AI transcript
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0:01:11 Today’s number, $535,000. That’s how much Ferrari’s first-ever electric car will cost. True story.
0:01:17 I came up to Ed. I drove up in a Ferrari and I said, “Ed, if you bust your ass, work really hard,
0:01:24 and devote your entire life to properties, someday, someday, I will have two Ferraris, bitch.”
0:01:37 [Music]
0:01:42 Welcome to ProFG Markets. Ed, it’s true. It’s true.
0:01:48 A Ferrari is like a consistent, reliable erection. I don’t have a Ferrari, Ed.
0:01:55 Today, we’re discussing Netflix entertainment venues and takeaways from Cannes, from Cannes, where I still am.
0:02:00 Here with the news is ProFG media analyst Ed Elson. Ed, what is a good word?
0:02:04 You’re looking at a little sunburn. Have you gotten too much sun?
0:02:08 I think it’s rosy. I’m at that age where when I drink, I turn a bright, like, it’s not even red.
0:02:14 It’s more like a pink before you get bloated and have a stroke or something.
0:02:20 It’s just a very unhealthy, like, it’s like rosacea. I don’t know, rosacea means a rash.
0:02:24 It’s just, and then it smeared all over my body. I just look like shit.
0:02:25 Very good. How’s it been?
0:02:28 It’s, you know what? It’s been wonderful. It’s gone really fast.
0:02:32 It’s nice. I’m here with my boys and we’re staying at a fancy hotel and they do…
0:02:33 Where are you staying?
0:02:36 We’re at the hotel du Cap, of course, and we love it here.
0:02:47 And then I go, in this total baller moment, I take a zodiac into the Palais and then I tell people the Arab brand is over and for some reason they keep bringing me back.
0:02:53 And it’s amazing. Elon is here with Linda Yaccarino and we’ll talk more about that.
0:02:58 Yeah, this is, I’ve been to this conference more than any conference ever.
0:03:04 I wouldn’t come to Cannes just for Cannes. I wouldn’t come for Alliance just for Alliance, but the combination together is absolutely wonderful.
0:03:06 And your boys, how are they enjoying it?
0:03:13 They love it. You know, they just, they just want to be, they just want to be with us in a place that has 38 Euro hamburgers.
0:03:22 So they love it. I mean, they get these hilarious order room service and then call me and say, “Dad, Dad, can I order the 28 Euro cheesecake?”
0:03:24 And I’m like, “No. No.”
0:03:28 Yeah. What’s your policy on a room service? Are they allowed to do that?
0:03:33 My parents always said I wasn’t allowed to do that. And I also wasn’t allowed to get to take any snacks from the ball.
0:03:35 That was like that line. Can’t do that.
0:03:41 Oh my God. The closest my father’s ever come to violence is one day, I had never been in a hotel. So I was like 12.
0:03:47 And we went and my dad, after the divorce, took me and his new wife, my new mommy.
0:03:49 His seventh wife.
0:03:55 Took me to Hawaii and I somehow ended up in a room. It was me and my sister in a room and I don’t know what my sister was doing.
0:04:04 And I found out I opened this cupboard and there were all these amazing chocolates and snacks and I just went, “Ape shit.” I had never seen anything like that.
0:04:06 It was like opening stuff just to try it.
0:04:07 Hell yeah.
0:04:18 And then he walked in and he saw that and I thought, “My dad, it was the threat of violence that scared me more than anything. My dad, my father actually never beat me.”
0:04:20 So he didn’t bring out the thick ear.
0:04:30 Yeah, but he always seemed just really like a hair trigger away from beating the shit out of me. And he used to threaten a lot and he was very quiet and very intense.
0:04:34 Anyways, that was the closest I thought, “Okay, this is it. This is it.”
0:04:42 And he explained to me and then he walked me through the prices and every time he’d be like, “And Pringles are $3 at fucking A.”
0:04:53 And he’d get like all emotional. It was so torturous. Anyways, hold me Ed and you wonder why I want to pay you minimum wage. You wonder why.
0:04:55 All right, get on with the news. Break out the news.
0:04:57 Let’s start with our weekly review of Market Vitals.
0:05:13 The S&P 500 topped 5500 for the first time. The dollar was flat. Bitcoin hit a one month low and the yield on 10-year treasuries was volatile, shifting to the headlines.
0:05:24 Inflation in the UK fell to its lowest level in almost three years and hit the Bank of England’s target rate. Prices rose only 2% in May from a year earlier. That’s down from 2.3% in April.
0:05:28 And that metric will also be a key talking point ahead of the election next week.
0:05:41 Apple has reportedly stopped working on the new generation of its Vision Pro headset. The company is still developing a cheaper version with fewer features, but according to the information, it has deprioritized the next generation of the device due to slow and sales.
0:05:56 And finally, NVIDIA is now the most valuable company in the world with a market cap of roughly $3.3 trillion. The company’s rise to the top is among one of the fastest in market history, adding $3 trillion in market cap over the past 20 months.
0:05:59 That’s just insane. Scott, where should we start?
0:06:16 Well, let’s start with the boring stuff. Inflation in the UK, it’s great. That’s sort of what Chairman Powell in the US has said is the target is 2%. So, I mean, inflation hit the UK really hard. It escalated so dramatically, so fast that maybe this is a little bit of checkback.
0:06:34 I wouldn’t be surprised if it unfortunately goes negative. I mean, the UK economy is just, the bottom line is this is really fucked up. After spending a bunch of time in the UK, I think, okay, whoever’s running the economy here is not, I don’t know, what’s the term? They have their head up their arse.
0:06:44 Look, I’m happy. I think this is great. I think inflation across the West is coming down. I don’t know if it’s energy prices. Do you have any color on what brought inflation down in the UK?
0:06:56 I mean, it’s a boring answer. I really think it’s just a mix of everything. I think it’s rate heights coming into effect. I think it’s supply chains loosening up. I think it’s just low consumer confidence, which was decreasing spending.
0:07:08 I think it could also be, as you say, they went up so high and it’s sort of that Danny Blanchflower regulating effect that we’ve talked about where it’s just, you know, wages aren’t keeping up and so prices have to come back down again.
0:07:19 It’s not totally clear. This is clearly a global trend. I mean, prices are generally speaking coming down. And I think we’re going to see a lot more of these positive inflation headlines start to roll in.
0:07:30 But I do also think we need to take all of them with a grain of salt. And the UK is a great example of that because, yes, 2% inflation last month, that sounds pretty good.
0:07:42 But a year ago, it was 9%. And the year before that, it was also 9%, which means that in the past three years, prices of everything have risen more than 20%. So it’s compounded.
0:07:54 So I think what people in the UK should think about is, if your salary hasn’t increased more than 20% in the past three years, you are literally falling behind economically.
0:08:05 Quality of life has gone down. Exactly. And, you know, I think a lot of employers are probably going to use this as, oh, I think we’re out of the woods. You know, that’s going to be probably a big negotiating point for employers.
0:08:20 And from an acceleration perspective, yeah, we might be, it might be over. But from an absolute perspective, you know, I caught in the milk that cost a pound three years ago, it costs between a pound 20 and a pound 25 now.
0:08:29 I mean, that’s, that really hits lower middle-income households, right? Because they’re not, they weren’t eating out to begin with very often, but 25% higher.
0:08:45 Also, rent over the last year, paid to private landlords in the UK, is risen by 9% in this year alone. So, you know, this is, I don’t know, I liked what Kyla said, a vibe session, you know, the lower middle-income homes, they have no choice.
0:08:54 They have to pay, they pay a disproportionate amount of their disposable income on rent and food, meaning that when these things go up in price, it really hits them hard.
0:09:01 So I’m trying to think like, what’s come down in price, Range Rovers or Energy, or what’s, what is actually keeping that number down?
0:09:10 The CPI inflation is nearing the 2% target in several G7 economies, including the UK, France, Germany and the Eurora area. So that’s good news.
0:09:20 The good news in the US, I think, is that wages actually rose faster than inflation, meaning the purchasing power is actually starting to go up again reasonably. But I don’t know if that’s the case in Europe. I wonder what wages have done.
0:09:32 In the UK, that is the case. I haven’t seen the overall Europe data, but again, it’s only a recent trend. So much of the conversation around inflation gets so murky because it’s really about the time frame.
0:09:38 Are we looking at the monthly increase, yearly increase? Are we looking at the yearly increase as compared to the previous month?
0:09:47 So I just think when it comes to inflation, it’s very easy to see the headline number that says inflation’s coming down or inflation’s going back up again.
0:09:56 And we’re so quick to judge. But the reality is, if you care about this, I think the best thing to do is to just go to the National Statistics website in the US.
0:10:03 That would be the Bureau of Labor Statistics and read the whole thing for yourself because it’s always a bit more complicated than it seems.
0:10:13 Yeah. And so let’s get right to the fun stuff. Apple has reportedly stopped working on Vision Pro 2. This is shocking to me. This is just shocking.
0:10:28 I don’t see how anyone couldn’t have thought that putting a ridiculous gadget on your head that made you feel nauseous and made you even less attractive to potential mates, but only cost $3,500.
0:10:39 And it just infuriates me that people still aren’t willing to call this the ultimate stillborn technology. I mean, this thing never even crawled for God’s sakes.
0:10:46 I mean, this thing was literally DOA. And people, all these Apple acolytes, it’s okay.
0:10:55 All right, you can respect Starlink and still feel like, okay, but Elon Musk should not be spreading homophobic conspiracy theory.
0:11:01 You can say, all right, Apple’s an amazing product, but they haven’t cooperated with the government around child safety.
0:11:11 You can hold two ideas in your head at once. And these Apple acolytes, evangelist cultists refuse to believe that they’re going to get it wrong on certain pieces of hardware.
0:11:17 This thing never made any sense. They’re trying to pretend that, oh, we’re still going to have this.
0:11:26 They’ve basically, I’ll tell you, folks, you want to be fired. You want an easy way to get severance. Working at Apple on the Vision Pro is a good way to get severance eventually.
0:11:27 Very heartache.
0:11:35 We’re working at any media company that decides to spend money on X. These are literally the quickest way to a severance check.
0:11:37 So I’m, anyways, I’m shocked at, I’m shocked.
0:11:42 I mean, honestly, a very crucial question here. Have you ever tried any of these headsets?
0:11:43 Yeah.
0:11:44 Which ones have you tried?
0:11:51 I’ve tried the Meta. My 13-year-old was really excited about it and really wanted it. So we said, okay, you put half your money up.
0:11:53 So you bought one? Okay.
0:11:55 Right. Why wouldn’t I?
0:12:01 Dude, do you realize the shit I buy from my family? Like, I get to decide what they buy.
0:12:03 It’s like a ball snack for you. Yeah.
0:12:07 By the way, my kids suffer from device addiction and spend all day on fucking TikTok.
0:12:12 Do you think I have any influence over them? And then people will say, well, you’re the parent. It’s about good parenting.
0:12:15 Oh, fuck you. That means you don’t have children.
0:12:19 I love it when people say, oh, they shouldn’t be on social media. Just take their device away.
0:12:25 Okay. So let me get this. Let me get this. No one will have sex with you because you clearly don’t have kids.
0:12:27 You don’t know, you don’t know what this is like.
0:12:31 I just think it’s hilarious that people think my kids listen to me.
0:12:36 I love that. Yeah. And they’re really into World War II history and CrossFit. Not.
0:12:37 Anyways.
0:12:41 But you haven’t tried the Vision Pro, sounds like.
0:12:47 I put it on and I did that train set video where you get to see this amazing 3D train set. It really is.
0:12:48 Oh, yeah?
0:12:50 Yeah. Look, it’s incredible.
0:12:51 Where did you try it?
