548: Starting to Count Chickens


00:00:00   Let's go live. If I can figure, I gotta find that window on this tiny, tiny screen.

00:00:05   I thought you had the 5K there.

00:00:08   Yeah, I do.

00:00:09   Oh, it's so tiny, the 5K. Alright. I do feel like that when I use my studio display. I'm like, "Oh, I'm so cramped here. Could it be on the small computer?"

00:00:19   I know, I'm on my dumb ultra-fine and it's so tiny. All my windows are all crammed together.

00:00:25   Oh, my life is so hard. I'm used to 6Ks and now I only have 5Ks.

00:00:30   Speaking of LG though, my nephews, my little tiny nephews were here. After Long Island Vacation, they came back here and were around here for a little bit.

00:00:38   What is their age range? Like, I got them so bad. You would think, like, once you have kids, you know kids' ages. Nope, I had kids. They grew up all through these years and I can look at a little kid and I have no idea how old they are.

00:00:49   Anyway, some of them are really little, I think before kindergarten and some of them pushing against the teens. So, the whole range there.

00:00:56   And I think it was maybe the littlest one from the mouth of babes because they asked to see. They said, "Show me that video game that we don't see." They wanted to see me play Destiny again because they didn't all have games like that at their house.

00:01:05   So, I played Destiny for a little bit and showed it to them. And within two minutes of playing, I'm playing on my LG gaming monitor, the littlest nephew says, "This monitor is really wobbly."

00:01:15   Even children know that the LG cannot make a stand that holds the monitor still. It's insane. I recently watched a gaming YouTube channel where they were talking about the monitors and the guy was like, "Yeah, LG is not very good at making stands, but it's not that big a deal. You can just use a VESA mount."

00:01:30   I'm like, "If I was doing a review channel for monitors, I would constantly ding them for stands that can't hold the monitor still."

00:01:37   The solution is not, "Oh, just buy another stand. Use a VESA mount." No, the solution is, make a stand that can hold your monitor still. Anyway, trying to bump the desk marker.

00:01:47   The best thing is it works like a bobble head. Like, it's got a spring in it, so as soon as it starts going, it goes, "Bubble, bubble, bubble, bubble, bubble, bubble."

00:01:54   I'm telling you, I had an awful time with my LG 5K, and I had to send it away for two months, and that was a bummer. But once I've gotten it back, it's actually been just fine, as I knock on wood.

00:02:10   Ultra fine.

00:02:11   It's been ultra fine. And the reason it's been ultra fine, and not just regular fine, is twofold.

00:02:16   One, I never, ever, ever even look at the USB-C connection to my computer on the monitor side.

00:02:23   But still, gravity is slowly pulling down on them, slowly prying them off the motherboard.

00:02:28   You are 100% correct. And then secondly, and we talked about this in the past, but my Fully, which I think they were a sponsor forever and a day ago, but my Fully monitor stand, I love this thing.

00:02:39   If you keep talking about that name brand, Casey, we're going to have to talk about how you pronounce that word. I'm sorry. I held off for like three shows, but now it's back. I can't.

00:02:47   Yeah, is it like a sound artist? A Fully artist?

00:02:50   How am I supposed to pronounce it? Fully?

00:02:52   No.

00:02:53   Fully, that's it.

00:02:54   I'm trying to, let me just, I'm trying to think of how Casey says it. It's not like Fully artist, because it's not what he's saying. F-O-L-E-Y. Like the people who make the noise of footsteps for movies and stuff.

00:03:03   It's more like, let me see. No, that would be different. I'm trying to think of a word. Maybe it's a sound that doesn't exist in the English language.

00:03:12   It is closer to Fully than it should be. Like that's where Marco's getting that from, but it's not exactly like it.

00:03:18   It's almost fully, but it's not quite fully.

00:03:21   But it's not fully.

00:03:23   Maybe it's like a baby horse with an E sound at the end. You know, a baby horse.

00:03:28   A Fully.

00:03:29   Yeah. Anyway, Casey, the word is pronounced fully. It's like a pulley. Like a pulley with ropes. Can you say pulley?

00:03:37   Yeah, pulley.

00:03:38   No, you can't say pulley either. This is the problem.

00:03:40   But that was wrong differently.

00:03:42   No, it was wrong exactly the same way.

00:03:44   Concentrate. We have a show to do.

00:03:45   This is the show.

00:03:47   For goodness sakes, Marco, do you have any queries about Mario that you'd like to vote?

00:03:51   Marco knows about queries. He's talked about it many times. It's a settled topic. This is new. This is brand new.

00:03:56   Super.

00:03:57   You said it in a couple of shows and I let it slide, but you keep bringing it back. And so now we have to talk about it.

00:04:02   We can't move forward until we talk about it.

00:04:05   It just needs to be named and mentioned in case you should know that it's a thing. Just like Marco knows that query is a thing. Whatever.

00:04:11   Like we all have our things.

00:04:12   And Mario is a thing.

00:04:14   Well, that's just, yeah, that's a regional thing. You're right. And Marco's thing, I think his thing is an Ohio thing, right? The query thing is an Ohio?

00:04:21   I think so.

00:04:22   Probably. So I don't know where a pulley is coming from, but the word is pulley.

00:04:26   I genuinely cannot hear the difference between the two things you just said.

00:04:29   Here, y'all. You gonna pull a Merlin on me?

00:04:31   I am. I really am. I have no idea the difference.

00:04:34   I can hear the difference between Mario and Mario. I can definitely hear it.

00:04:37   Oh, yeah, obviously.

00:04:38   This is like hover. This is totally like hover all over again.

00:04:41   I was just gonna say.

00:04:42   The problem was with hover, all three of us had no idea what they were talking about. You're like, what?

00:04:46   I still don't understand why the Brits are so angry. I really don't.

00:04:48   I do. I think I understand it now. But that's like, that's a UK thing. This just must be, I don't know, Connecticut? I don't know where it's coming from.

00:04:54   Do you think they were frowning while we were pronouncing it improperly?

00:04:57   Oh, goodness. That was a sad discovery as well. But at least that's not pronunciation related.

00:05:02   Oh, golly. Can we move on for the love of all that is good and holy?

00:05:06   Yeah, tell us about your baby horse.

00:05:10   So my fire hazard has been returned.

00:05:13   Oh, wait. Was this, it was an inflated battery on something, but I forgot what.

00:05:17   That's right. In an old iPhone that we were using for a white noise machine for Michaela.

00:05:24   Actually, I think this was Declan's. It doesn't matter. It was one of the kids.

00:05:27   And it had exploded more and more and more over the last couple of weeks.

00:05:33   I finally had the chance to go to the Apple store.

00:05:35   I showed them the phone and said I would like to recycle this, please. And the guy said, okay.

00:05:40   Can I have your name and email? Sure, I guess.

00:05:45   What?

00:05:46   He ran through a purchase of $0 for Apple Renew-Free Recycle-Gen.

00:05:52   Not sure what that means. On the receipt, it says recycle information.

00:05:56   Apple NPO Recycle, serial number, whatever. Is this an Apple device? Yes.

00:05:59   Is it a serialized product? Yes. Does it turn on? No.

00:06:02   Zero dollars. But they took it. Didn't blink an eye.

00:06:06   But they needed personal information to take it? Apparently.

00:06:09   They needed my, well, I guess it was just to send me the receipt? Question mark?

00:06:13   But yeah, they wanted my name and email address to do it.

00:06:15   I wish I could remember what they asked me. I gave them an old iPad. It wasn't swollen or anything.

00:06:20   It was just basically non-functional and super old and worth zero dollars.

00:06:23   So I said, it was an Apple store. I said, here, you can recycle this.

00:06:26   And I don't think they asked me anything. I think they said, hey, does it turn on?

00:06:29   I said, no, it doesn't turn on. It's just, it's dead.

00:06:32   I think they just said, okay, bye. And I walked away. But maybe they did ask for my email. Who knows?

00:06:37   I'm not sure. Moving on, we had some text editor feedback.

00:06:41   And did you know the entire internet wrote us to tell us that Nova is a thing that exists in the world?

00:06:47   I've got a little pushback on that, on the flow of feedback. So here's the thing.

00:06:51   The context of this discussion was someone asked us, like, hey, what text editors are you using?

00:06:55   And it was one of those things, questions that we answer every few years.

00:06:57   So we're sort of revisiting, hey, have we changed? Are we still using the same text editors?

00:07:01   That was the context. And in that context, we're not going to name every text editor in the world

00:07:05   because we're just telling you what we're using.

00:07:07   Now, the discussion did branch off a little bit when Marco was like,

00:07:10   I remember I tried some new text editors back in the day and he couldn't remember what they were

00:07:14   and he looked them up. But still, very focused on what we were using or trying.

00:07:17   It wasn't a survey of here are all the text editors on the Mac.

00:07:21   It wasn't even a discussion of here are all the good text editors on the Mac.

00:07:24   So I'm going to give us mostly a pass for not mentioning every text editor under the sun.

00:07:28   Second thing is, even if it had been a discussion of let's talk about all the text editors under the sun,

00:07:33   I'm not sure I would have brought up Nova, which, yes, of course, we all know about Nova.

00:07:37   I own it. I'm not sure I would have brought it up because I think of Nova like an IDE.

00:07:43   Now, I also think of VS code like an IDE, so maybe that's not fair.

00:07:47   But here's the thing. I revisited Nova because I paid for it ages ago and they have this weird thing

00:07:51   where you pay for it and you get a year of free updates.

00:07:54   And then after that you can still use the program, it just never updates itself anymore.

00:07:58   So I relaunched it and I realized my yearly thing had actually expired a little while ago,

00:08:02   so I reupped it by paying for another year of Nova updates.

00:08:05   And Nova, the text editor part of it, has gotten so much better and so good, I was amazed.

00:08:13   It was already good. My subscription wasn't that old. I knew Nova was good.

00:08:16   In fact, I sent some feedback and asked for a feature edition to the program

00:08:20   and they added it in two months. It was amazing.

00:08:23   But now, if you go into Nova, it's not like VS code level of support from the entire internet.

00:08:29   VS code has tons of people behind it. It's very popular, whatever.

00:08:32   But it's close for a tiny company like Panic to be even within shouting distance of VS code.

00:08:36   And of course, everything they do is nicer than it is in VS code because it's Mac native.

00:08:41   But there's so much as a third-party extension system. Every feature you can imagine is in there somewhere.

00:08:47   It's still not really like a text editor in the style of "I just edit text." It's an IDE.

00:08:52   It does file transfers because they're the company that makes transmit.

00:08:56   It is an incredibly full feature. But if you're thinking, "Oh, this is an IDE. I don't want an IDE.

00:09:00   I just want a good text editor," Nova is also an amazing text editor.

00:09:05   So I would have been wrong not to mention it because, A, we talked about VS code.

00:09:09   But B, if you just ignore all the IDE parts and just use it as a text editor,

00:09:15   as long as you're okay with having sidebars and stuff, which most Mac users are.

00:09:18   They're not like me with my bare BB Edit windows with no sidebars on them.

00:09:22   It has so many features, and they're all incredibly well implemented.

00:09:26   I was blown away by my newly updated version. I forget what version they're on.

00:09:30   They increment the end version number pretty quickly. They might be up to 15 or something or whatever.

00:09:34   But if you haven't looked at Nova in a while, take a look. It's pretty amazing.

00:09:38   Cool. Yeah. I had known about it originally about the Coda product.

00:09:44   And then, of course, Nova came out of that, I think.

00:09:48   But I had always also thought about it as an IDE.

00:09:52   And I wasn't really thinking I was in the market for that kind of IDE,

00:09:55   especially because it's primarily focused on--at least Coda was primarily focused on web development,

00:09:59   in particular, and front-end web development, which I really don't do a lot of,

00:10:03   as you can tell by looking at any website that I run.

00:10:08   So this was good to hear. Panic makes really good stuff.

00:10:12   So I think I will check that out next time I'm in the market for a text editor,

00:10:16   which at this rate is going to be sometime between three months from now and 30 years from now.

00:10:21   But you're also a sidebar-less text mate user, though, aren't you?

00:10:24   No, I use the sidebar. But it's just a file browser.

00:10:27   Yeah, okay. Again, we talked about VS Code because it's so popular, right?

00:10:32   And it's so well supported and everything or whatever.

00:10:34   But Nova is like that, but the really nice Mac version of it.

00:10:38   It's not as much third-party support and as much industry-wide support for everything under the sun,

00:10:42   but still way more than I thought it had.

00:10:44   Just launch it and go into their extension manager and see how many extensions there are.

00:10:48   I can always test these editors and say, "Is there anything for Perl?"

00:10:50   And there were multiple things for Perl, and so that warms my heart.

00:10:53   But there's tons of stuff for Swift. There's language server support for all that.

00:10:57   It's got a lot of features.

00:11:00   Obviously, you have to find where they are in this editor versus yours.

00:11:03   But if you're going to talk about VS Code in the discussion, you should also talk about Nova.

00:11:06   Yeah, and I was impressed to see they have PHP debugging in it, which I don't know how widespread this is now,

00:11:13   but last time I changed text editors, that didn't exist.

00:11:17   And I have written PHP code in some kind of professional capacity now for my entire career,

00:11:23   and I have never had a debugger.

00:11:26   So that sounds pretty amazing.

00:11:28   It's insanity.

00:11:29   Yes. That's what writing PHP was for the entire time I was doing most of that.

00:11:37   Now I'm more in PHP maintenance mode, like the rest of the world.

00:11:41   So I haven't explored modern PHP tooling in a long time.

00:11:46   So that would be quite a luxury.

00:11:49   So yeah, next time I will check out Nova.

00:11:51   What else is there? Because I didn't put this in the show notes, and I'm guessing Jon did.

00:11:54   We heard a lot about Zed, which I take a little bit of umbrage with this name.

00:11:58   It should be called Z, shouldn't it?

00:12:00   No, Zed's dead baby. Like it's a reference to the movie, right?

00:12:04   I thought it was the ridiculous British pronunciation of the letters Z.

00:12:07   Pulp fiction.

00:12:09   Yeah, Mark, have you never seen Pulp fiction?

00:12:11   No, of course not.

00:12:12   Yeah, the SID list. Okay.

00:12:13   I have, I have. I don't remember this reference, but I've seen it.

00:12:15   Anyway, it's a beta, and it's one of these text editors.

00:12:18   There's a bunch of them hanging around, but there's one of these text editors that really, really focuses on interface speed.

00:12:24   I think at one point they say it's like programmed like a game engine. Maybe I'm thinking of a different one.

00:12:28   No, it's dead.

00:12:30   Built like a video game. I downloaded it, I tried it.

00:12:32   Like, I'm not sure like the redraw performance and interactive speed of the cursor in text is a big limiting factor in most text editors.

00:12:39   But then I'm going to use BBEdit, which is already insanely fast at everything.

00:12:42   But maybe people who use VI all day, which we'll get to in a second, might be frustrated by the slow speed of using something like VS Code and might want something faster.

00:12:50   It's a beta. There's still not a lot of support for a lot of stuff. It's still not done yet, but you can look at the website and look at all the little performance charts they try to show you to see how much faster it is than a bunch of competitors.

00:13:01   And I thought it was interesting, so we'll link that in the show notes.

00:13:04   Yeah, I saw that as well, and that would also be, like, I think my list of what text editors I would try in what order would probably be Nova, VS Code, and then Zed.

00:13:17   And then, you know, make a decision from there. But those three, I think, really stand out in terms of what's available right now and what's promising.

00:13:24   Is that the one with the multi-user thing, too? I think it is, yeah. It uses the, uh, I gotta look at the thing. CRDT, what does that stand for? Chat room. Can you beat me to it?

00:13:33   Conflict Resolution Free Data Type? Something like that.

00:13:38   Yeah, something like that. But anyway, the point is it's multi-user from day one, so if that's a feature that's important to you, like if you remember SubEva Editor or Google Docs or whatever,

00:13:46   built on that kind of stuff. That's another thing in favor of Zed. On the downside, it does not have nearly as many features as VS Code or Nova, or BB Edit for that matter, so it's young, it's beta, but check it out.

00:13:56   You know, I do the show notes for the most part. You know, obviously the other guys contribute here and there, but for the most part I do the show notes for the show.

00:14:04   And I try to include, when one of us has some sort of command line snippet, I try to include that snippet in the show notes, and I'm a big believer in putting, you know, stuff that you're typing into the computer,

00:14:15   you know, like a command line command in a monospace font. And to do that in Markdown, you use the backtick.

00:14:24   And so I was looking at the next thing in the show notes, in our internal show notes, and it's ls-l backtick, which vi backtick, and I freaking blue screened, how do I escape a backtick in Markdown?

00:14:37   So you're not going to see this.

00:14:38   I'm sure there's a way, but this is yet another reason I dislike Markdown.

00:14:40   Oh, you bite your tongue. That is a hot take.

00:14:44   It's not for me. And exactly for reasons like this, because guess what? I know how to do it in HTML.

00:14:50   Well, and I could do it in HTML. That's the beauty of Markdown.

