Upgrade

00:00:00 ◼   ► [Music]

00:00:09 ◼   ► From Relay FM, this is Upgrade, Episode 472 for August 14th, 2023.

00:00:17 ◼   ► This episode is brought to you by ExpressVPN and ZocDoc.

00:00:20 ◼   ► My name is Mike Hurley and I'm joined by Jason Snow. Hi, Jason Snow.

00:00:24 ◼   ► Hi, Mike Hurley. How are you?

00:00:26 ◼   ► I dated the show today, which is a new thing to try.

00:00:29 ◼   ► I don't know what you think about that.

00:00:31 ◼   ► I mean, that's today. You're right. Is it good?

00:00:34 ◼   ► I mean, it means that if somebody listens later, they won't be confused about what we're talking about and think that it's a current episode.

00:00:39 ◼   ► Yeah. Well, try it out. Sometimes I might say it, sometimes I might not.

00:00:43 ◼   ► Summer of fun, you know what I mean? Sometimes he puts dates on the episodes.

00:00:47 ◼   ► You know where you can find the summer of fun in a calendar.

00:00:52 ◼   ► Let's start with a Snow Talk question. It comes from Kevin.

00:00:55 ◼   ► Kevin wants to know, Jason, if you were a baseball player, what would your walk-up song be?

00:01:01 ◼   ► Didn't we do this already? I feel like we did. I feel like I'm going to make the same jokes here.

00:01:06 ◼   ► We are 472 episodes in. We've probably been doing Snow Talk for like 300 episodes at this point.

00:01:13 ◼   ► There are going to be questions that come up more than once. It's just life.

00:01:17 ◼   ► I'm waiting for Kate, the official historian of Upgrade, who has just said that they feel like we did this episode.

00:01:25 ◼   ► Here's the thing. If neither of us can be sure and neither of us can remember, like no one can remember except you what it was, then it's a perfectly good question to do again.

00:01:32 ◼   ► But the listeners could do it. So the short version is, my favorite answer to this question is my friend Phil Michaels who said that it would be the national anthem of the Soviet Union.

00:01:40 ◼   ► I just think that's amazing. I think an old wrestling reference, but like, whoa, what satirical majesty that would be.

00:01:47 ◼   ► I believe I established in the Macworld Pundit Showdown podcast of many years ago that Don't Dream It Over by Crowded House is a great walk-up song.

00:01:58 ◼   ► Also a song you can have played at your funeral. So, you know, double duty there.

00:02:03 ◼   ► But what I really want to say in this segment since we reused a question is there's been a little humidity over the weekend.

00:02:11 ◼   ► It was warm, but the extra humidity here made it feel even warmer.

00:02:16 ◼   ► And I went to a baseball game yesterday and it was warm and living in the Bay Area has completely ruined me to withstand high temperatures.

00:02:24 ◼   ► So anyway, it was just a little extra humidity. I think some of the monsoonal moisture is coming up from the south, making it a little bit moister here in the Bay Area.

00:02:32 ◼   ► And that's my weather segment that happens when we repeat a Snell Talk question.

00:02:38 ◼   ► Well, here's the thing. So here's the thing, all right, so there's been some detective work occurring in the Discord.

00:02:42 ◼   ► Zach Knox has consulted, underscore David Smith's Pod Search and searched for the term "walk-up" and it has not returned an answer.

00:02:52 ◼   ► Now what you got to say for yourself?

00:02:54 ◼   ► What I got to say is that probably the whisper algorithm changed it to something like "waffle."

00:03:00 ◼   ► Yeah, potentially. But what I'm saying is there's no history of it. But like I said, hang on a second.

00:03:08 ◼   ► Stop the presses. Underscore David Smith has appeared in the Discord.

00:03:13 ◼   ► Oh no, he said his name and he appeared!

00:03:15 ◼   ► And episode 187.

00:03:18 ◼   ► I just searched for "walk-up" and there it is, 187.

00:03:23 ◼   ► And here we go, at 2 minutes and 20 seconds. I think about my friend Philip Michaels has explained that his "walk-up" music would be the Soviet national anthem.

00:03:31 ◼   ► Yes, absolutely.

00:03:32 ◼   ► I think that's a wrestling reference, Mike. Wow, that's wild. Okay, so it's in there.

00:03:38 ◼   ► And it's got to be "Don't Dream It's Over" by Crowded House, right? Like, I think that would have to be it.

00:03:42 ◼   ► That's my walk-up music for the Pundit Showdown podcast when we did that.

00:03:45 ◼   ► See, so what I did is I didn't remember for sure, but I remembered what my answer was and that's how I knew. And that's why I have to tell you, first off, thanks to Underscore, thanks to Kate, proven right yet again, and again, a little humid this weekend. That's what I'm saying. Humid.

