching a streaming service we're going to charge 10 times what we want because

01:28:04   you want our content uh and so I think it's a very interesting game to see where they

01:28:08   are so the Netflix is in the Disney's pretty happy they get to be like yeah for the most

01:28:12   part we're exclusive Disney does some licensing but we're happy uh your Sony are pretty happy

01:28:16   we're licensing out you're charging more for it the other three is like well when do you

01:28:20   go all in when do you pull back and how do you balance that it's hard to say no to all

01:28:26   that money but you are trying to also build for the long haul okay so real quick hits

01:28:30   before we go um HBO Max where are they now they you know they had their launch it was

01:28:34   a little shaky but they've also had all those uh they've had a bunch of originals that have

01:28:39   gotten some more nominations and they've done their movie rollout this year so what are

01:28:43   you thinking about them right now growing their their price uh I still think they're

01:28:48   on the up I'm still uh very much a a bull on HBO Max I think they will continue to grow

01:28:53   I think they I think Kyler has been great for that company I think he knows what he's

01:28:57   doing that team I know somewhat well uh and they are doing phenomenal things um I do think

01:29:03   that price point is going to hurt them until Netflix hits 15 at which point they can then

01:29:07   market it as we are the same price as Netflix to an extent or we are actually maybe they

01:29:11   go down a dollar we're cheaper than Netflix um I think that will happen Netflix's most

01:29:16   popular plan is 14 in the US right now it's only one dollar less than what HBO Max is

01:29:20   um I think ads are going to help them a lot bringing in new subscribers who don't want

01:29:24   to pay and are finally watching an ad or two um but I I think it's hard to bet against

01:29:29   HBO right now because of that exact thing where you know even if you sign up for HBO

01:29:33   specific shows you sign up to watch White Lotus you sign up to watch whatever they're

01:29:36   doing there's still a group of people who watch White Lotus and go I want to watch the

01:29:40   new gossip girl HBO Max exclusive I want to watch the pretty little liars reboot I want

01:29:44   to watch you know Slimmy Gomez cooking show um and so I think they're fine I think them

01:29:49   partnering with with Discovery and whatever that ends up becoming whether it's a bundle

01:29:53   whether it becomes you know HBO Discovery Max whatever it is uh I think is gonna be

01:30:00   an undeniable bundle um but we'll see when that happens HBO Max I'm still very bullish

01:30:06   on I think it's easy to to say like I don't know if they can succeed I I can absolutely

01:30:10   agree with and see all the points against them but for some I just think it's hard to

01:30:15   bet against HBO right now I think it's gonna be hard to bet against HBO in five years how

01:30:20   about Paramount Plus yeah Paramount Plus is um I think you know kind of the one that I'm

01:30:27   least uh sure about I think ViacomCBS has an amazing library arguably one of the best

01:30:34   libraries out of all of them they have Nickelodeon which is a huge asset they have you know BET

01:30:40   they've got all they've got MTV they've got programming that people want I just think

01:30:45   if they want them on other streaming services you know and I don't think if if ViacomCBS

01:30:51   wants Paramount Plus to succeed then what they really need to do is amp up their originals

01:30:55   and bring people in and they keep their library to retain and I think that's figuring out

01:30:59   what is coming up on the deals block what is they can license and acquire the rights

01:31:03   to in order to do what they need and they're just not there yet all their focus is on their

01:31:07   brands but their brands are not Star Wars and and Marvel like they're not that that's

01:31:13   on Nickelodeon is kind of a sell but Nickelodeon's a selling is in well SpongeBob's on Netflix

01:31:18   I might watch SpongeBob uh Teenage Mutant Ninja Turtles on Netflix I'll watch that there

01:31:22   I don't know how many people who are going to sign up for Paramount Plus just for that

01:31:26   they might sign up to watch something new and exciting and then that keeps them there

01:31:29   but I think until Paramount Plus starts to even you know Peacock doesn't have many originals

01:31:33   that are very in demand but there are some and they're growing I think until Paramount

01:31:37   Plus gets there and that you know they're the latest to it to an extent or arguably

01:31:41   the earliest there are CBS all access now with the now that mom and dad are back together

01:31:46   I promise I was gonna say I mean they do have one franchise which is Star Trek and I pay

01:31:51   for Paramount Plus because of Star Trek and that's it and that's fine but like that's

01:31:55   not enough like that is a nice piece as part of a larger strategy that does not exist so