0:12:55 A good friend of mine has one. He has a Vision Pro and he put it on.
0:13:01 Yeah. I think it’s incredible. I think it’s absolutely amazing. I think IMAX is amazing.
0:13:08 When I first saw my film at IMAX, I’m like, wow, this is amazing. I go to IMAX once every two years and it’s a shitty business.
0:13:13 So they will let it die a slow death. It’s cool. They manage the press really well.
0:13:19 But this is stupid. As smart as Apple intelligence is, this was that stupid.
0:13:25 And like, and who predicted this first despite all the Apple people coming for me? Who predicted this first?
0:13:27 Oh, I don’t know. I have no idea.
0:13:37 Who predicted this? Who predicted every fucking Apple person like getting their knee pads out and blowing the Cupertino sphere and like, oh, it’s going to be amazing.
0:13:44 And it’s the future of computing. Give me a fucking break. Anyway, I don’t know why I’m so angry.
0:13:48 Okay. Well, let me just take the other side of this for at least a second.
0:13:51 Second over. This thing’s stupid.
0:13:52 Go ahead. I’m sorry.
0:14:04 Good minute. It’s pretty breathtaking. I think one great use case. I don’t know if you tried it, but they have the live sports feature where it’s this immersive experience where it literally feels like you’re in the stadium watching a live sports game.
0:14:16 That’s the potential of this. I mean, I just don’t see any reason why anyone wouldn’t, given the choice, choose the immersive feature with the Vision Pro to watch a live sports game, then just looking at it, watching the game on a flat screen.
0:14:26 Having said that, I think there are two main huge issues for me that you kind of bring out. One was the thing was way too heavy. It’s like uncomfortable. My neck got tired.
0:14:40 And two, it’s way too expensive. It’s three and a half thousand dollars plus tax for something that is at most like a fun gadget, which is why I do think it’s interesting that they’re not working on upgrading this edition of the Vision Pro,
0:14:49 but they’re working on a new Vision Pro headset still, which is one lighter and two half the price. It’s going to cost one and a half thousand dollars.
0:14:57 And if both of those things are true and they don’t sacrifice on quality, I might buy it. I think I will buy it actually.
0:15:14 Despite the immersive experience, which will wow you, I still think you will opt for either watching it on the flat screen on your computer or actually going to the game. I don’t know if this really… We’ve been talking about these immersive experiences.
0:15:15 We have for years.
0:15:31 You know, all those video parks where you put on a headset and you’re flying through space and they have fans blowing in your face. That’s when my kids go, they go to the technology for inherits or at Selfridges and they get on something where they’re Superman and they have wind in their face and they’re flying through space.
0:15:33 Isn’t the stuff amazing down there in Selfridges?
0:15:34 It’s pretty nice.
0:15:36 They always have the craziest gadgets I’ve ever seen.
0:15:52 No, it’s great. And then we go have dimsum and dimtie, f*ck or whatever. I was ordered the cream of s**t. I love it. You just got that. Welcome Ed. Welcome. Anyway.
0:15:56 Okay, so, headsets.
0:16:00 Let’s talk about… No, no, no. Let’s call it. Let’s talk about it in the video now.
0:16:12 Okay, look, I can’t get over this thing. I can’t get over this thing. I looked up what is the global value of the automobile industry and it’s like 1.4. The top 10 automobile companies including Tesla are worth 1.4 trillion.
0:16:29 This company has added that and the GDP of Sweden in the last 12 months. This company is an extraordinary example. I think of where the economy is headed. The thing I don’t like about this or the thing I think we have to be thoughtful around is that if you look at the Nasdaq,
0:16:45 this company is now responsible for something like 45 or 50% of the Nasdaq’s gains for the year. And I hate the Nasdaq and the S&P indices because they give people the illusion and it is an illusion that the economy is really strong.
0:17:02 Really what they are at the end of the day is they are indices on the super rich because the super rich own a disproportionate amount of the stocks. And spoiler alert, the super rich are killing it. They’re at all time highs. In the last 10 years, we’ve gone from 500 billionaires to 2,500.
0:17:16 So I worry a little bit that this really is a bit of a, not only a distraction, but it’s an unhealthy distraction that mass over some of the bigger issues that ALS. What are your thoughts on it?
0:17:29 Well, I think the statistics are just staggering. Four years ago, this company was barely in the top 50 largest companies in the world. It’s now worth more than the entire UK stock market. It’s now worth more than the entire French stock market.
0:17:47 But the thing I’ve been thinking about is, you know, no one is happier about this than the employees of NVIDIA who probably joined this company a few years ago, thinking they were going to join this kind of somewhat known, decent middle to upper tier tech company.
0:17:59 And suddenly they are the superstars who are being rewarded basically as if they are the founding employees of a startup that’s about to go public. And to illustrate this, Mia found this great stat.
0:18:11 If you joined this company five years ago, say as like a mid-level project manager. And at that level, it’s pretty reasonable to assume that you’d be getting a stock grant of around $70,000 over four years.
0:18:22 So assuming that five years ago, $70,000 stock grant, that initial grant today is now worth ten and a half million dollars.
0:18:31 So I would bet that there are hundreds, maybe thousands of employees in this exact position who have basically been made millionaires overnight.
0:18:48 And if we can take this a step further, if you look at the workforce, there are roughly 30,000 employees at the company overall. It’s got a market cap of $3.3 to $3.4 trillion, which means that the market cap per employee of this company is $113 million.
0:18:55 That’s six times higher than Apple. It’s eight times higher than Microsoft. It’s one of the highest in the world.
0:19:10 Wait, $113 million per employee. Jesus Christ. That number is staggering. I spent the better part of seven or eight years working around the clock on a company benchmarking digital competence.
0:19:18 Came up with this really interesting indices. Just everything lined up. It was a great core group of employees, great clients.
0:19:27 We cornered the luxury market for digital benchmarking. All the moons lined up. We got a bidding war mowing, and I sold this company for $158 million.
0:19:34 We had, I think, 80 or 100 employees. So that’s $1.6 million per employee, not $113 million.
0:19:42 So basically, one employee at NVIDIA has created the market cap of just slightly less than the entire company fell pale.
0:19:51 And let me move to financial advice. Anyone at NVIDIA that is listening to this podcast, listen to me very closely.
0:19:59 Sell. Now, okay, and let me acknowledge the stock might double. It doesn’t matter.
0:20:11 If you have more than 90% of your net worth and more than a million dollars in this company, and this is what I didn’t learn, you need to diversify because this company could go down easily.
0:20:26 Easily, easily 80%. It might double. But the pain of losing, of going from being worth $5 million, right, to $1 million, is much more severe than the joy of going from $5 million to $10 million.
0:20:34 So you have thousands of employees that have millions, even tens of millions of dollars that are highly concentrated.
0:20:48 And you want to remember what Kahneman wrote about loss aversion theory. This needs to be a win for you. Take as much off the table as you can, as you can, and hope you’re wrong.
0:20:56 Leave a little in the company, fine. And I hope I’m wrong for you. But you want to make sure this is a win no matter what.
0:21:11 And I could have sold in 1998 when I was 33 years old, I could have sold 10, 15, 20 million dollars in red envelope stock, stuck that away, and had economic security for the rest of my life.
0:21:20 But instead, I’m like, no, this company is amazing, and I’m amazing, and I’m devoted to this in the market’s champagne and cocaine. Don’t be stupid, Scott Galloway.
0:21:27 Be smart here. Take some, if not most, off the table.
0:21:31 We’ll be right back after the break with a look at Netflix’s take on theme parks.
0:21:49 Support for Prop G Markets comes from BetterHelp. We’re halfway through 2024, which makes this a great time to pause, take a moment, and take stock of how the year has gone so far.
0:21:59 I know that personally, I feel fortunate that I’ve gotten to spend so much time with my boys. We’re going to football games, and I’m kind of a yes to anything with the rights to back out with friends.
0:22:05 But I’m trying to just be open to stuff, get out of the house more and be more social. All that good stuff.
0:22:10 Anyways, if you’re looking to find more opportunities to celebrate what’s going well and adjust the things that need some tweaks,
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0:22:50 Support for this show comes from Greenlight. As your kids get older, they’ll pick up a ton of new habits from family, friends, and the internet.
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0:24:30 We’re back with ProfG Markets.
0:24:35 Netflix is opening two experiential entertainment venues in 2025.
0:24:37 The complexes will be called Netflix houses,
0:24:42 and they’ll take up more than 100,000 feet of former department stores in Dallas and Philadelphia.
0:24:48 Netflix houses will feature events, games, restaurants and stores designed to immerse customers in the worlds of Netflix content,
0:24:52 and these venues represent Netflix’s largest leap into live experiences to date.
0:24:57 Scott, it appears that Netflix is taking a page out of Disney’s book,
0:25:00 who have invested heavily in parks and experiences.
0:25:02 What do you make of this move from Netflix?
0:25:07 I think Netflix is thinking, should we explore becoming Disney before Disney becomes us?
0:25:14 And that is, Disney is gone, not all in, but they’re taking a lot of that 10 billion in EBITDA and pouring it into their streaming group.
0:25:19 I think they’re one of the streamers that survives because they have such great IP and such singular positioning around family.
0:25:24 And Netflix has developed such unbelievable IP. It rivals Disney’s IP.
0:25:29 Netflix has created Stranger Things, Bridgerton, Umbrella Academy.
0:25:32 You know, I see pop-ups for Stranger Things.
0:25:37 I can see afternoon tea with Bridgerton, where people come in and corsets and then start fucking.
0:25:40 That’s what I’d like to see.
0:25:43 But Stranger Things, you can see like a haunted house for Stranger Things.
0:25:47 And my guess is, one, it’s probably good for the brand at a minimum.
0:25:50 It’ll create some excitement. They’ll get a lot of press.
0:25:54 And if it ends up that this thing has staying power and it becomes a choice,
0:26:01 they’re really, you’re assuming at some point you actually mate and you have children,
0:26:05 which I’m doubtful around if I read the stats around young men.
0:26:11 But assuming that happens, you’ll find there really isn’t a lot to do with your kids.
0:26:15 And I remember my dad picking me up on weekends.
0:26:19 He used to come to my pick me up for my mom’s every other weekend.
0:26:21 I’d get in the car and he’d say, how’s your mom?
0:26:25 I’d be like fine. And then there’d be a pause and he’d say, that bitch.
0:26:29 Anyways, anyways, little memory, little walk down memory lane.
0:26:36 But other than taking me to LA Kings games to watch Marcel Dion and Whitey Whiting and Rogi Vachon.
0:26:40 These are great hockey players you’ll never think of again.
0:26:44 He would have to take me to the movies. There was just nothing to do with a kid.
0:26:47 And I think there’s just a huge economic opportunity here.
0:26:52 So, I mean, I can tell you if the Netflix thing opens and there’s an umbrella academy thing
0:26:55 and there’s a stranger things, I mean, where the Galloway’s are going to be there
0:26:57 and we’re going to spend a lot of money there.
0:27:00 And if they find it’s sustainable and that they can, you know,
0:27:04 it’s not just a one-time sugarhead like the Museum of Ice Cream, right?
0:27:06 Eventually, you know, that’s going to go away, right?
0:27:10 Where you explore your creativity by jumping into a ball pit and then eating pistachio ice cream.
0:27:14 Yeah, that was worth my $38. That was money well spent.
0:27:16 Anyway, it’s only $38. That’s cheap.
0:27:21 I am so convinced that this is graduates of NYU’s Gallatin School that do a lot of edibles.
0:27:24 And they’re like, in the middle of watching South Park, really high.
0:27:26 What if we open something like the museum?
0:27:30 This is a real thing in New York. There’s a museum of color.