00:04:03 ◼   ► I'm standing by my inclusion of this question.

00:04:08 ◼   ► Okay.

00:04:09 ◼   ► Because I just feel like only you are the one to remember that it's been recorded, like you've answered it before. And it was like, and as I said, this was like 250 episodes ago, nearly 300 episodes ago, 187. So I think it's okay to ask again.

00:04:28 ◼   ► Alright, so is that the statute of limitations, especially if I give the same answer?

00:04:32 ◼   ► Uh-uh, nope. There is no statute of limitations because I won't allow it. Denied.

00:04:37 ◼   ► Well, no, but it would work in your, okay, let me explain this. It would work in your favor if there were a statute of limitations because we could say after 200 episodes, they all reset and they can be asked again.

00:04:45 ◼   ► Right, but I don't want it to be fixed to that because what if I want to ask you a question that was asked 150 episodes ago? So like, I'm not going to put a number on this. I'm just going to do it every now and again. That's the rule.

00:04:59 ◼   ► Okay.

00:05:00 ◼   ► If you'd like to send us a Snell Talk question of your own, could be new or could be old, go to upgradefeedback.com and you can send in a Snell Talk question to help us open the show.

00:05:09 ◼   ► I have some follow up for you, Jason Snell.

00:05:12 ◼   ► Oh, that's great.

00:05:13 ◼   ► Brian writes in with a question.

00:05:15 ◼   ► Regarding the technological 23rd century Star Trek thing comment from the university president, did you potentially consider that he may have been referring to the technological pitch that Apple is making, not necessarily the financial innovation?

00:05:29 ◼   ► Maybe Apple was pitching the Vision Pro and filming and showing games in VR and AR in the near future and using the PAC-12 as a testbed.

00:05:37 ◼   ► The university president may have seen that as part of the presentation and equated it with technology from the future.

00:05:45 ◼   ► So this is Michael Crow, the president of Arizona State University, who apparently has quite a reputation in academic circles. Not necessarily a great one.

00:05:53 ◼   ► So Brian, I think he was referring to streaming, honestly. Not the fact that they were going to do a rev share deal, but that they had a streaming plan and they were going to take everything and build a streaming package about it.

00:06:11 ◼   ► However, now that you mentioned the idea of the Vision Pro, it wouldn't surprise me if part of their pitch was-

00:06:20 ◼   ► Well, it certainly is Star Trek-y, right? Like, if you saw that-

00:06:24 ◼   ► It would not surprise me that they were saying, "Look, we're going to be able to do some VR with your games. We're going to have immersive game stuff that you're going to be able to do over the next five years of the contract," or whatever it was.

00:06:38 ◼   ► And that that was part of their pitch, too. So, again, technological 23rd century Star Trek thing, we don't actually know.

00:06:45 ◼   ► But yeah, honestly, if I were Apple, why would I not pitch that? This is part of our pitch to you, is that you're going to be our testbed for this amazing breakthrough stuff, and you're going to put the competition to shame with how that first super immersive sideline view of a football game is going to be Oregon versus Washington or something like that, which at the time were part of the pitch.

00:07:09 ◼   ► And then they would be like, "This is great," except two of them didn't and it all fell apart. So, yes, maybe so. Maybe that is part of what Michael Crow was talking about.

00:07:19 ◼   ► I just enjoy- I love that quote because it's this incredible combination of enthusiasm and lack of knowledge. I just think it's kind of amazing, right?

00:07:29 ◼   ► I'm not going to get into the detail, but suffice it to say, he doesn't say he was blown away by it, but he was obviously blown away by it because he referred to it as a 23rd century Star Trek thing.

00:07:39 ◼   ► So, obviously, he was very impr- and I will say Michael Crow, big on being seen as an innovative thinker in academia. That's his thing.

00:07:47 ◼   ► They did a whole new leadership model for athletics that fell apart, did not work, but he was innovating. And so, he's exactly the kind of person to whom that pitch would be addressed and that would work for.

00:08:01 ◼   ► And it did work for him. He was ready to sign on the dotted line. It just didn't work out that way.

00:08:05 ◼   ► So, Brian, I do think that- I would not be surprised if Vision Pro and being part of the VR future was part of the pitch, but it could have also- I wouldn't put it past him that he was just sort of saying, "We're just going to be on streaming and it's going to be very futuristic in that way," instead of being on ESPN like everybody else.

00:08:25 ◼   ► MLS season pass subscribers have doubled since Messi joined Into Miami. This came from Into Miami owner Jorge Mas. Quote from 9to5Mac, "Industry sources have indicated that MLS season pass was close to reaching the 1 million subscriber milestone before Messi's arrival. Factoring that in today's announcement of subscribers doubling would suggest that MLS season pass now has more than 2 million pay-in subscribers."