00:14:53   Oh, well then you should just do it in HTML. And once you're doing that, why use a Markdown at all? Anyway.

00:14:57   Why are you the way you are? Anyway, tell me about vi.

00:15:00   Yeah, so we were asking, we were using it in the last show, does it not come with vi?

00:15:04   And it's not because we're wondering, like, about the command line stuff, you know, that comes with the Mac.

00:15:09   It's because Mac OS, over the past several major versions, Apple has been doing a thing where they ditch a bunch of stuff that used to come with it.

00:15:17   So Mac OS 10, as it was then known, used to come with tons of command line stuff, and slowly that stuff departed.

00:15:23   One of the theories/reasons is it has to do with the licensing for the GPL stuff, and that being less compatible with what Apple wanted to do,

00:15:32   or the new versions of the GPL being less compatible with whatever.

00:15:35   Another is that Apple just didn't want to maintain this stuff anymore.

00:15:38   They said, look, if you want this on your Mac, it's really easy to install it from, you know, a package manager,

00:15:43   although Apple doesn't really have its own package manager, which is kind of crappy.

00:15:46   Or you can compile from source, and so, anyway, the point is, things have been leaving the Mac.

00:15:50   So that's why we were asking, hey, is vi on the Mac? We should have said is vi still on the Mac?

00:15:53   Because of course it's been on the Mac for ages, but I was wondering if it had departed.

00:15:56   And I asked that because Emacs recently departed, and I was annoyed when it departed, so now I have to go find and download and install it myself.

00:16:03   But just double checking, a couple of people wrote in to tell us that if you run that command that Casey read out before,

00:16:09   which is what I did, I just copy and pasted it from my own command line,

00:16:12   you say, where is vi on the Mac, and what is it? It is a symlink to vim.

00:16:17   So userbin vi is a symlink to userbin vim. And so vim comes on the Mac, and vi is just an alias to it.

00:16:24   And isn't that the case for almost every modern Unix kind of thing? Like, aren't they all?

00:16:29   Yeah, probably, except for like IBM AIX from ages ago, or if there are any proprietary Unixes still around.

00:16:36   Yeah, I think you're right that basically vi is vim on most systems, but back in the day it wasn't.

00:16:41   All right, and then tell me about mig.

00:16:44   This I didn't know. Something that does come with Mac OS, I don't know how long this has been shipping with Mac OS,

00:16:51   but when they ditched Emacs, I should have like aliased Emacs to this.

00:16:55   mg, originally called micro-gnu-emacs, and later changed at the request of Richard Stallman,

00:17:01   I'm reading from the Wikipedia page, I guess of course Richard Stallman wouldn't want Emacs to be in the name of anything else,

00:17:05   is a public domain text editor that runs on Unix-like operating systems.

00:17:09   It's based on micro-emacs, but intended to more closely resemble gnu-emacs,

00:17:13   while still maintaining a small memory footprint and fast speed.

00:17:16   It's in userbin mg on your Mac right now, if you have a modern version of Mac OS,

00:17:20   and it looks and behaves kind of like Emacs, except it launches a little bit faster.

00:17:24   I'm still probably going to install real Emacs, but it's nice to know that if I'm stranded on a Mac,

00:17:29   I don't have to be at the mercy of vi, I can just type mg.

00:17:32   Or I don't know if nano is there, or pico, or like a million of these editors, I don't know which ones come with the Mac,

00:17:37   we'll just check now, let's see.

00:17:39   Nano is in userbin nano, pico is in userbin pico, yeah, that's got a lot of stuff.

00:17:45   I guess if it's in userbin, then you didn't put it there, huh?

00:17:48   Yeah.

00:17:49   All right, fair enough.

00:17:50   There's a bunch of options, I do end up writing, nano is a sim link to pico, which is nice.

00:17:54   There's a lot of weird Unix text editors, but mg I honestly had never heard of,

00:18:00   and I was surprised to find that it's on my Mac, but yeah, I'll probably still keep using Emacs.

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00:19:05   Thank you so much, and I'll talk to you again about it in a little while.

00:19:12   Somebody noticed Neland, I do not understand French.

00:19:17   I did Google how to pronounce this, but Googling how to pronounce people's names is totally polluted by SEO crap of computers reading out names phonetically, which is not useful.

00:19:25   Such a shame. If anyone's looking for a call sheet-like thing or a Stack Overflow-like thing,

00:19:30   knowing how to pronounce people's names is just a poop show. I'm trying to find a nice way to say it.

00:19:38   It is ripe for disruption. If someone made a nice site that wasn't garbage,

00:19:44   or a nice app that wasn't garbage that did what these apps claim to do,

00:19:48   which is let someone from Italy record themselves and say, "Here's how you say this name,"

00:19:53   and you can pick from five different recordings and people rate them,

00:19:55   like kind of a Stack Overflow-type thing for name pronunciation, that would be super useful.

00:19:59   But that doesn't exist, so I don't know how to pronounce this person's name. I'm sorry.

00:20:03   And same with me. That's right. So anyway, they posted on Mastodon.

00:20:07   I just noticed something neat in Mac West Sonoma. As you know, Safari now shows favicons, favicons.

00:20:11   I can't pronounce anything, apparently, so whatever these are.

00:20:14   Favicons.

00:20:15   Favicons in your bookmarks bar. But if you rename a bookmark and add an emoji,

00:20:21   that emoji acts as a custom icon, which is super cool. And there's a little video,

00:20:26   I think it's a GIF, actually, a screen capture of this happening. Very slick. I dig this.

00:20:31   Yeah, ever since they added the color favicon, that's how I say it.

00:20:34   But you were stuck with whichever one the website used. But now you don't have to be stuck with it.

00:20:38   If the website uses an ugly one or uses something that you can't remember,

00:20:40   or they changed it and you don't like how they changed it, just put an emoji in there and that will become the icon.

00:20:44   It was really neat to see that.

00:20:46   All right, Ryan Roy--oh, I should back up a little bit. Sorry.

00:20:49   We got a lot of feedback about LLC's legal stuff and accounting stuff. Imagine that.

00:20:55   Again, we are not accountants. We are not lawyers. We don't really know what we're talking about.

00:21:00   Consult someone who does, if you have questions. But just to show how muddy the waters are,

00:21:05   we got a little bit of feedback. Ryan Roy writes, "I'm a CPA who does state and local taxes for large corporations.

00:21:10   I just wanted to clarify that if you have an LLC that you are the sole owner of--

00:21:14   tax people use the terms disregarded entity or single-member LLC--

00:21:18   you can still operate as a 'real business' and have employees that you pay a salary to.

00:21:22   There can also be LLC's with multiple owners called members.

00:21:24   If you have a multi-member LLC, the LLC would file its own federal and state tax returns,

00:21:28   and then the individual owners would then report their share of the LLC's income or loss on their tax return."

00:21:34   So, yeah, LLC's can get complicated.

00:21:36   Continuing on, Patrick Yan writes, "Single-member LLC's do not provide protections from torts committed by the sole member of the LLC.

00:21:45   If you commit an act of negligence, the LLC does not protect you because you personally have committed the act.

00:21:51   For example, if you made an artisanal baby toy and accidentally left a razor blade in the box,

00:21:55   you would still be personally liable for injuries due to negligence.

00:21:58   Having an LLC does not protect you since you personally committed said negligence.

00:22:02   If, instead, you had an employee who accidentally did the same thing without your knowledge,

00:22:06   then your personal assets would indeed be protected.

00:22:08   The best protection for solo entrepreneurs is to get a hefty umbrella insurance policy of at least a few million dollars."

00:22:14   Yeah, that's worth mentioning because I also got the same advice from the--

00:22:18   I don't know what you call them--financial helper person that we consulted with

00:22:23   when I was doing estate planning stuff recently, and they also recommended you should get an umbrella insurance policy,

00:22:28   probably for this reason. And so I did, and so I have one.

00:22:31   So I'm still not going to put razor blades in my baby toys.

00:22:34   I got an umbrella insurance policy a year or two back.

00:22:38   I had heard a story--this is a second or third-hand story. Consider the source.

00:22:41   We don't need follow-up about it. I'm just telling you the story that scared me into compliance.

00:22:45   A friend of mine said that a friend of his had an issue where his daughter, I think it was,

00:22:52   had gotten a really bad car wreck, and then somehow the daughter was liable,

00:22:57   and I forget, they didn't have the appropriate amount of insurance or something like that.

00:23:02   Fast forward to, oh my gosh, these people owe hundreds of thousands of dollars to the other person

00:23:07   that the daughter hit or something along those lines.

00:23:10   And so if they had had an umbrella insurance policy, then hypothetically that would have covered it.

00:23:16   So all that to say, look into an umbrella insurance policy, even if you don't have an LLC.

00:23:21   It's something you might want to consider.

00:23:23   Yeah, they're surprisingly affordable because they only cover stuff like--

00:23:27   they're only there just in case your other insurance doesn't deal with it,

00:23:31   and presumably you have to have the other insurance, you have to have auto insurance in the United States

00:23:34   if you own a car. So that's why they're reasonable, because most of the time you just pay the money

00:23:39   and never get anything for it, but that's the nature of insurance. I'm glad I have mine.

00:23:43   Exactly, same here. And then somebody, I presume, John, put some links in here.

00:23:47   I'm happy to read them, but John, do you want to tell me the genesis behind all this?

00:23:50   This is me Googling around to see, because Patrick can give one thing.

00:23:55   Ryan Roy talked about some more stuff. Here's the thing. We mentioned this on the show last time.

00:24:00   This stuff varies by state, so lots of people will tell you something authoritatively

00:24:05   that is absolutely true in their state or in the states where they work or in the states where they're a lawyer

00:24:09   or in the states where they practice accounting but may not be true in your state.

00:24:13   And we got a lot of reports from readers--listeners, sorry--who say--

00:24:17   someone from Missouri is like, "I got an LLC once like 10 years ago, and I think it paid $50,

00:24:23   and I haven't had to pay anything since, and here I am in Massachusetts paying $500 a year."

00:24:27   So it varies a lot.

00:24:29   That is, by the way, that's criminal. I cannot believe--

00:24:33   California is $800 a year.

00:24:35   That is ridiculous.

00:24:37   We're second place.

00:24:38   Oh, my God.

00:24:39   Oh, goodness gracious. So you're Googling around.

00:24:42   So here's me Googling around. These are people who have good SEO in Google.

00:24:47   I didn't go past the first page of results.

00:24:49   This is from Denha and Associates PLCC.

00:24:53   Their subhead says, "Attorneys and counselors at law."

00:24:56   All right, so this is getting to the point, because I wanted to know, hey, is Patrick in, right,

00:24:59   that you don't get any liability protection if you're a sole member because you're the prun who commits all the acts, blah, blah, blah?

00:25:05   So this is what this website says, and we'll link it in the show notes.

00:25:08   "A single-member LLC may"-- and the "may" is in scare quotes.

00:25:12   I didn't add them. They're in the actual document.

00:25:14   "A single-member LLC may act as a shield to protect your personal assets from the liabilities associated with the business conducted by the LLC.

00:25:21   For example, if your LLC owns a rental property and someone slips and falls on that property and wants to sue the property owner,

00:25:27   that plaintiff will be required to sue the LLC, not you personally.

00:25:31   If the plaintiff ultimately wins the lawsuit, he or she will only be able to come after the assets owned by the LLC, not the owner.

00:25:37   The same protection applies to protect the owner from any debts of the LLC.

00:25:41   So this example of the person slipping and falling, again, another hypothetical.

00:25:45   What if you were personally negligent? You didn't put down a wet floor sign or whatever?

00:25:49   Not entirely clear, because they're saying, here's a situation where you would be protected,

00:25:53   and maybe it's only if your own personal negligence didn't cause the fall, but then how would they win the lawsuit?

00:25:58   I don't know. It's confusing. So here's one more.

00:26:00   This is from Walter's Cluer, a global-- this is what they say on their website.

00:26:04   "A global provider of professional information, software solutions, and services for clinicians, accountants, lawyers, tax, finance, audit, risk compliance, and regulatory sectors."

00:26:12   This company does a lot.

00:26:13   So this is talking about what Casey was-- or Marco was alluding to last show about keeping your stuff separate,

00:26:19   keep your personal crap separate from your LLC stuff, because if you intermix them too much,

00:26:24   in various legal proceedings, they can do a thing that's called "piercing the veil," which sounds so weird and fantasy-ish, whatever.

00:26:32   But "piercing the veil" is saying that they sort of go through the LLC and see that you are there on the inside of it,

00:26:39   because you've mixed it together too much. All right, so this is what this website says about that.

00:26:43   "When the veil is pierced, the owners of the LLC lose the limited liability that their business entity has provided.

00:26:48   That means their personal assets can be seized by creditors to pay off business debts and liabilities."

00:26:52   A lot of the stuff you read online talks about debts and liabilities, like if your business has liabilities,

00:26:57   if your business takes out loans and you can't pay back, that's a common thing that they think you're going to be worried about if you have a business.

00:27:04   And that's something the LLC can protect from, unless they pierce the veil.

00:27:08   So, continuing, "The criteria by which a creditor can pierce the corporate veil varies by state."

00:27:13   Of course it does. Why would it not?

00:27:15   "To protect the entity, a single-member LLC must demonstrate that the business exists separately from itself.

00:27:21   This involves ensuring timely compliance with annual filing requirements."

00:27:25   That's why you've got to pay all those fees to your state.

00:27:27   "And filing fees in the state in which the LLC is incorporated, and creating and maintaining an operating agreement.

00:27:32   Single-member LLC owners must also keep their business assets separate from personal.

00:27:36   The best way to do this is to maintain a separate business bank account and credit card and only use these for business expenses.

00:27:41   Single-member LLC asset protection can also be jeopardized if a charging order..."

00:27:46   You can read... No, a changing order? Charging order? A changing order? You'll see it on the website.

00:27:51   "If a changing order..." That's what I have here. "Protection is imposed by a creditor on distributions from the business entity..."

00:27:57   See, now it says charging order. I must have just typo'd it.

00:28:00   "A charging order is a court-authorized lien that protects non-debtor members of an LLC from being forced into partnership with the owner's creditor.

00:28:07   However, because a single-member LLC just has one owner, there are no non-debtor members to protect.

00:28:12   Subsequently, the business can be liquidated and the proceeds used to satisfy a judgment claim by the creditor.

00:28:16   Certain states, including Alaska, Delaware, Nevada, South Dakota, and Wyoming, have amended their LLC laws to ensure that single-member LLCs have the same protection from creditors as multi-member LLCs.

00:28:27   Meanwhile, in Florida and New Hampshire, LLC laws have been changed to limit the liability protections of single-member LLCs compared to multi-member LLCs."

00:28:34   This is why you have to talk to someone in your state. There are so many asterisks and exceptions and hypotheticals.

00:28:40   It's so hard to figure out, "Am I protected? And what are protected from? Under what situations?"

00:28:46   But that's why stuff like, we talked about last episode, like sort of best practices of like, "Oh, you should keep yourself separate."

00:28:52   Someone's going to say, "Well, in my state, I don't have to keep my stuff separate because we have some law that blah, blah, blah."

00:28:56   But like just sort of trying to follow best practices for running your business, filing your annual fees, making sure you're in compliance, giving your assets separate.

00:29:05   It gives you the best fighting chance about getting the most protections available to you in your particular state. America.

00:29:12   Yay.

00:29:14   And in conclusion, Florida is dangerous for yet one more reason.

00:29:18   As if you needed another, here we are.

00:29:20   Don't live in Florida, if you can at all help it.

00:29:22   And New Hampshire, live free or die.

00:29:24   I'm back. We are sponsored again by ATP Membership. And here's why you might want to become a member.

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00:30:49   So ATP.fm/join. Eight bucks a month. And I'll talk to you again soon.

00:30:54   I wanted to quickly recap Call Sheet Week 1. And I just wanted to say thank you to basically everybody.

00:31:06   I was probably, I think I came across way more morose last episode on analog than I meant to.

00:31:12   But, you know, I really didn't want to like do a jig or happy dance or whatever prematurely only to find out that maybe things weren't so great.

00:31:20   You know, I didn't want to count those chickens, as they say. And now I'm starting to count chickens. Things are pretty great.

00:31:26   I appreciate everyone who has talked about the app, who has written me to say thanks about the app, who have told their friends about the app.

00:31:36   I also think I happened to stumble somewhat deliberately and somewhat accidentally onto some extremely fortuitous timing.

00:31:44   It just so happened that The Verge started a new newsletter. And so briefly I was the number one story on The Verge.

00:31:54   Kind of, sort of, because their newsletter, I think, I forget what it's called. I should have put this in the show notes. I'm so sorry.

00:32:02   I will definitely put a link in the show notes. But whatever it's called, Installer, I believe. I think that's right.

00:32:06   Their new newsletter installer, I'm pretty sure that's correct, featured Call Sheet as one of the first things that spoke about once they got through the "Hey, this is your new newsletter, blah, blah, blah."

