Prof G Markets: Is Reddit Undervalued? + Netflix Goes After Podcasts

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0:01:53 – Today’s number, 0.004%.
0:01:55 That’s the chance of being born with a genetic mutation
0:01:58 that allows you to sleep less than six and a half hours
0:02:00 each night without any ill effects.
0:02:05 True story, last night I had six hours of straight sleep.
0:02:07 The other two were gay, but I woke up fulfilled.
0:02:20 That’s wrong.
0:02:22 Let’s enjoy it while it lasts.
0:02:26 Today’s discussion on profit markets.
0:02:27 I’m out of breath, by the way,
0:02:29 ’cause I did about seven minutes of working out.
0:02:32 – Yeah, I can tell, I can hear it.
0:02:34 – Oh my gosh.
0:02:35 – What was that, some push-ups?
0:02:37 I saw you doing something off night.
0:02:41 – Secretary Hexhats said that he did five rounds
0:02:44 of 47 push-ups, so I’m committed to doing five rounds
0:02:46 of 48, ’cause I’m already very excited
0:02:48 about whoever’s gonna be 48.
0:02:51 And I did two sets of 48, so I’m trying to figure out,
0:02:54 I’m on TikTok and YouTube, trying to figure out
0:02:59 how to increase your push-up strength.
0:03:02 But anyways, Ed, what’s going on with you?
0:03:03 What’s going on with you?
0:03:07 As I try to out-push up the DUI hire,
0:03:09 Secretary Hexhats, what’s going on with you?
0:03:11 – Yeah, I’m doing pretty well.
0:03:15 I’m in Mexico City, heading to Puerto Escondido tomorrow.
0:03:19 – Oh, Eduardo, don’t install a biblioteca.
0:03:20 Where are you staying though?
0:03:20 It’s like a nice hotel.
0:03:22 – Yes, a miroval, it’s not that nice.
0:03:25 It’s okay, it’ll do.
0:03:26 Yeah, I’m heading out tomorrow.
0:03:27 We’re going to Puerto Escondido.
0:03:28 It’s gonna be great.
0:03:33 I had tacos for breakfast, lunch, and dinner yesterday.
0:03:35 – That’s the five food groups.
0:03:36 What’s Mexico City like?
0:03:38 It’s a hot city right now.
0:03:39 – It’s great.
0:03:41 I haven’t seen that much of it yet.
0:03:43 One thing I did notice that was kind of interesting
0:03:47 is there are BYD stores and BYD ads everywhere.
0:03:49 I haven’t seen a BYD vehicle yet,
0:03:51 but it is interesting.
0:03:54 I mean, I’ve seen it at least five times.
0:03:56 You never see that in America.
0:04:00 So clearly, China’s trying to push that in Mexico.
0:04:01 It’s kind of interesting.
0:04:03 But yeah, it’s a beautiful city.
0:04:04 It’s a good time.
0:04:06 Going to Contra More later tonight.
0:04:08 Apparently, that’s the great restaurant.
0:04:09 Maybe we’ll check out the sojo house, it’ll be good.
0:04:12 – Ask me where my favorite place to vacation in the world
0:04:14 is, there’s someone who’s been literally everywhere.
0:04:17 – What is your favorite place to vacation in the world?
0:04:21 – Mexico, if I could only vacation one place.
0:04:22 What’d it be, Mexico?
0:04:23 I think it might be Mexico.
0:04:24 Maybe Italy, Mexico, yeah.
0:04:25 – Really?
0:04:26 – Yeah, it’s fantastic.
0:04:30 – Over France, over Italy, over Greece, Mexicans.
0:04:32 – Oh yeah, you have it all in Mexico.
0:04:34 You have culture, you have amazing food.
0:04:35 – The pricing is crazy.
0:04:38 I mean, everything’s been crazy cheap.
0:04:41 I had like great meals and it’s been, you know,
0:04:43 it’s like getting sweet green practically.
0:04:44 – It’s got sort of that
0:04:47 making us amazing beach beautiful water vibe
0:04:49 for about 40% of the price.
0:04:51 And the people are friendlier.
0:04:56 Also, it’s got extraordinary architecture, incredible food.
0:04:59 I just absolutely adore Mexico.
0:05:00 Anyways, I’m glad you’re there.
0:05:01 – Glad you’re glad.
0:05:02 And before we get into the show,
0:05:04 I just want to promote the market’s newsletter.
0:05:08 So we’ve expanded this show into a new weekly newsletter.
0:05:10 We’re breaking down key market moves
0:05:14 with data-driven analysis and crisp visuals every Monday.
0:05:18 So please subscribe now at profgmarkets.com.
0:05:19 I think the newsletter is pretty great.
0:05:22 It’s kind of everything in the podcast
0:05:23 and you get to read it in about two minutes,
0:05:25 sort of exactly what you need on a Monday.
0:05:27 – I wasn’t a big fan of it at first.
0:05:29 And then I saw the first one and–
0:05:30 – You weren’t?
0:05:31 I thought you, I thought this was your idea, no?
0:05:32 – It was my idea.
0:05:36 And then, and then I thought, okay,
0:05:40 we spend so much time on our No Mercy, No Malice newsletter.
0:05:41 I mean, it’s taken us 10 years
0:05:43 to get to half a million subscribers.
0:05:45 We really haven’t figured out a way to monetize it,
0:05:47 quite frankly, that’s not why we started it.
0:05:50 But it’s just this monkey on my back,
0:05:52 mostly come Thursday night when I’m like,
0:05:54 okay, what am I going to write about
0:05:55 that people would actually want to read
0:05:56 and doesn’t embarrass everybody?
0:05:59 And then I thought, okay, the notion of another newsletter.
0:06:02 And then when I saw the work that Mia and team had done
0:06:05 on the design and we have already sent out a test batch
0:06:07 and people seem to really like it,
0:06:11 I think we’re going to be close to 200 or 250,000 subscribers
0:06:12 right out of the gate.
0:06:15 So now, now I like it and yes, it was my idea.
0:06:17 – Yeah, I think it’s a great newsletter,
0:06:19 I’m excited about it.
0:06:21 Let’s start with our weekly review of market vitals.
0:06:23 (upbeat music)
0:06:30 The S&P 500 was volatile, the dollar declined,
0:06:34 Bitcoin dropped, the yield on tenure treasuries jumped.
0:06:35 Shifting to the headlines.
0:06:38 Inflation came in hotter than expected
0:06:40 with the consumer price index rising 3% in January
0:06:44 from a year earlier, prices jumped 0.5% from December,
0:06:47 which was the biggest monthly increase since the summer.
0:06:50 All three major indices fell on that news.
0:06:52 Average tuition at US private schools
0:06:55 surged to nearly $50,000 this year,
0:06:58 marking the biggest increase in at least a decade.
0:07:01 Schools kept tuition steady during the pandemic,
0:07:03 but rising teacher salaries and material costs
0:07:06 are now pushing prices higher.
0:07:08 And finally, the European Union has committed
0:07:11 to mobilizing 200 billion euros for AI investments.
0:07:14 50 billion euro will come directly from the EU,
0:07:18 while more than 20 investors, including Blackstone and KKR,
0:07:20 have pledged the remaining amount.
0:07:22 20 billion euros will be set aside
0:07:24 to fund four AI gigafactories dedicated
0:07:28 to training large language models.
0:07:31 So let’s just start with this inflation read.
0:07:33 Let’s just go over the important numbers really quick.
0:07:36 So the CPI rose 3% euro a year, core CPI,
0:07:39 which strips out food and energy.
0:07:43 And as we’ve discussed, the reason you want to use core CPI
0:07:45 as opposed to CPI is because food and energy prices
0:07:46 are very volatile.
0:07:49 So it can sometimes sort of distort what’s really happening.
0:07:51 And that rose 3.3%.
0:07:55 So even higher, this was not a very good report.
0:07:59 The big drivers were shelter, transportation, medical care.
0:08:02 But the item that’s getting the most attention here
0:08:06 is the price of eggs, which has risen 15%
0:08:11 in the past month alone and 53% in the past year.
0:08:16 So a carton of 12 eggs now costs more than $8 on average.
0:08:18 A year ago, it was less than $5.
0:08:22 And the reason this is happening is kind of interesting.