01:32:02   I don't say this is a negative thing I think I've said this on other podcasts and and people

01:32:07   always see it as like a negative or like I'm dunking and I don't I don't mean it I think

01:32:11   it's a positive I think there are gonna be a few companies who in five to six years will

01:32:16   take a step and back and go do we want to invest the money that goes into keeping up

01:32:21   and running a streaming service or are we the best of what we or do we do what we do

01:32:25   best make very good TV shows and good movies and license them out to everyone else who

01:32:31   wants to buy it's a seller's market everybody wants to buy content I think it's really telling

01:32:35   also that I look at Paramount Plus and like they have they claim to have some global aspirations

01:32:39   but the truth is Star Trek is a great example of that and this goes all the way back to

01:32:43   the Les Moonves era you know they they built that for North America and they sold it to

01:32:48   the world on Netflix and then they also sold like Picard went to Amazon but basically they

01:32:54   they funded their shows by selling all of the streaming internationally to someone else

01:33:00   and you know it's not a far step from that to just say well why doesn't that show just

01:33:05   always go on Netflix but you would have to abandon your hope of of your own streaming

01:33:09   service and I I think you're right I don't know who it is and maybe it's Paramount Plus

01:33:14   maybe it's not but it seems unlikely that all of these services are gonna make it right

01:33:19   like it doesn't I just don't see it and so somebody's gonna have to fold up their tent

01:33:23   at some point or be bought yeah and again I don't think it's inherently a negative thing

01:33:28   I think Sony is a very fascinating company right so many we have television writes a

01:33:33   bunch of stuff we have movies we have spider-man we have all these things we don't need a string

01:33:38   service because we know you need content to compete with all the other guys right I think

01:33:41   at the end of the day if there's three kind of you know companies that create as enough

01:33:47   demand for a string service alone by the by their own content I think Disney is undeniable

01:33:52   if you have kids and people will always have kids and also for just Star Wars Marvel adult

01:33:56   fans so Disney Plus undeniable Netflix it is just the amount of money they're pouring

01:34:02   into it and the hits they are creating and the library that they do have makes them easy

01:34:06   and to your point just now the international stuff they're doing the local things they're

01:34:10   picking up and going okay we can distribute this internationally and now it's a Netflix

01:34:14   original very important and I do think I think HBO Max partnered kind of with discovery whatever

01:34:20   that ends up becoming well there's a bundle internationally whether it's one streaming

01:34:22   service that's pretty undeniable it's just got your perfect badge of like prestige entertainment

01:34:27   teen entertainment and unscripted stuff that people love everything else is a potential

01:34:33   I'm not saying that Peacock and Paramount Plus can't take off they absolutely could

01:34:37   I just also think NBC Universal and Viacom CBS have made a ton of great shows same with

01:34:42   Warner Brothers Television for other companies and that's fine I think if you can continue

01:34:48   making your great shows and owning sports on linear for however long that happens and

01:34:53   figuring that stuff out becoming a content arms dealer is not a bad situation I just

01:34:58   think they need to have the room to experiment and not fail I don't like that term but to

01:35:03   experiment realize you know what we don't want to upkeep a streaming service like I

01:35:07   think these companies are going to figure out you know when when it was when cable was

01:35:11   number one thing when broadcast was number one thing you were selling your content you

01:35:14   don't have to worry about how it got to people that was Comcast who now owns right in AT&T

01:35:19   and they're going yeah we'll take care of it like don't worry now they're going crap

01:35:24   we have to up we have to make sure that our arts are AWS is down that means we're down

01:35:28   like what does that mean what's going on and we'll see I think the hassle will be a lot

01:35:33   for certain companies and if the revenue is just not there and the promise of revenue

01:35:36   is not there strategically it just makes more sense to become the content arms dealer right

01:35:41   sell to the highest bidder well Julia thank you so much for spending some time go we broke

01:35:46   it we broke it all down we solved it all yeah great figured it out it's all good ScarJo

01:35:52   call us we know what's going on so thank you so much where can people find you and your

01:35:57   stuff on the internet yeah so I'm on Twitter at loudmouth Julia and I write you know kind

01:36:03   of still pretty frequently prepared analytics so I have posts that go out from time to time

01:36:08   but mostly Twitter the Twitter your great Twitter follow if you're interested in this

01:36:12   stuff and if you're still listening to this you are so thanks again thanks for being here