0:27:34 And you walk into a room and you give your personality traits and it says,
0:27:38 “Oh, you’re Chartreuse.” They’re like, “Oh, wait, I’m Chartreuse.”
0:27:40 And it tells you what color you are.
0:27:43 And you’re like, and you all talk to each other and you think that there’s some sort of insight there.
0:27:44 Anyway.
0:27:46 The key detail, though, is that you have been to both.
0:27:50 It sounds like you’ve been to the Museum of Color and the Museum of Ice Cream.
0:27:52 When you have kids, you’ll go to all of them.
0:27:53 You’ll take anything.
0:27:56 You’ll literally go to all of them. And that’s the opportunity here.
0:27:58 So if they could, one, it’s great marketing.
0:28:01 And two, potentially, they could say, “You know what?
0:28:07 We’re going to reinvent Disney instead of buying maybe seven million acres in Orlando
0:28:11 and getting into fights with, you know, Joey Bagadon, its governor.
0:28:16 We’re going to develop these things in urban centers, reinvent the theme park concept,
0:28:21 and it could be this multi-channel and leverager IP and start to get a little bit of that flywheel.”
0:28:24 You keep on saying the unbelievable IP.
0:28:27 I mean, stranger things maybe, Squid Game maybe.
0:28:30 You mentioned Umbrella Academy. I haven’t even heard of that.
0:28:32 Again, see above doesn’t have kids.
0:28:34 Okay, fair enough.
0:28:40 But I mean, you compare this to the Disney assets, like, you know, Star Wars, Pirates of the Caribbean.
0:28:46 Frozen, Toy Story. These are like iconic, iconic IP assets.
0:28:53 Do you really think that Money Heist holds a candle to any of those Disney assets?
0:28:58 And do you think it’s legitimately durable enough to build a park around?
0:28:59 I think they’ve got a lot.
0:29:02 I think you underestimate the power of their IP and how many niches are out there
0:29:05 that they’ve really definitely exploited.
0:29:12 You might be right, and they might find they just don’t have the depth of, you know, what I think is.
0:29:19 My favorite would be as if they did a special ride for Dahmer, the monster, the Jeffrey Dahmer story.
0:29:24 They’re going to have to do a bunch of rides about the bajillion documentaries they’ve put out in the past two years.
0:29:29 It’s like, if you have to ask what’s for lunch, that means you’re for lunch.
0:29:31 Oh my God, Wednesday?
0:29:34 Well, let’s just stay on up for one more second.
0:29:36 I mean, let’s compare it to Disney’s business.
0:29:40 So Disney’s Parks and Experiences Unit is a great business.
0:29:43 They brought in $8.5 billion in revenue last quarter.
0:29:45 That’s 40% of their overall revenue.
0:29:51 As a percentage of their operating income, it’s 60%, so it’s highly profitable.
0:29:59 Having said that, Netflix appears to be making a different move here, and that is they haven’t called it a theme park.
0:30:03 They’re specifically calling it this experiential entertainment venue.
0:30:07 And so it’s not clear that there’s going to be actual rides.
0:30:10 It’s going to be more of, you know, hanging out at the mall.
0:30:15 And there are, you know, stranger things, themed events, but it’s not a theme park.
0:30:20 So I’m just, we’d like to get your take, your strategy take.
0:30:27 Why do you think they’re trying to differentiate themselves from the theme parks that Disney have proven work?
0:30:29 And how do you think it’s going to be different from Disney?
0:30:33 This is the kind of thing we used to get paid to figure out at profit.
0:30:35 You know, they come to us with questions.
0:30:39 What if Netflix were to open some sort of theme park question mark and come back to us?
0:30:42 And the pain points, first off, what are the pain points at Disney?
0:30:47 One, it’s extraordinarily expensive, extraordinarily expensive, right?
0:30:53 To take a family of four to Disney in the hotels, you’re looking at five to ten grand.
0:30:58 Two, it’s the seventh ring of hell in terms of time cost.
0:31:00 You can’t really go for one day.
0:31:05 When you have a line for three hours for the Avatar ride, it’s not really accessible either.
0:31:08 It’s in, you know, it’s not in the city center.
0:31:15 They need huge swaths of land outside of, you know, in a suburb of Orlando or Paris or Tokyo.
0:31:20 So one, smaller, cheaper and cheerful, something maybe you can go in and get out in two hours,
0:31:25 maybe three hours, something that costs a hundred or two hundred bucks for a family of four,
0:31:27 not five to ten thousand.
0:31:31 So I think there’s a lot of pain points that they could solve.
0:31:36 Where they say, okay, how do we give people 30, 40, 60% of the Disney experience
0:31:40 for 10% of the price and 5% of the time commitment?
0:31:43 So I think this is really brilliant.
0:31:47 I don’t know if it’s going to go anywhere, but like I said, this is, what is scenario planning?
0:31:53 Scenario planning is trying to develop a strategy that across a number of scenarios has the best outcomes.
0:31:54 It’s not predicting the future.
0:32:00 It’s saying, all right, let’s look at three or four possible futures and then develop a strategy that fits best
0:32:04 and has the best outcome across all of these potential futures or the majority of them.
0:32:10 So one, it’s a cute idea, and it gets some awareness and some press, but it’s not really a sustainable business.
0:32:12 All right, don’t spend too much on it.
0:32:15 Open it, short-term leases, position it as a short-term thing.
0:32:19 So people don’t start shitposting you, like me, if you’re the Apple Vision Pro 2.
0:32:24 Don’t say we’re going, we’re going to try and create the next Disney Parks, but be better.
0:32:26 No, just say it’s a marketing thing.
0:32:27 We think we’re experimenting.
0:32:29 And then what if it’s big?
0:32:36 Well, we’re in a position with our IP to really go crazy with it and we’ll immediately start looking at locations all over the world.
0:32:39 These things could be hugely profitable.
0:32:44 I went, oh my God, I went to life-size monopoly in London.
0:32:45 Think about that.
0:32:47 Think about how desperate parents are.
0:32:53 You go to this place where the guy in the top hat and all these characters from monopoly.
0:32:54 No.
0:32:59 And you roll a giant dice and then you have to have, and then you have challenges with strangers.
0:33:04 And these people with thick accents from the north of England, you’re like, what the fuck are they saying?
0:33:07 I’m supposed to work with these people and your kids get really into it.
0:33:15 And you do these games and you pay 50 bucks and then you go downstairs and maybe they order you like a ham and cheese sandwich for 18 quids.
0:33:16 It sounds miserable.
0:33:18 And you’re like, oh, that was fun.
0:33:19 That was fun.
0:33:25 And you’re like, just get them home and get them in bed so we can start drinking.
0:33:32 But there’s a lot of opportunity in the space for kids because it is on weekends.
0:33:34 It is, especially with little kids.
0:33:35 Slim picking.
0:33:37 It is difficult.
0:33:41 We’ll be right back after the break for Scott’s takeaways from the Cannes Lions Festival.
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0:36:51 We’re back with Prodigy Markets.
0:36:54 Scott, you’ve been at Cannes Lions all week, an international festival
0:36:56 where thought leaders from the advertising industry get together.
0:37:01 It is essentially the Oscars of advertising, except it’s set in the French Riviera.
0:37:05 Can you share just some of your main takeaways from this festival
0:37:08 and especially your thoughts on the state of advertising right now?
0:37:12 Well, first and foremost, I went to the Yahoo party with the chain smokers,
0:37:15 and I didn’t realize, but the chain smokers are not a band, they’re DJs.
0:37:16 That’s right.
0:37:18 And they’re also very nice guys.
0:37:19 And they’re VCs.
0:37:21 And they’re starting a venture capital fund.
0:37:23 And they’re also like the most lovely people.
0:37:26 I was literally, I’m bragging a little bit, I was with the band
0:37:27 and we couldn’t get in.
0:37:28 It was so mobbed.
0:37:31 There were so many, there was literally 2,000 people trying to get in
0:37:34 to see the chain smokers that even though I was with the chain smokers,
0:37:36 I could not get in.
0:37:37 What do you mean you were with them?
0:37:38 You were just hanging out?
0:37:39 I know.
0:37:40 It’s Alex and what’s his name?
0:37:41 I don’t know their names.
0:37:43 Chain and Smoker.
0:37:44 I don’t know.
0:37:45 I don’t know their names.
0:37:47 They’re super nice guys with super hot girlfriends.
0:37:48 That’s all I could register.
0:37:50 Anyways, can’t.
0:37:53 First, it’s really can as a conference.
0:37:55 It’s the only conference I’ve been to over here for 10 years.
0:37:56 It’s actually growing in importance.
0:37:58 And a lot of non-traditional companies are showing up.
0:38:01 So there was this, the hottest beach was something called Sports Beach.
0:38:04 And all of these sports firms are becoming media companies.
0:38:07 The Kelsey guys, that guy came up and hugged me.
0:38:10 And he was standing that Paul revealed that Michael,
0:38:13 literally the Michael Jordan of La Crosse, who’s I would call a friend said,
0:38:14 “Do you want to come to Sport Beach?”
0:38:15 I’m like, “Yeah, take me in.”
0:38:18 And this enormous bear of a man with a big beard came up and hugged me.
0:38:20 And it was the Kelsey guy that’s retiring.
0:38:22 I know nothing about football.
0:38:24 And his agent offered to bring me and my sons to a camp.
0:38:25 And they couldn’t be nicer.
0:38:27 I’m sitting there looking at these two.
0:38:30 And I’m like, “These two are a different species.”
0:38:31 That was my first observation.
0:38:34 Like I can’t believe I’m part of the same genome as these guys.
0:38:40 Anyways, the LA Rams are at can in force.
0:38:45 And it just struck me that marketing and brands are having a bit of a resurgence.
0:38:47 And people want to come here.
0:38:50 And I think it’s wonderful because the entropy,
0:38:53 the serendipity of running into people and saying,
0:38:55 “Hey, do you want to grab a latte?”
0:38:56 I ran into so many people.
0:38:59 I ran into former students and everything’s like,
0:39:00 they’re guard and the screen is down.
0:39:02 I ran into a former student who said,
0:39:03 “Do you want to grab a glass of water?”
0:39:04 I’m like, “Yeah, sure.”
0:39:07 And we caught up and it’s like the most lovely woman and she’s working at Roku.
0:39:09 And that happens like 10 or 20 times.
0:39:10 It’s really wonderful.
0:39:11 They do a great job.
0:39:13 The South of France is extraordinary.
0:39:17 But I think the biggest stories coming out of can will be amongst the following.
0:39:22 One, the Musk-Yakarino Apology Tour,
0:39:27 which I think is going to go over as well as if Millie Vanilly showed up at the Spotify beach
0:39:30 and rushed the stage and tried to sing.
0:39:35 I’ve been joking and I’ve been saying this all week,
0:39:37 which I’m sure didn’t help things.
0:39:40 You know, I’ve been a total whore speaking at everything.
0:39:41 These people love abuse.
0:39:43 I’m like, you’re all going to be out of fucking work.
0:39:44 Why are you here?
0:39:46 Anyway, and they keep inviting me back.
0:39:51 Anyways, I’m like, would anyone like to join me for a glass of rosé at Twitter Beach?
0:39:55 They’ve renamed it the Nazi porn de plage.
0:39:58 And so I just don’t think that’s going to work.
0:40:00 And the question I’ve been asking everyone at this conference is,
0:40:03 how are you more likely to get fired?
0:40:05 Okay, and I’ll give you three options.
0:40:09 Putting in the communal refrigerator, you know, in a snack room,
0:40:13 mushroom chocolates and saying property of Ed Elson,
0:40:16 referring to your assistant as jiggles,
0:40:23 or, or, or deciding to advertise on X where you might,
0:40:26 you might end up next to a swastika and then they call you in and say,
0:40:29 this is really bad for the Sesame Street brand.