0:08:24 It’s because of this outbreak of bird flu,
0:08:27 which is a common problem in the industry.
0:08:30 But apparently right now, the outbreak we’re seeing
0:08:32 is one of the worst we’ve ever seen.
0:08:34 And this is a huge problem for farmers
0:08:37 because if you find one single case of bird flu,
0:08:39 it means you have to kill your entire flock.
0:08:41 So in the past four months,
0:08:44 American farmers have killed 15%
0:08:46 of all of the chickens in America.
0:08:51 So supply is really low, which is why prices are really high.
0:08:55 Your reaction, Scott, to this inflation data
0:08:57 and perhaps eggs specifically.
0:09:00 – I would say probably the biggest impact it’s gonna have
0:09:02 with the exception of consumers who really feel it,
0:09:06 especially those who energy, housing and food
0:09:07 takes up the disproportionate amount of their income,
0:09:10 which is 80 or 90% of the American consumer.
0:09:13 It’s that the market is gonna have to absorb the fact
0:09:16 that the expected interest rates probably aren’t coming
0:09:20 as quickly as they thought or in the foreseeable future.
0:09:22 The number that pops out to me,
0:09:26 and I had someone who basically ran Obama’s campaign call me
0:09:27 ’cause I was just on CNN,
0:09:29 where by the way, I dropped an F bomb, no joke, on CNN.
0:09:30 – That’s not good.
0:09:33 – And Dana Bash, who I think should be president,
0:09:35 if we’re gonna start picking cable news hosts
0:09:38 to be presidents and secretaries,
0:09:39 asked me what the Democratic Party needs to do,
0:09:42 and I listed all these things and some we need
0:09:44 to be the party of tomorrow and not fucking around.
0:09:47 And then I said that I’m like, “Oh no, I’m not on a podcast.”
0:09:50 And literally, Dana and the other hosts looked at me
0:09:51 like they just got me masturbating.
0:09:54 They did not know what to do.
0:09:55 – They’ve never had that before?
0:09:56 – Oh, it’s happened several times.
0:09:58 I was raised by a single mother and I was like,
0:10:01 oh, wait, you mean dropping an F bomb?
0:10:03 I’m sorry.
0:10:04 – That was good.
0:10:05 – That’s why you come here,
0:10:08 subscribe to our markets newsletter now.
0:10:12 – I don’t think you’re gonna be on CNN again after this.
0:10:13 – Well, if I don’t get another show on CNN Plus,
0:10:17 as far as I’m concerned, my life is over, that’s it.
0:10:19 Anyway, but I was talking,
0:10:22 one of the Obama people called me and said,
0:10:23 “I liked what you had to say,”
0:10:26 and he specifically zeroed in on, I think,
0:10:28 the big idea that the Democrats need.
0:10:31 We need to move from being the party of complaints
0:10:36 and whining and the seniors who changed jello night outrage
0:10:38 to the party of the future.
0:10:40 And I think one of the really interesting ideas
0:10:43 that one or both political parties should forward
0:10:46 is just a massive program that provides subsidies
0:10:49 to the private sector and decreases the ability
0:10:53 to reject housing permits such that we have a massive influx
0:10:57 and creation of millions of units in new housing stock.
0:11:01 And I think this would help level up young people
0:11:04 and it’s just psychologically so important,
0:11:07 employ a ton of people, especially a lot of young people,
0:11:10 especially a lot of young men who over index
0:11:12 around construction and vocational jobs.
0:11:14 But what you’re seeing every month
0:11:16 is an increase in housing costs.
0:11:18 I mean, do you know what’s about to happen?
0:11:21 I have a buddy in LA who had his house on the market,
0:11:24 like a nice little bungalow for $1.1 million,
0:11:27 which is basically means it was a shack
0:11:28 if it was in Santa Monica,
0:11:30 and he just got an offer for 1.8
0:11:33 ’cause something like 13 or 15,000 dwellings
0:11:35 have been taken immediately out of the market in LA
0:11:37 because of the wildfires.
0:11:42 So I zero in on the housing, but this isn’t a surprise.
0:11:45 The question is whether it sticks to Trump or not,
0:11:46 as most things don’t.
0:11:49 But when you combined an incredibly aggressive
0:11:52 anti-immigration policy, tariffs,
0:11:55 and then massive deficit or a fiscal plan
0:11:59 that probably indicates an explosion or deficits,
0:12:01 this all adds up to inflation.
0:12:03 I would predict it’s actually gonna get worse.
0:12:04 What are your thoughts?
0:12:07 – Certainly gonna get worse the way we’re headed so far.
0:12:10 I mean, you mentioned the shelter costs.
0:12:15 It’s up 4.5% or 4.4% year over year.
0:12:17 The housing accounts for nearly a third
0:12:20 of the overall CPI rise.
0:12:23 And we keep on seeing this with every single inflation print.
0:12:25 It’s like it’s very high.
0:12:26 What was the problem?
0:12:27 It was housing.
0:12:32 The way we’re headed in terms of immigration and tariffs,
0:12:34 this is all only gonna get worse.
0:12:35 I think the question is,
0:12:40 can Trump sort of vaccinate himself
0:12:43 from being associated from this whole inflation thing?
0:12:47 Because Biden, we know, I mean, after COVID,
0:12:49 you had all these supply chain issues around the world
0:12:51 which sent prices skyrocketing,
0:12:54 not just in America, but everywhere in the world.
0:12:56 Every single government was dealing with inflation.
0:13:00 Biden did a terrible job of making clear
0:13:02 to the American people that actually,
0:13:04 it doesn’t really have anything to do with him
0:13:05 or his policies.
0:13:07 This was a global problem.
0:13:10 But it’s very hard to convince the American public of that
0:13:13 when you go to the gas station and prices are up 10%.
0:13:16 And the same might be true here with eggs.
0:13:18 I mean, people could be showing up to the supermarket.
0:13:21 Eggs are up 53% in the past year.
0:13:23 And usually when something like that happens,
0:13:25 the first person you blame is the president.
0:13:27 Now the question for Trump is,
0:13:31 is he gonna do a better job of pushing the blame
0:13:32 somewhere else?
0:13:34 And I think the answer is probably yes.
0:13:36 I think he’s gonna be talking a lot about bird flu.
0:13:41 By the way, he’s blamed this inflation print on Biden already.
0:13:42 He said, this isn’t my fault.
0:13:45 And I honestly, I think that’s actually a fair assessment.
0:13:50 I think inflation is sort of a lagging indicator.
0:13:52 But if this continues,
0:13:54 it’s gonna be a big problem for him
0:13:58 because this was really the big issue
0:14:01 that was on the ballot in November.
0:14:02 Speaking of inflation,
0:14:05 let’s talk about the cost of private schools in America,
0:14:07 up to $50,000 up 7%.
0:14:08 I find this so interesting
0:14:11 because you talk a lot about this issue
0:14:14 in higher education specifically,
0:14:17 where you have colleges driving down supply
0:14:20 with lower and lower admissions rates,
0:14:22 at the same time, driving up prices.
0:14:25 And it’s all culminated in what we call
0:14:28 kind of the Hermesification of higher ed,
0:14:30 where they’re basically adopting the same
0:14:34 go-to-market strategy as an Hermes or a Louis Vuitton,
0:14:37 college degrees are becoming increasingly luxury items.
0:14:40 Well, now we’re seeing that same dynamic,
0:14:43 not just at colleges, but in high schools
0:14:46 and in middle schools and even elementary schools.
0:14:50 And I just wanna point out this crazy stat that I saw
0:14:54 in New York, and granted, New York is an exception,
0:14:55 but in New York,
0:14:58 the average tuition for a private elementary school,
0:15:01 so this is grades K through five.
0:15:03 These kids are like six years old.
0:15:07 The average tuition is $22,000 per year.
0:15:10 And then you look across America,
0:15:15 the fact that it’s now up to 50,000 for private schools
0:15:17 from elementary to high school.
0:15:19 For boarding schools, it’s $73,000.
0:15:23 And meanwhile, the admissions rates continue to go down,
0:15:26 i.e. there are still incredible amounts of demand.
0:15:28 People are still down to pay for this,
0:15:30 but it’s only a very specific cohort in America
0:15:31 who could actually do that.
0:15:34 So what does this say about America?