00:32:17   Well, because of that, the headline on The Verge for their own new newsletter was something like "The new app that all movie lovers should download" or something like that.

00:32:29   Yeah, because the newsletter lists multiple apps. It's basically like, "Here are the cool new apps we've seen, but yours got the headline."

00:32:35   Right, which, again, incredibly, incredibly fortuitous timing on my part. Or maybe they really just love it that much.

00:32:43   Installer is the newsletter. It's by David Pierce. I'm so sorry I didn't have that in front of me.

00:32:48   And the headline as it sits right now, "The new app every movie lover needs. Couldn't have planned it better."

00:32:54   Now, if I'm really honest with myself, I think a lot of this was just very good timing, like I said.

00:32:58   Hey, take the win. Who cares why it's there?

00:33:01   Oh, yeah. I'm taking the win big time. But I think it just so happened that I caught the very first, I almost said episode, the very first instance of this newsletter.

00:33:12   And so, couldn't have planned it better. I'm so incredibly grateful. There's been a lot, a lot of press coverage.

00:33:18   It has pretty much been universally complimentary. And it's been incredible. And I am so unbelievably thankful.

00:33:27   I've been looking at numbers for the optional expensive plans, the $20 and $50 a year plans.

00:33:34   And it's surprising how many of you opted into that. And we're going to talk, I think, in the after show about why that means even more to you than you may have realized.

00:33:44   So I just wanted to say thank you to everyone and apologize for being a little bit, maybe morose isn't the best word, but a little bit tepid last episode.

00:33:54   Because I really just did not want to count my chickens and get ahead of myself.

00:33:57   But like I said, the numbers are starting to roll in from the first few days and they're looking pretty, pretty good.

00:34:02   And the best part about this is from my perspective, and speaking of owning your own pricing, hypothetically these numbers will be about the same every year.

00:34:12   Assuming I don't screw stuff up, assuming the movie database doesn't fold a lot, Twitter, what have you.

00:34:17   This should be for the foreseeable future. And that's really awesome.

00:34:21   And it's also been awesome to get this app out the door and not only realize that I have more to do, which has been true of every app I've shipped.

00:34:30   But be really jazzed and excited about doing more.

00:34:33   Because I feel like I've got some momentum and I feel like I've got users that really care about the app.

00:34:39   And as I sit here now, I have a beta among the small beta group.

00:34:44   Again, the members, I very much appreciate the time you spent with the beta, but it's now just a select few.

00:34:51   But anyway, that beta has a ton of small but important changes that I've already shipped and there's more coming before I send it to the App Store.

00:34:58   So I'm really, really thankful, very, very thankful to anyone who's even kicked the tires on the app, much less ponied up some of their own cash to subscribe to it,

00:35:06   who have told their friends about it. I am super, super appreciative and thank you so very much to every single one of you.

00:35:12   Yeah, first of all, congrats. That's amazing. And I'm so happy for you.

00:35:17   Thank you.

00:35:18   You've worked hard on this and hard work does not guarantee success. People can work hard on the wrong problem and not have much success at all.

00:35:26   Like my apps. I work really hard on them. I do. I do work really hard. And every time I'm working hard on them, I'm like, "Why are you working hard on this? No one wants these apps."

00:35:35   But I use them all day every day, so I guess it still works out.

00:35:38   Yeah, it works out.

00:35:39   The great thing about, you know, a lot of, as we've discussed, a lot of customers do not like subscription-based pricing for their own various reasons,

00:35:48   some of which we agree with, some of which we don't. But what you just said, how this has motivated you and encouraged you to keep working on the app,

00:35:58   that's key to subscription-based pricing. That's one of the greatest upsides to the developer and therefore indirectly does benefit the users.

00:36:07   Because, you know, the way most apps have worked before this, you know, most income from software is what you described has happened with your previous apps,

00:36:15   which is you get some, you know, if you're lucky, you make a splash however you can when it launches.

00:36:20   You get, you know, whatever bump of sales, whatever burst of sales is going to happen, you know, up front.

00:36:26   And then it very quickly actually drops down to some like baseline level of sales, which is probably pretty close to zero.

00:36:33   And when you're on that one, you know, the day one high of that kind of launch and you see that big spike and you're like, "Oh my God, this is great.

00:36:42   I wonder when it's going to, you know, how far is it going to go?" And that's a wonderful feeling.

00:36:47   But then, you know, three days later or a week later when it's no longer going up and it starts to crash back down,

00:36:53   at that point it's very difficult for your motivation at that point to be like, "Yeah, let's, now that I've made almost all the money I'm ever going to make from this app,

00:37:04   let's start tackling all these difficult feature requests." No.

00:37:07   Like you phrasing it as motivation makes it sound like, "Oh, it's hard for me to like get my button gear and do a thing." Like it's practical.

00:37:14   Like you have to choose how to spend your time. And if you're going to say, "I'm going to work, you know, 40 hours a week for the next three years to make the equivalent of 0.01 cents per hour."

00:37:25   You do the math on it and you could say, "Look, I'm putting all, should I put all my work and time and energy into something that basically has zero sales?"

00:37:32   I mean, that's why it makes no sense what I do with my apps. But like that, it's not like, "Oh, I can't, I can't be motivated. I'm so tired."

00:37:38   Like good sales, no, good sales makes it worth your while because if you have a subscription and you have people using the app,

00:37:44   you should invest the time because you need them to keep subscribing so the app needs to be good, right?

00:37:49   Whereas if people are buying it and those people think, "Well, I paid $5 once 10 years ago, you should keep updating this app for me forever."

00:37:55   That's great to think that, but economically it doesn't work out. You can't, you know, if you make all your money the first year,

00:38:00   you can't make $0 income for the next three years as you work day and night on the app to satisfy the people who paid $5 three years ago, right?

00:38:08   So don't think that it's a matter of laziness or not being able to get your juices flowing or whatever. It's just plain math.

00:38:16   You need to do things with your time that will make money for your family and if no one is buying your app,

00:38:22   if essentially no one is buying your app anymore, don't spend the next three years heads down working on it.

00:38:26   Exactly. And that's what's great about subscription-based pricing is you kind of have a constant demand level established.

00:38:37   As long as the app continues to work, you can be reasonably sure that not all, but most of the current subscribers will probably stick around at the next interval, whatever that subscription is.

00:38:50   And again, it's not all. You mentioned earlier, Casey, you mentioned like, "Oh, I'm guaranteed basically," and you know that you're not, and I know you know that.

00:38:58   Just to clarify, you will lose some people, but you'll also be bringing new people in, hopefully, continuously as time goes on.

00:39:05   And so hopefully, the goal with any kind of subscription-based plan is whatever you're losing to churn, hopefully you're making at least that many new subscriptions happen,

00:39:15   and that way you stay ahead of the number.

00:39:18   And every improvement you make can be like a ratchet, because now suddenly your app is more attractive to new customers.

00:39:23   It's more valuable. It has better features. It's better at doing what it does.

00:39:27   And after several years of you working on that, your app is defended better against competitors, because they can't get all the features that you've got in the amount of time that you spend on it.

00:39:36   So now you have a competitive advantage, and it's just the ratcheting mechanism of like, "Yeah, there's a lot of churn, but I want to get just a little bit more, just a little bit more, just a few more customers," and you do that by improving the app.

00:39:46   And that also reduces your churn, because the app gets better and better.

00:39:50   People come to love it more, they come to rely on it more, they're delighted by the new features that you add.

00:39:55   There are minor annoyances in the app that you fix, and they appreciate that, and that motivates them not to churn out.

00:40:01   I don't know what the terminology is in the world of streaming services or whatever subscription things we talk about, churn.

00:40:07   Is churn out a thing? But anyway.

00:40:09   I think the verb is also just churn. It causes them to churn.

00:40:12   I don't like that. I think that's probably right as well, but I just don't like it. I'm the Merlin now.

00:40:17   But anyway.

00:40:18   Yeah, that's fine.

00:40:19   With subscription, you can see the value of investing your time. You see it right there, and it's a virtuous cycle.

00:40:25   As you make your app better, you reduce churn, and you increase the satisfaction of your existing users.

00:40:31   Exactly.

00:40:32   And in fact, one thing I thought of, probably better I didn't bring it up last show, because you were already in a hesitating kind of mood.

00:40:41   With all this press attention, you're probably going to get copycats. Probably fairly quickly.

00:40:47   That thought has crossed my mind as well.

00:40:49   Just wait until you search for callsheet and see that they've put callsheet in their keywords, then you know you've arrived.

00:40:53   Yeah, exactly. It'll be, you know, free callshoot or whatever, and it'll be like a crappy clone of your app, but free and filled with ads.

00:41:01   And so I think it's interesting to, you know, kind of as a thought experiment, you should be mentally prepared for that to happen, and to kind of have some kind of game plan.

00:41:10   Even if the game plan is change nothing, you should have some kind of plan for what do you think you want to do when, not if, when a competitor comes out to the app store that is similar enough to your app to cause problems for you, and is free with ads, and will therefore undercut you.

00:41:27   Because that will happen. It's the app store. It might have already happened, and if not, certainly it'll be there by next week.

00:41:33   You know, because the amount of press attention that you got, it's great, but it's a double-edged sword, you know. It shines a big light on you, and on this app category, oh, there's a market for that. Hmm.

00:41:44   And so I guarantee you there's people right now working their butts off trying to clone your app as quickly as possible.

00:41:49   And if they aren't already shipped, they will be soon, probably soon.

00:41:54   I had clones within a week, so Casey, you will have clones?

00:41:58   Yeah.

00:41:59   I had foolish clones thinking that I was, that there's some lucrative market they're tapping into, it's like suckers, and there's no sales here.

00:42:04   Yeah, but, yeah, right. But anyway, like, you know, you are, you are leaving room for them because you don't really have, like, a free plan in the sense of, like, a free unlimited with ads.

00:42:14   And you probably, I mean, you know, you expressed in the past, and we talked about this on the show, why you didn't really want to go that direction.

00:42:21   And that's probably the right move for you, like, if that's still how you feel, you probably still shouldn't make an ad plan or whatever.

00:42:27   But be prepared for that to happen. And that preparation could be as simple as you're just going to keep working, making your app always be better than theirs.

00:42:35   That's not going to necessarily...

00:42:37   Sharpen your marketing message to emphasize the fact that yours is the one without the ads.

00:42:41   Like, it should be like the Amazon title. Call sheet, no ads, no garbage, no sign in.

00:42:46   Call sheet, movies, TV, no ads, no garbage, no sign in.

00:42:49   Yeah.

00:42:50   I would like to revise my prior statement. I have made no money. In fact, I've made negative money on this app. It's been a disaster. Nobody should pay attention to it.

00:42:59   Well, as of right now, you haven't made any money. Apple takes a long time to pay.

00:43:02   Well, that's true.

00:43:03   You actually are probably negative in the sense that you probably, like, you know, paid some money to get it, you know, have the account up there, get it listed.

00:43:08   Maybe you've bought some ads here and there already, you know.

00:43:10   Mm-hmm.

00:43:11   But yeah, like, be prepared for when the, when the clones come, if they haven't already, have a game plan in mind of, like, how you're going to deal with that.

00:43:19   Because it will happen, and it's better not to be too surprised when it happens. But, you know, it's interesting, like, a huge part of the appeal of your app is that you're replacing something that is ad-filled with something that is better and not ad-filled.

00:43:32   So that actually gives you a little bit of defense because something else that comes in and is filled with ads will not have the same appeal that you have.

00:43:41   Right, right.

00:43:42   But, you know, that will happen.

00:43:44   And if that, you know, if some other even decent, not even good, but if some decent app comes in and is full of ads, they will probably get way more installs than you.

00:43:55   Probably, yeah.

00:43:56   You know, it's going to be like, you know, 3 versus 2048 all over again.

00:43:59   You can have the nice one, but if an ad one comes in and it proves to be a popular enough category, like, they can explode and they can, they can, you know, possibly even make more money than you if they, if they, you know, play their game right.

00:44:12   And so you got to kind of decide, like, you know, do you want to try to capture that market yourself because that market exists or are you willing to give that up in exchange for having your app be the premium option?

00:44:24   But that won't necessarily mean you are leaving a lot of market behind for someone else to pick up.

00:44:29   Yeah, I don't like that you're giving everyone a game plan here, Marco.

00:44:32   Maybe we should move on.

00:44:34   I totally hear what you're saying.

00:44:36   I have thought about this a smidge. I haven't spent any meaningful time thinking about it because I've been like the Tasmanian devil for the last two weeks.

00:44:44   But yeah, this thought has definitely crossed my mind and honestly, I'm not really sure what I'm going to do. Not yet anyway.

00:44:49   My inclination is I want to be the premium product in the space and I don't, I have a premium price when compared to free, but it's not that expensive.

00:45:01   And so...

00:45:02   Oh, it doesn't matter. It's not free. That's it.

00:45:04   The App Store has two prices. Free and not free.

00:45:07   Free and expensive. Yeah, exactly.

00:45:09   But I will say that the chat room has had some interesting ideas. Mike C. Wells said, "What if someone creates a clone called Flukup?"

00:45:20   Perfect.

00:45:21   Or Wedge says, "Hear me out. The clone is named FlawSheet."

00:45:27   I mean, IMDB is kind of already the free junked up clone, so you've got that going for you.

00:45:31   Yeah, that's true.

00:45:32   You know what I would like to see? I would love if everybody who reviews... Maybe I shouldn't give people ideas.

00:45:37   I was going to say everybody who reviews CallSheet in the App Store should somehow work in a list pun to the review.

00:45:44   Please, don't encourage this.

00:45:46   Oh, come on! That's a flawless procedure. It gets my full endorsement.

00:45:52   But anyway, no, thank you so much to everyone. I really do appreciate it.

00:45:55   And yeah, if you find an app that's a clone, I don't want to know because I'm riding high right now. I don't want to know about it.

00:46:04   We are sponsored, still, by ATP Membership.

00:46:08   So, yes, this is kind of weird that we have all three spots this week taken up by ATP Membership.

00:46:14   This is not a common thing, but it's becoming a not uncommon thing because the ad market is really cyclical and it's in a down market right now.

00:46:23   We're going to talk about it a little bit later in the show, but just as it is, we're leaning into membership a lot more heavily these days.

00:46:31   And it's wonderful. We are so, so thankful to have so many of you as members.

00:46:36   And if we can get a few more, it would really help us out a lot in terms of the current ad market.

00:46:43   So, atb.fm/join. Again, you get the ad-free feed. You get the bootleg.

00:46:49   You also get occasional access to other bonus things. So, we will occasionally do member exclusive specials.

00:46:54   That'll be things like we watch a movie and comment on it together, or we try a new food, or most recently we did a tier list ranking all of the iPhones.

00:47:03   And we're going to do more Apple hardware stuff like that in the near future.

00:47:06   So, occasional exclusive content as well. You get occasional discounts on our membership on our merchandise.

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00:47:19   You get a discount on that in your member panel.

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00:47:42   Thank you so much for considering becoming a member, and talk to you soon.

00:47:47   Talk to you soon.

00:47:48   [Music]

00:47:51   Everyone in the little Apple ecosystem, ecosphere, I almost said, this little section of the world,

00:47:59   has been talking about a very interesting rumor that has been perennial, but has sprung back up.

00:48:05   It has sprouted, if you will. And the rumor is that Apple is thinking about considering, or at the very least could, buy Disney.

00:48:14   Like THE Disney. Like Walt Disney World Disney. And this all started, I believe, by an article in the Hollywood Reporter,

00:48:23   a quote, "veteran Hollywood executive," quote, told the Hollywood Reporter. This executive said,

00:48:29   "I don't think Apple would buy the company that is Disney as it presently exists.

00:48:34   But if you see Bob Iger, CEO of Disney, start to divest things, that feels like he's prepping for a sale.

00:48:40   And there's clearly no buyer like Apple. Not long after that," writes the Hollywood Reporter,

00:48:46   "Iger went on television and hung a 'possibly for sale' sign on Disney's TV businesses."

00:48:50   And just like that, it was a little more possible to see the outlines of a slimmed-down Disney that could be a tempting acquisition target.

00:48:58   We're going to talk about this a little more in a minute, but I wanted to point out, when I was doing my research for tonight's recording this morning,

00:49:03   at the very, very bottom of the Hollywood Reporter article, and maybe Marco you can make this the chapter art for this chapter if you don't have a better answer.

00:49:12   At the very bottom of the article, there's a chart, if you will, an image, "Big Hollywood Small Fish for M&A Mergers and Acquisitions."

00:49:21   And it shows a bunch of red circles. And that represents the approximate worth or value of all these different brands.

00:49:29   Paramount is a little pin, if you will, of $11 billion. Fox Corp is a little bit bigger than Paramount, $16 billion.

00:49:38   Warner Bros. Discovery, $35 billion. Disney is looking pretty big. It's on the bottom left corner. And that's $158 billion.

00:49:46   But then you look immediately above Disney in this chart, and there's Apple at $2.8 trillion, which is like five times bigger.