00:08:50 ◼   ► Little quick math there, 1 times 2.

00:08:53 ◼   ► Hey, look, someone's got to do it. You know what I mean? What do you think about 2 million as a number for MLS season pass?

00:09:00 ◼   ► I think it's twice as good as 1 million. 1 million. I mean, here's the thing is I don't know the size of the MLS audience. 1 million for everything is interesting.

00:09:15 ◼   ► Apple said they were happy with it. MLS seemed to be happy with it. It's a starting point, but I do think that if you look at that Pac-12 negotiation, that was one of the things that was part of the argument is are we going to get to 1 million or 2 million or 5 million?

00:09:32 ◼   ► Because if we can get 5 million, then we're making a lot of money, but if we get 1 million, we are not. So I don't know. I honestly, I don't know. I think what it does show you is that the Apple being involved in the signing of Messi was a good idea. Right?

00:09:52 ◼   ► Yeah.

00:09:53 ◼   ► It's a really good idea.

00:09:54 ◼   ► Yeah. It was a great idea because it, I mean, look, will these sustain? Probably not. Like the churn rate on this, I reckon will be pretty high, but at least they got, they're going to have more than they would have had otherwise. Right?

00:10:08 ◼   ► Like it's not going to go back down to a million most likely. Maybe it's like million five or something like that. And that would still be a great reason to have brought him on.

00:10:18 ◼   ► I would imagine the metrics are also pretty interesting. Right? Because I think Messi has obviously fans in the U S but has fans all over the world. And so is there, you know, are, are, is this a much more international audience than was in the first million? Like maybe.

00:10:36 ◼   ► Yes. I mean, I think, I think part of that is true. Uh, I believe that must said that we've spoken about this before, uh, that it was, there was a lot more Spanish language than before outside of America, I think.

00:10:54 ◼   ► Um, and so like there's been a, there's been a shift there as well.

00:10:59 ◼   ► And all the broadcasts for those who don't know all the broadcasts on MLS elite pass are in English and Spanish. And then the ones in Canada are also in French. Um, and this is, this is really good, right? Because they've got Spanish language broadcasts available for, uh, Latin America.

00:11:19 ◼   ► I mean, not Brazil, but like Argentina where messy is from Spanish speaking country. So they've got it like done, like you can watch on Apple, uh, Apple's platform and see the games in Spanish, which is huge. Plus throughout the rest of, um, Spanish speaking Americas and Spain.

00:11:37 ◼   ► Uh, it's, it's good. There's a, there's a big audience in Spanish speaking Americas for, uh, for messy, I would think. And it's accessible and for MLS, right? And it's accessible because they went to the trouble of generating the Spanish language version in parallel with the English language version script.

00:11:54 ◼   ► And then following on from this Apple is working on a documentary series about messy coming to America. This is now the second documentary project feature him. Uh, the first was a previously announced project of his road to a world cup win spoilers for the world cup, uh, or for the Lana messy documentary.

00:12:12 ◼   ► He's his team. He was on the world cup winning team, uh, the guitar will cup. So they were doing that already. Um, and now they're doing one about him kind of like how he's settling in. I imagine him eating lots of waffles and stuff like this is what I think is going to happen.

00:12:26 ◼   ► Right. It's like going to his first Walmart, stuff like that. That's what I think it's going to be sure. Messy in America. Yeah. Right. Yeah. Yeah. I'm sure he's down with the people and not like just chilling in his, uh, palatial Miami estate.

00:12:39 ◼   ► No, no, no. I mean, he's got to fly. So, you know, he's got to fly to like Dallas and then he's like looking at cows and having a steak and to be honest and pumping some oil out of the ground and you know, cowboy riding, riding a horse.

00:12:55 ◼   ► It could be, he probably knows how to ride a horse, right? He's probably out on the, the, the pompous and Patagonia doing cowboy stuff, right? He's from Argentina. I mean, I couldn't, I literally know nothing about him other than his soccer.

00:13:09 ◼   ► So I couldn't say if he's got my apologies to Argentina, those are the facts I know among the, among the facts I know about Argentina. So he could potentially have written, learned to ride a horse in Argentina. He might be a cowboy type or he might be a more refined gentleman. I don't know. I honestly don't know.

00:13:28 ◼   ► This one's probably, I don't know if it's going to make you more mad than you already were, but just like as a point to wrap around the upcoming $130,000 electric Cadillac Escalade will not feature CarPlay GM confirmed to the verge.