0:15:37 What does this say about our education system?
0:15:38 Where is this all headed?
0:15:42 I left Manhattan because
0:15:44 when my kids were applying to school,
0:15:45 I think it was pre-K,
0:15:49 I think my oldest was four years old or three years old.
0:15:51 And let me be clear, the story ends well.
0:15:54 He’s a star now and doing incredibly well,
0:15:56 but when he was three or four, he was speech delayed.
0:15:59 And they have something called a play date,
0:16:00 which is really just an interview
0:16:02 where they invite a bunch of the kids who are applicants
0:16:03 to play with each other.
0:16:08 And then there’s these three young Gestapo,
0:16:09 Shdazi people in the room,
0:16:12 pretending to like your kid, taking notes,
0:16:13 which is really comfortable.
0:16:16 And they did this game where they go around a circle
0:16:20 and they hit their hands on the floor and I like Daisy’s,
0:16:21 my name is Lisa, the next one.
0:16:26 My name, I like ice cream and my name is Bob.
0:16:28 And then they get to my son and he hits his hands on the floor
0:16:31 and he’s like, that’s it, he’s just looking around.
0:16:32 And I’m like, he’s not getting in.
0:16:35 And we applied to seven schools
0:16:37 and they all send out the letters
0:16:38 on the same day.
0:16:40 And I was told by a friend of ours
0:16:42 who was coaching us around this one school we wanna go to,
0:16:47 make sure you drop off muffins to the admissions director.
0:16:49 I drop off muffins and I’m like,
0:16:51 I’m not fucking dropping off muffins.
0:16:53 That’s where I draw the line at muffins.
0:16:54 And I was under the illusion,
0:16:56 oh, I’m a big time professor,
0:16:58 or a podcaster will get into three or four,
0:17:00 if not five or six of schools.
0:17:02 We got into zero of the seven.
0:17:06 And I was so upset that no one was gonna let me
0:17:09 pay $58,000 for my kid to play with blocks.
0:17:12 That I said to my partner, I said,
0:17:15 I’ve been single and an entrepreneur my whole life,
0:17:17 or most of my life, I’m used to rejection.
0:17:20 I am not used to it for my four year old.
0:17:22 And we left New York.
0:17:25 The issue with K through 12 is the following.
0:17:27 I have no problem with tuition going up.
0:17:29 And my proposal would be the following.
0:17:31 I would like tuition to go up another $10,000
0:17:34 in the form of a tax on every kid’s family
0:17:36 that is in private school,
0:17:39 such that they can pour more money back into public schools.
0:17:41 Because here’s the problem.
0:17:45 I went to a public school and it was in the ’70s in LA,
0:17:48 and it was the year they started integration or busing.
0:17:50 And this isn’t a hallmark story.
0:17:54 Overnight, 40% of our class was black kids
0:17:58 who were on a bus from Compton for an hour each day.
0:18:00 And the idea would be to all get along
0:18:01 and have great empathy for each other.
0:18:03 And we fucking hated each other.
0:18:06 And we used to have black-against-white softball games
0:18:07 and the faculty allowed it.
0:18:08 That’s the bad news.
0:18:11 The good news was about the time we got to high school,
0:18:12 we were getting along.
0:18:15 And I think, I genuinely believe that over the long term,
0:18:19 I’ve established a lot more empathy for people not born
0:18:21 with pale skin and outdoor plumbing
0:18:23 and got to grow up in Westwood.
0:18:26 But my two best friends, Adam and David,
0:18:28 immediately, their parents pulled them out of school
0:18:31 and sent them to this Tony private school called Winward,
0:18:35 where they go to Catalina Island and study marine biology.
0:18:36 And I went home and said to my mom,
0:18:37 I need to go to private school.
0:18:40 And she said, I had one of those, what I call talks,
0:18:42 where she sat me down and said, we’re different.
0:18:44 What we need to do in private schools,
0:18:46 quite frankly, is tax the shit out of them
0:18:49 and reinvest in public schools.
0:18:52 So the fact that private schools are going up in costs,
0:18:53 that doesn’t bother me at all.
0:18:56 I would like to see them go up more in costs
0:18:59 in the form of taxation and then reinvested in public schools
0:19:02 ’cause the key signal or the key metric of success
0:19:05 of K through 12 schools isn’t even resources,
0:19:07 it’s parental involvement.
0:19:11 And dual parent households typically have one or two parents
0:19:14 who can spend more time being involved in the school.
0:19:17 But when you pull out all of those wealthy parents,
0:19:21 all of those typically dual income dual parent households,
0:19:24 the amount of parental involvement in that school declines
0:19:27 and the quality of the education spirals down.
0:19:29 – Yeah, exactly.
0:19:32 Let’s talk about this new initiative from the EU,
0:19:34 Invest AI.
0:19:36 This is sort of their version of Stargate.
0:19:39 This is a 200 billion euro,
0:19:42 which is roughly around $200 billion at this point,
0:19:45 to invest in AI across Europe.
0:19:48 This seems like a pretty good idea, I would say.
0:19:50 I mean, I feel like Europe and the EU generally
0:19:54 gets shitposted for not being ahead of the curve on tech
0:19:57 or AI and just some pretty staggering numbers here
0:19:59 to reference.
0:20:04 The US raised $209 billion in VC funding last year,
0:20:06 Europe raised only $62 billion.
0:20:11 So the America’s share of global venture capital is 57%.
0:20:14 This is last year, Europe’s was only 16%.
0:20:17 If you look at AI VC funding specifically,
0:20:22 US makes up 74% of funding, Europe makes up 9%.
0:20:26 So Europe is way, way behind the puck
0:20:29 when it comes to AI and generally speaking,
0:20:31 technological progress.
0:20:33 So now it looks like they’re trying to rectify that
0:20:35 with this AI initiative.
0:20:38 Do you have any reactions to what the EU is doing?
0:20:39 – A lot of it comes down to this.
0:20:41 The number you skipped over that me have pulled together
0:20:44 for us was that AI specific VC funding,
0:20:47 you got it in percentages was 97 billion in the United States.
0:20:48 It was 9 billion in Europe.
0:20:50 And keep in mind, the US and Europe actually
0:20:53 have some similar size economies.
0:20:55 It really all comes down to a risk complexion.
0:20:57 And the way I summarize it when I’m speaking
0:21:02 to a European audience is that you’re the ones that stayed.
0:21:04 And that is think about who went to America,
0:21:06 they were risk takers.
0:21:08 And that DNA just carries through.
0:21:11 – You think that’s why Americans are more risk aggressive?
0:21:12 It’s genetic?
0:21:13 – Oh my God, are you kidding?
0:21:16 Look at what is the most innovative part of America?
0:21:17 – California?
0:21:19 – Yeah, and who went to California?
0:21:22 The people with a nice cozy life on the East Coast?
0:21:23 Who went to the West Coast?
0:21:25 – I’m with you, I’m with you, I don’t want to hear more.
0:21:28 – When you talk about success, this is true in life.
0:21:34 If you want to score above your weight class professionally
0:21:36 and romantically, it’s a function
0:21:37 of how much risk you’re willing to take.
0:21:38 – I agree with that.
0:21:40 I’m just surprised that you’re making the genetic argument.
0:21:42 I’m down to hear it out.
0:21:44 It’s the first time I’ve heard this from you.
0:21:49 That Americans are genetically predisposed to taking risks.
0:21:51 And perhaps that is the explanation
0:21:53 behind their false wealth.
0:21:57 My parents came to the U.S. on a steamship
0:22:01 with like three or $400, that was enormous risk.
0:22:04 And also that’s why immigrants are so incredibly powerful.
0:22:06 They not only work harder, they’re like,
0:22:09 I just fucking crawled under a fence and avoided dogs
0:22:14 and left my family and left my sick mother to come here.
0:22:20 That risk-taking DNA is everywhere in our gene pool.
0:22:22 And it’s not, it’s not in Europe.
0:22:23 So the fact they’re doing this.
0:22:26 – Yeah, culturally, I think Europe feels
0:22:29 and has felt for generations that they have more to lose.
0:22:31 They’ve basically just rested on their laurels.
0:22:33 And it’s interesting to see that this is happening
0:22:35 only after America did it.
0:22:38 It’s also happening only after China came out
0:22:39 with deep seek.