0:40:31 Why did you decide to do this?
0:40:34 This is really bad for Cheerios to be next to a swastika.
0:40:36 And you go, well, it’s, it’s Twitter.
0:40:38 I thought we’d be fine.
0:40:39 Okay, you’re fired.
0:40:42 This is the dumbest brand.
0:40:46 If you’re looking, literally, if you’re looking to be fired and I said this,
0:40:50 be on the vision pro team or decide to spend money on Twitter.
0:40:53 I think the apology tour will probably be the biggest story that didn’t work.
0:40:55 Did people, sorry, did, did people agree?
0:41:00 I agree with you with that take, but do you think the advertising industry generally agrees?
0:41:02 Like, yeah, we’re totally staying away from X.
0:41:04 It’s just, it’s a porn site now.
0:41:05 I think people want to forgive Elon Musk.
0:41:06 It’s interesting.
0:41:08 Someone pointed out to me that he’s got a much stronger,
0:41:10 he’s got much more goodwill outside of the U.S.
0:41:14 So Twitter has declined by about 75% in revenue in the U.S.
0:41:18 It’s, it hasn’t declined at all in Japan and it hasn’t declined as much in Europe.
0:41:21 His brand, he’s much, actually, much better like outside of the U.S.
0:41:23 and is inside of the U.S.
0:41:26 Some people have said to be fair that small and medium sized business now
0:41:29 that the prices have come down because no one wants to advertise there,
0:41:33 that it is a good, a decent ROI medium for a quote unquote smaller brand
0:41:35 that’s maybe not as worried about brand safety.
0:41:40 I mean, keep in mind, if you’re a unilever, if you’re a unilever, you have a good job.
0:41:42 You basically just don’t want to get fired.
0:41:45 It’s like, okay, be smart, hire talented people, talented agencies,
0:41:48 which they have access to, and don’t fuck up.
0:41:52 And so these smaller brands probably can target more niche audiences.
0:41:57 It might have a second life there, but like, I just don’t think it works.
0:41:59 I think she comes across is just…
0:42:00 Was she there?
0:42:03 I was surprised he didn’t just send her, his pet CEO.
0:42:05 Well, but she’s not a CEO.
0:42:07 That’s why I call her his pet.
0:42:10 She’s a full-time cultist, apologist, trying to…
0:42:14 She’s literally the circus clown behind an elephant scooping up his shit.
0:42:18 And it’s just so pathetic to watch.
0:42:19 That’ll be the number one story.
0:42:22 The number two story is weird, and that is…
0:42:26 I’m friends with a guy named Michael Kasten, who is literally the mayor of Cannes.
0:42:28 He had a company called MediaLink that would basically…
0:42:30 It was kind of like the mafia.
0:42:34 If you were a small up-and-coming tech firm that wanted to sell into brands and everything,
0:42:37 he’d say, “Okay, give me $100,000, and I’ll take you to a boat party.”
0:42:40 And he’d throw parties, and the only people that could come in were clients of his.
0:42:44 It was a total mob thing, but he’s a nice man.
0:42:46 And for some reason, he’s always been really generous to me.
0:42:48 I’ve never been a client of his.
0:42:50 I’ve never paid him any money.
0:42:56 But I spoke on a panel actually with him actually just a few hours ago at that…
0:42:57 I think it was called the Collins House.
0:43:01 These two really nice people have a brand innovation firm, whatever it is.
0:43:04 Anyways, and so Michael’s always been really nice to me.
0:43:09 But Michael basically had a falling out with a UTA who bought MediaLink.
0:43:11 He was unceremoniously fired.
0:43:13 He’s then filed a defamation suit against them.
0:43:18 Michael is launching a new firm and decided to have the launch dinner on the deck,
0:43:22 overlooking MediaLink’s biggest party.
0:43:27 I think it’s literally like little Sarah crashes Rachel’s bot mitzvah because she wasn’t invited.
0:43:29 Well, how good was the dinner?
0:43:30 It was fine. I like Michael.
0:43:32 It’s a hotel to cap. It’s great.
0:43:37 But I immediately went down to see Lenny Kravitz play at the I Heart Media Party because that was cooler.
0:43:39 The party you weren’t invited to?
0:43:41 Oh, by the way, I should shout out.
0:43:42 Are you a security?
0:43:43 No, I should shout out.
0:43:45 I Heart Media could not be more generous and nicer to me.
0:43:49 And Bob Pittman and his assistant Sidney made sure that I was taken care of.
0:43:50 I was ribbing them.
0:43:53 Thank you. Thank you. Thank you.
0:43:55 All right, enough of that bullshit.
0:43:57 Because you complained that they listened to the podcast?
0:43:58 Yeah. What happened?
0:44:00 Ed, I’m not exaggerating.
0:44:01 Everyone listens to this thing.
0:44:03 Everyone’s coming up and going, how old is that?
0:44:05 How old is that Ed Elston?
0:44:07 And they’re like, you know, anyways.
0:44:14 But Michael Cassin, the question I asked, I said this on this panel, would a CEO with ovaries have done this?
0:44:17 I think there’s a difference between male and female leadership.
0:44:19 No woman would have done this.
0:44:23 It was just like, I literally said to them, this is the definition of a dick move.
0:44:24 Yeah.
0:44:25 You don’t get in the way there.
0:44:27 You don’t get in the way of their party.
0:44:28 Exactly.
0:44:30 Just whatever boss, compete against them, but don’t get in the way.
0:44:33 But anyways, I do like Michael and he’s been very generous to me.
0:44:42 And then I also think the story that is sort of overhanging everything, but may or may not be written, is that the most valuable company in the world isn’t here.
0:44:53 And I really appreciate that because Metta used to come here and pretend to be the partner to the media world and run their fingers through their hair before they shot them in the fucking face.
0:44:56 And NVIDIA could own the whole fucking thing.
0:45:07 I mean, NVIDIA could just say, I know, let’s take $100 million or yesterday’s share appreciation between 330 and 331 and own it.
0:45:19 And they’re not even pretending that they’re your friend because the reality is if you think about an industry that’ll probably are a job that’ll be disrupted at the low end, it’ll probably be like a low-level media planner.
0:45:23 I would think that AI is going to be able to just get all over efficiency around media planning.
0:45:28 Which I wanted to ask, are people concerned about that or how are they positioning AI?
0:45:37 Are they like, oh, this exciting new technology was so excited for how it’s going to enhance the advertising industry or are they all kind of freaking out like, oh shit, AI can do our jobs?
0:45:44 Well, when you’re in Cannes and everyone’s speaking publicly and no one wants to piss off a potential partner, they’re like, oh no, Google’s a partner.
0:45:47 We see a lot of opportunity to partner with Google.
0:45:51 I mean, they’re all such Vaseline over the lens.
0:45:55 I think that’s why I get invited here is I literally stand out because I’m like, are you fucking crazy?
0:46:01 Come on, they’re literally serving you your last meal and asking you to pay for it.
0:46:07 Anyway, everything here is sunshine and roses and rainbows, right?
0:46:14 That brands are coming back, media spending is up, and AI is going to be good for us.
0:46:18 So it’s definitely not, it’s a celebration.
0:46:22 This is more a convocation and a gore and a chance for people.
0:46:26 And I think this is really important to see, touch, and feel each other.
0:46:29 And I think that we’re desperate for that coming out of COVID.
0:46:31 And it’s in a beautiful part of the world.
0:46:34 But I think Nvidia, I feel like, is overhanging everything.
0:46:37 Any discussion of TikTok and the potential ban?
0:46:39 Was anyone worried about that?
0:46:42 It’s interesting, TikTok has a pretty big presence here.
0:46:45 And maybe because I’m not that dialed in, I haven’t heard a lot.
0:46:50 TikTok doesn’t invite me to their TikTok beach, surprisingly enough.
0:46:54 So I haven’t heard, we didn’t talk a lot about TikTok.
0:46:56 It’s interesting you say that, not a lot of people brought up TikTok.
0:47:00 Everyone’s talking about AI, full stop.
0:47:03 And also just sports, and that was a big theme here.
0:47:05 Just the power of sports marketing.
0:47:09 But no, I haven’t heard a lot of people talk about TikTok.
0:47:13 But I’ve noticed two years ago, either my brand is waning
0:47:15 or people are worried about what I’m going to say.
0:47:18 But I was invited to three panels this time.
0:47:21 I usually get invited to several panels every day.
0:47:24 So maybe I’m losing my luster.
0:47:25 I don’t know.
0:47:27 I probably fucked up doing this pot with you.
0:47:28 That’s probably what this all says.
0:47:29 No, it’s not that.
0:47:32 I think it’s probably because you’re telling everyone that brand is dead.
0:47:34 They still seem to just lap it up though.
0:47:35 They just love it.
0:47:37 They just love getting slapped.
0:47:39 They’re like, “Thank you, sir. May I have another?”
0:47:44 All right, let’s take a look at the week ahead.
0:47:48 We’ll see data on the personal consumption expenditures index for May.
0:47:50 And we’ll also see earnings from FedEx and Nike.
0:47:52 Do you have any predictions for us?
0:47:55 Well, I’ve just been thinking a lot about the exchange wars.
0:48:01 I think it’s fascinating this Texas exchange and Raspberry Pi going public on the LSE.
0:48:02 I think you’re going to see…
0:48:03 I think the biggest…
0:48:04 Talked about this.
0:48:07 The biggest IPO of this year is going to be Sheehan on the LSE.
0:48:13 And then the biggest IPO of 2025 is going to be SpaceX on the Texas exchange.
0:48:16 And I think it’s going to set off a bit of a war.
0:48:17 I think it’s healthy.
0:48:19 I think it’ll bring down costs.
0:48:22 It’s good that the NYC and the NASDAQ are going to have competition.
0:48:26 But my prediction for 2025 is what I loosely refer to as exchange wars.
0:48:33 As the biggest IPOs of 2024 and 2025 are on the LSE and this new Texas exchange,
0:48:37 specifically Sheehan and SpaceX respectively.
0:48:41 This episode was produced by Claire Miller and engineered by Benjamin Spencer.
0:48:43 Our associate producer is Alison Weiss.
0:48:45 Our executive producer is Jason Stavins and Catherine Dillon.
0:48:49 Mia Silverio is our research lead and Drew Burrs is our technical director.
0:48:52 Thank you for listening to ProfG Markets from the Vox Media Podcast Network.
0:48:57 Join us on Thursday for our conversation with Ben Miller only on ProfG Markets.
0:49:03 Lifetimes
0:49:10 You help me
0:49:13 In kind
0:49:17 Reunion
0:49:22 As the world turns
0:49:27 And the ground flies
0:49:32 In our lives
0:49:36 Hi, we’re Visible.
0:49:38 We’re the wireless company with nothing to hide.
0:49:40 Seriously, hidden fees?
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0:49:59 Sometimes the choice is just Visible.
0:50:01 Switch today at Visible.com.
0:50:02 Rate with service on the Visible plan.
0:50:05 For additional terms and network management practices, see Visible.com.
0:00:15 You raise your glass to another guest because you both know the holidays just beginning.
0:00:18 And you’re only in Terminal 3.
0:00:23 Welcome to Virgin Atlantic’s unique upper-class clubhouse experience,
0:00:27 where you’ll feel like you’ve arrived before you’ve taken off.
0:00:32 Virgin Atlantic, see the world differently.
0:00:38 Hi, we’re Visible. We’re the wireless company with nothing to hide. Seriously.
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0:01:11 Today’s number, $535,000. That’s how much Ferrari’s first-ever electric car will cost. True story.