00:13:41 ◼   ► Obviously this is the case because it's a GM vehicle and they've already said this is going to happen, but it's worth pointing out. This is a new EV announced post that announcement and they confirmed directly to the verge that it will not feature CarPlay or Android Auto.

00:13:54 ◼   ► That will be the Google like backed system, which includes like Google maps and stuff like that. But is there a good luck payment system? Yeah. Good luck. So a lot of money to not offer people all the options that they might want.

00:14:07 ◼   ► And made by Relay FM Discord member Spol inspired by our chapter shuffling conversation from last week is a service called Pod Shuffle. There's a link in the show notes to Pod Shuffle. It's a little bare bones right now. And Spol did say like, they said I could talk about it on the show.

00:14:27 ◼   ► They have not confirmed that it will work when put under load from listeners, but basically you can give the URL of an MP3 so you can like right click on the URL on any of our shows and you can submit it to this service and it will take the MP3, reorder the chapters and give you something out for you to download at the end of it.

00:14:47 ◼   ► So you can take any show with chapters in, put it into the service and it will put the chapters back for you in a random order for your listening pain. Seems like a bad idea.

00:14:59 ◼   ► Yep. That was the whole point last week is that it was a bad idea. Not that we wouldn't do it as a summer of fun at some point because it would be funny to do it that way. But now you can just do it with anything and be terrible to yourself and others. So great. Thank you Spol for it's amazing that you did this terrible thing.

00:15:16 ◼   ► Yes. This seems quite complicated. I don't know how it works and I am convinced it's going to spit out either a large hosting bill or make a server break. But I did confirm I could put it in the show for that reason. So I guess get it while it's hot I suppose.

00:15:32 ◼   ► Okay.

00:15:34 ◼   ► This episode is brought to you by ExpressVPN. I don't know if you ever noticed when you open an incognito window but there's this little note that says your activity can still be visible to your employer, your ISP or something like that.

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00:16:37 ◼   ► I use ExpressVPN on hotel wifi a lot if I don't have my own credentials for a network. I just want to have that extra peace of mind. But more than anything I use it to be able to browse like I'm at home when I'm away. I want to catch up on the show that I'm watching but the service that I'm using doesn't work.

00:16:56 ◼   ► We just had this right now where Adina's mom is visiting. She lives in Romania and she can't access her shows on HBO Max which is a thing that's in Romania but not in the UK. So we set her up with ExpressVPN so she could continue watching the shows that she was watching because now she can tell HBO Max that she's actually back in Romania again. Even though she isn't.

00:17:16 ◼   ► So stop letting people invade your online privacy. Protect yourself at ExpressVPN.com/upgrade. That's E-X-P-R-E-S-S-VPN.com/upgrade to learn more. That is ExpressVPN.com/upgrade to get three extra months for free. Our thanks to ExpressVPN for the support of this show and Relay FM.

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00:19:43 ◼   ► Yeah, I mean, let's leave the name aside, because I think that that's pointless.

00:19:47 ◼   ► But the idea that this is a big change is interesting.

00:19:51 ◼   ► The way he phrases it is fascinating. It reminds me of the conversation

00:19:55 ◼   ► we had about iPhone buttons.

00:19:59 ◼   ► They were rumored that they were going to remove the moving buttons from the iPhone, the side of the iPhone,

00:20:03 ◼   ► this year and replace them with pressure-sensitive ones that don't move, because there's a lot of advantages

00:20:07 ◼   ► to not having a button that moves, because there's less

00:20:11 ◼   ► progress and less failure, theoretically, because it just doesn't move.

00:20:15 ◼   ► No moving parts. Apple loves that when there are no moving parts.

00:20:19 ◼   ► And they built it in a test version, and it failed. And they were like,

00:20:23 ◼   ► "All right, let's go back to the old way." And the way

00:20:27 ◼   ► Germin phrases this is they're not sure if they're going to do this or not.

00:20:31 ◼   ► Because it will break compatibility with existing bands, and will it

00:20:35 ◼   ► work? The existing bands are not just

00:20:39 ◼   ► something that many of us have spent a lot of money on. It's tried and

00:20:43 ◼   ► true technology. Whatever

00:20:47 ◼   ► weaknesses it might have, they haven't replaced it. There haven't been

00:20:51 ◼   ► big gates about it. It works.

00:20:55 ◼   ► It's a

00:20:59 ◼   ► risk. It's a risk changing to a new system, and you want to test it out.