0:22:42 The fact that, I think everyone is surprised to see,
0:22:44 oh, wow, Europe is committing to AI,
0:22:46 but they’re only down to do it once America did it.
0:22:48 And then once China basically showed them,
0:22:51 you guys are behind the curve.
0:22:55 So, they’re taking the risk, but after everyone else did.
0:22:56 – Well, Europe has to do something
0:22:59 because Europe, if you look at the rise of China,
0:23:01 it actually, so China has grown its economy
0:23:04 much faster than the global economy.
0:23:07 And it has the second most billionaires behind the U.S.
0:23:09 And it hasn’t come at the cost of the U.S. though.
0:23:11 The U.S. has maintained its share of GDP,
0:23:13 its share of billionaires, its share of growth.
0:23:15 It’s come at the cost of Europe.
0:23:17 And so Europe needs to take a page
0:23:21 out of that hard-working playbook of China
0:23:24 and that risk-taking playbook of the United States.
0:23:26 And without government subsidies
0:23:27 and encouraged people to take these risks,
0:23:29 it’s just not gonna happen.
0:23:30 – We’ll be right back after the break
0:23:32 with a look at Reddit.
0:23:33 And if you’re enjoying the show so far,
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0:27:15 We’re back with ProfG Markets.
0:27:16 Reddit reported fourth-quarter earnings
0:27:19 that largely beat analyst expectations
0:27:22 with sales up 71% from a year earlier.
0:27:24 It also posted its second quarterly profit
0:27:25 since going public.
0:27:29 However, the stock dropped more than 13%
0:27:32 after user growth missed expectations.
0:27:33 CEO Steve Huffman explained
0:27:35 that a change in Google search algorithm
0:27:38 led to, quote, volatility in user growth,
0:27:42 but assured investors that traffic has since recovered.
0:27:47 Scott, you are a pretty significant Reddit shareholder.
0:27:50 What are your initial reactions here?
0:27:51 – Look, I’m just pissed off.
0:27:52 Now, after this drawdown today,
0:27:56 I’m only up 500%, not 600, so…
0:27:58 – Is that true? Is that the number?
0:28:01 – Well, it priced at $35.
0:28:02 – Let’s find out the number.
0:28:05 – It priced at $35, it’s at 200.
0:28:08 So what is that, up about 450%?
0:28:09 – Yeah, okay.
0:28:11 – And that’s in seven months?
0:28:12 – Yeah.
0:28:16 – Look, this was a fucking layup.
0:28:20 This was, if you believe we’re in an attention economy
0:28:24 and you can transition or arbitrage
0:28:27 or turn, convert attention into dollars,
0:28:30 this company still has a long way to go.
0:28:34 And that is, I mean, it was up 71% year on year.
0:28:36 Average revenue was up 28%,
0:28:38 net income quadrupled to 71 million.
0:28:40 I think that a lot of people just said,
0:28:42 okay, with this kind of valuation,
0:28:44 maybe it’s gotten out over its skis,
0:28:45 but I think it’s already recovered
0:28:47 some of those losses today.
0:28:48 It’s an asset-like company,
0:28:52 it’s got sort of meta-like margins of 93%.
0:28:54 Meta’s gross margins were 82%,
0:28:56 ’cause they keep making these ridiculous
0:28:59 capex investments and things like headsets.
0:29:01 Get this, because of Alphabet’s big investments
0:29:06 in cloud and AI, their gross margins are 58%.
0:29:09 Apple’s was 47%, which makes sense,
0:29:11 ’cause they’re on hardware,
0:29:14 but gross margins at the fourth or fifth
0:29:17 most traffic side in the world are 93%.
0:29:21 So I would argue, and see above, shareholder,
0:29:26 I mean, it’s still, I don’t wanna say it looks cheap.
0:29:27 It’s hard to think of something
0:29:29 up four and a half-folder looks cheap,
0:29:31 but its worth is between 50 and 60.
0:29:36 It’s 1/50th the value of sites above and behind it.
0:29:37 So now the problem is,
0:29:39 it hasn’t been able to monetize as well,
0:29:43 but with year-on-year revenue increases of 70 plus percent,
0:29:47 it appears that it’s doing pretty well.
0:29:51 The problem is, unless its monetization comes up,
0:29:55 its average revenue per user was $4.20,
0:29:57 but meta is about three and a half times higher.
0:30:00 So on a book level, it looks expensive.
0:30:01 Their key is very straightforward.
0:30:04 They got the traffic, that’s usually the hard part.
0:30:05 They have to show their ability
0:30:08 to continue to increase our poo,
0:30:12 but the takeaway also going second order of fact,
0:30:17 we’ve said that as it relates to podcasting,
0:30:20 that there’s going to be this incredible dynamism
0:30:22 in the podcasting space over the next 12 months,
0:30:24 where you’re gonna see at the top 100 podcasts,
0:30:25 you’re gonna see 50 new ones,
0:30:27 and you’re gonna see 50 dropout,
0:30:29 and the arbiter of that churn is gonna be YouTube,
0:30:32 which is now the largest distribution platform
0:30:33 for podcasts.
0:30:35 People spending more time listening to podcasts on YouTube
0:30:37 than on Apple or Spotify.
0:30:41 I think in 2026, the arbiter of podcasts
0:30:44 and the biggest growing distribution mechanism of podcasts
0:30:45 is gonna be Reddit.
0:30:48 I think Reddit is so perfect for podcasting.
0:30:52 Think about the discussions, the threads, and the audience.
0:30:54 I think if you could figure out a way to distribute
0:30:58 clips, full podcasts, live podcasts,
0:31:00 it to me, it’s just out of central casting
0:31:04 to become the Spotify or the YouTube of podcasting.
0:31:05 – That’s very interesting.
0:31:07 I didn’t expect you to say that.
0:31:11 I mean, you mentioned the valuation there,
0:31:12 that perhaps it’s undervalued.
0:31:13 I’m with you.
0:31:16 I think this is still undervalued.
0:31:20 And I think dropping 13% after that quarter,
0:31:21 I don’t think was warranted.
0:31:24 The thing that Wall Street was upset about clearly
0:31:26 was the user number.
0:31:31 So users grew 39% to 101.7 million.
0:31:34 Investors were expecting 103 million.
0:31:37 And I think what really freaked them out
0:31:40 was what Reddit said about this change
0:31:41 in the Google search algorithm.
0:31:44 So you might remember last year,
0:31:47 Reddit got this big boost because Google changed
0:31:49 how it ranks search results.
0:31:51 It was called the hidden gems update.
0:31:55 And the new Google algorithm basically prioritized
0:31:57 what they called authentic content.
0:32:00 So that is content that is user generated
0:32:01 that you find on forums,
0:32:05 that you find on chat rooms, i.e Reddit.
0:32:08 So this was a great thing for Reddit last year.
0:32:10 Now, according to the CEO,
0:32:13 this quarter or this last quarter,
0:32:15 Google changed the algorithm again.
0:32:17 And we don’t really know why or what exactly changed,
0:32:20 but that was why you saw this quote volatility
0:32:21 in the user growth.
0:32:24 And I think that’s what upset Wall Street here,
0:32:27 this idea that Reddit is too reliant on Google.
0:32:30 They’re not growing organically on their own.
0:32:33 And so when Google changes their algorithm,
0:32:35 suddenly that causes a problem for their growth.
0:32:37 I think that’s a fair criticism.
0:32:40 I think the bigger criticism of Reddit though,
0:32:42 and this is a bull case,
0:32:46 is they just punch below their weight on everything.
0:32:48 Ninth most visited website in the world
0:32:51 is higher than Netflix, it’s higher than Amazon.
0:32:54 You’ve got 100 million daily active users.
0:32:57 So these people are using it every single day.
0:32:58 They don’t release the monthly active users,
0:33:02 but it’s estimated to be around a billion,
0:33:05 a billion people using this once a month, at least.
0:33:09 And yet the company is worth only $35 billion.
0:33:13 It’s less than a tenth of the value of Netflix.
0:33:16 And so we’re talking about this as a team,
0:33:20 and Mia did this really interesting analysis.
0:33:22 So we were discussing like the cultural significance
0:33:27 of Reddit, the idea, how important is Reddit to society?