0:01:17 I came up to Ed. I drove up in a Ferrari and I said, “Ed, if you bust your ass, work really hard,
0:01:24 and devote your entire life to properties, someday, someday, I will have two Ferraris, bitch.”
0:01:37 [Music]
0:01:42 Welcome to ProFG Markets. Ed, it’s true. It’s true.
0:01:48 A Ferrari is like a consistent, reliable erection. I don’t have a Ferrari, Ed.
0:01:55 Today, we’re discussing Netflix entertainment venues and takeaways from Cannes, from Cannes, where I still am.
0:02:00 Here with the news is ProFG media analyst Ed Elson. Ed, what is a good word?
0:02:04 You’re looking at a little sunburn. Have you gotten too much sun?
0:02:08 I think it’s rosy. I’m at that age where when I drink, I turn a bright, like, it’s not even red.
0:02:14 It’s more like a pink before you get bloated and have a stroke or something.
0:02:20 It’s just a very unhealthy, like, it’s like rosacea. I don’t know, rosacea means a rash.
0:02:24 It’s just, and then it smeared all over my body. I just look like shit.
0:02:25 Very good. How’s it been?
0:02:28 It’s, you know what? It’s been wonderful. It’s gone really fast.
0:02:32 It’s nice. I’m here with my boys and we’re staying at a fancy hotel and they do…
0:02:33 Where are you staying?
0:02:36 We’re at the hotel du Cap, of course, and we love it here.
0:02:47 And then I go, in this total baller moment, I take a zodiac into the Palais and then I tell people the Arab brand is over and for some reason they keep bringing me back.
0:02:53 And it’s amazing. Elon is here with Linda Yaccarino and we’ll talk more about that.
0:02:58 Yeah, this is, I’ve been to this conference more than any conference ever.
0:03:04 I wouldn’t come to Cannes just for Cannes. I wouldn’t come for Alliance just for Alliance, but the combination together is absolutely wonderful.
0:03:06 And your boys, how are they enjoying it?
0:03:13 They love it. You know, they just, they just want to be, they just want to be with us in a place that has 38 Euro hamburgers.
0:03:22 So they love it. I mean, they get these hilarious order room service and then call me and say, “Dad, Dad, can I order the 28 Euro cheesecake?”
0:03:24 And I’m like, “No. No.”
0:03:28 Yeah. What’s your policy on a room service? Are they allowed to do that?
0:03:33 My parents always said I wasn’t allowed to do that. And I also wasn’t allowed to get to take any snacks from the ball.
0:03:35 That was like that line. Can’t do that.
0:03:41 Oh my God. The closest my father’s ever come to violence is one day, I had never been in a hotel. So I was like 12.
0:03:47 And we went and my dad, after the divorce, took me and his new wife, my new mommy.
0:03:49 His seventh wife.
0:03:55 Took me to Hawaii and I somehow ended up in a room. It was me and my sister in a room and I don’t know what my sister was doing.
0:04:04 And I found out I opened this cupboard and there were all these amazing chocolates and snacks and I just went, “Ape shit.” I had never seen anything like that.
0:04:06 It was like opening stuff just to try it.
0:04:07 Hell yeah.
0:04:18 And then he walked in and he saw that and I thought, “My dad, it was the threat of violence that scared me more than anything. My dad, my father actually never beat me.”
0:04:20 So he didn’t bring out the thick ear.
0:04:30 Yeah, but he always seemed just really like a hair trigger away from beating the shit out of me. And he used to threaten a lot and he was very quiet and very intense.
0:04:34 Anyways, that was the closest I thought, “Okay, this is it. This is it.”
0:04:42 And he explained to me and then he walked me through the prices and every time he’d be like, “And Pringles are $3 at fucking A.”
0:04:53 And he’d get like all emotional. It was so torturous. Anyways, hold me Ed and you wonder why I want to pay you minimum wage. You wonder why.
0:04:55 All right, get on with the news. Break out the news.
0:04:57 Let’s start with our weekly review of Market Vitals.
0:05:13 The S&P 500 topped 5500 for the first time. The dollar was flat. Bitcoin hit a one month low and the yield on 10-year treasuries was volatile, shifting to the headlines.
0:05:24 Inflation in the UK fell to its lowest level in almost three years and hit the Bank of England’s target rate. Prices rose only 2% in May from a year earlier. That’s down from 2.3% in April.
0:05:28 And that metric will also be a key talking point ahead of the election next week.
0:05:41 Apple has reportedly stopped working on the new generation of its Vision Pro headset. The company is still developing a cheaper version with fewer features, but according to the information, it has deprioritized the next generation of the device due to slow and sales.
0:05:56 And finally, NVIDIA is now the most valuable company in the world with a market cap of roughly $3.3 trillion. The company’s rise to the top is among one of the fastest in market history, adding $3 trillion in market cap over the past 20 months.
0:05:59 That’s just insane. Scott, where should we start?
0:06:16 Well, let’s start with the boring stuff. Inflation in the UK, it’s great. That’s sort of what Chairman Powell in the US has said is the target is 2%. So, I mean, inflation hit the UK really hard. It escalated so dramatically, so fast that maybe this is a little bit of checkback.
0:06:34 I wouldn’t be surprised if it unfortunately goes negative. I mean, the UK economy is just, the bottom line is this is really fucked up. After spending a bunch of time in the UK, I think, okay, whoever’s running the economy here is not, I don’t know, what’s the term? They have their head up their arse.
0:06:44 Look, I’m happy. I think this is great. I think inflation across the West is coming down. I don’t know if it’s energy prices. Do you have any color on what brought inflation down in the UK?
0:06:56 I mean, it’s a boring answer. I really think it’s just a mix of everything. I think it’s rate heights coming into effect. I think it’s supply chains loosening up. I think it’s just low consumer confidence, which was decreasing spending.
0:07:08 I think it could also be, as you say, they went up so high and it’s sort of that Danny Blanchflower regulating effect that we’ve talked about where it’s just, you know, wages aren’t keeping up and so prices have to come back down again.
0:07:19 It’s not totally clear. This is clearly a global trend. I mean, prices are generally speaking coming down. And I think we’re going to see a lot more of these positive inflation headlines start to roll in.
0:07:30 But I do also think we need to take all of them with a grain of salt. And the UK is a great example of that because, yes, 2% inflation last month, that sounds pretty good.
0:07:42 But a year ago, it was 9%. And the year before that, it was also 9%, which means that in the past three years, prices of everything have risen more than 20%. So it’s compounded.
0:07:54 So I think what people in the UK should think about is, if your salary hasn’t increased more than 20% in the past three years, you are literally falling behind economically.
0:08:05 Quality of life has gone down. Exactly. And, you know, I think a lot of employers are probably going to use this as, oh, I think we’re out of the woods. You know, that’s going to be probably a big negotiating point for employers.
0:08:20 And from an acceleration perspective, yeah, we might be, it might be over. But from an absolute perspective, you know, I caught in the milk that cost a pound three years ago, it costs between a pound 20 and a pound 25 now.
0:08:29 I mean, that’s, that really hits lower middle-income households, right? Because they’re not, they weren’t eating out to begin with very often, but 25% higher.
0:08:45 Also, rent over the last year, paid to private landlords in the UK, is risen by 9% in this year alone. So, you know, this is, I don’t know, I liked what Kyla said, a vibe session, you know, the lower middle-income homes, they have no choice.
0:08:54 They have to pay, they pay a disproportionate amount of their disposable income on rent and food, meaning that when these things go up in price, it really hits them hard.
0:09:01 So I’m trying to think like, what’s come down in price, Range Rovers or Energy, or what’s, what is actually keeping that number down?
0:09:10 The CPI inflation is nearing the 2% target in several G7 economies, including the UK, France, Germany and the Eurora area. So that’s good news.
0:09:20 The good news in the US, I think, is that wages actually rose faster than inflation, meaning the purchasing power is actually starting to go up again reasonably. But I don’t know if that’s the case in Europe. I wonder what wages have done.
0:09:32 In the UK, that is the case. I haven’t seen the overall Europe data, but again, it’s only a recent trend. So much of the conversation around inflation gets so murky because it’s really about the time frame.
0:09:38 Are we looking at the monthly increase, yearly increase? Are we looking at the yearly increase as compared to the previous month?
0:09:47 So I just think when it comes to inflation, it’s very easy to see the headline number that says inflation’s coming down or inflation’s going back up again.
0:09:56 And we’re so quick to judge. But the reality is, if you care about this, I think the best thing to do is to just go to the National Statistics website in the US.
0:10:03 That would be the Bureau of Labor Statistics and read the whole thing for yourself because it’s always a bit more complicated than it seems.
0:10:13 Yeah. And so let’s get right to the fun stuff. Apple has reportedly stopped working on Vision Pro 2. This is shocking to me. This is just shocking.
0:10:28 I don’t see how anyone couldn’t have thought that putting a ridiculous gadget on your head that made you feel nauseous and made you even less attractive to potential mates, but only cost $3,500.
0:10:39 And it just infuriates me that people still aren’t willing to call this the ultimate stillborn technology. I mean, this thing never even crawled for God’s sakes.
0:10:46 I mean, this thing was literally DOA. And people, all these Apple acolytes, it’s okay.
0:10:55 All right, you can respect Starlink and still feel like, okay, but Elon Musk should not be spreading homophobic conspiracy theory.
0:11:01 You can say, all right, Apple’s an amazing product, but they haven’t cooperated with the government around child safety.
0:11:11 You can hold two ideas in your head at once. And these Apple acolytes, evangelist cultists refuse to believe that they’re going to get it wrong on certain pieces of hardware.
0:11:17 This thing never made any sense. They’re trying to pretend that, oh, we’re still going to have this.
0:11:26 They’ve basically, I’ll tell you, folks, you want to be fired. You want an easy way to get severance. Working at Apple on the Vision Pro is a good way to get severance eventually.
0:11:27 Very heartache.
0:11:35 We’re working at any media company that decides to spend money on X. These are literally the quickest way to a severance check.
0:11:37 So I’m, anyways, I’m shocked at, I’m shocked.
0:11:42 I mean, honestly, a very crucial question here. Have you ever tried any of these headsets?
0:11:43 Yeah.
0:11:44 Which ones have you tried?
0:11:51 I’ve tried the Meta. My 13-year-old was really excited about it and really wanted it. So we said, okay, you put half your money up.
0:11:53 So you bought one? Okay.
0:11:55 Right. Why wouldn’t I?
0:12:01 Dude, do you realize the shit I buy from my family? Like, I get to decide what they buy.
0:12:03 It’s like a ball snack for you. Yeah.
0:12:07 By the way, my kids suffer from device addiction and spend all day on fucking TikTok.
0:12:12 Do you think I have any influence over them? And then people will say, well, you’re the parent. It’s about good parenting.
0:12:15 Oh, fuck you. That means you don’t have children.
0:12:19 I love it when people say, oh, they shouldn’t be on social media. Just take their device away.
0:12:25 Okay. So let me get this. Let me get this. No one will have sex with you because you clearly don’t have kids.
0:12:27 You don’t know, you don’t know what this is like.
0:12:31 I just think it’s hilarious that people think my kids listen to me.
0:12:36 I love that. Yeah. And they’re really into World War II history and CrossFit. Not.
0:12:37 Anyways.
0:12:41 But you haven’t tried the Vision Pro, sounds like.
0:12:47 I put it on and I did that train set video where you get to see this amazing 3D train set. It really is.
0:12:48 Oh, yeah?
0:12:50 Yeah. Look, it’s incredible.
0:12:51 Where did you try it?
0:12:55 A good friend of mine has one. He has a Vision Pro and he put it on.
0:13:01 Yeah. I think it’s incredible. I think it’s absolutely amazing. I think IMAX is amazing.