00:49:54   Just visually five times bigger. I don't want to do that math in my head, I'm sure I'm wrong. But visually it's...

00:49:59   Well, you can do the math. I put the numbers down in the show notes here. So I did them in billions. Disney, $160 billion.

00:50:04   And I tried to put Apple in billions too, just because some people don't have to do it. So it was $160 billion. Apple is $2,780 billion.

00:50:12   So it's an order of magnitude. $160 versus $2,700 is an order of magnitude larger.

00:50:20   And the other dots here, they put Amazon up or whatever, but Google $1,650 billion. Amazon, $1,420 billion.

00:50:27   These are tech companies that are in the thousands of billions, aka trillions. And Disney is in the hundreds of billions.

00:50:34   Even though you think of Disney, they own everything. They have all this IP. They're Disney, they're so big. $160 billion.

00:50:40   It's peanuts compared to these tech companies.

00:50:42   Yeah, it's absolutely bananas. And we're going to talk more about that here in a second.

00:50:45   But Jason Snell had a write-up at Six Colors, and then there was a really, really good and long but great segment about this on Upgrade with Mike Hurley.

00:50:54   Speaking, a reading from Jason at Six Colors.

00:50:57   "The Apple Buys Disney concept has been floating around for years, but it has never seemed more likely than it does right now.

00:51:04   That is not to say that it seems especially likely, but given its current business issues and the return of former Apple board member Bob Iger to the CEO job there,

00:51:12   it doesn't seem as outlandish an idea as it once did. Apple buying Disney would certainly be unexpected.

00:51:18   But after many years of shaking my head at the idea, I'm hesitant to do so now.

00:51:22   While Apple's slowly been creeping toward being a company that's as much about digital services as hardware and software,

00:51:29   a move like this would be instantly transformational.

00:51:32   It may simply be the fact that the tech industry is about to eat the entertainment industry whole.

00:51:37   If that's the case, Apple may not find a better match than its old friends at Disney."

00:51:43   And again, there was a long conversation about this on Upgrade, and we're going to, I think, kind of crib some of the approach that they took there.

00:51:51   And then Jason, again, this time over at Macworld.

00:51:55   "So if it's inevitable that in an era of streaming media, the tech industry will eat the entertainment industry whole, why would Apple buy Disney?

00:52:02   It could be as simple as this. It's potentially an avenue of further growth for Apple.

00:52:05   If Apple believes integrating Disney's intellectual property, customer experiences, theme parks, cruises, and the rest into its ecosystem will form a virtuous circle that will send Apple's revenues and profits ever higher, that's probably reason enough.

00:52:18   When you're as big as Apple, you need to get creative in order to seek growth."

00:52:22   There's a lot to unpack here. There's a lot, a lot.

00:52:25   And when I was doing this research this morning, my initial reaction was, "Well, I agree that it is more likely than ever before, but no freaking way."

00:52:34   And then I saw that chart on the bottom of that Hollywood Reporter article, and then I thought to myself, "Ugh, this really isn't that big a deal for Apple, is it?"

00:52:45   Part of the reason Apple has all that money, though, is that they don't spend a lot of it.

00:52:50   They buy little companies all the time. They can buy like 100 companies a year, but they buy them for pocket change, like stuff they find on the sofa.

00:52:56   Disney is a little bit bigger than stuff they find on the sofa, but still well within their reach.

00:53:01   If they bought 100, 200 billion dollar companies routinely, they wouldn't have 2.8 trillion dollars.

00:53:07   A couple hundred billion here, a couple hundred billion there, soon you're talking about real money.

00:53:11   So Apple is not kind of like, they're not gung ho. Their money isn't burning a hole in their pocket.

00:53:18   They're not like, "We've got to spend this. It's not Brewster's millions." That's why they have all that money.

00:53:22   So that's why I think the discussion about this with Jason and the surrounding discussion in Hollywood Reporter and everything

00:53:28   has basically said that Apple's got to have a reason. And part of the reason is kind of like the manifest destiny of the current economic conditions in the US.

00:53:38   The idea is that the tech companies have all the money, and it's inevitable that they will eventually eat the smaller fish that are trying to do the same thing.

00:53:48   And in this particular context, the smaller fish are all those media companies that own things, and they all started their own streaming services.

00:53:54   So there was Netflix, and then these companies were like, "Why are we selling our things to Netflix? We should have our own streaming service."

00:54:00   And everybody thought that. So now there's the Paramount streaming service, and there's the Disney streaming service, and there's the Peacock streaming service.

00:54:06   Everybody wanted to have their own streaming service, and then they pulled their stuff back and said, "Now if you want to see our stuff, it's on our streaming service."

00:54:11   And here's the thing. These companies' core competencies are not running a streaming service.

00:54:16   The tech companies are better suited to that, but most of the tech companies don't have content except for Netflix, which has got its own original content, and Amazon's paying for its own, and Apple's as well.

00:54:25   So here I have all these companies that have streaming services, and a lot of these companies, like Paramount Plus or whatever, they need to make their streaming service make money.

00:54:34   But Amazon and Apple, they have other ways to make money, like AWS and iPhones.

00:54:40   So they don't necessarily need to make sure immediately that their streaming services make money, because Apple and Amazon, just the name too, have paid tons of money to make TV shows and movies.

00:54:53   You may have seen many of them. Those cost a lot of money to make. I don't think either one of them is making enough in subscribers to their services, although Amazon is part of Prime, so I don't actually know how that works out.

00:55:03   But they don't have to worry that much about that, whereas Disney spent so much money making programming for Disney Plus, but now they're like, "Okay, Disney Plus, it's great that you have this big launch and you got all the subscribers, but do you see a future in which you can be profitable for us?

00:55:19   Because we kind of need you to make money. Yeah, we make money from lots of other things too, but we don't have an iPhone sitting in the side making billions and billions of dollars for us, so I need to at least see a roadmap where the streaming service would become profitable."

00:55:32   Everybody's saying that. Everybody who's got a streaming service is saying, "We spent upfront," and they're all, I think Jason said this on one of his shows, they all want to be the last company standing.

00:55:42   "We're all going to spend a bunch of money upfront and we're just going to say, 'Spend billions, make the best shows you can, get Tom Hanks on the phone. We're just going to spend this money and make the best shows, and the goal is not to make money. Don't worry.

00:55:55   The first few years we're just going to lose billions and billions of dollars, but we just need to outlast the other companies." And they go under and they get consolidated and they get bought out, and it'll just be Netflix, Amazon, Apple, and us.

00:56:08   And everyone wants to be the us, and they're not all going to be. So the manifest destiny is tech companies will own this sector because their circles are the biggest, as Casey pointed out, and they'll outlast you.

00:56:21   They can lose money for longer than you can. And they have, especially Apple, have so many huge businesses that are like, I think people are showing graphs, like, "Which ones of Apple's businesses make more profit than all of Disney?"

00:56:34   And it's like, AirPods? The iPad? Like, pick a random ass side business for Apple, like a hobby business or whatever. Yeah, that makes more profit than all of these other companies, right?

00:56:47   Forget about the iPhone, gigantic monster, or services, which is its own giant amorphous blob of stuff, right?

00:56:55   So if you think the tech companies are going to own everything, and you're looking at how is that going to happen, how are tech companies going to own anything? Are all the media companies going to go out of business? No, someone's going to buy them.

00:57:06   So if you believe in that manifest destiny, and you look at the world, and you say, "Okay, so who's going to buy who?" The reason people always talk about Apple and Disney is because there is kind of a culture, an ethos, a level of taste, and quality, and well-earned brand fame.

00:57:27   There are a lot of similarities between Apple and Disney, and also Apple and Nintendo, which we've talked about in the past, that they're companies with a reputation for caring a lot about the quality of their product.

00:57:36   They have earned a reputation for producing a quality product. They have lots of attention to detail, and both companies have, at various times, been willing to do things that are against the grain, because they believe they're the right thing to do, and they make for the best long-term success of the business, even if in the short term they're expensive, and other companies wouldn't do them.

00:57:56   That's why Apple is Apple, and that's why Disney is Disney. That's why people always talk about these two, and if you buy into the "tech eats everything," Apple eats Disney. It makes perfect sense.

00:58:07   I'm not entirely sure I buy into the "tech eats everything." I'm not entirely sure that Disney can't just outlast this on its own. If anyone's capable of weathering the storm, it's Disney that owns everything now, and owning everything is lucrative.

00:58:21   If Disney's just managed well, it can hunker down and wait for the other ones to get eaten up, and it can be the last one standing. I believe if you have to pick which one is going to be the last one standing, I think Disney's got enough other businesses to keep itself up.

00:58:34   But I'm kind of in the same camp as Jason, where I had previously entirely dismissed it, and now I can no longer do that. I can't entirely dismiss it. I can still say that I probably wouldn't bet on it, although speaking of betting, when Gruber talked about this, he said, "I would bet on it," or no, I think he said, "I would bet against it."

00:58:50   If anyone knows Gruber in betting, whichever way he bets, bet the opposite. That means if we're going to follow that strategy, and I'm talking about actual bets, Gruber bets on actual things, his track record's not great.

00:59:02   If he would not bet for it, then we should be expecting it to happen, because he's going to lose that bet, because that's the Gruber way. I don't know what to think right now.

00:59:11   I do believe that it makes more sense than it has ever made, and I'm definitely watching it a lot more closely than I have.

00:59:17   Marco, any immediate thoughts before we start talking about what is Disney anyway?

00:59:21   I think... I can't see this going this way unless major changes at Disney happen, like divesting a lot of their stuff.

00:59:31   This is part of what we're about to talk about, and it's part of what Upgrade covered in their segment on this.

00:59:36   The thing is, Apple has, as mentioned, a lot of money, turns out. Again, going back to our financial analyst from last episode, Apple makes a lot of money, turns out.

00:59:45   The thing is, Apple could buy lots of companies. They could buy almost any company. There are very few companies in the world that Apple couldn't buy, but they don't.

00:59:56   Because what would they do with it if they bought it? A lot of times they can get the benefit they need to out of a company without buying it.

01:00:03   And so why would they spend not only the money, but also the organizational overhead to have this additional company as something they own?

01:00:10   A good example of this is, if you look at things that would benefit Apple to their core products, look at all the components that go into an iPhone.

01:00:20   You don't see Apple buying Samsung Display or whatever. You don't see Apple buying memory companies and stuff like that.

01:00:28   They still buy components from other companies. Why? Because they don't need to buy those companies.

01:00:34   They can just strike deals with them and spend their money that way and then not have the mess and liability and risk on their hands of running those companies.

01:00:46   And not only do they not want to buy those companies, but they're willing to spend billions and billions of dollars on those other companies.

01:00:55   Like a lot of the chip stuff they've done and the manufacturing stuff they've done, part of the deal is Apple pays for the equipment that will machine out their little Apple watches or whatever.

01:01:02   Apple pays for that and the companies that build the stuff for them use those machines, but Apple had to pay to get the machines.

01:01:10   And Apple doesn't get to keep them. I think they belong to the other companies. They're basically willing to invest in these companies.

01:01:16   And it's like, well, at that point, why don't you just buy the company? Well, no, Apple doesn't want to be in the business of manufacturing things because it's not like you can run a company just manufacturing Apple stuff.

01:01:26   Although TSMC's third three nanometer thing is actually kind of doing that because I think Apple bought all the three nanometer chips the company could possibly produce.

01:01:32   But on an ongoing basis, the fact is that at a certain point, Apple will no longer need any more of Widget X.

01:01:40   But the company that builds the factory that builds Widget X or whatever, certain kinds of screws or whatever, that building still exists.

01:01:46   Those employees still exist and they have to find new customers to pay for them to manufacture something that can be manufactured in that giant building.

01:01:52   That's what Apple doesn't want. So Apple is so averse to buying these companies that they're willing to pay billions and billions of dollars to basically say, "Here, company, take a whole bunch of our money so you can be better at making the thing we want you to make.

01:02:06   But we don't want to own you. When we're done with you, we're done with you. If we decide we're not using you anymore, we're going to use a different manufacturer in a different country.

01:02:13   We just wipe our hands of it and say, you know, "It's great that we bought all those CNC milling machines and we used them for 10 years and you get to keep them. See you later. We're going somewhere else now."

01:02:23   Yeah, exactly. Apple could buy lots of companies, but they don't because they largely don't need to.

01:02:30   And I think Disney could be similar. I mean, it's a little bit more complex in that the areas that we think of as what that would mean, what Disney owns and what would come along with such a thing, that includes a lot of things that we think Apple would probably want, like movie and TV content.

01:02:48   Obviously, that's the number one thing that you can think of, like what would Apple want.

01:02:52   Apple doesn't want to run theme parks. Apple doesn't want probably to run cable networks. There's all sorts of things that Disney owns that Apple probably doesn't want to be in the business of.

01:03:04   I don't think Apple wants to be writing new songs for Frozen 4 or whatever and then licensing that music to people or whatever. There's so many parts. It's such a big company.

01:03:13   Most of that stuff Apple doesn't really have much use for and I think it would actually be pretty averse to owning. So there's a lot of that that you can just toss right out the window. Apple wouldn't buy it as long as that's part of the company probably.

01:03:27   Or Apple would buy it and immediately divest it themselves.

01:03:30   But even looking at the core stuff, okay, so they'd have a lot of movie, TV, and maybe some sports stuff, the ESPN or whatever. Okay, that's interesting. That's valuable. But is that worth buying the whole company?

01:03:44   Or can they just spend way less money and have way less on their plates and just make deals with the company or whoever buys it to license that content?

01:03:54   And that's probably the more likely outcome. You can also, you know, also, whatever they would charge you. Suppose they bought Disney's video content and everything, that whole library.

01:04:05   Well, why would they want that? To have a streaming service, presumably? Well, they already have one. It's called Apple TV Plus. Disney already has one. It's called Disney Plus.

01:04:13   I think if Apple bought Disney, I honestly think those would remain two separate services. Now, Apple could have a nice bundle where they would sell both together for some discounted combined price.

01:04:25   But Apple TV Plus can't absorb all of Disney's content without blowing up itself into something where you'd never be able to find anything ever again.

01:04:35   And Disney Plus is doing so well on its own, relatively speaking. Why would Apple want to dissolve it and put it into Apple TV Plus, which is a much more low-visibility, low-scale service compared to Disney Plus, I assume.

01:04:50   Those are better off being kept separate. And again, just maybe having a bundle at some point. But it makes sense to keep those things separate.

01:04:57   In the same way one company can own multiple TV channels that have different styles of shows on them, Apple TV Plus and Disney Plus have very different styles of content that go on each one.

01:05:12   And it doesn't make sense, I don't think, to combine those things. Similarly, buying Disney and all the many properties that they own, that would give you access to a whole bunch of TV content.

01:05:26   Like a huge library of old TV and movies and everything like that. But that also doesn't really fit in Apple TV Plus.

01:05:32   Because again, TV Plus is much more like HBO, at least the way HBO used to be. Much more like we're going to make original stuff and it's going to be this curated thing in a certain style that's going to appeal to certain demographics.

01:05:46   That's Apple TV Plus. It doesn't make sense to dump all of Disney's back catalog into that and all of the many, many companies that Disney owns.

01:05:54   That doesn't make any sense to me. So I don't see it going for that reason.

01:05:58   And maybe, I think sports, they have a bunch of different things in sports that are relevant. I don't understand sports enough to comment on how relevant those are.

01:06:06   But we already see Apple throwing around big money trying to buy sports rights in general through other companies.

01:06:13   And that seems to be going fairly well overall. I mean they don't have everything they want, I'm sure, but I think they can just keep doing that.

01:06:22   So again, I don't see the value in Apple buying an entire giant conglomerate. Or even assuming Disney might divest some stuff before a sale, you'd still be buying most of it.

01:06:36   And I just don't see why Apple needs to buy it. I think they'd much rather spend their money just taking advantage of it as a third party.

01:06:43   I think you're not thinking like a big time executive, Marco. I mean as you know, I have a lot of experience being a media executive or as the CEO of Apple.

01:06:53   I don't know about Apple and Disney, but the reason "analysts" are looking at this is they kind of look at the same things that you just described and they come away from it with a different take.

01:07:06   So you just mentioned Apple TV+ and Disney+. Well, think of it this way if you're trying to get into their mindset. Apple has been, over the past several years, paying money to creative people to make television shows and movies.

01:07:20   And that is something that Apple previously didn't do at all. And Apple decided, "We want to be in this business."

01:07:27   And the reason they wanted to be in the business is because they wanted to have a streaming video service because that would get someone its services revenue. That would get people to pay Apple a monthly fee in exchange for a service.

01:07:37   And once Apple has you paying for one service, they can try to get you to pay for others. They can do bundles. That whole recurring revenue subscription services is a growth area for Apple.

01:07:46   So they said, "We're going to have a streaming service." And they started from zero. And they had to hire a bunch of executives who know how to find people who can make television shows and movies.