0:33:31 And we landed on this term, mind share.
0:33:33 And we wanted to figure out a way
0:33:35 to kind of quantify that for Reddit.
0:33:38 Is there a way to come up with a score
0:33:40 for the amount of mind share that Reddit has
0:33:43 in people’s minds and their conversations
0:33:44 in society at large?
0:33:47 So Mia did this analysis.
0:33:49 She looked at website visits.
0:33:53 She looked at mentions on TV, Wikipedia page views,
0:33:58 job search volume, how many analysts track the stock,
0:34:00 et cetera, et cetera, all these different metrics
0:34:02 to kind of get a gauge for this mind share.
0:34:04 And then she came out with a weighted average
0:34:06 and we called it the mind share score.
0:34:10 And what she found is that Reddit’s mind share rating
0:34:12 is only four times lower than Google’s.
0:34:14 But if you look at the market cap,
0:34:16 it’s more than 60 times lower.
0:34:18 So in other words, if you were to look at Reddit
0:34:20 as a multiple of mind share, and let’s be clear,
0:34:22 this is very non-gap.
0:34:25 We came up with these metrics on our own.
0:34:26 But if you looked at it as a multiple of mind share,
0:34:29 Reddit is severely undervalued.
0:34:31 And so this begs the question,
0:34:34 like what does Reddit need to start doing
0:34:36 to start punching above its weight?
0:34:39 Or at least to live up to the expectations
0:34:43 that come with the fact that you are a top 10 website
0:34:45 in the world that everyone knows who you are.
0:34:48 Everyone who uses the internet is using Reddit
0:34:50 in some sense, we use it all the time.
0:34:54 And we have our Reddit page, which I love
0:34:56 and we love engaging on that.
0:35:00 But the company is still very small relative to its peers.
0:35:01 So what do you think it would take?
0:35:03 I guess you mentioned the podcast there,
0:35:05 but what else do you think it would take
0:35:06 for Reddit to start punching
0:35:09 at least in line with or above its weight?
0:35:14 – My father peaked at the age of about 48 or 49 professionally.
0:35:19 And then he was the national sales manager for OM Scots,
0:35:20 a fertilizer company,
0:35:23 which I realized was a kind of a weak flex.
0:35:27 But he used to roam around to like the equivalent of Lowe’s
0:35:31 and Home Depot’s and Sears and become buddies
0:35:34 with the person in charge of lawn care,
0:35:36 the lawn care outdoor department there.
0:35:38 And my dad is super fucking charming.
0:35:42 I mean, ridiculously charming.
0:35:45 And then sell them basically bags of shit.
0:35:53 Anyways, but that was when he peaked and then he went on
0:35:56 and then he’d started a string of four or five divorces
0:36:00 and then left me, hold me, hold me.
0:36:01 Anyways, he used to say to me,
0:36:04 he had all these like tests to decide
0:36:06 if I’d be a good salesperson or not.
0:36:09 And I remember we used to sell subscriptions and whatever
0:36:12 and sorry to test if you would be a good sales person.
0:36:14 – Yeah, he thought sales is everything.
0:36:17 And he used to sign me up for stuff,
0:36:21 like selling magazine subscriptions.
0:36:23 And he used to give me a thing and he’d say,
0:36:27 this is your wrap and he’d practice with me at the door
0:36:30 and he’d send me out on a Saturday.
0:36:32 And then basically like mothers used to say
0:36:34 the Roman warriors come home with your shield or on it.
0:36:36 And he’s like, how many subscriptions
0:36:37 do you think you’re gonna get?
0:36:38 He’d give me a quota.
0:36:40 – I’m like eight fucking years old.
0:36:41 – I kind of love this.
0:36:42 – I was eight.
0:36:43 – I’m sure it was traumatizing.
0:36:44 I was eight. – I was eight.
0:36:47 – And I’d roam around the shores community
0:36:49 in Laguna Niguel and I’d knock on doors
0:36:50 and I’d say, hi, I’m Skye Callaway.
0:36:52 I met whatever it was, Emily to,
0:36:53 and we’re doing a magazine drive
0:36:55 to try and raise money for our school.
0:36:57 I live down the road.
0:36:59 And he’d say, throwing your interest.
0:37:00 And I’m like, I liked the big wheel
0:37:02 and I like I dream a genie.
0:37:06 And he’d be like, no, don’t say I dream a genie.
0:37:07 And I’m like, he’d say something else.
0:37:10 I’m like, Brady Bunch is like, better, more wholesome.
0:37:12 And I’d roam around the neighborhood.
0:37:14 – This explains so much.
0:37:16 – I’d roam around the neighborhood
0:37:17 and I’m not exaggerating it.
0:37:21 I sold more subscriptions to Life and Readers Digest
0:37:24 and any nine-year-old in Emily to elementary school history.
0:37:28 And he used to have all these tests for me
0:37:31 around whether I’d be a good sales person or not.
0:37:32 Who am I kidding?
0:37:35 Salesman, they didn’t have any women back there, so.
0:37:37 And one of his tests that I remember
0:37:39 is he used to, or this adage he used to have is that
0:37:42 a salesman, a shoe salesman goes to Africa.
0:37:45 Two salesmen go to Africa.
0:37:46 And one comes back and says,
0:37:48 yeah, it’s never gonna work here.
0:37:50 Nobody wears any shoes.
0:37:51 And then the second comes back and goes,
0:37:53 oh my God, this is amazing.
0:37:54 Nobody has any shoes.
0:37:57 And it reminds me a bit of what you’re saying
0:38:02 because the fact that their valuation in an art pool
0:38:05 are so low relative to the space they command,
0:38:08 that’s this is amazing, no one has any shoes.
0:38:10 And that is you kind of answer your own question.
0:38:12 There’s a lot of upside here.
0:38:16 And if they keep growing revenues 73% a year,
0:38:18 they’re gonna catch up pretty quick.
0:38:21 If there is this much room to run as you say,
0:38:23 and which by the way, I agree with,
0:38:25 I think there’s huge opportunity.
0:38:29 Shouldn’t they be burning money?
0:38:31 I mean, this is the other thing that stood out to me
0:38:34 is that they are now profitable.
0:38:37 They were profitable the quarter before this
0:38:39 and then they were profitable last quarter.
0:38:43 And it feels like they’ve now tatted themselves
0:38:45 to earning a profit.
0:38:47 But I feel like what we’re describing
0:38:52 is a nascent company that should arguably be losing money
0:38:54 trying to invest in growth,
0:38:56 trying to get more users,
0:38:57 trying to acquire customers,
0:39:00 trying to figure out a monetization strategy.
0:39:05 But instead, they’re churning out $71 million in net income
0:39:09 out of $35 billion market cap.
0:39:12 And I look at that and I see bigger things for this company.
0:39:15 Couldn’t they think bigger and just lose money
0:39:17 at least for a couple more years
0:39:19 until they really get some traction?
0:39:20 – I think you’re right.
0:39:25 My advice to Steven Huffman would be an is growth.
0:39:28 At this point, just growth.
0:39:29 And the problem is when you go profitable,
0:39:34 it’s hard to go back because everyone will say,
0:39:37 Reddit slips back into losing money.
0:39:40 And for them, it’s all about,
0:39:41 at this point, it’s all about growth
0:39:43 and closing that delta you’re talking about
0:39:48 where market cap and revenue is equivalent to attention.
0:39:51 I would have found ways to spend that money,
0:39:54 more partnerships, more salespeople,
0:39:57 more content, more original content.
0:39:59 That’s eventually where they will go.
0:40:03 This is, I mean, when you think about it,
0:40:05 Reddit was probably would have been
0:40:08 one of the better acquisitions before they’d gone public
0:40:10 for any one of a number of companies, right?
0:40:14 But they, I agree with you, I wouldn’t have gone,
0:40:17 I would have spent more aggressively to get growth
0:40:20 from 72% to 80 or 90% or extend it longer.
0:40:23 – I don’t think shareholders want dividends at this point.
0:40:27 I think they wanna see 100% user growth.
0:40:27 – Yeah, they want growth.
0:40:29 – And whatever, if you’re losing money.
0:40:30 – Yeah, I think that’s right.
0:40:31 – We’ll be right back.
0:40:34 And by the way, we’ll be taping this podcast live
0:40:37 at South by Southwest on March 10th.