00:21:03 ◼   ► I can totally see their point. If you look at an Apple Watch from the side,

00:21:07 ◼   ► especially if you have a band that is not the same color as the body of your watch, like I've got the

00:21:11 ◼   ► orange sport band on right now, I know it doesn't look

00:21:15 ◼   ► like a lot, but that band insert, by percentage,

00:21:19 ◼   ► is a large, surprisingly large, it's like, whatever, 10%,

00:21:23 ◼   ► I don't know, percentage of the volume is being handled by

00:21:27 ◼   ► this band mechanism. So I totally get them

00:21:31 ◼   ► saying, "Ugh, we want that space back," because they have so much

00:21:35 ◼   ► limited space, and if they're trying to make it thinner, there's even more space pressure.

00:21:39 ◼   ► So I can see it.

00:21:43 ◼   ► Honestly, as somebody who has lots of bands,

00:21:47 ◼   ► there will be an outcry, but after 10 years of band

00:21:51 ◼   ► compatibility, I thought they'd break compatibility after five years. We could probably go back

00:21:55 ◼   ► to early episodes of Upgrade and find out what I actually theorized about it,

00:21:59 ◼   ► but I have been saying for a while now, I was very much on the idea

00:22:03 ◼   ► that they wouldn't break compatibility for a while, because they're going to want to make people feel

00:22:07 ◼   ► comfortable in the ecosystem and easy to upgrade and all of that,

00:22:11 ◼   ► but after 10 years, I feel like, if you break band compatibility,

00:22:15 ◼   ► I might complain about it, but I don't have much of a leg to stand

00:22:19 ◼   ► on at that point. I gave you 10 years. Also, I

00:22:23 ◼   ► wouldn't be surprised if what they do is what they did with the iPhone X, which has come

00:22:27 ◼   ► up with a new, high-end design that's cutting edge, that breaks

00:22:31 ◼   ► compatibility, and also have a Series

00:22:35 ◼   ► X or a Series 9. Well, I guess there's a Series 9.

00:22:39 ◼   ► Series X. And then there's this other thing. It's clearly the future

00:22:43 ◼   ► and that's where it's going, but if you want to buy an Apple Watch today

00:22:47 ◼   ► and keep your bands, you can do that. We'll let you do that. The iPhone

00:22:51 ◼   ► 8. I had three different

00:22:55 ◼   ► ideas at the same time in my brain. Because I think it's complicated to add another one

00:22:59 ◼   ► because of the Ultra. So what if they did this to the Ultra first?

00:23:03 ◼   ► But then I wonder if you would want magnetic bands

00:23:07 ◼   ► on the Apple Watch Ultra, because it's meant to be extreme, so it should be

00:23:11 ◼   ► more rugged. And I feel like the Apple Watch Ultra, I

00:23:15 ◼   ► don't know if that would be able to go to a magnetic band system.

00:23:19 ◼   ► Right, given the way it's pitched. So I think they could do it. I think they could

00:23:23 ◼   ► totally do it where they still sell old-style. I mean, maybe it's not a new generation,

00:23:27 ◼   ► but maybe it is. But certainly they'll keep around an old-style

00:23:31 ◼   ► watch in the product line, and then they'll have this new watch and maybe it is

00:23:35 ◼   ► more expensive, but not an Ultra. And there's just

00:23:39 ◼   ► a little added complexity in the line, but they're giving people a chance to either

00:23:43 ◼   ► make the step or not. What I'm saying is that I thought the iPhone

00:23:47 ◼   ► X was a pretty good transitional thing, where they're like, "Look, I know this is way more expensive, but

00:23:51 ◼   ► we're also making a traditional iPhone for you." And this is the future, but we

00:23:55 ◼   ► know that right now not everybody's going to do it, and we still want you to be able to buy a phone.

00:23:59 ◼   ► And then over time, the old model sort of fades into the

00:24:03 ◼   ► background, and then it's sort of up to the user to decide when do you let go of those

00:24:07 ◼   ► old watch bands for this shiny new

00:24:11 ◼   ► thing. Because it's going to come. They could bring the

00:24:15 ◼   ► Edition branding back, right? Like Apple Watch Series 10

00:24:19 ◼   ► Edition, and the Edition could be this fancy. My point is that they've had

00:24:23 ◼   ► Series 10 could have different

00:24:27 ◼   ► products within that series, and one of those could be the

00:24:31 ◼   ► more future-facing. I'll just put my

00:24:35 ◼   ► point, how I feel about this. If it means they will change the design

00:24:39 ◼   ► of their Apple Watch, I will re-buy bands as many

00:24:43 ◼   ► as they want. I desperately want the design language

00:24:47 ◼   ► to change. And so I would

00:24:51 ◼   ► look, as well, no one expected it to last this long.

00:24:55 ◼   ► That these bands would continue. When they changed the physical sizes of them

00:24:59 ◼   ► for the Series 4, that felt like the obvious time. They still didn't do it.