01:07:56   And Apple gave them billions and billions of dollars and said, "Throw this money at movie stars. Find people who know how to make good TV shows. Bid against them to get them to not make it on Netflix, but instead to make it on our new thing, Apple TV+.

01:08:09   And they started with Carpool Karaoke and Planet of the Apps. And they came all the way to, again, having movies with Tom Hanks in them and well-regarded TV shows like Severance and all sorts of stuff.

01:08:20   But that's a thing that Apple did. They did that for a reason that made sense to the business. I think that still makes sense to the business. That Apple wants to have a streaming video service with content.

01:08:32   If you want to grow that business and say, "How can we make Apple TV+ better? How can we make streaming video better?"

01:08:40   Acquiring Disney and all its assets and its streaming service is a shortcut to that. Because Apple's going to say, "We like the kind of content you have. You have the best IP in the entire world." No, they probably wouldn't combine it into a single service.

01:08:51   But having, as Jason said on one of the shows, Apple TV+ being kind of like the HBO icon inside the Disney+ streaming app, or having them cross-link to each other, or even just keeping them separate.

01:09:03   It is a shortcut to saying, "Rather than organically growing our streaming service over several more years as we have organically grown from zero, acquire this company and all of a sudden we get all the subscribers to Disney+ and we have the ability to grow it even more."

01:09:20   Because unlike Disney, who's worried about where they're going to continue to fund this content for. Disney+ is doing well from a subscription perspective. They got a lot of subscribers.

01:09:28   Not doing well from a balance sheet perspective because Disney paid tons of money to make tons of content for it and that costs a lot of money up front.

01:09:35   And they're not really making all that back on subscriptions yet or it's not quite in the balance. Apple's like, "Don't worry about that. We get the iPhone. We make that much money in a week. It'll be fine."

01:09:43   It would be a shortcut to growing your business. So from a big time CEO perspective, you're like, "Services is great. We want more subscribers for service. Here's our graph of how Apple TV+ has been growing.

01:09:56   We're doing great but if we simply acquire Disney+, look what happens to the graph." Instantly after the acquisition, the number of subscribers goes up like this and we think we can turn their business around and make them profitable and fund them for a few more years or whatever.

01:10:08   So that's a synergy that I think makes sense. Even though, as you noted, it's not like you're just going to combine them all into Apple TV+. You're probably not going to combine them all into Disney+. You'll probably keep them separate but it's still services revenue and there are still synergies to be had there.

01:10:20   And I think the same is true for IP, movies and stuff like that. Apple has made movies. Apple won an Oscar for one of their movies. Disney has a lot of IP and a lot of movies and a lot of people know how to make movies.

01:10:32   So Apple's been trying to hire those people and find people who know how to make movies. Disney's done that already. They have them. They're there. They've got Star Wars. They've got movies lined up. They've got all the Marvel things. It's already there. It's ready-made. It's a shortcut to growth.

01:10:43   And that's what Jason was getting at. When you're as big as Apple, you're looking for where is the next growth going to come from. Now you can say Apple should stop. They're the biggest company in the world. They don't need to grow anymore.

01:10:53   But in this particular realm of making movies and TV, that ship has already sailed. Apple has decided this is the thing they're going to do and they're doing it because I think it's a growth opportunity.

01:11:03   So you're either going to say Apple stop doing Apple TV+ and don't buy Disney or Apple if you're going to keep doing Apple TV+, buying Disney starts to make a lot more sense.

01:11:13   So the particular one that you were hung up on, like their content and the movies and TV, I think from a growth at all costs, not growth at all costs, but from a growth in avenues that Apple has already chosen perspective, it makes perfect sense to me.

01:11:26   Unless you're going to argue that Apple shouldn't be in streaming video and that the technology sector is not going to eat the media sector when it comes to streaming video, I don't think you can argue it's Apple buying Disney just to get the streaming stuff.

01:11:41   But now we should talk about all the other things that would come with Disney and which ones we think Disney should divest itself from before it becomes palatable to Apple. But Disney+, definitely you want that to be part of the Disney that you buy, I think.

01:11:53   Yeah, so we're taking a page out of upgrade a little bit, but Mike had the good idea to run through the stuff that Disney does, like the broad businesses that Disney participates in.

01:12:03   And I don't know if this is the exact same list that Mike and Jason worked through.

01:12:08   This is not his list. This is my crappy list. I'm sure his list was more thorough.

01:12:12   But I did want to just touch on some of the stuff so that people realize, especially if you've never looked at the giant Disney org chart or haven't looked at it recently, to realize all the stuff that Disney owns.

01:12:21   The diversity of stuff. This is not all the stuff. This is like a sampling of the things that Disney owns that you may not have thought about.

01:12:27   Indeed. So Disney Parks. So this is Walt Disney World, Disneyland, Shanghai Disney, DisneySea, Disneyland Paris.

01:12:36   They have parks all over the world. And I know Marco, like me, is a super fan of these Disney parks.

01:12:43   But genuinely, all kidding aside, I really am a super fan. Like I was snarking about Marco, but I really genuinely adore Disney World.

01:12:53   I have gone there as many times as I've seen Pulp Fiction.

01:12:56   Goodness. There's hope for you yet, I think.

01:12:59   Look at it this way. You have a bunch of fun new things to experience. But anyway, I totally understand if Disney Parks are not for you.

01:13:09   That's okay. But they are for me. I love them. I adore them. We try to go as a family every few years.

01:13:15   We were just at Disney World in January. I adore Disney Parks. In a lot of ways, they're very appley.

01:13:21   Actually, earlier today, we went to Kings Dominion, which is a local amusement park.

01:13:27   And I like Kings Dominion just fine, but it is stark, the difference between Kings Dominion, which is admittedly a little bit on the rattier side,

01:13:37   than Disney World, which is what if we spared no expense, because we're basically printing money.

01:13:43   And not that Disney World is perfect by any means, but it's just stunning the difference between the two in every measurable way.

01:13:53   Cleanliness. How modern everything is. I rode a ride that was originally based off the Italian job, and now it's like some stunt coaster or something like that.

01:14:03   And there's a billboard in the ride, because you're riding in pretend Mini Coopers, and it's supposed to take after the movie, even though they lost the rights to the movie.

01:14:11   And at one point, you're supposed to be driving on a street, and there's a billboard, I don't know, 30 feet from your face.

01:14:19   And the billboard has clearly seen years and years and years of sun, and is almost white at this point.

01:14:24   I can guarantee there is zero chance that an equivalent billboard in a ride at Disney World would look anything but brand new. Ever. Ever.

01:14:34   And that's a very Apple-like attention to detail. I adore Disney Parks. They are such incredible user experiences.

01:14:43   And in that sense, I see so much in common with Apple. But why on earth would Apple want anything to do with this?

01:14:52   I just don't see Disney Parks as being something Apple would be interested in.

01:14:58   I think they would definitely have to keep Parks, and part of that is the old diagram that you'll see from the Walt Disney drew on a piece of paper.

01:15:05   I don't know if he drew it himself, but it's part of the original Walt Disney era.

01:15:08   It's a bunch of boxes and lines and arrows that have changed over the years, but the fundamental idea is still the same.

01:15:13   How does Disney make money? How does that company work?

01:15:17   And the lines basically are like, "We make a bunch of movies that kids, we make good movies that people like, and kids love them too."

01:15:24   And then we make toys from the movies that people buy, and we have television shows that kids want to watch because they have their favorite characters.

01:15:31   And then they come to Disney World and pay us for these very expensive tickets so they can see their characters and ride their rides.

01:15:36   And it's like this cycle that says we create the content and then we get money from people who like the content because our movies are good.

01:15:43   We make good movies, we make good TV shows, we get fans, and those fans want to give us money.

01:15:48   And the Parks are one of, as Casey knows, one of the really big funnels for getting that money.

01:15:53   So if you take Parks out of the equation, part of what you're buying in Disney, you've broken the machine a little bit.

01:15:59   Now the downside to Parks is, as I think Ben Thompson has talked about recently because he's Mr. Businessman, Parks don't scale.

01:16:05   It's kind of like being a consultant. People think, "I'm going to program, I'm going to be a consultant, or I'm going to run a consulting company,

01:16:11   and people are going to hire us and we're going to write their code for them or whatever."

01:16:16   And it's like consulting or anything like Parks that involves people or whatever, it scales with the number of people that you can run through the machine.

01:16:24   So if you have a consulting business, the amount of money you can make depends on how many people you have, how many programmers you have.

01:16:29   Because you can't say that some company says, "We want you to write all these billions of lines of code for us."

01:16:33   You're like, "Uh, but I don't have that many employees and I can't hire them that fast." It doesn't scale. You know what scales?

01:16:39   Streaming services, selling software, things where when you make a new copy of the software it doesn't cost you anything,

01:16:44   or streaming services you pay some minimal fee for the extra bandwidth they're going to cost or whatever.

01:16:48   Those businesses, those kind of software businesses where the unit cost per extra customer is very, very small,

01:16:55   or sometimes even close to zero depending on how you squint at it, those scale really well.

01:16:59   But Parks, there's only a certain number of them and you can't have one around every corner.

01:17:04   And if you did have one around every corner, you would take away from the specialness.

01:17:07   So Parks don't necessarily scale, but they are very powerful, very good money funnels for Casey and his family

01:17:14   that is an important part of the cycle. You watch the movie, you see the thing, "Oh, now there's a Star Wars land."

01:17:20   You love Star Wars, Disney loves Star Wars, and it's saying, "Oh, there's a Frozen parade."

01:17:23   And the people, like, that's part of the Disney machine. So you absolutely have to keep Parks because otherwise you've broken Disney.

01:17:29   Like, why would you, like, disconnect that part of the cycle?

01:17:32   The second thing is, Parks, as you mentioned, kind of feel like Apply because Disney has that attention to detail.

01:17:37   It's part of the cultural similarity between the companies that they care that they would care that their billboard is faded.

01:17:42   They would not accept that it's faded. They would fix it, right? Someone would note it.

01:17:46   Like, there's a culture of everyone who works in those places and the companies that run is that we want to have a quality product.

01:17:53   And if it's not quality, we need to fix it. And so many companies aren't like that. So Apple and Disney have that in common.

01:17:59   But that said, the very first thing I thought of when I was seriously considering this is that Apple's particular culture and design philosophy is especially poorly suited to Disneyland, I feel like.

01:18:13   And the analogy that sprung to mind immediately was like, you know, in Disney they do a really good job of incorporating the garbage cans into the landscape.

01:18:20   They'll be styled like whatever land you're in. They're not, like, out in your face with an ugly trash bag on them with flies buzzing around them.

01:18:27   Like, that's part of the Disney experience. So Disney, you know, hidden, well incorporated trash cans.

01:18:33   They're right where you need them to be, but they're not in your face until you're looking for one.

01:18:36   And when you're looking for one, you find it and it's pleasantly integrated. But otherwise, they're not like, you know, stinking up the joint and getting in your way. Right?

01:18:43   An Apple solution to that would be no garbage cans. Kind of like in the Apple store. They said, you know what? Lines are annoying.

01:18:49   Apple store, no lines, no registers. And how many times have we talked about, I wish I just wish there was just a line and some registers.

01:18:56   Like, Apple's philosophy is very often aspirational when it comes to human nature. We wish humans would act this way.

01:19:04   Caleb Sasser, Caleb, my friend, my daughter has a friend named Caleb.

01:19:09   Cable Sasser recently posted a thing about things people put in theme parks that are used in unexpected ways by patrons.

01:19:17   Like, if you build anything in the theme park, anything at all that can be sat on by humans, they will sit on it because they're tired and it's hot.

01:19:25   And you're like, but that's not a seat and people shouldn't sit there. So then they have to like patch them by like putting a bar or a sign. You put a sign, people don't care.

01:19:32   Like, you build like a sculpture that's supposed to be like a sculpture that's part of whatever, you know, I don't know if it was like part of Avatar Land or the aliens ride or some, you know, property franchise that had some particular thing that fits within the world.

01:19:45   But it's chair height. People are going to sit on that. And you can't stop them. And if you put rope around it, it looks ridiculous or whatever.

01:19:53   And that's Apple's blind spot when it comes to design of physical spaces. Talk to anyone who's worked in Apple Park. It's an amazing, beautiful building and a bunch of the stuff in it is, again, aspirational with respect to human nature.

01:20:05   You know, it doesn't reflect the actual physical reality of humans. Sometimes it leans too far into form and less into function.

01:20:15   And Disney strikes a much better balance than that than Apple. All right. So that brings me to the next thing as we go on this list, kind of like when Apple bought Beats or when Apple buys anything.

01:20:24   The question is, does Apple buy them and, you know, Star Trek Borg like assimilate them and make them be just like Apple?

01:20:30   Or does Apple allow the company that it acquired to maintain its individual culture and continue to do what it does?

01:20:36   And I think if Apple ever requires Disney, it is absolutely essential that Apple allows, for example, Parks to continue to do what Parks does well without I know this isn't a problem that busy doesn't work there, but without, for example, imagine if Johnny I was still there.

01:20:51   Do not parachute Johnny Ive into Disney Parks. He will ruin it. Like he's great. And the thing he's things he does is better than anyone else. But Disney Parks does not need Johnny Ives help at all.

01:21:03   What you know what Disney what that part of Disney needs is Apple's money and Apple's overarching philosophy of quality attention to detail long term thinking, you know, just that that whole vibe, which is he mostly has but like having more money loosens that up.

01:21:18   So by all means, Apple should lean on the idea of like, it's really important for us, you know, at big corporate Apple for you and Parks to do a great job.

01:21:27   But we're just going to let you do that, like, well, make sure you're doing a good job, but we're not going to tell you how to do it. We're not going to say there's too many garbage cans here. Why don't you just get rid of them entirely and just tell people to carry their garbage with them back to their car. We'll get them little bags that are made out of recycled paper so they can do that.

01:21:39   And the parks people should say Apple, step back, like, we've been doing this a little bit longer than you have. I think we know how to do this. And so that is that is the danger of buying something as big as Disney is Apple has to have the wisdom to know when to back off.

01:21:56   And I think I think they mostly let beats continue to be beat see like beats didn't turn into Apple like the the AirPods Max is different than the beats products that probably have a lot of similar tech under the covers.

01:22:07   Beats was allowed to still be beats. And that's just beats. Disney is Disney. So if Apple acquires Disney, a they should keep parks and be they should keep their hands off parks.

01:22:18   I don't know that Apple. I don't know that they want to acquire things that they would have to keep their hands off of agreed. They did it with beats not quite. I mean, they sort of I mean, we don't we don't know all the details of it.

01:22:33   It seemed like a lot of the reason they bought beats was really also to get Johnny Iovine. I mean, to be like an executive there for a while. It was it was it was actually kind of an acquire, I think. But, you know, beats modern beats headphones are nothing like the beats headphones when Apple bought the company.

01:22:52   But they're also nothing like Apple headphones.

01:22:54   No, they're actually so modern beats headphones are it's like the sport version of equivalent Apple headphone models.

01:23:02   But can you ever imagine imagine Apple shipping anything Apple branded that look like beats headphones? I can't.

01:23:08   Honestly, well, it depends. I mean, but it is it's it's clearly a sub brand of Apple. You know, like there's lots of there's lots of like, you know, high end goods that have like sub brands, you know, like I know.

01:23:18   But like that's just beats, though. I wish I could think of a better one because Apple doesn't buy lots of big companies. Beats is actually one of their larger acquisitions.

01:23:25   But like but Disney is Disney. And I think like that's the thing you can't if you're going to buy Disney, you can't break Disney. You can't break the machine that is Disney, nor can you assimilate them Borg like you have to let them be Disney.

01:23:37   I mean, I agree with you that you would have to let them be Disney. I just don't know if that's really an Apple's DNA because I I hear what you're saying about beats in beats is certainly way more an island on their own than than I think any of us expected.

01:23:52   They're not an island. They're best a peninsula. Like what was it? Wasn't it Claris or something? What makes it like FileMaker or something?

01:23:59   Oh, poor Claris. That's a little bit. So this actually leads me to the next thing. This was an Ask ATP question, and it is actually relevant to this. This is a random Ask ATP chucked into here.

01:24:07   Aaron Thomas asks, it seems like Nintendo, Sony, etc. have good relationships with game developers. What can Apple and Google learn from video game manufacturers to have better relationships with their third party developers?

01:24:17   This might seem like it's not that relevant, but I feel like it is. So this whole thing of Apple allowing some subset of its company to do its thing without interference.

01:24:30   Maybe beats wasn't the best example because maybe their headphones have become more Apple like than I realize over time.

01:24:36   But a good example that's relevant to this question about Nintendo and Sony and game developers is Apple TV Plus. Apple had nobody at the company who knew how to make movies and television shows because Apple had never done it before.

01:24:49   And they had to start from nothing and build their way up by hiring essentially industry people who have experience doing that, paying them a whole bunch of money and saying, we don't know how to make movies.

01:25:00   We don't know how to find directors and scripts and who to give money to and how you can tell when you should back a project. We don't know any of that.

01:25:09   So they hired people to do it. And there was all those stories early on about exactly what we're talking about. Is Apple messing around?