01:36:17   on upgrade thank you so much I really appreciate it hey Jason hey hey Myke hi Jason are you

01:36:24   back from your vacation already yes okay well since you're here I had to read that one ad

01:36:30   and I'm really much more comfortable if you do it can you do this last yeah well you know

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01:38:24   Myke give me some lasers

01:38:33   I have way more lasers wow you know well you've got them stored up that might be the first

01:38:38   time I've ever done that and it felt really really good I guess it means that it's time

01:38:43   for hashtag ask upgrade yes the first comes from Miff Digital who asks do you think that

01:38:49   it's going to be a big iPhone upgrade year or a small iPhone upgrade year someone who

01:38:54   has an iPhone 8 plus should I wait for the new iPhone or snag a deal on an iPhone 12

01:39:02   I have a theory I think we talked about this a couple weeks ago I think this is going to

01:39:06   be that classic thing where Apple changed the outside last year and so this year won't

01:39:12   look every different any different and people be like oh that's boring and on the inside

01:39:17   it's going to have some wild stuff that's like way better internally in terms of camera

01:39:22   or processor or who knows what else sensors what other stuff they're going to do so that's

01:39:27   going to be I feel like that's not a bad prediction to make to say that I think it will look the

01:39:31   same and actually be way better on the inside because that's you know it's sort of a different

01:39:37   set of motivation some people are motivated by looks some people are motivated by specs

01:39:42   they can't change the look every year they can change the specs every year more or less

01:39:47   so that's my guess what do you think about the the great philosophical question of do

01:39:52   I get a deal on a on an iPhone now if you can find a deal or if you wait and pay full

01:39:58   price for the latest and greatest I think for this year if you could imagine or if your

01:40:07   budget would allow that you would be getting a pro phone I think it's going to be a big

01:40:13   upgrade yeah because I think that the promotion display which is very likely to come to this

01:40:20   year's phone it would be what I would be flabbergasted if they didn't make it work this time right

01:40:26   I think that's going to make a big big big change to the iPhone experience maybe always

01:40:31   on display too right that's a exact that could be a really nice feature and probably on the

01:40:35   pro phone yeah I think you're right if you're if you're looking for just a 12 and you can

01:40:40   get a deal and you're not really going to buy in the pro line you know if you're if

01:40:43   you're coming down on that side of the fence of features and price I think you could probably

01:40:50   just go ahead I think it would be worth getting the deal because the difference will probably

01:40:54   just be like better camera and like the camera is always better if you're coming from an

01:40:58   eight plus the camera is going to be so much better for you going to the 12 that I would

01:41:03   just go to the 12 but if you think that you would be tempted to go for a 12 pro like that

01:41:09   and that might be in your budget I reckon I reckon even 11 pro sorry 12 pro to 13 pro

01:41:15   or whatever it's going to be I think that's going to be a pretty big upgrade even this

01:41:19   year with that screen I think it's going to be awesome yeah Raghada asks many people believe

01:41:26   that the M1 in the iPad pro creates a perception that it is a grown-up computing device what

01:41:32   are your thoughts on the perception the M1 in the iPad wait hold on can I can I give

01:41:38   another go on that yes

01:41:45   many people believe the M1 in the iPad creates a perception that it is a quote grown-up computing

01:41:50   device do you think it makes the Mac wait what hang on does the Mac line make the iPad

01:42:00   oh yeah this is a confusing question isn't it I misunderstood what this question was

01:42:05   asking me and now I don't understand what this question means so I think I'm just gonna

01:42:11   so my own well for the question here's what it is the idea we've said that the by putting

01:42:16   the M1 in the iPad it makes it seem like a grown-up computing device because it's using

01:42:21   a Mac chip and Raghada is asking the reverse which is does having it in the iPad give any

01:42:27   kind of like cache to the Mac oh all right cool I got it hey everybody welcome to interpreting

01:42:34   ask upgrade questions with Myke and Jason third time's a charm many people believe that

01:42:40   the M1 in the iPad creates a perception that it is a grown-up computing device what are

01:42:45   your thoughts on the perception that the M1 in the iPad would then give towards the Mac

01:42:50   so like the question being I guess does it make the Mac seem better or worse because

01:42:55   it shares cooler with the iPad or modern cooler or not right like it's I could imagine some

01:43:01   people going oh this is just an iPad chat boys is an iPhone chip I bet there are people

01:43:07   that I like that I think the I think that there if we take this question is being does