0:13:08 When I first saw my film at IMAX, I’m like, wow, this is amazing. I go to IMAX once every two years and it’s a shitty business.
0:13:13 So they will let it die a slow death. It’s cool. They manage the press really well.
0:13:19 But this is stupid. As smart as Apple intelligence is, this was that stupid.
0:13:25 And like, and who predicted this first despite all the Apple people coming for me? Who predicted this first?
0:13:27 Oh, I don’t know. I have no idea.
0:13:37 Who predicted this? Who predicted every fucking Apple person like getting their knee pads out and blowing the Cupertino sphere and like, oh, it’s going to be amazing.
0:13:44 And it’s the future of computing. Give me a fucking break. Anyway, I don’t know why I’m so angry.
0:13:48 Okay. Well, let me just take the other side of this for at least a second.
0:13:51 Second over. This thing’s stupid.
0:13:52 Go ahead. I’m sorry.
0:14:04 Good minute. It’s pretty breathtaking. I think one great use case. I don’t know if you tried it, but they have the live sports feature where it’s this immersive experience where it literally feels like you’re in the stadium watching a live sports game.
0:14:16 That’s the potential of this. I mean, I just don’t see any reason why anyone wouldn’t, given the choice, choose the immersive feature with the Vision Pro to watch a live sports game, then just looking at it, watching the game on a flat screen.
0:14:26 Having said that, I think there are two main huge issues for me that you kind of bring out. One was the thing was way too heavy. It’s like uncomfortable. My neck got tired.
0:14:40 And two, it’s way too expensive. It’s three and a half thousand dollars plus tax for something that is at most like a fun gadget, which is why I do think it’s interesting that they’re not working on upgrading this edition of the Vision Pro,
0:14:49 but they’re working on a new Vision Pro headset still, which is one lighter and two half the price. It’s going to cost one and a half thousand dollars.
0:14:57 And if both of those things are true and they don’t sacrifice on quality, I might buy it. I think I will buy it actually.
0:15:14 Despite the immersive experience, which will wow you, I still think you will opt for either watching it on the flat screen on your computer or actually going to the game. I don’t know if this really… We’ve been talking about these immersive experiences.
0:15:15 We have for years.
0:15:31 You know, all those video parks where you put on a headset and you’re flying through space and they have fans blowing in your face. That’s when my kids go, they go to the technology for inherits or at Selfridges and they get on something where they’re Superman and they have wind in their face and they’re flying through space.
0:15:33 Isn’t the stuff amazing down there in Selfridges?
0:15:34 It’s pretty nice.
0:15:36 They always have the craziest gadgets I’ve ever seen.
0:15:52 No, it’s great. And then we go have dimsum and dimtie, f*ck or whatever. I was ordered the cream of s**t. I love it. You just got that. Welcome Ed. Welcome. Anyway.
0:15:56 Okay, so, headsets.
0:16:00 Let’s talk about… No, no, no. Let’s call it. Let’s talk about it in the video now.
0:16:12 Okay, look, I can’t get over this thing. I can’t get over this thing. I looked up what is the global value of the automobile industry and it’s like 1.4. The top 10 automobile companies including Tesla are worth 1.4 trillion.
0:16:29 This company has added that and the GDP of Sweden in the last 12 months. This company is an extraordinary example. I think of where the economy is headed. The thing I don’t like about this or the thing I think we have to be thoughtful around is that if you look at the Nasdaq,
0:16:45 this company is now responsible for something like 45 or 50% of the Nasdaq’s gains for the year. And I hate the Nasdaq and the S&P indices because they give people the illusion and it is an illusion that the economy is really strong.
0:17:02 Really what they are at the end of the day is they are indices on the super rich because the super rich own a disproportionate amount of the stocks. And spoiler alert, the super rich are killing it. They’re at all time highs. In the last 10 years, we’ve gone from 500 billionaires to 2,500.
0:17:16 So I worry a little bit that this really is a bit of a, not only a distraction, but it’s an unhealthy distraction that mass over some of the bigger issues that ALS. What are your thoughts on it?
0:17:29 Well, I think the statistics are just staggering. Four years ago, this company was barely in the top 50 largest companies in the world. It’s now worth more than the entire UK stock market. It’s now worth more than the entire French stock market.
0:17:47 But the thing I’ve been thinking about is, you know, no one is happier about this than the employees of NVIDIA who probably joined this company a few years ago, thinking they were going to join this kind of somewhat known, decent middle to upper tier tech company.
0:17:59 And suddenly they are the superstars who are being rewarded basically as if they are the founding employees of a startup that’s about to go public. And to illustrate this, Mia found this great stat.
0:18:11 If you joined this company five years ago, say as like a mid-level project manager. And at that level, it’s pretty reasonable to assume that you’d be getting a stock grant of around $70,000 over four years.
0:18:22 So assuming that five years ago, $70,000 stock grant, that initial grant today is now worth ten and a half million dollars.
0:18:31 So I would bet that there are hundreds, maybe thousands of employees in this exact position who have basically been made millionaires overnight.
0:18:48 And if we can take this a step further, if you look at the workforce, there are roughly 30,000 employees at the company overall. It’s got a market cap of $3.3 to $3.4 trillion, which means that the market cap per employee of this company is $113 million.
0:18:55 That’s six times higher than Apple. It’s eight times higher than Microsoft. It’s one of the highest in the world.
0:19:10 Wait, $113 million per employee. Jesus Christ. That number is staggering. I spent the better part of seven or eight years working around the clock on a company benchmarking digital competence.
0:19:18 Came up with this really interesting indices. Just everything lined up. It was a great core group of employees, great clients.
0:19:27 We cornered the luxury market for digital benchmarking. All the moons lined up. We got a bidding war mowing, and I sold this company for $158 million.
0:19:34 We had, I think, 80 or 100 employees. So that’s $1.6 million per employee, not $113 million.
0:19:42 So basically, one employee at NVIDIA has created the market cap of just slightly less than the entire company fell pale.
0:19:51 And let me move to financial advice. Anyone at NVIDIA that is listening to this podcast, listen to me very closely.
0:19:59 Sell. Now, okay, and let me acknowledge the stock might double. It doesn’t matter.
0:20:11 If you have more than 90% of your net worth and more than a million dollars in this company, and this is what I didn’t learn, you need to diversify because this company could go down easily.
0:20:26 Easily, easily 80%. It might double. But the pain of losing, of going from being worth $5 million, right, to $1 million, is much more severe than the joy of going from $5 million to $10 million.
0:20:34 So you have thousands of employees that have millions, even tens of millions of dollars that are highly concentrated.
0:20:48 And you want to remember what Kahneman wrote about loss aversion theory. This needs to be a win for you. Take as much off the table as you can, as you can, and hope you’re wrong.
0:20:56 Leave a little in the company, fine. And I hope I’m wrong for you. But you want to make sure this is a win no matter what.
0:21:11 And I could have sold in 1998 when I was 33 years old, I could have sold 10, 15, 20 million dollars in red envelope stock, stuck that away, and had economic security for the rest of my life.
0:21:20 But instead, I’m like, no, this company is amazing, and I’m amazing, and I’m devoted to this in the market’s champagne and cocaine. Don’t be stupid, Scott Galloway.
0:21:27 Be smart here. Take some, if not most, off the table.
0:21:31 We’ll be right back after the break with a look at Netflix’s take on theme parks.
0:21:49 Support for Prop G Markets comes from BetterHelp. We’re halfway through 2024, which makes this a great time to pause, take a moment, and take stock of how the year has gone so far.
0:21:59 I know that personally, I feel fortunate that I’ve gotten to spend so much time with my boys. We’re going to football games, and I’m kind of a yes to anything with the rights to back out with friends.
0:22:05 But I’m trying to just be open to stuff, get out of the house more and be more social. All that good stuff.
0:22:10 Anyways, if you’re looking to find more opportunities to celebrate what’s going well and adjust the things that need some tweaks,
0:22:14 Online Therapy from BetterHelp might be worth checking out.
0:22:20 BetterHelp Online Therapy offers a safe space to work through stress and set achievable, realistic goals for the rest of the year.
0:22:26 BetterHelp is a convenient, affordable way to give talk therapy a try. It’s entirely online and flexible enough to fit any schedule.
0:22:32 You can fill out a brief questionnaire to get matched with a licensed therapist ready to help you lighten your emotional load.
0:22:44 Take a moment with BetterHelp. Visit BetterHelp.com/Markets today to get 10% off your first month. That’s BetterHelpHELP.com/Markets.
0:22:50 Support for this show comes from Greenlight. As your kids get older, they’ll pick up a ton of new habits from family, friends, and the internet.
0:22:56 You want to make sure they’re able to discern good habits from the bad, especially with the things that’ll stick with them into adulthood, like money.
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0:23:14 It has games that teach money skills in a fun, accessible way.
0:23:21 And it has a chores feature that lets you set up one time or recurring chores and rewards kids with allowance for a job well done.
0:23:28 I’ve tried Greenlight with my family and let me just say we were a Greenlight family before they became a sponsor of the podcast.
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0:24:30 We’re back with ProfG Markets.
0:24:35 Netflix is opening two experiential entertainment venues in 2025.
0:24:37 The complexes will be called Netflix houses,
0:24:42 and they’ll take up more than 100,000 feet of former department stores in Dallas and Philadelphia.
0:24:48 Netflix houses will feature events, games, restaurants and stores designed to immerse customers in the worlds of Netflix content,
0:24:52 and these venues represent Netflix’s largest leap into live experiences to date.
0:24:57 Scott, it appears that Netflix is taking a page out of Disney’s book,
0:25:00 who have invested heavily in parks and experiences.
0:25:02 What do you make of this move from Netflix?
0:25:07 I think Netflix is thinking, should we explore becoming Disney before Disney becomes us?
0:25:14 And that is, Disney is gone, not all in, but they’re taking a lot of that 10 billion in EBITDA and pouring it into their streaming group.
0:25:19 I think they’re one of the streamers that survives because they have such great IP and such singular positioning around family.
0:25:24 And Netflix has developed such unbelievable IP. It rivals Disney’s IP.
0:25:29 Netflix has created Stranger Things, Bridgerton, Umbrella Academy.
0:25:32 You know, I see pop-ups for Stranger Things.
0:25:37 I can see afternoon tea with Bridgerton, where people come in and corsets and then start fucking.
0:25:40 That’s what I’d like to see.
0:25:43 But Stranger Things, you can see like a haunted house for Stranger Things.
0:25:47 And my guess is, one, it’s probably good for the brand at a minimum.
0:25:50 It’ll create some excitement. They’ll get a lot of press.
0:25:54 And if it ends up that this thing has staying power and it becomes a choice,
0:26:01 they’re really, you’re assuming at some point you actually mate and you have children,
0:26:05 which I’m doubtful around if I read the stats around young men.
0:26:11 But assuming that happens, you’ll find there really isn’t a lot to do with your kids.
0:26:15 And I remember my dad picking me up on weekends.
0:26:19 He used to come to my pick me up for my mom’s every other weekend.
0:26:21 I’d get in the car and he’d say, how’s your mom?
0:26:25 I’d be like fine. And then there’d be a pause and he’d say, that bitch.
0:26:29 Anyways, anyways, little memory, little walk down memory lane.
0:26:36 But other than taking me to LA Kings games to watch Marcel Dion and Whitey Whiting and Rogi Vachon.
0:26:40 These are great hockey players you’ll never think of again.
0:26:44 He would have to take me to the movies. There was just nothing to do with a kid.
0:26:47 And I think there’s just a huge economic opportunity here.