0:40:42 Head to voxmedia.com/sxsw to learn how to join us.
0:40:44 Hope to see you there.
0:40:46 (upbeat music)
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0:41:02 Out, uncertainty, self-doubt,
0:41:04 stressing about not knowing where to start.
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0:41:14 Out, word art, sorry, live laugh lovers.
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0:41:30 – Introducing the new McSpicy from McDonald’s.
0:41:32 It looks like a regular chicken sandwich,
0:41:35 but it’s actually a spicy chicken sandwich.
0:41:40 McSpicy, consider yourself warned, limited time only.
0:41:43 I participate in McDonald’s in Canada.
0:41:44 – We’re taking Vox Media podcast on the road
0:41:46 and heading back to Austin
0:41:49 for the South by Southwest Festival, March 8th to the 10th.
0:41:51 What a thrill.
0:41:53 We’ll be doing special live episodes
0:41:54 and pitch shows, including Pivot.
0:41:57 That’s right, that dog’s going to the great state of Texas.
0:41:59 Where should we begin?
0:42:02 With Esther Perrell, a touch more with Sue Bird
0:42:04 and Megan Rapinoe, not just football
0:42:08 with Cam Hayward and more, presented by Smartsheet.
0:42:11 The Vox Media podcast stage at South by Southwest
0:42:14 is open to all South by Southwest badge holders.
0:42:16 We hope to see you at the Austin Convention Center soon.
0:42:21 Visit voxmedia.com/sxsw to learn more.
0:42:25 And that’s voxmedia.com/sxsw.
0:42:36 – We’re back with Prof. G Markets.
0:42:38 Netflix is exploring the possibility
0:42:41 of expanding into video podcasts.
0:42:42 The streaming giant has reportedly reached out
0:42:44 to high-profile podcasters,
0:42:47 including Alex Cooper of Call Her Daddy,
0:42:49 to create talk-based video shows.
0:42:51 Though Cooper is currently under a three-year deal
0:42:54 with SiriusXM, while still in the early stages,
0:42:57 Netflix is reportedly considering two strategies,
0:43:00 securing exclusive content from top podcasters,
0:43:04 or providing access to existing shows without ads.
0:43:08 Scott, let’s get your take on this potential move.
0:43:09 But I think the real question is,
0:43:10 I mean, I’m just reading out this headline,
0:43:13 reportedly reached out to high-profile podcasters.
0:43:15 Have you gotten a phone call?
0:43:18 – So Amy Atkins was this woman in high school.
0:43:21 I had this enormous crush on.
0:43:22 I just want to point out,
0:43:25 I love that the answer, which I expect to be no,
0:43:26 it must be delivered as a parable.
0:43:32 – I was so in love with Amy Atkins,
0:43:35 and she kind of pretended to like me and da-da-da.
0:43:37 And then she shows up one day and says,
0:43:40 oh, this is my boyfriend, Sean.
0:43:43 And I’m like, oh, and I wanted to strangle him.
0:43:47 And I’m like, wait, you got a boyfriend and it’s not me.
0:43:50 And anyways, I’m not exaggerating.
0:43:53 I sent an email to Ted Zarandos last night.
0:43:56 And I’m like, fucking Alex Cooper?
0:43:59 Alex Cooper?
0:44:00 – What did you say?
0:44:03 What exactly did you say?
0:44:06 – I don’t know Ted well, but I know him.
0:44:10 And by the way, he’s like an incredibly decent,
0:44:12 nice, thoughtful man.
0:44:15 And obviously built this amazing company.
0:44:18 But I got to be honest, I felt a little like,
0:44:19 who’s this guy, Sean?
0:44:24 I find out in Business Insider, you’re interested in podcast.
0:44:25 I got nothing.
0:44:26 He didn’t call me.
0:44:28 He didn’t call me for advice.
0:44:30 He didn’t send me a message saying,
0:44:32 oh, you and Ed and Kara’s name came up,
0:44:34 but we decided that we don’t want to be in news
0:44:36 or you dropped too many F-bombs on CNN.
0:44:41 Nothing, just news that he’s dating Alex Cooper.
0:44:46 So no, we did not hear from Netflix.
0:44:49 And I read about it and it just kind of,
0:44:52 so back to the actual story here,
0:44:54 it makes all the sense in the world.
0:44:56 And people are constantly saying,
0:44:57 okay, will Netflix go into sports?
0:44:59 No, well, they didn’t know they go to sports.
0:45:03 Will Netflix go into, you know, live?
0:45:04 Will they go into gaming?
0:45:06 They’re going into,
0:45:09 if there’s a tension there and a chance to get subscriptions
0:45:10 and differentiate their offering,
0:45:12 you should assume they’re gonna go there.
0:45:14 And it makes all the sense in the world
0:45:17 because the primary arbiter of the next evolution
0:45:21 of the fastest growing out supported medium podcast is video.
0:45:23 And the guy who’s about to displace
0:45:24 or one of our predictions
0:45:26 is the guy who’s gonna displace Joe Rogan
0:45:27 as the biggest podcaster in the world,
0:45:29 is this guy, Steven Bartlett,
0:45:34 because he got very serious about video production quality,
0:45:39 optimizing Mr. Beasting, his thumbnails, different titles.
0:45:42 He called me, I was on with Constantine,
0:45:44 I forget his name, the thoughtful conservative kid.
0:45:45 Constantine Kissen.
0:45:47 And then this third guy, whose name I forgot,
0:45:48 he was also very thoughtful.
0:45:51 They, Steven Bartlett brought us on
0:45:53 to talk about the state of the world.
0:45:54 And I was supposed to represent America.
0:45:56 And every comment was that douchebag prof
0:45:58 does not represent America.
0:46:02 Anyways, he called me or no, he didn’t call me.
0:46:05 He texted me, he left me a voice memo the next day
0:46:07 and said, this is gonna be,
0:46:09 this will do four million views.
0:46:10 This is amazing, congratulations.
0:46:12 And I immediately went to YouTube
0:46:15 and it was like 63,000, I’m like, it’s at 63,000.
0:46:17 He’s like, oh no, our algorithms have already figured out
0:46:19 it’s gonna be around four million.
0:46:22 That’s how sophisticated he is around video,
0:46:26 is that within a half an hour of putting it on YouTube,
0:46:28 he knows how big the video is gonna be.
0:46:30 And they do all these A/B testing.
0:46:34 And what he does on his pod is he will go to New York
0:46:37 for a month, go to LA for a month, and he does,
0:46:39 he demands in-person interviews.
0:46:42 The thing I did with Constantine was the first time
0:46:44 they had ever done a podcast remotely.
0:46:47 He demands, again, for video production quality.
0:46:50 While everyone is trying to get rid of the studio,
0:46:51 he’s going the other way.
0:46:53 And Rich Roll does the same thing.
0:46:55 Rich Roll forces you to go out to Agura Hills,
0:46:56 which is not fun.
0:46:57 – Shout out Rich, love Rich.
0:46:58 – Oh, he’s fantastic.
0:47:00 He’s the kind of guy you want as a big brother.
0:47:02 He’s so thoughtful and soulful and handsome.
0:47:05 And you’re like, I’m coming back as Rich Roll.
0:47:07 But he makes you go out to Agura Hills
0:47:09 and he has all these, like Steven Barlett,
0:47:10 he has all these cameramen
0:47:12 and he must have spent a ton of money early on,
0:47:16 gave up all his profits, imported into video.
0:47:17 That is the new arbiter.
0:47:20 And when you think about the premiere video platform,
0:47:22 YouTube, number two is Netflix.
0:47:24 And I imagine Netflix will go high-end
0:47:27 and they’ll say to someone like fucking Caller Daddy
0:47:28 or some other bullshit.
0:47:32 He’ll say, we’ll make this really cool and interesting.
0:47:35 And by the way, if you’re looking to be
0:47:36 the number one podcast in the world,
0:47:39 we can do that with a simple tweak of the algorithm.
0:47:43 And in 36 hours, by putting you on the homepage of Netflix
0:47:47 for 36 hours, it’s one of those things I wish I thought of.
0:47:49 And that is Netflix will overnight
0:47:51 be able to take, they’ll own a bunch of podcasts.