00:25:03 ◼   ► I get if you have a big stack

00:25:07 ◼   ► of Apple Watch bands, but no matter, like I'm talking

00:25:11 ◼   ► to you listening, no matter what you put aside what you want to happen, do you really

00:25:15 ◼   ► expect that they would never do this?

00:25:19 ◼   ► In all of history, that they will never change the band connection

00:25:23 ◼   ► of the Apple Watch. You must know that it's going to happen. I understand

00:25:27 ◼   ► if you invested a lot of money into this system, but it was always

00:25:31 ◼   ► going to happen. Just because it hasn't, doesn't mean it would never.

00:25:35 ◼   ► And so I feel like anytime is as good as any

00:25:39 ◼   ► to change it, but if they're going to come along with a brand new design, yes please

00:25:43 ◼   ► change it. And I like the idea of a magnetic system to be honest.

00:25:47 ◼   ► I think Apple has shown that they really understand how to make strong magnets at this point.

00:25:51 ◼   ► Right? Like with MagSafe and I use the

00:25:55 ◼   ► magnetic band on my Apple Watch, like the magnetic link. It never comes off.

00:25:59 ◼   ► It only ever comes off when I want it to. It never falls off.

00:26:03 ◼   ► I never catch it and pull the watch off or anything. So I think it could be kind of interesting

00:26:07 ◼   ► as a way to take the watch off, pop it on a new one.

00:26:11 ◼   ► I think it could be kind of cool.

00:26:15 ◼   ► I can go back. I'm on a pod search from David Smith.

00:26:19 ◼   ► Watch band compatibility we have been talking about since episode

00:26:23 ◼   ► 112. Geez. So what year, when was that?

00:26:27 ◼   ► Like what year was that? Well that was, what,

00:26:31 ◼   ► that was probably 16?

00:26:35 ◼   ► 112 you said? That was, yeah, October 2016.

00:26:39 ◼   ► 2016 is post the

00:26:43 ◼   ► draft for that event, right?

00:26:47 ◼   ► And we were debating whether they would keep

00:26:51 ◼   ► watch band compatibility. That was a very early draft

00:26:55 ◼   ► in fact. So yeah, I mean, I agree with you.

00:26:59 ◼   ► I will feel the pain like everybody else if they break band

00:27:03 ◼   ► compatibility, but I feel like it's been a good run, right? Honestly

00:27:07 ◼   ► it's a little bit like saying, this just happened the other week where somebody was like

00:27:11 ◼   ► so and so tragically died of old age at 92.

00:27:15 ◼   ► And I'm like, tragically? Like,

00:27:19 ◼   ► they had a really good run and they died in their sleep of old age in their 90s?

00:27:23 ◼   ► It's like, I don't know. I don't know. He had a good run, right?

00:27:27 ◼   ► They had a good run and no one lives forever so

00:27:31 ◼   ► that was a pretty good like, sign me up for something like that. That super longevity

00:27:35 ◼   ► and then gentle farewell. That's how I feel

00:27:39 ◼   ► about the Apple watch band thing, honestly. We've had

00:27:43 ◼   ► a great run. It's been way longer than I ever anticipated. I am still wearing

00:27:47 ◼   ► this orange watch band that I'm wearing is really old.

00:27:51 ◼   ► I've worn it on many watches for a very long time.

00:27:55 ◼   ► I feel fortunate to have gotten to this point, but if they come up with a super stazzy new watch

00:27:59 ◼   ► that looks different and works different and has a different connection,

00:28:03 ◼   ► I will be sad. Remember, you know, don't

00:28:07 ◼   ► be sad that it's over. Be happy

00:28:11 ◼   ► that it happened. And by it, I mean your watch bands.

00:28:15 ◼   ► It's better to have watched and banded than have not watched

00:28:19 ◼   ► and banded at all. You know what I mean? Also,

00:28:23 ◼   ► just keep the watch that you have of all the bands you have for like three more years

00:28:27 ◼   ► and don't buy any more bands, right? And then if it's that much of a problem.

00:28:31 ◼   ► By then, somebody on Amazon will have made a magnetic connector

00:28:35 ◼   ► to band connector adapter that will be

00:28:39 ◼   ► deeply unsatisfying. You know what it will be? It will be like, you know, have you ever

00:28:43 ◼   ► seen those Apple Watch rugged cases? Have you ever seen those? That you can get

00:28:47 ◼   ► a case to put on the Apple Watch? It would be one

00:28:51 ◼   ► of those with the lug things on the ends.

00:28:55 ◼   ► Put it in a little plastic box and you can connect your watch bands to it. All that thinness that you

00:28:59 ◼   ► got from this new fancy watch? Gone. Forget about it. Watch band.