0:26:52 So, I mean, I can tell you if the Netflix thing opens and there’s an umbrella academy thing
0:26:55 and there’s a stranger things, I mean, where the Galloway’s are going to be there
0:26:57 and we’re going to spend a lot of money there.
0:27:00 And if they find it’s sustainable and that they can, you know,
0:27:04 it’s not just a one-time sugarhead like the Museum of Ice Cream, right?
0:27:06 Eventually, you know, that’s going to go away, right?
0:27:10 Where you explore your creativity by jumping into a ball pit and then eating pistachio ice cream.
0:27:14 Yeah, that was worth my $38. That was money well spent.
0:27:16 Anyway, it’s only $38. That’s cheap.
0:27:21 I am so convinced that this is graduates of NYU’s Gallatin School that do a lot of edibles.
0:27:24 And they’re like, in the middle of watching South Park, really high.
0:27:26 What if we open something like the museum?
0:27:30 This is a real thing in New York. There’s a museum of color.
0:27:34 And you walk into a room and you give your personality traits and it says,
0:27:38 “Oh, you’re Chartreuse.” They’re like, “Oh, wait, I’m Chartreuse.”
0:27:40 And it tells you what color you are.
0:27:43 And you’re like, and you all talk to each other and you think that there’s some sort of insight there.
0:27:44 Anyway.
0:27:46 The key detail, though, is that you have been to both.
0:27:50 It sounds like you’ve been to the Museum of Color and the Museum of Ice Cream.
0:27:52 When you have kids, you’ll go to all of them.
0:27:53 You’ll take anything.
0:27:56 You’ll literally go to all of them. And that’s the opportunity here.
0:27:58 So if they could, one, it’s great marketing.
0:28:01 And two, potentially, they could say, “You know what?
0:28:07 We’re going to reinvent Disney instead of buying maybe seven million acres in Orlando
0:28:11 and getting into fights with, you know, Joey Bagadon, its governor.
0:28:16 We’re going to develop these things in urban centers, reinvent the theme park concept,
0:28:21 and it could be this multi-channel and leverager IP and start to get a little bit of that flywheel.”
0:28:24 You keep on saying the unbelievable IP.
0:28:27 I mean, stranger things maybe, Squid Game maybe.
0:28:30 You mentioned Umbrella Academy. I haven’t even heard of that.
0:28:32 Again, see above doesn’t have kids.
0:28:34 Okay, fair enough.
0:28:40 But I mean, you compare this to the Disney assets, like, you know, Star Wars, Pirates of the Caribbean.
0:28:46 Frozen, Toy Story. These are like iconic, iconic IP assets.
0:28:53 Do you really think that Money Heist holds a candle to any of those Disney assets?
0:28:58 And do you think it’s legitimately durable enough to build a park around?
0:28:59 I think they’ve got a lot.
0:29:02 I think you underestimate the power of their IP and how many niches are out there
0:29:05 that they’ve really definitely exploited.
0:29:12 You might be right, and they might find they just don’t have the depth of, you know, what I think is.
0:29:19 My favorite would be as if they did a special ride for Dahmer, the monster, the Jeffrey Dahmer story.
0:29:24 They’re going to have to do a bunch of rides about the bajillion documentaries they’ve put out in the past two years.
0:29:29 It’s like, if you have to ask what’s for lunch, that means you’re for lunch.
0:29:31 Oh my God, Wednesday?
0:29:34 Well, let’s just stay on up for one more second.
0:29:36 I mean, let’s compare it to Disney’s business.
0:29:40 So Disney’s Parks and Experiences Unit is a great business.
0:29:43 They brought in $8.5 billion in revenue last quarter.
0:29:45 That’s 40% of their overall revenue.
0:29:51 As a percentage of their operating income, it’s 60%, so it’s highly profitable.
0:29:59 Having said that, Netflix appears to be making a different move here, and that is they haven’t called it a theme park.
0:30:03 They’re specifically calling it this experiential entertainment venue.
0:30:07 And so it’s not clear that there’s going to be actual rides.
0:30:10 It’s going to be more of, you know, hanging out at the mall.
0:30:15 And there are, you know, stranger things, themed events, but it’s not a theme park.
0:30:20 So I’m just, we’d like to get your take, your strategy take.
0:30:27 Why do you think they’re trying to differentiate themselves from the theme parks that Disney have proven work?
0:30:29 And how do you think it’s going to be different from Disney?
0:30:33 This is the kind of thing we used to get paid to figure out at profit.
0:30:35 You know, they come to us with questions.
0:30:39 What if Netflix were to open some sort of theme park question mark and come back to us?
0:30:42 And the pain points, first off, what are the pain points at Disney?
0:30:47 One, it’s extraordinarily expensive, extraordinarily expensive, right?
0:30:53 To take a family of four to Disney in the hotels, you’re looking at five to ten grand.
0:30:58 Two, it’s the seventh ring of hell in terms of time cost.
0:31:00 You can’t really go for one day.
0:31:05 When you have a line for three hours for the Avatar ride, it’s not really accessible either.
0:31:08 It’s in, you know, it’s not in the city center.
0:31:15 They need huge swaths of land outside of, you know, in a suburb of Orlando or Paris or Tokyo.
0:31:20 So one, smaller, cheaper and cheerful, something maybe you can go in and get out in two hours,
0:31:25 maybe three hours, something that costs a hundred or two hundred bucks for a family of four,
0:31:27 not five to ten thousand.
0:31:31 So I think there’s a lot of pain points that they could solve.
0:31:36 Where they say, okay, how do we give people 30, 40, 60% of the Disney experience
0:31:40 for 10% of the price and 5% of the time commitment?
0:31:43 So I think this is really brilliant.
0:31:47 I don’t know if it’s going to go anywhere, but like I said, this is, what is scenario planning?
0:31:53 Scenario planning is trying to develop a strategy that across a number of scenarios has the best outcomes.
0:31:54 It’s not predicting the future.
0:32:00 It’s saying, all right, let’s look at three or four possible futures and then develop a strategy that fits best
0:32:04 and has the best outcome across all of these potential futures or the majority of them.
0:32:10 So one, it’s a cute idea, and it gets some awareness and some press, but it’s not really a sustainable business.
0:32:12 All right, don’t spend too much on it.
0:32:15 Open it, short-term leases, position it as a short-term thing.
0:32:19 So people don’t start shitposting you, like me, if you’re the Apple Vision Pro 2.
0:32:24 Don’t say we’re going, we’re going to try and create the next Disney Parks, but be better.
0:32:26 No, just say it’s a marketing thing.
0:32:27 We think we’re experimenting.
0:32:29 And then what if it’s big?
0:32:36 Well, we’re in a position with our IP to really go crazy with it and we’ll immediately start looking at locations all over the world.
0:32:39 These things could be hugely profitable.
0:32:44 I went, oh my God, I went to life-size monopoly in London.
0:32:45 Think about that.
0:32:47 Think about how desperate parents are.
0:32:53 You go to this place where the guy in the top hat and all these characters from monopoly.
0:32:54 No.
0:32:59 And you roll a giant dice and then you have to have, and then you have challenges with strangers.
0:33:04 And these people with thick accents from the north of England, you’re like, what the fuck are they saying?
0:33:07 I’m supposed to work with these people and your kids get really into it.
0:33:15 And you do these games and you pay 50 bucks and then you go downstairs and maybe they order you like a ham and cheese sandwich for 18 quids.
0:33:16 It sounds miserable.
0:33:18 And you’re like, oh, that was fun.
0:33:19 That was fun.
0:33:25 And you’re like, just get them home and get them in bed so we can start drinking.
0:33:32 But there’s a lot of opportunity in the space for kids because it is on weekends.
0:33:34 It is, especially with little kids.
0:33:35 Slim picking.
0:33:37 It is difficult.
0:33:41 We’ll be right back after the break for Scott’s takeaways from the Cannes Lions Festival.
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0:36:51 We’re back with Prodigy Markets.
0:36:54 Scott, you’ve been at Cannes Lions all week, an international festival
0:36:56 where thought leaders from the advertising industry get together.
0:37:01 It is essentially the Oscars of advertising, except it’s set in the French Riviera.
0:37:05 Can you share just some of your main takeaways from this festival
0:37:08 and especially your thoughts on the state of advertising right now?
0:37:12 Well, first and foremost, I went to the Yahoo party with the chain smokers,
0:37:15 and I didn’t realize, but the chain smokers are not a band, they’re DJs.
0:37:16 That’s right.
0:37:18 And they’re also very nice guys.
0:37:19 And they’re VCs.
0:37:21 And they’re starting a venture capital fund.
0:37:23 And they’re also like the most lovely people.
0:37:26 I was literally, I’m bragging a little bit, I was with the band
0:37:27 and we couldn’t get in.
0:37:28 It was so mobbed.
0:37:31 There were so many, there was literally 2,000 people trying to get in
0:37:34 to see the chain smokers that even though I was with the chain smokers,
0:37:36 I could not get in.
0:37:37 What do you mean you were with them?
0:37:38 You were just hanging out?
0:37:39 I know.
0:37:40 It’s Alex and what’s his name?
0:37:41 I don’t know their names.
0:37:43 Chain and Smoker.
0:37:44 I don’t know.
0:37:45 I don’t know their names.
0:37:47 They’re super nice guys with super hot girlfriends.
0:37:48 That’s all I could register.
0:37:50 Anyways, can’t.
0:37:53 First, it’s really can as a conference.
0:37:55 It’s the only conference I’ve been to over here for 10 years.
0:37:56 It’s actually growing in importance.
0:37:58 And a lot of non-traditional companies are showing up.
0:38:01 So there was this, the hottest beach was something called Sports Beach.
0:38:04 And all of these sports firms are becoming media companies.
0:38:07 The Kelsey guys, that guy came up and hugged me.
0:38:10 And he was standing that Paul revealed that Michael,
0:38:13 literally the Michael Jordan of La Crosse, who’s I would call a friend said,
0:38:14 “Do you want to come to Sport Beach?”
0:38:15 I’m like, “Yeah, take me in.”
0:38:18 And this enormous bear of a man with a big beard came up and hugged me.
0:38:20 And it was the Kelsey guy that’s retiring.
0:38:22 I know nothing about football.
0:38:24 And his agent offered to bring me and my sons to a camp.
0:38:25 And they couldn’t be nicer.
0:38:27 I’m sitting there looking at these two.
0:38:30 And I’m like, “These two are a different species.”
0:38:31 That was my first observation.
0:38:34 Like I can’t believe I’m part of the same genome as these guys.
0:38:40 Anyways, the LA Rams are at can in force.
0:38:45 And it just struck me that marketing and brands are having a bit of a resurgence.
0:38:47 And people want to come here.
0:38:50 And I think it’s wonderful because the entropy,
0:38:53 the serendipity of running into people and saying,
0:38:55 “Hey, do you want to grab a latte?”
0:38:56 I ran into so many people.
0:38:59 I ran into former students and everything’s like,
0:39:00 they’re guard and the screen is down.
0:39:02 I ran into a former student who said,
0:39:03 “Do you want to grab a glass of water?”
0:39:04 I’m like, “Yeah, sure.”
0:39:07 And we caught up and it’s like the most lovely woman and she’s working at Roku.
0:39:09 And that happens like 10 or 20 times.
0:39:10 It’s really wonderful.
0:39:11 They do a great job.
0:39:13 The South of France is extraordinary.
0:39:17 But I think the biggest stories coming out of can will be amongst the following.
0:39:22 One, the Musk-Yakarino Apology Tour,
0:39:27 which I think is going to go over as well as if Millie Vanilly showed up at the Spotify beach
0:39:30 and rushed the stage and tried to sing.
0:39:35 I’ve been joking and I’ve been saying this all week,
0:39:37 which I’m sure didn’t help things.