01:25:16   Is Tim Cook coming in and saying, there's too much swearing in this movie. I don't like it. We only want to make family friendly things. Change the blood to green. That's a Nintendo reference.

01:25:24   Is that Mortal Kombat on the Super Nintendo? Yeah, because Nintendo had the family friendly thing. Yeah, they changed it to Sweat.

01:25:32   I think it was just green. Yeah. Well, one of them had green blood. Maybe it was Doom that had green blood. I forget the exact reference.

01:25:38   You had to have a Genesis to see the actual blood Mortal Kombat.

01:25:42   And so that was the story before anything really happened with that. It was like, Apple interfering. Tim Cook says, there's too much violence in this show or too much sex in this or whatever.

01:25:54   Because that was people's fear that Apple is going to screw it up. But I think now enough time has passed and enough content has been produced on Apple TV Plus, both movies and television.

01:26:03   I think we can safely say that Apple is not really messing with the content. They are not ensuring everything is family friendly. There's tons of cursing, tons of nudity, tons of violence.

01:26:13   Everything you could possibly imagine is there. It's not over the top. It is branded in a certain way, but pretty much like HBO stuff was branded.

01:26:21   It is high quality, highfalutin stuff, a smaller number of better quality things. But as far as I can tell from the outside, Apple has let the creative subdivision of its company that makes television shows and movies do its job without much interference.

01:26:40   Because how could they interfere? There's no one in Apple who knows anything about that. The way Apple supports them is we will hire the best people who know what they're doing and not mess with them.

01:26:52   I don't know if they're doing that with the car, because that seems to be not successful. But the TV and movies we can see, I don't think Apple has messed with them.

01:26:58   I think they built a wing of their company that didn't previously exist and essentially are letting it run like a television and movie creation studio.

01:27:06   Because if they weren't, I don't think it would be successful. Because Apple previously had no expertise in this area. They just would have screwed it up.

01:27:13   So I think Apple can keep its hands off in areas where it knows it doesn't have expertise. Their only job is to find the people who do and let them do their work.

01:27:21   And guess what? In Disney, you don't have to find them. They're already there. For the most part, except for the Star Wars directors. You want to talk about that a little bit.

01:27:27   But anyway, I think Apple has demonstrated that it can keep its paws off of stuff that it doesn't understand, even within parts of its own company that it builds up from zero.

01:27:37   Let alone acquiring Disney. So I am much more optimistic that if they did acquire Disney, they absolutely would be able to keep their hands off of things that they don't know anything about.

01:27:48   Alright, animation. That falls under the category of people who make TV shows and movies. The reason I listed that is because they have Disney animation, but also Pixar of course. Don't forget about them.

01:27:57   Acquired by Disney a while back and in relation to Apple. Anything like that where people are doing creative things? I think even Steve Jobs, not that he's there anymore, but showed that he more or less acquired Pixar and ran it for a long time.

01:28:12   He didn't mess with stuff on a creative... He knew I don't know how to make movies. I just know how to hire smart people who do. And I may offer a bit of advice here and there.

01:28:20   But read everything you can about the history of Pixar. Steve Jobs is not going into individual scenes and saying, "I think this guy should move over there like that. Why is he saying this?" Nope. Steve Jobs did not do that.

01:28:28   Disney has a whole bunch of animation. They've got 2D animation, computer animation, Frozen, Pixar animation, Marvel, Star Wars, all the stuff from 20th Century Fox, which I can't believe we can't call 20th Century Fox anymore, but it makes perfect sense because it's not owned by Fox.

01:28:45   What is it called? 20th Century Features? I forget what it's called now. All the Disney IP, Snow White, Seven Dwarfs, Donald Duck, Mickey Mouse, all that stuff, all the people who make that content and all of the content itself.

01:28:59   A. Apple super duper wants that and B. Apple should not and probably wouldn't touch the people who are making it because they know what they're doing. They would guide it. They would herd it in the right direction. They would insist on quality. They would sort out any issues with funding and new acquisitions of IP and stuff like that.

01:29:18   But when it comes time to make the actual movies, I think they would let the people who do it do it. And this is all exactly in the realm of like, "Hey, we have a streaming service where people watch video." This all feeds into and supports that.

01:29:30   And this also relates to Marvel and Star Wars and like you said in 20th Century or whatever. All the Disney IP, I think, was it Marco earlier that said it? I'm sure it was John. It's always John. But I thought it was Marco that said, "Why would Apple buy Disney?" I think if it were Apple, they're fine without any big marketing agreements other than Toy Story on your watch.

01:29:53   I don't think they need to buy Disney to get this. If anything, I would see Apple swooping in as Disney gets ever more desperate and just saying, "Here's a bunch of effectively free money and the only thing you need to do is let us use some of your IP and stuff that we want to do it in."

01:30:08   I just don't see buying Disney as necessary like Marco was saying earlier. Why bother buying it when you can give a seemingly ever more desperate business a bit of a parachute to get to do whatever the hell you want?

01:30:23   Then you're betting on Disney not being the last company standing because you're saying, "We're just going to sit here with our arms folded and we think Disney is essentially going to have to give up on their efforts to have a streaming service." At that point, Disney will then be out there saying, "Okay, well, we tried to do this on our own and it didn't work out. So now we have a bunch of IP that we're willing to license you. And Apple, do you want to license it? Netflix, do you want to license it?" Like kind of where they were before they had Disney Plus.

01:30:45   Disney content could be available elsewhere. Of course, Disney sells things through the… You could buy Disney movies on Apple's iTunes store or whatever the hell it's called now. I don't know if I want to take that bet though because I think if I'm thinking which is going to be the last company standing, I think Disney can weather the storm of, "Oh, we just blew a lot of money up front on Disney Plus and a bunch of content for it. And COVID really hurt our movie ticket sales or whatever and everyone's not doing well."

01:31:12   I think Disney can weather that. And so, first of all, Apple doesn't want someone else to acquire them because that would be bad like some other tech company because then Apple's getting none of that. And second, Disney's not going to license anybody that stuff when they're still pursuing their own strategy of doing a streaming service. So it's kind of like all the companies…

01:31:28   I don't see them as equivalent. I understand what you're saying, but the sort of licensing I'm talking about isn't broadcasting Disney stuff or making new Disney or new shows with Disney IP. What I'm saying is Apple would want to do like they do today. Like let's make a watch face with Toy Story characters.

01:31:44   But a watch face with Toy Story is nothing. You want 100 million Disney Plus subscribers to be paying you money every month. You want to be able to make new movies in Star Wars. That's where the show is. Again, it gets back to if you think Apple is and should… Are they pursuing having a streaming service where they pay for content to be made?

01:32:01   Disney and all this stuff is a way to massively grow that business and to have a potentially insurmountable moat of IP against all of your competitors in the tech world. It's not about a Mickey Mouse watch face. That is peanuts.

01:32:17   That's a fair point. And actually, the more you talk about it, the more I'm getting convinced. Not that this will happen, but I think the avenue to this happening could be a defensive play more than it could be anything else. I don't feel like Apple is in the position that they're really desperate to find new ways to earn money. I agree with what Jason said that they are getting to that point, but I don't think they're there yet.

01:32:39   They're not desperate, but it's like, again, it's a C-level executive thinking, which is far and dust. It's like, "You're already the biggest company in the world. You're already making so much money." But it's like, "But where is the next big growth going to come from?"

01:32:48   What if we made more?

01:32:50   Yeah, where is the next big… You know, in services revenue. That's why they're pursuing this. Services revenue. Look at the service revenue line going up. How can we grow that even faster? A Disney acquisition would be part of that.

01:33:01   Well, but doesn't the relative sizes of these companies now kind of prove that maybe this wouldn't be enough to move the yield for Apple?

01:33:13   Oh, that's a great point, too. Yeah.

01:33:15   But think of it this way. If you look at how Apple TV+ has grown organically, like by itself, versus how much Disney+ has grown organically by itself, you can look at those things and say, "I mean, we don't know Apple TV+ subscribers, but I'm going to go out on a limb and say Disney+ has more."

01:33:31   I would assume so.

01:33:33   Disney+ has more content and Disney+ has better content. Apple has done a good job with the content that it's made, but it cannot compete. It couldn't even compete with what Disney+ had before it started buying every company under the sun. And now that Disney+ owns everything under the sun, if it's not going to be Apple, Apple doesn't want one of its competitors to get that, and it can't organically race to catch up with it.

01:33:53   Yeah, it's small potatoes in the grand scheme of things, but what you have to do is not compare the Disney+ to the Apple+, compare the Disney+ to the Apple TV+, which we don't know how big the dot's going to be, but I'm going to say it's going to be very small.

01:34:05   And again, it is a Disney machine. It is not just like a streaming service with some IP. It is a bunch of things that all work together to get people to love Disney properties and go to Disney parks and go on Disney cruises and buy Disney toys and license Disney stuff, which then if Apple owns them, they're getting the license material and it all circles back.

01:34:22   So it is a shortcut to growth because somebody has already built an entertainment mecca of just everything under the sun that tons of people want that makes movies and TV shows and all the people who know how to make them.

01:34:35   That's ready made sitting there for you, just $160 billion. Although we should go through some more things that they own because there's a bunch of crap in there that Apple definitely does not want.

01:34:43   Stuff Apple doesn't want?

01:34:45   Well, so here's the next line item here is Disney+ also has Hulu apparently in the US?

01:34:50   Yes.

01:34:51   I mean, I guess they would take that because it's part of a streaming service, but then we get to things like ESPN and I think that's part of what the discussion of selling things off.

01:34:57   I do not think Apple wants to have anything to do with what they call in the biz apparently the linear TV market, which is code word for television that is not like an Internet streaming service.

01:35:08   That is a big world and it is a big world that is going through a lot of radical changes. And I think Apple wants absolutely no part of that.

01:35:15   So Disney owns ABC, FX, Disney Channel, Disney Junior, a bunch of channels that are part of cable packages. ABC is a network, right?

01:35:24   I don't think Apple wants any of that.

01:35:27   And they shouldn't.

01:35:29   It doesn't fit into any of their businesses.

01:35:31   I don't think that Apple wants ESPN, the cable network, but I think that's kind of you're not thinking far enough past the end of your nose.

01:35:41   I think Apple would love to have access to all the sports deals and sport related things that ESPN has access to.

01:35:49   But those are two separate things. That's what the CEO was saying. They were trying to sell like sell the linear part of it.

01:35:54   Apple does not want the linear part.

01:35:56   That I agree with.

01:35:57   The other part of it. And so a lot of these things like are separable. So ABC has a streaming service and a bunch of IP, but ABC is also a television network.

01:36:04   A lot of these companies, especially like ESPN, make money by being part of cable packages or whatever. Apple doesn't want any part of that business.

01:36:11   I don't get, you know, that business of making money by being part of everyone's cable package is on its way out. We don't want that.

01:36:18   But we do want, to your point, whatever sports rights that ESPN has, you know, streaming sports rights or whatever, like the type of deals they did with MLS or whatever.

01:36:26   Apple definitely wants those, but does not want the linear things.

01:36:29   And I don't know how they're entangled, and I don't know how easily they would be to separate.

01:36:32   But the divesting of loser businesses, a lot of it is divesting of the stuff that has to do with all world cable, linear television, while trying to keep the stuff that Apple or any acquirer does want, which is, oh, I have the rights to broadcast these sports teams or whatever.

01:36:47   And how cleanly separable are those? How long would it take to separate them? Are they separable at all?

01:36:53   But I think in the end, if any of these things are encumbered by linear TV baggage and can't be separated, Apple doesn't want them.

01:37:00   And I don't blame them. Because, again, look at what Apple does. Is Apple trying to get into linear television? No.

01:37:05   Everything they're doing, even the stuff they're trying to do with sports rights, is internet focused, streaming focused, the rumors are Vision Pro focused, right?

01:37:13   It is, you know, they do not want to be, you know, as evidenced by Apple TV Plus, they do deals with cable providers, so you can get Apple TV Plus at a discount as part of your package.

01:37:24   But it's not a channel on your cable television dial. What the hell do you call it now? They don't have dials. On your cable television box. Whatever.

01:37:33   So anything that has to do with old fashioned cable television or broadcast television, like ABC is broadcast over the air, right?

01:37:40   Apple does not want that. And so if Disney wants to be as attractive as possible to Apple, they need to rip out the old crappy linear TV cable bundle broadcast crap from the juicy, delicious intellectual property and other stuff.

01:37:55   And contracts and sports rights and everything that are part of that.

01:37:59   I don't know. I'm happy to talk about this as long as we want, but I still, other than defensive posturing, I'm just still unconvinced. I just, I don't think the juice is worth the squeeze. I really don't.

01:38:13   And, you know, as we were thinking, or as we were talking about it earlier, I couldn't help but reflect back to the WWDC 2013 intro video, the Dots. Speaking of Dots.

01:38:23   And although a lot of that video was very cringey, as I would say, or cringe as the kids would say now, I think it did do a pretty decent job of explaining the Apple ethos to those of us who are not within Apple.

01:38:39   And from the best I can tell. And, you know, I was scanning through it as you guys were talking and there were a couple of lines that stood out to me.

01:38:47   One of them was, "If everyone is busy making everything, how can anyone perfect anything?"

01:38:53   And I feel like the way that's applicable here is that Apple is already spread a little bit on the thin side.

01:39:00   I mean, granted, they could hire, they could do a lot of things to make more stuff work, but it certainly seems like they're spread a little thin.

01:39:08   And if you look at reports about how the betas are going right now, apparently not great, Bob.

01:39:13   And so, it seems to me like adding a whole bunch of very, very different types of businesses to that plate just doesn't seem like a recipe for success.

01:39:29   Much less the probably hundreds of thousands of employees. Like, in so many ways, it just seems like a bad thing.

01:39:34   What year was the Dots video?

01:39:35   2013.

01:39:36   Yeah, so this is another comment that Jason made in his various discussions of this.

01:39:41   If your picture of Apple is the Apple of, I think he said 2010, that's not the Apple of today.

01:39:48   And that's true.

01:39:49   I remember the Dots video, but that Apple did not decide to start a movies and television studio to support a streaming service.

01:39:55   That Apple, I think, had not decided to try to make a car or whatever the hell they're doing there.

01:39:59   That Apple didn't even have a headset in the works, right?

01:40:02   I think that Apple maybe wasn't yet planning the watch.

01:40:07   Apple today is different than it was. And so, this is the thing. Apple has decided that it wants to pursue these new things that it didn't do before for whatever reason.

01:40:16   Is it because of growth? Is it because they think they can make an impact? Or whatever.

01:40:20   But they've already decided to be in a lot of the areas where Disney works.

01:40:26   And the things that don't seem like they work, like parks or cruises, I keep thinking of succession every time I say that.

01:40:32   It seems like, well yeah, but Apple's not into that. Apple has a park, but you're not allowed to go to it.

01:40:38   And Apple doesn't have cruises, they don't have cruise ships. That seems like it doesn't work.

01:40:42   But parks and cruises is part of the Disney machine, like I said.

01:40:46   That if you get the IP, you shouldn't also break the machine.

01:40:49   So that is kind of a new thing, but that machine does have kind of a cultural fit with Apple.

01:40:54   Disney also has music, and Apple, I don't think, Apple doesn't make any of its own music.

01:40:59   It doesn't pay to a record label for artists to make music.

01:41:05   But Disney does. Disney does that, and that would also be a new thing, but it does have some synergies.

01:41:10   So the thousand no's for every yes, the Apple that had that philosophy, it's not that it's totally changed and they're not like that anymore, because they are.

01:41:21   But they're definitely different than they were, as evidenced by what they've done.

01:41:26   Forget about any acquisitions, just look at what Apple itself has decided to do.

01:41:29   And again, setting aside the car, which they haven't actually done yet, but they decided to pursue that and have been pursuing it for years.

01:41:35   And that is a little bit of a different tack than those dots were leading us towards.

01:41:41   So I think the way Apple's attitude that you're both getting at, and a vibe that I also feel from them, is that they're not going to do something like this unless they can do it on their terms.

01:41:51   And very often they can't. Very often, like Apple is in the bidding war for sports rights, or Apple is trying to acquire a company or whatever.

01:41:59   And if it turns out that that company won't accept Apple's terms, Apple walks away.

01:42:04   And that's why they miss out on a lot of things. And I think that's how the thousands of no's manifest.

01:42:09   I do not think Apple is going to acquire Disney if they can't do it the way Apple wants.

01:42:15   Disney wants to get rid of X, Y, and Z, they don't want to buy these parts, they want these things to be separated.

01:42:21   Whatever their conditions are. And if you hear rumors about the conditions that Apple puts on companies that it's acquiring, or companies like...

01:42:28   Apple's conditions are complicated and onerous and unexpected and Apple does not budge on them.

01:42:33   So that's how I think the modern Apple manifests that a million no's for every yes.