0:47:54 They might start early by just being a distribution platform,
0:47:57 learning about it, making some ad revenue.
0:47:58 And then they will go vertical
0:48:00 and either launch their own or buy some.
0:48:05 And they will make, I would bet within 24 to 36 months,
0:48:07 three of the 10-pigas podcasts in the world
0:48:12 are owned by Netflix because they have the platform,
0:48:13 they can put it everywhere
0:48:16 and then they can maybe distribute it to YouTube,
0:48:18 put it on Apple and Spotify a week later,
0:48:21 members get it a week early, whatever it might be.
0:48:23 But this just makes, this is right as rain.
0:48:25 – Yeah, I think it’s right as rain.
0:48:28 I don’t think it’s gonna play out the way you’ve described.
0:48:30 I mean, I think the question is like,
0:48:32 what is this going to actually look like?
0:48:34 And I think the scenario you’re describing
0:48:38 is Netflix takes kind of the Spotify strategy
0:48:39 where you reach out to these podcasters
0:48:41 and you offer them these exclusive deals
0:48:44 to be the exclusive platform for that podcast.
0:48:48 I’d call that like the Spotify Joe Rogan strategy.
0:48:51 I personally don’t think it’s gonna look like that.
0:48:53 I think it’s gonna look a little bit more
0:48:57 like the MrBeast Amazon deal
0:49:01 where Amazon paid MrBeast $100 million
0:49:04 to create just one TV series with MrBeast,
0:49:07 which is now out and you can watch it right now.
0:49:09 Meanwhile, MrBeast is free
0:49:11 to keep posting his videos on YouTube.
0:49:14 So in other words, I think Netflix
0:49:18 isn’t necessarily going off to podcasting the medium.
0:49:21 I think they’re going off to podcasters the talent.
0:49:25 And that’s gonna be an incredible thing
0:49:28 for people like Alex Cooper and for Joe Rogan
0:49:30 and Theo Vaughn and all these people.
0:49:32 All of these people who’ve kind of become
0:49:35 like the new Hollywood superstars.
0:49:36 I mean, you think about how it’s changed.
0:49:39 These people are the Jennifer Aniston’s
0:49:41 and the Ben Stiller’s of our time.
0:49:44 And I think that’s what Netflix is really excited about
0:49:45 and they wanna capitalize on that.
0:49:49 Not necessarily to be the new podcast platform,
0:49:51 but certainly to be the platform that owns
0:49:54 or at least has some level of relationship
0:49:56 with the biggest stars in the world.
0:49:59 And it just so happens, the biggest stars in the world today,
0:50:00 they’re making podcasts.
0:50:02 That’s kind of what they do now.
0:50:04 – Yeah, the name, I love your take.
0:50:06 And the name that just jumps out,
0:50:07 it makes all kinds of sense is Theo Vaughn
0:50:09 ’cause he’s also a comedian.
0:50:11 I mean, they could say to Theo,
0:50:15 we’ll double or triple the size of your podcast audience.
0:50:16 And by the way, we’re gonna sign you up
0:50:20 for a four one hour comedy special on Netflix.
0:50:23 And we’re gonna pay you a crazy amount of money.
0:50:26 And basically, if you want access to Theo Vaughn,
0:50:27 which tens of millions of people do,
0:50:31 he’s got such a nice authentic vibe about him.
0:50:34 Where can you find Theo Vaughn on Netflix?
0:50:37 I think you wrote about this in a No Mercino Malice post.
0:50:39 We’ve got a little too much attention for my liking.
0:50:44 But you talked about, it’s no longer about brands,
0:50:45 it’s about people.
0:50:46 – People of the new brands.
0:50:48 – You know, people of the new brands.
0:50:49 I mean, I just think about the potential
0:50:50 of my mind spinning.
0:50:52 The guy’s from Smarlis.
0:50:53 By the way, I was on their podcast,
0:50:54 but I haven’t put it out yet.
0:50:56 I don’t know, I recorded like three weeks ago.
0:50:59 But anyways, those guys are just so good on TV
0:51:00 and they’re so funny.
0:51:01 – They’re interesting because they already
0:51:02 were Hollywood stars.
0:51:03 – That’s right.
0:51:04 – Then they switched.
0:51:05 They could come back again.
0:51:05 – That’s right.
0:51:08 But they’re all really appealing on camera.
0:51:09 – And let’s be clear.
0:51:11 I think you would be amazing too.
0:51:13 – I’m sorry, when did you say it?
0:51:14 – I’m sorry.
0:51:15 – Go ahead.
0:51:15 – I’m not gonna repeat it.
0:51:17 I said it once.
0:51:18 I think that would be an incredible idea.
0:51:21 I don’t think that it should be CNN Plus.
0:51:22 I don’t think it should be,
0:51:24 I mean, maybe let’s take this opportunity
0:51:25 to think about it.
0:51:26 I mean, if–
0:51:27 – You’re talking your own book here
0:51:29 ’cause when we go out, people come up to you.
0:51:30 They’re like, oh, hi, Scott.
0:51:32 And they literally run over me to,
0:51:34 and I have my, I’d like, are you taken?
0:51:37 I have a daughter at SMU.
0:51:38 – It’s always, I have a daughter.
0:51:42 – Well, yeah, is there anything wrong with that?
0:51:45 But they want to, yeah, yeah, you’re,
0:51:47 I’m like, we’re that movie, The Substance,
0:51:49 and I’m definitely Demi Moore.
0:51:51 And you’re like the hot young chick
0:51:53 I did emerge from my body.
0:51:56 – Anyways, have you seen The Substance?
0:51:58 – I haven’t seen it, but that makes sense.
0:52:01 But let’s just think about it for a second.
0:52:04 Like, what do you think a Scott Galloway Netflix show
0:52:06 should look like?
0:52:08 And I think that this is an opportunity to think,
0:52:12 like, imagine we are a Netflix producer.
0:52:14 Like, what kind of content do you think
0:52:16 people are looking from podcasters?
0:52:19 Because I will say, I don’t think it’s just a video podcast.
0:52:21 They can already get that on YouTube.
0:52:22 They can already get that on Spotify.
0:52:26 I also don’t think it’s whatever the fuck CNN+ was.
0:52:28 Something about that didn’t work.
0:52:29 It was maybe-
0:52:30 – Jake Tapper’s book club?
0:52:31 – Exactly.
0:52:32 – That wasn’t riveting content?
0:52:33 – It’s too, it’s too produced.
0:52:35 You lose all of the authentic feel
0:52:37 that you get with the podcast
0:52:39 and with that relationship with podcasters.
0:52:42 Like, what do you think a good Netflix show
0:52:45 for a podcaster would look like?
0:52:46 – Well, it’d be Scott and Ed.
0:52:51 So I think, I think eventually Netflix goes into news
0:52:52 and they do a loop where they,
0:52:55 so a daily business update
0:52:57 where it’s more highly produced,
0:52:59 more graphics, more visuals.
0:53:02 And also, if you were gonna do a regular podcast
0:53:03 every week, what I think you’d wanna do,
0:53:07 if you’re talking about your guests as Richard Reeves,
0:53:08 you take 15 or 20 minutes
0:53:10 and you go talk to parents and young men.
0:53:12 You just, quite frankly, you take podcasting
0:53:15 and you just massively increase the production value.
0:53:17 ‘Cause right now the means of production are,
0:53:19 and this is the thing I love about podcasting
0:53:23 and the thing that scares me about this
0:53:24 is the means of production
0:53:27 are basically what looks like a toiletry kit for me.
0:53:31 And that is Drew, who’s our tech wizard,
0:53:33 puts together this little Dopp kit for me
0:53:36 and it’s the size, it’s smaller than a lunch pail
0:53:38 or like literally like a toiletry kit.
0:53:41 And I can take it anywhere and pull out my mic,
0:53:44 probably get into my laptop and boom, I’m podcasting.
0:53:46 The game is gonna be upped
0:53:47 and you’re gonna see podcasts
0:53:49 where it’s an hour-long podcast,
0:53:50 but they’ll do breakouts.
0:53:52 And when we’re talking about Reddit,
0:53:54 it breaks to like a three-minute thing
0:53:56 where they’re interviewing the CEO
0:53:58 or they use amazing visuals to go online
0:54:01 and talk about Reddit and what’s interesting about it.