00:29:03 ◼   ► But this isn't all that's coming in the Watch 10. Micro LED display

00:29:07 ◼   ► which would see better colors and clarity and apparently

00:29:11 ◼   ► blood pressure monitoring as well as part of this device.

00:29:15 ◼   ► I love the argument that

00:29:19 ◼   ► Apple tests a lot of new cutting

00:29:23 ◼   ► edge features on the Apple Watch.

00:29:27 ◼   ► Which I think is true. The idea that

00:29:31 ◼   ► you, you know, they started with OLED on the Apple Watch

00:29:35 ◼   ► and eventually came to the iPhone. It's going to come to the iPad. The LPTO?

00:29:39 ◼   ► Is that LTPO? The display

00:29:43 ◼   ► that allows for always on was also came on the Apple Watch first.

00:29:47 ◼   ► Yeah, and there are lots of other examples. There was a piece about this that I can't find now that

00:29:51 ◼   ► somebody wrote about this that basically said the test bed for Apple's tech is now more the

00:29:55 ◼   ► Apple Watch than the iPhone and I think that there's some truth

00:29:59 ◼   ► in that and it's because it's a smaller number. It's a smaller thing.

00:30:03 ◼   ► And they can try this stuff out. So micro LED, like we've been hearing

00:30:07 ◼   ► about micro LED for a long time. It is superior. It's literally

00:30:11 ◼   ► LED controls pixel by pixel. So it gives you

00:30:15 ◼   ► that OLED-like control over the image and the blackness

00:30:19 ◼   ► and all of that and is

00:30:23 ◼   ► in many ways superior to OLED. But is a

00:30:27 ◼   ► cutting-edge technology that just sort of isn't there yet. And so if Apple would roll it out

00:30:31 ◼   ► on a display, their smallest display, right, which is the Apple Watch,

00:30:35 ◼   ► and start it there and then see where and learn,

00:30:39 ◼   ► right, they'll learn, they'll ship it and learn and grow and then end up with

00:30:43 ◼   ► maybe moving it to other devices down the road, Apple or iPhone,

00:30:47 ◼   ► Apple Vision, who knows what else. So that's

00:30:51 ◼   ► fun. And just like I said, it's a

00:30:55 ◼   ► fun. And just like we were talking last week about the new iPhone Pro

00:30:59 ◼   ► and sort of got ourselves excited about maybe this is that sea change

00:31:03 ◼   ► where it really feels like a very different phone than the last couple of years.

00:31:07 ◼   ► As we talk about features for this rumored watch upgrade that

00:31:11 ◼   ► Mark Gurman wrote about, I get that same sort of feeling, which is like, okay, you

00:31:15 ◼   ► put enough of this stuff together and you really can make a case. Like this is

00:31:19 ◼   ► a very big upgrade. And every so often you need to do that. You can, iteration

00:31:23 ◼   ► is great, but every so often you need to say, we're making a break, we're

00:31:27 ◼   ► taking a quantum leap, here's this big new thing. I think that gets people excited.

00:31:31 ◼   ► So there were some questions in the Discord, so I have no doubt that listeners will have

00:31:35 ◼   ► the same of like, how on earth does blood pressure monitoring, like analysis

00:31:39 ◼   ► work on a device like this? Because we've all been to the doctor and

00:31:43 ◼   ► they put the big cuff on you and squeeze your arm, right? So I remember Samsung

00:31:47 ◼   ► back in 2020 introduced this to some of their watches.

00:31:51 ◼   ► I'll read from their press release. The device measures blood pressure through pulse

00:31:55 ◼   ► wave analysis, which is tracked with the heart rate monitoring sensors.

00:31:59 ◼   ► The program then analyzes the relationship between the calibration value

00:32:03 ◼   ► and the blood pressure change to determine blood pressure to ensure accuracy users

00:32:07 ◼   ► are required to calibrate their device at least every four weeks. It's not to say that we use

00:32:11 ◼   ► the same technology exactly that Samsung uses, but just that like

00:32:15 ◼   ► this idea exists, right? The idea of blood pressure monitoring

00:32:19 ◼   ► on a smartwatch. Also, if you break band compatibility,

00:32:23 ◼   ► you once again open yourself up to the possibility

00:32:27 ◼   ► that you could offer, at least not if every band

00:32:31 ◼   ► was a smart band, but if some bands were smart bands, where

00:32:35 ◼   ► there is an interconnect beyond the thing that

00:32:39 ◼   ► holds it on the watch that is providing power to

00:32:43 ◼   ► a sensor that's in the band, because then you have potentially more coverage.