01:42:38   But given the special relationship between Apple and Disney, and particularly their new/old returning CEO,

01:42:48   and how those relationships might exist at the level of the board of directors and everything like that,

01:42:54   the possibility that they could come to an agreement that meets all of Apple's requirements is probably higher than it was for say like the NFL or whatever.

01:43:03   Where it's just like some company that has never really had direct contact with Apple coming into contact with Apple and being like,

01:43:08   "You can't just dictate terms, like no!" And Apple's like, "Well I'm sorry, we're not budging on this."

01:43:13   And it's like, "Well you don't get the deal then." And Apple's like, "Fine, you know, a thousand no's for every yes."

01:43:18   But with Disney, again, not that I think it's absolutely going to happen, but the odds of Apple getting the Apple-style deal that it wants out of Disney

01:43:28   are higher than with another company that Apple has had less contact with, because Disney knows what to expect from dealing with Apple.

01:43:35   Even though Steve Jobs is gone or whatever, but Disney has definitely had direct contact with Apple for a long period of time,

01:43:43   including the actual CEO being on the board of directors for a while. So I think it's possible they could get the Apple-style deal they want out of this.

01:43:51   Just to go back a quick step, WWDC 2013, Apple unveiled redesigned models of the Mac Pro, Airport Time Capsule, Airport Extreme, and MacBook Air,

01:44:00   and showcased OS X Mavericks, iOS 7, and iWork for iCloud. So just to put things in perspective.

01:44:05   That was the whole "The Dots" video was about iOS 7. Was it a thousand no's for every yes? A million no's? I don't remember how many no's it was.

01:44:11   A thousand. There are a thousand no's for every yes.

01:44:15   There we go. A thousand no's for every yes, but then iOS 7, the fonts were still way too thin and they fixed it.

01:44:19   Johnny Ive! Woo!

01:44:22   Thank you to our members for sponsoring this episode. You can join us at ATP.FM/JOIN, and we will talk to you next week.

01:44:34   Now the show is over, they didn't even mean to begin, cause it was accidental. Oh it was accidental.

01:44:45   John didn't do any research, Marco and Casey wouldn't let him, cause it was accidental. Oh it was accidental.

01:44:56   And you can find the show notes at ATP.FM, and if you're into Twitter, you can follow them at C-A-S-E-Y-L-I-S-S, so that's Casey List M-A-R-C-O-A-R-M,

01:45:15   N-T-M-A-R-C-O-A-R-M-N S-I-R-A-C-U-S-A-C-R-A-C-U-S-A, it's accidental. They didn't mean to, accidental. Tech podcast so long.

01:45:35   So, that's an unusual outro for the show, because this week we were exclusively member supported, and this is not the first time this has happened, but it's certainly not a common thing, and it's becoming more common.

01:45:50   And that's because our ad sales have been in the toilet recently, and there's a bunch of bigger picture moves in the industry and the economy that are causing this.

01:46:05   So, I wanted to discuss it here, just because, okay, look, let's start by saying, we're fine, the show is fine, no one's in trouble, not even you, Alex, no one's in trouble, everything's fine. So, anyway, what I've seen in not only our show, but in the podcast landscape in general, including things like Overcast podcast ads, those little banners that support a large part of Overcast's business, something happened around January.

01:46:34   And there's obviously been some economic changes in the larger landscape, but since January, ad sales and ad prices have dropped significantly, to the point where, I've never seen a drop like this since I've been selling these kinds of ads, either since we've been selling them for this show, or the ads in Overcast.

01:46:58   It's on the order of like 50% lower prices this year, and fewer sponsors, fewer buys, and lower prices. So, it's been a tough environment to try to sell ads in.

01:47:10   For podcasts like ours, there's been a lot of factors for that. The industry, the kind of ad that we do, it's called a host read, which means I read it, and they're baked in, which means that I record them and I stick them in the show, and everyone gets the same copy of the show with the same ads in it.

01:47:30   And it also means that no matter how many downloads that show gets, those ads are going to get that number of impressions, which might be higher or lower than the advertiser might want, and over time, those ads aren't changed.

01:47:44   So if you go back and listen to an episode from five years ago, you're going to hear the ad that was in there five years ago, not like a new ad. So that's the kind of show that we do, and the kind of show that we've always done.

01:47:55   That's not where the industry has moved largely. The industry has largely moved towards, first of all, dynamic ad insertion. When you download a podcast, and every download might have different ads spliced into it at download time.

01:48:11   Now, sometimes this is for somewhat innocuous reasons, like if you want to have the same ad spot included in four or five different episodes, you can do that. If you want to put new ads into new downloads of old episodes, like if you get a lot of back catalog traffic for your show, you might want to monetize your back catalog a little bit better and sell ads that will run in back catalog episodes, so they get spliced in that way.

01:48:36   But it's also often used in really annoying or creepy or both ways. So for instance, because dynamic ad insertion can check your IP address upon serving it to you, it can then do various targeting things based on tracking and other behavioral information that they can derive from you, either themselves or through other services that they're sharing all your crap with and tracking you across.

01:48:58   And that's really super creepy and that's why you can get personally targeted ads in dynamic ad insertion or DAI. You can get those injected into your show, or they can use your IP address to perform rough geolocation and figure out roughly what region you're in and, for instance, serve you an ad for a local car dealership, like a radio ad stuck in your podcasts.

01:49:20   Listeners hate this. It's awful for listeners, as you know, if you listen to any shows that do this. And most large podcast publishers are now doing this style of ad.

01:49:30   For us, first the ad market for shows like ours first got abstracted away from us by ad agencies. When we first started the show, we were largely being contacted by sponsors directly or we were contacting them directly and we would talk to their ad person or whatever and they would buy it and that'd be it.

01:49:49   Over the years that has shifted more and more towards, we have to deal with agencies and the agencies deal with the sponsors. And there's pluses and minuses to that, but I think it's proven to be mostly a minus.

01:50:01   Now we're even moving away from that into these dynamic ad insertion worlds. And when people are buying dynamic ads, largely they're not saying, "Give me episode 546 of ATP." What they're saying instead, because they have access to not only dynamic insertion, but also they have access to some kind of demographic targeting usually,

01:50:24   what they're able to say instead is they're able to go to a large ad exchange or platform and say, "All right, I want to buy 100,000 impressions at this CPM or lower, this cost per thousand or lower of men, age 25 to 34 in the US."

01:50:41   They're able to target it to that level. That's not the kind of ad that we sell. And frankly, that's not the kind of ad that we want to sell. We don't want to track you or to get your information like that or critically, we don't want to enable anyone else to track you in that way.

01:50:59   We don't want to make a show full of dynamic ads, ad insertion, because listeners hate it. And again, you're all podcast listeners, you probably listen to at least one show with DAI and you probably hate it.

01:51:12   We also don't want to join some kind of big ad marketplace for lots of reasons, chiefly of which we probably make a lot less money. And part of that is because ad marketplaces take their own cut and it's usually huge.

01:51:23   And they also would take away control from us and that would give us less control over things like we don't want to track people and be creepy and stuff like that.

01:51:30   We also don't want to join a big podcast network. And it honestly would have to be a big network to make a difference here because the small networks are having many of these similar issues.

01:51:41   But we don't want to join a podcast network because we are our own show. We don't want to share our branding. We don't want to have some network badge on our artwork and have ATP just be another show brought to you by big network X.

01:51:55   That's not our style. That's not our show.

01:51:57   Meanwhile, in 2020 we launched this membership program. And membership started out as a nice kind of side bonus income. Kind of like when we sell merchandise. When we sell t-shirts and stuff, that makes decent side income.

01:52:13   It was nowhere near the main income of the show, but it's decent side income.

01:52:17   Membership started that way. But membership is growing. And it's been going really well. And we really so much appreciate that.

01:52:28   And we wanted to say first of all how much we appreciate that because right now, as you've heard, the number of sponsorships on our shows has gone dramatically down since the beginning of the year.

01:52:38   And if you look at previous years, the amount of times that we had less than a totally full ad load, like less than all three ads before 2023, it almost never happened.

01:52:50   And now in 2023, I think it's more unusual when we have a full three ads than not.

01:52:58   And meanwhile membership is going great. So we wanted to just kind of brainstorm in public what directions we might want to take the show.

01:53:10   Because the landscape has so radically changed in the last six, seven months to the point where the ad business has become something that not only is it not working nearly as well for us as it used to,

01:53:22   but the direction that the podcast ads have gone has gone in a direction that we don't really want to go.

01:53:28   You know, right when we first launched the membership program, what we said, and this is still the goal, was we don't want to take anything away from the show.

01:53:40   We want to only be additive. So members will get things that were never given to everyone else for free.

01:53:45   It was extra content here and there, extra perks, like side stuff. And I think where we are now is, I don't think the show is ever going to go totally behind a paywall because none of us want that.

01:54:01   But at some point, because the landscape is now very different, I have argued, we don't all agree on everything here, but I have argued I think we should put more behind the member paywall if we're going to be a more member supported show.

01:54:19   And what everyone else does is their after show or their pre-show. If you look around the landscape of other podcasts that have member programs in the same extended universe as our show, that's a pretty common thing.

01:54:34   A lot of relay shows do it. There's a lot of shows that do that. And we kind of wanted to discuss this with you, the listeners. I know you're not here in the room with us, but kind of just get some feedback.

01:54:46   I can see a future in which we might go all membership and have no ads and just put the after show and maybe chapter markers or something. Some combination of like, most of the show would still be free and we would have on a regular basis, promos for membership in the show.

01:55:06   The same way we have sponsorship breaks now, we would have a member promo or two or three in every episode. And then maybe the after show becomes member only and chapters or whatever we come up with, plus the stuff we do now.

01:55:20   You did so well before telling everybody they weren't in trouble. I think you need another disclaimer now. We are not announcing anything. We are not changing anything. Chill out. This is just discussing it.

01:55:30   By the way, the reason we're discussing it, Marco alluded to this, but to be more concrete. So yeah, ads are super duper down this year, right? But we're not thinking of doing anything right this second.

01:55:43   But for example, if next year has a similar decrease to this year, if the ads just go away, not by our choice, but like, hey, guess what? No one wants to buy these kinds of ads anymore. They only want to buy the kind of ads that you don't want to have on your show.

01:55:58   And by the way, even before dynamic ad insertion and everything, we were already kind of at a step with the market in that we have 100% control over what ads we run. And we're picky.

01:56:11   We will reject ads from companies that we don't want to have ads on the show. We have always done that. We continue to do that, even though we don't have enough advertisers to fill the slots.

01:56:24   They still get the same thumbs down. We will remove advertisers that we thought were good but turned out not to be. That is not something that happens in a marketplace where people are like, oh, I just want these ads, everything's a commodity, I don't care what shows they run on, blah, blah, blah.

01:56:38   It's just, you know, we've always been out of step with that. So anyway, if we continue down this road and it's like next year, and the year after the ads just disappear, we need to think about how can we support the show.

01:56:49   So that's why we're musing about this. First, A, that's not why we're not making any changes right now about this, but we have to start thinking about it because thinking ahead is an important part of running a business.

01:56:58   You don't think about this after the ads go away entirely. You think about it when you can see a possibility that they might go away or dwindle to a point where they're no longer worth having at all.

01:57:09   And then you have to think about what can we do to, you know, how can we get some of that back. And so this year, membership, which used to be, so in all previous 10 whatever years of the program, advertising is how we made the vast majority of our income.

01:57:26   And then membership came along and advertising was still the way we made the vast majority of our income. Suddenly this year, membership, it's flipped.

01:57:34   Membership has become the way I think it's edged out ads. And not because membership has grown that much, although membership has grown and we thank you a lot for it.

01:57:42   The ads have gone way, way down, which is not the way you want to see things go. Like if your income's going to flip from like it used to be, you know, mostly it was this and then this was a little pool on the side.

01:57:52   If it flips, fine. But if it flips because the thing that used to be big becomes really, really small, that's not great.

01:57:57   So we're staring at this and saying, what do we happen if that, what happens if that ad number, which used to be the majority of your income, like think about this with your own income.

01:58:07   If the way you make the majority of your money went down by half, you'd be thinking about stuff. You'd be thinking about what, you know, what can we, what can we do about this?

01:58:18   What can we change going forward? So we are definitely thinking about things. And it's tricky. Like if you think about it, I'm sure people will send us feedback or whatever.

01:58:26   But like part of what you're buying as part of membership is you get an ad free version of the show.

01:58:32   But if the show is already ad free, that makes that less valuable because everybody gets an ad free version of the show.

01:58:38   So why would you pay extra for it? You just don't have to be a member or you can get the ad version of the show.

01:58:42   You know, we also sell the bootleg, you get a merch discount, you get to get the member specials. There's all sorts of stuff like that.

01:58:48   That's why Marker was musing about, okay, in a world where there are no ads, how do essentially we shore up the value of membership?

01:58:56   Because if we just got rid of the ads, we think membership would go down.

01:58:59   But see what we'll say, oh, I was being a member because I didn't want to hear the stupid ads. Now the ads are gone.

01:59:03   And now also membership gets cut in half and it's pretty soon, pretty soon our income just goes down down.

01:59:08   So you can see why we're thinking about this.

01:59:10   My idea, which we may or may not do, we haven't discussed it yet, is I sent out that survey about, what was the survey about originally? I forget.

01:59:19   Well, it was about tech versus non-tech stuff, right?

01:59:22   Oh, yeah, that's right. We did a survey about the member special because we wanted to hear if we were doing the right things for the member special.

01:59:26   And that was incredibly valuable. We found out that our mix of tech versus non-tech was incorrect, but also that it was kind of about in the middle and it wasn't, you know, anyway.

01:59:36   It was really valuable. It was like a three question survey or whatever. So probably at some point I would like to send out another survey that asked people's opinions about membership.

01:59:45   Now this is tricky because you can ask people what they're going to do. Like, if we did X, how would you feel about it? How do you feel about membership now?

01:59:51   And people will give their opinions, but people's own predictions about their future behavior is not always accurate.

01:59:56   That's just part of the world of surveys. So we'll have to think about whether that's worth doing or if, you know, if we're going to do it all or how we're going to do it.

02:00:03   But basically you, the listeners have always been the most important customer. That's part of our value to advertisers is you, our listeners, because we think our listeners are more valuable than the average listener, which is why we get pretty good ad rates.

02:00:19   Because the people who listen to the show who are interested in technology are not the same as just random people who are flipping through a bunch of podcasts on Spotify.

02:00:28   Like our audience is valuable and no, we're not going to give you all their demographic information and, you know, give you their IP addresses so you can figure out where they live or whatever.

02:00:38   But we know for a fact that they are valuable because advertisers get value out of them. Because, you know, people with services that appeal to this audience, we can characterize the audience by the kind of show we are.

02:00:50   So the audience of this show is where all the value is. And so that's why we're very interested in what the audience of this show thinks about the value proposition of membership, of the current ad thing, of things that they would find attractive going forward and things they would find not attractive going forward.

02:01:05   So we are definitely musing about this. But as you can see, if you think about it, it's not an easy problem. There's no sort of like, just do this and you'll be fine. None of those exist.

02:01:15   So we are thinking about it. We'd love to hear your feedback from it about this issue. And maybe at some point in the future, we will compel you to, we will ask you nicely to fill out some other terrible Google Forms thing where we'll gather some data.

02:01:30   The problem with the surveys, though, is like, the people, the number of people who filled out that survey about membership, even though it was not confined to members, like, hey, what do you think of our member specials?

02:01:40   Very few people filled it out in terms of the percentage of our audience. But the question we have about the future of the show really needs more of our audience to fill out. Who wants to fill out surveys?

02:01:51   So I don't know, like, I'm not a survey master. I don't understand sampling theorems and stuff like that. But even when the time comes, I'm sure the same subset of enthusiastic people who really care about the show will answer the survey.

02:02:02   But when it comes to questions like this, that enthusiastic subset is probably the ones that we need to listen to because they're the ones who care the most about the show. They care to fill out a survey or whatever. Anyway, we're thinking about it.

02:02:13   We hope you're thinking about it too. We just wanted to keep you in the loop so you know what we're dealing with over here and why we're thinking about this topic at all.

02:02:21   And also, I think it's worth, for you hearing and trying to throw out ideas or thinking about what we should do and everything, we could be a solely member-supported show in theory. That is actually within reach.

02:02:34   We're not there with today's member numbers, but seeing how far we've gotten with membership without having that much that's member exclusive, I think we could get there. I think we could replace our previous sponsorship income 100% with membership in theory.

02:02:54   Again, it would take some growth from the member base, but it's not like a totally ridiculous unattainable number. It's something that we have now proven is actually within reach and could be done.

02:03:05   I'll show you the numbers after the show. You're being very optimistic. I also believe we could do it, but it is not a slam dunk, especially in light of the things I just mentioned.

02:03:15   I'm sure people are already writing their emails right now that are saying, "I would be a member if you just lowered the price."

02:03:28   I can tell you the math about lowering the price, because obviously when you talk about Casey's app, whatever your price is, it needs to be lower until it's free and then we get back to advertising-based things or whatever.