0:39:40 You know, I’ve been a total whore speaking at everything.
0:39:41 These people love abuse.
0:39:43 I’m like, you’re all going to be out of fucking work.
0:39:44 Why are you here?
0:39:46 Anyway, and they keep inviting me back.
0:39:51 Anyways, I’m like, would anyone like to join me for a glass of rosé at Twitter Beach?
0:39:55 They’ve renamed it the Nazi porn de plage.
0:39:58 And so I just don’t think that’s going to work.
0:40:00 And the question I’ve been asking everyone at this conference is,
0:40:03 how are you more likely to get fired?
0:40:05 Okay, and I’ll give you three options.
0:40:09 Putting in the communal refrigerator, you know, in a snack room,
0:40:13 mushroom chocolates and saying property of Ed Elson,
0:40:16 referring to your assistant as jiggles,
0:40:23 or, or, or deciding to advertise on X where you might,
0:40:26 you might end up next to a swastika and then they call you in and say,
0:40:29 this is really bad for the Sesame Street brand.
0:40:31 Why did you decide to do this?
0:40:34 This is really bad for Cheerios to be next to a swastika.
0:40:36 And you go, well, it’s, it’s Twitter.
0:40:38 I thought we’d be fine.
0:40:39 Okay, you’re fired.
0:40:42 This is the dumbest brand.
0:40:46 If you’re looking, literally, if you’re looking to be fired and I said this,
0:40:50 be on the vision pro team or decide to spend money on Twitter.
0:40:53 I think the apology tour will probably be the biggest story that didn’t work.
0:40:55 Did people, sorry, did, did people agree?
0:41:00 I agree with you with that take, but do you think the advertising industry generally agrees?
0:41:02 Like, yeah, we’re totally staying away from X.
0:41:04 It’s just, it’s a porn site now.
0:41:05 I think people want to forgive Elon Musk.
0:41:06 It’s interesting.
0:41:08 Someone pointed out to me that he’s got a much stronger,
0:41:10 he’s got much more goodwill outside of the U.S.
0:41:14 So Twitter has declined by about 75% in revenue in the U.S.
0:41:18 It’s, it hasn’t declined at all in Japan and it hasn’t declined as much in Europe.
0:41:21 His brand, he’s much, actually, much better like outside of the U.S.
0:41:23 and is inside of the U.S.
0:41:26 Some people have said to be fair that small and medium sized business now
0:41:29 that the prices have come down because no one wants to advertise there,
0:41:33 that it is a good, a decent ROI medium for a quote unquote smaller brand
0:41:35 that’s maybe not as worried about brand safety.
0:41:40 I mean, keep in mind, if you’re a unilever, if you’re a unilever, you have a good job.
0:41:42 You basically just don’t want to get fired.
0:41:45 It’s like, okay, be smart, hire talented people, talented agencies,
0:41:48 which they have access to, and don’t fuck up.
0:41:52 And so these smaller brands probably can target more niche audiences.
0:41:57 It might have a second life there, but like, I just don’t think it works.
0:41:59 I think she comes across is just…
0:42:00 Was she there?
0:42:03 I was surprised he didn’t just send her, his pet CEO.
0:42:05 Well, but she’s not a CEO.
0:42:07 That’s why I call her his pet.
0:42:10 She’s a full-time cultist, apologist, trying to…
0:42:14 She’s literally the circus clown behind an elephant scooping up his shit.
0:42:18 And it’s just so pathetic to watch.
0:42:19 That’ll be the number one story.
0:42:22 The number two story is weird, and that is…
0:42:26 I’m friends with a guy named Michael Kasten, who is literally the mayor of Cannes.
0:42:28 He had a company called MediaLink that would basically…
0:42:30 It was kind of like the mafia.
0:42:34 If you were a small up-and-coming tech firm that wanted to sell into brands and everything,
0:42:37 he’d say, “Okay, give me $100,000, and I’ll take you to a boat party.”
0:42:40 And he’d throw parties, and the only people that could come in were clients of his.
0:42:44 It was a total mob thing, but he’s a nice man.
0:42:46 And for some reason, he’s always been really generous to me.
0:42:48 I’ve never been a client of his.
0:42:50 I’ve never paid him any money.
0:42:56 But I spoke on a panel actually with him actually just a few hours ago at that…
0:42:57 I think it was called the Collins House.
0:43:01 These two really nice people have a brand innovation firm, whatever it is.
0:43:04 Anyways, and so Michael’s always been really nice to me.
0:43:09 But Michael basically had a falling out with a UTA who bought MediaLink.
0:43:11 He was unceremoniously fired.
0:43:13 He’s then filed a defamation suit against them.
0:43:18 Michael is launching a new firm and decided to have the launch dinner on the deck,
0:43:22 overlooking MediaLink’s biggest party.
0:43:27 I think it’s literally like little Sarah crashes Rachel’s bot mitzvah because she wasn’t invited.
0:43:29 Well, how good was the dinner?
0:43:30 It was fine. I like Michael.
0:43:32 It’s a hotel to cap. It’s great.
0:43:37 But I immediately went down to see Lenny Kravitz play at the I Heart Media Party because that was cooler.
0:43:39 The party you weren’t invited to?
0:43:41 Oh, by the way, I should shout out.
0:43:42 Are you a security?
0:43:43 No, I should shout out.
0:43:45 I Heart Media could not be more generous and nicer to me.
0:43:49 And Bob Pittman and his assistant Sidney made sure that I was taken care of.
0:43:50 I was ribbing them.
0:43:53 Thank you. Thank you. Thank you.
0:43:55 All right, enough of that bullshit.
0:43:57 Because you complained that they listened to the podcast?
0:43:58 Yeah. What happened?
0:44:00 Ed, I’m not exaggerating.
0:44:01 Everyone listens to this thing.
0:44:03 Everyone’s coming up and going, how old is that?
0:44:05 How old is that Ed Elston?
0:44:07 And they’re like, you know, anyways.
0:44:14 But Michael Cassin, the question I asked, I said this on this panel, would a CEO with ovaries have done this?
0:44:17 I think there’s a difference between male and female leadership.
0:44:19 No woman would have done this.
0:44:23 It was just like, I literally said to them, this is the definition of a dick move.
0:44:24 Yeah.
0:44:25 You don’t get in the way there.
0:44:27 You don’t get in the way of their party.
0:44:28 Exactly.
0:44:30 Just whatever boss, compete against them, but don’t get in the way.
0:44:33 But anyways, I do like Michael and he’s been very generous to me.
0:44:42 And then I also think the story that is sort of overhanging everything, but may or may not be written, is that the most valuable company in the world isn’t here.
0:44:53 And I really appreciate that because Metta used to come here and pretend to be the partner to the media world and run their fingers through their hair before they shot them in the fucking face.
0:44:56 And NVIDIA could own the whole fucking thing.
0:45:07 I mean, NVIDIA could just say, I know, let’s take $100 million or yesterday’s share appreciation between 330 and 331 and own it.
0:45:19 And they’re not even pretending that they’re your friend because the reality is if you think about an industry that’ll probably are a job that’ll be disrupted at the low end, it’ll probably be like a low-level media planner.
0:45:23 I would think that AI is going to be able to just get all over efficiency around media planning.
0:45:28 Which I wanted to ask, are people concerned about that or how are they positioning AI?
0:45:37 Are they like, oh, this exciting new technology was so excited for how it’s going to enhance the advertising industry or are they all kind of freaking out like, oh shit, AI can do our jobs?
0:45:44 Well, when you’re in Cannes and everyone’s speaking publicly and no one wants to piss off a potential partner, they’re like, oh no, Google’s a partner.
0:45:47 We see a lot of opportunity to partner with Google.
0:45:51 I mean, they’re all such Vaseline over the lens.
0:45:55 I think that’s why I get invited here is I literally stand out because I’m like, are you fucking crazy?
0:46:01 Come on, they’re literally serving you your last meal and asking you to pay for it.
0:46:07 Anyway, everything here is sunshine and roses and rainbows, right?
0:46:14 That brands are coming back, media spending is up, and AI is going to be good for us.
0:46:18 So it’s definitely not, it’s a celebration.
0:46:22 This is more a convocation and a gore and a chance for people.
0:46:26 And I think this is really important to see, touch, and feel each other.
0:46:29 And I think that we’re desperate for that coming out of COVID.
0:46:31 And it’s in a beautiful part of the world.
0:46:34 But I think Nvidia, I feel like, is overhanging everything.
0:46:37 Any discussion of TikTok and the potential ban?
0:46:39 Was anyone worried about that?
0:46:42 It’s interesting, TikTok has a pretty big presence here.
0:46:45 And maybe because I’m not that dialed in, I haven’t heard a lot.
0:46:50 TikTok doesn’t invite me to their TikTok beach, surprisingly enough.
0:46:54 So I haven’t heard, we didn’t talk a lot about TikTok.
0:46:56 It’s interesting you say that, not a lot of people brought up TikTok.
0:47:00 Everyone’s talking about AI, full stop.
0:47:03 And also just sports, and that was a big theme here.
0:47:05 Just the power of sports marketing.
0:47:09 But no, I haven’t heard a lot of people talk about TikTok.
0:47:13 But I’ve noticed two years ago, either my brand is waning
0:47:15 or people are worried about what I’m going to say.
0:47:18 But I was invited to three panels this time.
0:47:21 I usually get invited to several panels every day.
0:47:24 So maybe I’m losing my luster.
0:47:25 I don’t know.
0:47:27 I probably fucked up doing this pot with you.
0:47:28 That’s probably what this all says.
0:47:29 No, it’s not that.
0:47:32 I think it’s probably because you’re telling everyone that brand is dead.
0:47:34 They still seem to just lap it up though.
0:47:35 They just love it.
0:47:37 They just love getting slapped.
0:47:39 They’re like, “Thank you, sir. May I have another?”
0:47:44 All right, let’s take a look at the week ahead.
0:47:48 We’ll see data on the personal consumption expenditures index for May.
0:47:50 And we’ll also see earnings from FedEx and Nike.
0:47:52 Do you have any predictions for us?
0:47:55 Well, I’ve just been thinking a lot about the exchange wars.
0:48:01 I think it’s fascinating this Texas exchange and Raspberry Pi going public on the LSE.
0:48:02 I think you’re going to see…
0:48:03 I think the biggest…
0:48:04 Talked about this.
0:48:07 The biggest IPO of this year is going to be Sheehan on the LSE.
0:48:13 And then the biggest IPO of 2025 is going to be SpaceX on the Texas exchange.
0:48:16 And I think it’s going to set off a bit of a war.
0:48:17 I think it’s healthy.
0:48:19 I think it’ll bring down costs.
0:48:22 It’s good that the NYC and the NASDAQ are going to have competition.
0:48:26 But my prediction for 2025 is what I loosely refer to as exchange wars.
0:48:33 As the biggest IPOs of 2024 and 2025 are on the LSE and this new Texas exchange,
0:48:37 specifically Sheehan and SpaceX respectively.
0:48:41 This episode was produced by Claire Miller and engineered by Benjamin Spencer.
0:48:43 Our associate producer is Alison Weiss.
0:48:45 Our executive producer is Jason Stavins and Catherine Dillon.
0:48:49 Mia Silverio is our research lead and Drew Burrs is our technical director.
0:48:52 Thank you for listening to ProfG Markets from the Vox Media Podcast Network.
0:48:57 Join us on Thursday for our conversation with Ben Miller only on ProfG Markets.
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Scott shares his thoughts on the new “Netflix Houses” and why he thinks Netflix has some of the most valuable IP in the entertainment industry. Then Scott talks about his experience at Cannes Lions and what the festival has demonstrated about the state of the advertising industry.
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