0:54:03 But the game, the bar is gonna be raised
0:54:07 and they have such incredible depth of talent
0:54:10 that they’ll be able to say, okay, Scott and Ed,
0:54:12 if you wanna do a daily market show,
0:54:15 we have an unbelievable production team
0:54:17 in not only in New Jersey, but in Madrid.
0:54:20 And when you’re done recording at 7 p.m.,
0:54:22 we have our folks in LA take it over,
0:54:24 then they throw it over the wall to the folks in Madrid
0:54:25 at three in the morning,
0:54:27 where it’s eight in the morning, their time,
0:54:32 and they produce just this really impressive podcast
0:54:34 meets Hollywood, if you will.
0:54:38 Let me what is it, the days of me just tapping in
0:54:41 from the Dolphin Hotel and Walt Disney World
0:54:44 and getting a quarter of a million people to listen that day
0:54:46 with the bad curtains in the background.
0:54:49 I’m not sure that shit’s gonna survive.
0:54:50 – Well, that is the big question.
0:54:51 Can you do that?
0:54:54 Can you invest that much, bring in that many people
0:54:56 and maintain the level of authenticity
0:54:58 that you get on podcasts?
0:55:00 I would argue, I don’t think-
0:55:01 – That’s a great point.
0:55:02 – It’s possible to do that.
0:55:04 I think the more highly produced you get,
0:55:07 the less real things start to feel.
0:55:08 And there’s something-
0:55:08 – It’s interesting.
0:55:12 – There’s something nice about you being in a hotel
0:55:13 and there’s a curtain behind you
0:55:16 and we can actually see what is happening in your life
0:55:19 because as I’ve said, I think the thing that people crave
0:55:21 most is connection with people.
0:55:22 This is what I wrote about in that blog post,
0:55:24 “People of the New Brands”.
0:55:27 They crave connection with real people
0:55:28 because of this issue with loneliness
0:55:30 that we keep on seeing.
0:55:34 And I don’t think that a highly produced Netflix series
0:55:37 is going to be the kind of thing that addresses
0:55:40 that level of connectivity and authenticity
0:55:42 that you get with podcasts.
0:55:44 – We should tease, we’re thinking,
0:55:46 oh, I’m not thinking, we’ve decided Propg Markets,
0:55:51 which is the fastest growing part of our podcast empire.
0:55:53 We’re going to go to daily.
0:55:55 And one of the things we’re talking about is,
0:55:57 all right, Scott’s traveling all the time.
0:55:59 Scott doesn’t want to work that hard.
0:56:02 And how do we incorporate Scott into a daily show?
0:56:04 And you guys came up with this notion of,
0:56:06 and it’s being doing authenticity,
0:56:08 that it’s like, where in the world is Scott?
0:56:11 And I would literally tap in on my phone wherever I am
0:56:13 and just provide a viewpoint in your view and Claire’s view.
0:56:15 And I thought it was really insightful,
0:56:19 was rather than trying to mimic 80% of the production value
0:56:21 when I’m in studio, just put it on your phone.
0:56:24 And it’s just wherever you are at that moment,
0:56:27 and Ed is asking questions or you’re giving your view,
0:56:31 but go the other way and make it very raw.
0:56:34 Like live from the bar at Maison Estelle
0:56:36 or wherever I’m getting drunk.
0:56:38 Scott, go into a bathroom stall
0:56:40 and tell us what you think about the Reddit earnings.
0:56:43 But I thought that was really interesting,
0:56:45 but whatever Netflix does,
0:56:47 everything is sort of colliding back
0:56:49 to where what’s old is new again, right?
0:56:51 We’re kind of reassembling the cable bundle.
0:56:54 It’s advertising, but it’s also subscription.
0:56:58 But I think that podcasts are gonna become more like TV
0:57:01 than TV is gonna become like podcasts.
0:57:02 Anyways, I think it’s gonna be fascinating to see,
0:57:06 but it’s just, you hear this and you just know
0:57:09 in 24 months, there’s a non-zero probability
0:57:14 that what everyone’s talking about YouTube and podcasts,
0:57:16 people are gonna start talking about Netflix and podcasts.
0:57:18 I also think Reddit, it’s about who controls,
0:57:20 who has custody of the consumer,
0:57:22 who has the trust and the direct vertical interface
0:57:23 with the consumer.
0:57:26 – Okay, let’s take a look at the week out.
0:57:29 We’ll see earnings from Walmart and Alibaba.
0:57:33 We’ll also see consumer sentiment data for February.
0:57:34 Do you have any predictions for us, Scott?
0:57:35 – I can’t help it.
0:57:37 I’m a broken clock here.
0:57:39 Tesla is imploding.
0:57:40 It’s absolutely imploding.
0:57:44 It’s sales are off between 10 and 60%
0:57:46 across European nations.
0:57:50 It was off, I believe they’re off 11% in China.
0:57:54 In a growing market, BYD is producing as good a car
0:57:56 for 40% of the price.
0:57:58 They haven’t had a new vehicle,
0:58:02 a new kind of mass vehicle introduction in over six years.
0:58:05 When I’m getting into Tesla’s and I’m biased,
0:58:08 but I think they just feel stale.
0:58:09 I think the competition has caught up
0:58:11 and even surpassed them.
0:58:14 And then I think about what he’s done with the brand,
0:58:16 just trashing it with Nazi salutes,
0:58:21 like the model Tesla SS and changing his pronouns
0:58:23 to he and Himmler.
0:58:25 I just think this is gonna catch up.
0:58:29 It already is and you’re seeing sales imploding.
0:58:32 Meanwhile, it has this just ridiculous fucking multiple.
0:58:35 And I’ve always said this, that stock prices
0:58:39 are like Michael Jordan jumping from the free throw line.
0:58:42 It feels like he’s never gonna come down and he always does.
0:58:44 And fundamentals, I don’t care if you’re game stop,
0:58:46 I don’t care if you’re too social.
0:58:50 At some point, Michael Jordan hits the hardwood again.
0:58:53 I think the stock is below 200 in the next six months.
0:58:55 – Good luck, we’ve said this before.
0:58:58 They always find a way to justify it.
0:59:01 I mean, I agree with everything you said
0:59:02 and yet I don’t think it’ll happen
0:59:05 because the market always somehow, this company,
0:59:09 they just love this company, they always figure out a way
0:59:11 to say, no, no, there’s still more room to run.
0:59:12 But we’ll see.
0:59:14 – Yeah, I’m sticking to my guns here.
0:59:16 It is time, it is time.
0:59:20 – This episode was produced by Claire Miller
0:59:21 and engineered by Benjamin Spencer,
0:59:23 our associate producer is Alison Weiss.
0:59:25 Mia Silverio is our research lead.
0:59:27 Isabella Kinsel is our research associate.
0:59:29 Drew Bars is our technical director.
0:59:32 And Catherine Dillon is our executive producer.
0:59:33 Thank you for listening to “ProfG Markets”
0:59:36 from the Vox Media Podcast Network.
0:59:38 Join us on Thursday for our conversation
0:59:41 with Kyla Scanlon, only on “ProfG Markets.”
0:59:47 ♪ Lifetimes ♪
0:59:55 ♪ You help me ♪
1:00:00 ♪ In kind reunion ♪
1:00:05 ♪ As the world turns ♪
1:00:12 ♪ And the ground flies ♪
1:00:14 ♪ And loves ♪
1:00:22 – Do you wanna hear my other movie impression?
1:00:23 – Yes, please.
1:00:25 – And I’ll ask you to guess who it is.
1:00:25 – Okay.
1:00:27 – Okay, ready?
1:00:28 – How about no?
1:00:29 (laughing)
1:00:30 – Who is that?
1:00:32 – Who is that?
1:00:33 – Mike Myers, what’s the guy’s name?
1:00:35 – That’s right, that’s right.
1:00:36 – What is that movie?
1:00:37 – “The Spy I Love Me.”
1:00:40 You’re getting warmer, you’re getting warmer.
1:00:41 Mike Meyer.
1:00:43 – “Austin Powers.”
1:00:44 – There you go, very good.
1:00:46 Anyways, inflation.
1:00:48 – Yeah, speaking of inflation,
1:00:51 let’s talk about the cost of private schools in America.