01:43:14   the iPad rub off favorably on the Mac as well I think the answer is yes Apple has spread

01:43:19   that out over time but if you remember when the you know Apple has used like the MacBook

01:43:26   rolled out and they said that 12-inch MacBook I mean like this is from the people who who

01:43:31   made the iPad right and they've been trying to bring iPad like features to their laptops

01:43:36   especially and I mean the iMac is like a giant iPad too when you look at it right like I

01:43:42   think that I think that yes regard here has has come up with a good way of looking at

01:43:48   this which is what Apple is trying to do is have the M1 on the iPad be like oh it's serious

01:43:53   it's like like a Mac chip and on the Mac side I think maybe not with the chip so much but

01:43:59   more broadly Apple does try to have it be like we want to use what we've learned in

01:44:05   the iPad and the kind of that kind of attitude and the cachet if there is any with the iPad

01:44:10   to be like drive that into Mac design so that the Mac feels more cutting-edge or modern

01:44:17   or like a use the some of the judgments we make some of the criteria we use to judge

01:44:24   mobile devices on Macs especially laptops which I think is good right because I think

01:44:30   that smartphones and tablets have really raised our expectations for what a mobile device

01:44:34   is and I find myself more and more getting frustrated I love my M1 MacBook Air I think

01:44:38   it's really great I do think it benefits from being more iPad like in terms of battery life

01:44:43   and things like that but there are still things that it doesn't do that the iPad does that

01:44:46   frustrate me like why does it do it this way and the answer is always because computers

01:44:51   used to do that and so I think that Apple philosophically Apple wants the Mac and especially

01:44:57   the MacBook line to be more iPad like not in the way you're thinking which is make it

01:45:03   an iPad but in the way it behaves in terms of some features so like the one that I always

01:45:09   complain about is on my iPad if I close the cover and put it to sleep and I'm listening

01:45:13   to music and my headphones from the iPad the music still plays and if you close the cover

01:45:18   your MacBook Air the music stops well why is that it's because well that's how sleep

01:45:23   works on computers and the answer should be shouldn't work like that anymore right why

01:45:27   why why other than that it's been that way for more than a decade is that the way it

01:45:33   is and and so like I think the iPad and the iPhone have really good influences on the

01:45:38   Mac I don't think necessarily it's to answer this question it's the M1 that's doing that

01:45:42   but I do think that there are some really positive influences the that the the iPad

01:45:47   and the iPhone make on the Mac.

01:45:52   And Patrick asks which body part Jason would you trade for an iPad OS version of BB edit?

01:45:59   I I would love to see an iPad OS version of BB edit.

01:46:03   Not that much.

01:46:04   But the truth is there are a lot of other text editors the great thing about BB edit

01:46:09   is it's a text editor I can use other text editors to do what I want on iPad OS I might

01:46:15   have given up like the last knuckle of my pinky finger on my left hand for it early

01:46:22   early on in the iPad days but at this point you know between one writer and drafts and

01:46:28   and some of the the scripting tools that are over there I'm okay I'd love to see it because

01:46:33   I think that having more connection between BB edit on the Mac and on the iPad would be

01:46:41   nice like syncing settings and having some more of the features that are built into BB

01:46:46   edit that I miss in some of those apps but I wouldn't trade a body part for it Patrick

01:46:52   at this point it would be great but it's it's not enough there's there are other options

01:46:58   while lesser that are good enough for this.

01:47:01   If you would like to send in a question for us to answer on the show just send out a tweet

01:47:04   with the hashtag ask upgrade or you can use question mark ask upgrade in the real AFM

01:47:09   members discord which you can get access to if you sign up for upgrade plus go to getupgradeplus.com

01:47:15   and you'll get longer ad free versions of every episode of upgrade if you'd like to

01:47:19   find Jason online you can go to sixcolors.com and he is @jasnow j s n e double l i am @imike

01:47:26   i m y k e thanks to holo smile and pingdom and also whoever Jason's guest was yes it

01:47:33   was Julia Alexander summer of fun we'll be back next time until then say goodbye Jason

01:47:39   snow say goodbye Myke Hurley goodbye Myke Hurley

01:47:42   you

01:47:42   you

01:47:43   you

01:47:43   you

01:47:44   you

01:47:44   you

01:47:45   you

01:47:45   you

01:47:46   you

01:47:46   you

01:47:48   you

01:47:48   you

01:47:50   [ Silence ]