02:03:38   It's really hard to make that back in volume. If you cut your price in half, you'd get twice as many customers. It's almost never true.

02:03:45   I'm sure there's some economic theorem involving the word "elastic" that I don't know the term for that explains this or whatever, but if you do the math on it, especially with where you're changing things, where a lot of people are paying for membership as an ad-free show and now the show is ad-free for everybody, it's not so simple.

02:04:00   I agree with Marco that it's definitely plausible, but it's not simple or easy. We would have to ask our listeners how they feel about it before we say, "This will totally work," because it's very easy to not only fix your problem, but to make it ten times worse.

02:04:19   We talked about this a little bit already, but I think it's important to say it again. I'll speak for myself. ATP is the lion's share, overwhelming majority of the LIS family income, to the point that everything else is basically like a Disney-sized dot, if you will, compared to everything else.

02:04:43   Compared to ATP. I would be losing my mind if members weren't here helping keep us afloat. I mean us in both contexts. I mean ATP, and I mean the four of us in the family, five if you include Penny.

02:05:00   Genuinely, I know this sounds like I'm just sucking up and maybe I am, but I also really mean it. If it weren't for members and the amount of members that we have, I think the LIS family would be in a real tough spot right now.

02:05:15   To the point that I would probably be starting to think about applying for jobs, if not actively applying for jobs at this point.

02:05:33   Advertising pays whenever you feel like you can get the money from them. And yes, they're supposed to pay after X number of days or Y, but I can tell you that one part of the business, kind of like shrinkage, and if you know the retail business, you know what the term shrinkage means?

02:05:49   I believe that's the Seinfeld term. I think they call it just shrink, I think.

02:05:53   I think shrinkage is what it is.

02:05:55   For people who don't know, that's a term of like if you run a clothing store, some percentage of your stuff's going to get stolen. And you have to factor that into your business. And one of the things you have to factor into your business, if you have a podcast or you have advertisers, especially in the tech world, is that some of the people who buy ads on your show will never pay you. That's just a thing that happens.

02:06:14   The ad will run and you won't get paid.

02:06:16   Then the company will go out of business. If it's like a startup and they paid for an ad for their startup, they may go out of business before they pay for your ad. And believe me, when it comes time for the creditors of that VC funded startup, podcast advertisements are really low on the list of getting that money.

02:06:31   So that's just something you have to factor in. But second thing is, when people do ad buys, they buy them at a big chunk very often, and you get that big chunk after they have all run much later. So Casey's family will be flipping out because he'd be going literal months with no income.

02:06:45   Waiting for that big ball of advertising money that is not a sure thing to hopefully land. And that is a potential cash flow problem.

02:06:53   But membership, on the other hand, is nice regular income that comes on a monthly or annual basis that is way more predictable than getting money for advertisers.

02:07:03   This is exactly it. And not only that, but on top of everything, this is what Marco was talking about. It used to be that you would wait for all your ads to run and they would pay you in one big lump. And it was like Christmas, even if it was in February or whatever.

02:07:16   But that was when we had a direct relationship with advertisers. Now we have these agencies. And so the agencies are potentially getting a tremendous lump sum of money from the advertiser.

02:07:28   And then the agencies wait for the advertisers to pay them. And then, of course, because it's an agency, they have to make everything difficult.

02:07:35   And then it takes literally months for the money that is owed to us to eventually arrive at our doorstep. It's more difficult than you would imagine.

02:07:46   And yeah, again, I say this because I want members to know how incredibly valuable you are to all three of us. Because hand to God, I would be in a bad spot right now if it wasn't for membership.

02:08:00   Obviously, we have savings. I'm not saying I would be destitute or anything like that. But I would be dramatically changing my life and thus my family's lives if it wasn't for members.

02:08:11   I don't know how to stress how serious I'm being. I'm being extraordinarily serious. And that's how much we appreciate the members.

02:08:19   And I can speak for myself. When we floated some of these ideas, again, we're not changing anything right now. When we floated some of these ideas about taking the after show and pulling that behind the paywall or what have you,

02:08:32   I am devoutly against it. And we haven't gotten serious enough about it to get into a proper fight about it. But there may be a fight brewing between the three of us if it gets to that point.

02:08:45   But that being said, at some point, my kids got to eat. And although there are a trillion things I would rather do than pull the after show behind the paywall,

02:08:54   that is something that is on the table if we really get that desperate. And gosh, I hope not to. I really hope not to. And again, we're saying all this in front of you because we don't want this to seem like a, "Oh, they had one bad week. Now they're pulling everything."

02:09:10   That's not at all what this is. But it would be a bad idea not to think about it, like Marco was saying. And because we respect and value all of you, member or not, so much, we want you to know kind of where our heads are.

02:09:25   Because we don't want this to be a surprise if in six months or a year, or maybe five years in the best case scenario, something changes. And all of you are like, "Wait, what? We don't want that. Wait, what?"

02:09:37   That's why we're here with you right now. Again, you're not in the room, but you're in the room having this conversation with us. And we've got some stuff that we want to try. We have some member specials that we have ideas queued up.

02:09:51   We don't have any specials queued up, but we are recording one this week. We don't know when it'll be out, but we're recording one this week, which we think you'll like.

02:09:58   So we're trying to do what we can, again, to be additive and not take away something that previously existed. But eventually, everyone's got a price. And if things get bad enough, even I, who is devoutly against, and I'm picking on the aftershow just because it's an obvious example,

02:10:15   I'm devoutly against taking the aftershow behind the paywall, but there will come a time that if ads continue to stink, if membership goes down a lot, or if we need more membership in order to keep the three of us going, even I will have a price at some point.

02:10:31   Yeah. And also, we have other options on the table. We just would rather not take them. One thing we could do is drop our ad rates down and drop our standards down so that we can get more ads. That, I think, is not the direction we want to go.

02:10:48   I don't want to be reading crappy ads for things I don't really believe in. I don't want to stick our name on something that we would rather not stick our name on. And there are certain price floors below which it's not really worth doing the ad and taking the risk and everything.

02:11:04   I mean, that's why I think, like, I see us leaning more into membership in the future in all likelihood. I mean, again, we're not announcing any changes yet because we haven't made any changes and we haven't decided on any changes yet. And heck, I mean, ads take so long to pay us that we could stop taking ads today and we would still have ad income for the next year.

02:11:22   Or more.

02:11:23   Or more.

02:11:24   Depending on how things go.

02:11:25   Yeah, like we have, we, I mean, the amount of money that we are owed.

02:11:29   And the other thing to consider is the ad market does fluctuate. This is the biggest downturn we have ever seen by far. And it could just be continuing to crater, which is why we're thinking about this, but it could also turn back up again.

02:11:39   And that's another reason why we shouldn't suddenly start taking ads for like garbage, fake nutritional supplements that we don't believe in or like, you know, whatever.

02:11:46   All sorts of terrible ads that you care about, you know, that on other programs you hear these ads, you're like, I can't believe that they're actually smart. Like that would destroy the value. It would, I think it would destroy our reputation, but also it wouldn't be recognizing the value of our listeners.

02:12:04   Because we don't, our listeners are not just a random subset of the population. They are attentive listeners who care about our program, who bought, who are interested in products related to technology.

02:12:16   They're not probably interested in products that have nothing to do with it. Or like, that's why when we pick our advertisers, we try to pick advertisers that are a good fit for our audience.

02:12:27   And that who are willing to recognize the value of our audience and not treat them like an undifferentiated sea of people that are the same as the average customer for all podcasts across the entire world.

02:12:39   That's the problem is like, the way where the market is headed with all these like, you know, big agencies and now big exchanges and big DAI platforms and everything. You're not really buying the show as much as you used to. And so our extra value of like how, how good our listeners have been to direct advertisers and direct response advertisers, like, you know, you hear Squarespace a lot.

02:13:02   It's not a coincidence. They are a direct response advertiser. We work with them directly and they see a ton of value in our ads. And that they have been our longest running and biggest sponsor by far.

02:13:14   We should mention Linode here, by the way. This is a thing that particularly hurt ATP. Linode has been a past sponsor. This is a company that Marco was using before they were a sponsor. A company that he liked that was a perfect fit for our show. Technology related, product we believe in and like Squarespace, the reason they're willing to pay for ads on our show is because they know our audience is potentially in the market for like hosting on Linode, right?

02:13:37   And because once they get a customer, that's recurring revenue because once you start hosting something, you pay that hosting bill every month, just like with Squarespace. So it's absolutely worth it to them to pay what it costs to run an ad on our show to acquire those customers, knowing full well that our show is full of people who might want to host something on Linode.

02:13:54   And they were a great sponsor for us. We loved having them as a sponsor. They were a great fit for our listeners and we liked them. We liked the business. And then Akamai acquired them and they stopped advertising on podcasts. And that hurt us a lot. Above and beyond, it's like, yeah, so the market is down, which Marco sees in a general way and across Overcast advertising.

02:14:15   But ATP in particular, Linode was such a good sponsor for us. And why did they buy so many of our ads? Because they were such a good fit for our audience. But Akamai doesn't want to run podcast ads. So yeah, that was adding insult to injury.

02:14:29   Yeah, like if you look at how many of our episodes last year were sponsored by Squarespace and Linode, it's very frequent. They probably bought a similar number of ads between the two companies each. And so to lose Linode really did hurt. That was a huge amount of our inventory that used to be sold and now is gone.

02:14:49   If you think about next year, Squarespace is, yeah, we're not doing podcast advertising anymore. Like that would be massively destructive to the entire podcast industry, but also particularly to ATP. Because again, Squarespace, I mean, you hear Squarespace ads in everything, right?

02:15:02   But Squarespace for ATP listeners, that is much better than Squarespace on a comedy podcast. Who on a comedy podcast is running a website at all? I know Squarespace is going to pitch it, but people listen to ATP, they should have a website and they should buy a domain from one of our sponsors and they should host it on one of our sponsors. Like it's a perfect fit for us.

02:15:18   So I really hope they don't go the way that Linode did.

02:15:21   Oh yeah. If Squarespace ever pulls out of our show as an advertiser, I think that kills our ad program. Like that's when we go member only. Because I don't think the ad program, I don't think our ads could survive that. Losing Linode was bad enough. Losing Squarespace also would be devastating.

02:15:38   And that's also, that's part of the reason why I'd like to push us more in the direction of member only because I don't like having to rely on one source of income like that. Like that's not good for diversification and security.

02:15:49   So yeah. But yeah, in general, like that kind of relationship where we're dealing directly with the sponsor and they're selling a tech-based subscription income product where it makes sense for them to pay the high acquisition cost of podcast advertising.

02:16:04   And one that we actually like and believe in and think is good.

02:16:07   Yeah, exactly. Like Squarespace and Linode, like I'm able to talk about those constantly because I use them both. You know? Whereas like, you know, any other random podcast.

02:16:16   Can you believe Squarespace and Linode didn't sponsor this episode?

02:16:19   I know, right? Like any other random podcast ad you hear is, you know, not nearly, it's not nearly as easy for us to say, "Oh my God, this is perfect for our audience." You know? And have it be worth it to them as well.

02:16:32   So anyway, all this is to say like as the industry moves towards everything in podcast advertising being just commodities where you're just buying a certain number of impressions on a certain demographic.

02:16:45   Our show loses that because no one is buying high quality listeners specifically on a marketplace. What you're buying is numbers and demographics and we can't give you that.

02:16:55   Yeah, they just want warm bodies and they need to know the demographics. They want to know, you know, where you live and they want to know your IP address so they can find out everything that you can find out from an IP address, which is a frightening amount of information.

02:17:07   They need that information to target their ads. And once they have targeted their ads, they don't care where they run and what shows they run.

02:17:13   They just want to target those things no matter where they are. And it's just an undifferentiated sea of warm bodies.

02:17:18   And that is value destructive to our podcast, which has a particular kind of listener that has a particular kind of value to a particular kind of advertiser.

02:17:26   By the way, it's worse than that targeting. They also want, quote, "attribution." This is like possibly the most invasive form of ad tracking usually because what attribution means in the ad world is they want to track who the ad has been served to.

02:17:42   And that way, if later on that person makes a purchase, they're able to associate this purchase was made after this person saw or heard or whatever this ad.

02:17:52   And that ad might have been a week ago or it might have been on a different device. So that's why they have all these like all these different tracking mechanisms, try to fingerprint people and try to track you between different apps and services and different devices and different times.

02:18:04   Because if an ad platform can tell advertisers this purchase was directly attributable to somebody who clicked on or listened to or whatever this particular ad you ran, that's a pretty strong feature for an ad platform.

02:18:18   And they don't want you to have to remember to use code ATP because code ATP doesn't identify you. There's no identifying information to that ATP.

02:18:24   They want to know which specific person bought and they do not want to rely on you remembering to go to the landing page or click on a link in the show notes or entering a promo code.

02:18:32   They'll do it all behind the scenes and they won't just know this person came here ADP, they will know literally who you are based on your IP address.

02:18:39   Yeah, and they don't have to do it themselves because there's lots of podcast tracking and hosting and ad serving services that is for you.

02:18:44   You know, I made this feature in Overcast a while ago where I added this privacy button on every podcast page in Overcast.

02:18:51   You can tap that and you can see what domains and services those episodes are served through.

02:18:57   And if you look at the privacy page of any major podcast, any podcast that has a big name and a staff, click that privacy tab and you'll see the same handful of services on many of them.

02:19:11   And many of those are interpodcast tracking services that will take this data, they'll know who they served each DAI copy to, they'll be able to track it to certain demographics,

02:19:23   they'll be able to attribute purchases to them later, which means a lot more tracking.

02:19:28   So that's the world of podcast advertising largely.

02:19:33   There are still exceptions like our show, but we're dwindling and the world is becoming more hostile to us and more difficult for us to sell our ads in.

02:19:41   And so this is the direction it's going and this is the direction it has already gone.

02:19:45   Like this fight is largely over, like shows like ours lost.

02:19:48   Like this is not the way things are mostly done anymore and it's only moving more in that direction.

02:19:54   We are very lucky that we have the membership program and that we established it relatively early so that that way we have, we've been building an alternative and we could run the show entirely on that theoretically, you know, with some growth.

02:20:11   But it's not, again, I don't think it's out of the question. I think we could actually get there.

02:20:15   All this is to say the future, the specifics of the future are uncertain, but I think the future of this show is very solid.

02:20:23   And I think we have lots of solid ground to rely on here, to keep building on.

02:20:30   Our members are great and we thank you so much and hopefully we will continue to try to figure out ways to get more members because when the ad market does finally crater for this show, whenever that happens, hopefully it never happens.

02:20:44   But if that happens and that's not out of the question, we now have something else we can move to and that's pretty great.

02:20:51   Truly and genuinely, thank you to all the members. I cannot overstate how much we appreciate you.

02:20:58   I think I'm pretty sure I speak for all three of us, but certainly all four of us in the List family, that's what we appreciate about you.

02:21:05   Yeah, it's incredible that we have such a strong backstop to fall back on as our ad sales are tanking.

02:21:14   And part of that is because we panicked when COVID was coming. Not panicked, but in general, again, forethought, we are all very good about sensing danger.

02:21:22   But we sense danger and we sense danger at COVID because no one knew how anything was going to happen when COVID is like everything was up in the air. Who knows what's going to happen? And so we need to have a backup plan and we started membership and in hindsight, that was in hindsight, we didn't need it to save us through COVID because actually advertising, yes, it went down, but it kind of picked back up again.

02:21:41   But boy, are we glad that back then it was like, oh, we love our, you know, members and stuff like that.

02:21:48   Here's the thing. It's also a more comfortable business relationship for us because we feel like you're paying for a thing directly that you want from us and we give it to you. And that makes so much sense. And it's so straightforward advertising in the mix. It's not impossible.

02:22:03   And there are, you know, we, but it complicates it because there's three parties here. There's the listeners, there's the advertisers and there's us.

02:22:09   Don't forget the agencies and the marketplaces and the salespeople.

02:22:13   Yeah, and obviously they're overcomplicated, but like conceptually, like again, we can, we can navigate that. We can try to find good advertisers for our customers and have a good fit and all that or whatever.

02:22:22   But it's so much simpler to just say, you listen to the show and you like the show and we want to give you the show and we want to give you the show that you like and then you pay us for it. It's just so straightforward, right?

02:22:31   It's just, it's, it's, it is a, it is mentally a relief to the degree that we can make more of our customers be like that than like advertising, but we just not entirely sure how to make that happen to the degree that we don't need advertising at all anymore.

02:22:49   Yeah, but, but you know, if, when we, when we first started doing this, like the idea that it would ever be in, in like, you know, possible, you know, reach distance of replacing ads, we would never have guessed that. We, we specifically didn't. Like we, like when we were talking about doing this, like we never thought it would even be a chance that it might replace our ad income.

02:23:10   Advertising going down the toilet really helps it. Yes, it definitely has closed the cap quite a bit. Can you match zero? Cause I think, yeah.

02:23:23   Oh my. It's funny, but it's not funny.

02:23:26   Beep, beep, beep.