00:32:47 ◼   ► And I don't know how that works, and yeah, maybe that band is, maybe it's untenable,

00:32:51 ◼   ► but like I'm just thinking out loud here, the idea that you have the ability

00:32:55 ◼   ► to do some other stuff with that watch band if you want to, even if it's

00:32:59 ◼   ► some simple stuff to aid in the accuracy of your

00:33:03 ◼   ► blood pressure sensor or whatever, I don't even know.

00:33:07 ◼   ► I was thinking, right, like when I read the blood pressure monitoring thing, and I was just like, in my mind, I was like,

00:33:11 ◼   ► can you imagine if for this watch, just like big watch, if they could also have

00:33:15 ◼   ► nailed or do nail the glucose monitoring thing that we spoke about at the same time,

00:33:19 ◼   ► can you imagine, this would be like, they would not be able

00:33:23 ◼   ► to stock enough of these things. That's Apple's goal,

00:33:27 ◼   ► whether they can reach it or not, I mean, it's very hard to do that kind of technology on a device

00:33:31 ◼   ► like this, but that's certainly Apple's goal, is that if you

00:33:35 ◼   ► ask them, what does this look like in 10 years, what does your health initiative look like in 10 years,

00:33:39 ◼   ► they're like, we should be able to non-invasively monitor

00:33:43 ◼   ► so many things about you in order to warn you or keep you

00:33:47 ◼   ► on track or make you healthier or pass information to your doctor.

00:33:51 ◼   ► And that's why glucose monitoring is something that they've invested a huge amount

00:33:55 ◼   ► of money in and it just sort of hasn't panned out yet, but it may at some point.

00:33:59 ◼   ► Sometimes I wonder about, like, would they

00:34:03 ◼   ► either work with partners or build some of their own sensors? I think about the AirPods

00:34:07 ◼   ► sometimes, about like, we've talked about using AirPods as temperature

00:34:11 ◼   ► sensors and putting other sensors inside AirPods so when you're wearing your AirPods

00:34:15 ◼   ► you've got a second point of monitoring on your body in addition to the Apple Watch.

00:34:19 ◼   ► I don't know, it's all, I think this is their dream.

00:34:23 ◼   ► I have not seen any reporting that their glucose monitoring tech has actually come to the point

00:34:27 ◼   ► where they can do it, but like, I'm sure they desperately

00:34:31 ◼   ► want to do that. No, there was that report that they made a

00:34:35 ◼   ► leap, right, like they made some kind of breakthrough, but not

00:34:39 ◼   ► to the point where it was like, oh, and it's going to be ready in a couple of years, but that

00:34:43 ◼   ► they're getting closer, they had some kind of breakthrough that got them closer to doing it.

00:34:47 ◼   ► Last thing on this, apparently there are some discussions in high places

00:34:51 ◼   ► at Apple about moving the watch away from an annual

00:34:55 ◼   ► refresh due to the incremental annual upgrades that they've seen for many years.

00:34:59 ◼   ► Right. This is

00:35:03 ◼   ► I would say fundamentally a marketing question, and I know that producing a new

00:35:07 ◼   ► watch every year is a manufacturing and product design question, but it's also

00:35:11 ◼   ► I think at its core a marketing and the big market-seeking

00:35:15 ◼   ► market-defining version of the word marketing

00:35:19 ◼   ► because I think what you have to ask yourself is, what does it

00:35:23 ◼   ► cost for us to iterate the Apple Watch every 12 months instead of 18 or 24?

00:35:27 ◼   ► Okay, what is the cost? There's absolutely cost. You've got to

00:35:31 ◼   ► you've got to go through a whole product cycle and upgrade at least some of the components

00:35:35 ◼   ► and change your marketing and do all of those things, right? And I know that it's incremental

00:35:39 ◼   ► but it's still an upgrade, it's still a new model. What does that

00:35:43 ◼   ► cost to do that at 12 months instead of 18 or 24?

00:35:47 ◼   ► And then on the other side, what is the benefit

00:35:51 ◼   ► in terms of trying to sell a product to users that's

00:35:55 ◼   ► new and do marketing about a new model?

00:35:59 ◼   ► And how much sale does that generate that you might lose

00:36:03 ◼   ► if you can't do that marketing as often or if the product that's in stores

00:36:07 ◼   ► is perceived as being old? And that is

00:36:11 ◼   ► a question for a team at Apple that has, you know, hopefully

00:36:15 ◼   ► they're getting paid pretty well and they're going to make that decision, but that, to me, that's

00:36:19 ◼   ► the core of the decision because clearly they don't need to do an Apple Watch

00:36:23 ◼   ► every year. They don't need to do an iPad every year and they don't. They don't need to do

00:36:27 ◼   ► most Mac models are on like an 18 month cycle. The iPad's definitely on an

00:36:31 ◼   ► 18 month cycle. They don't need to. However,

00:36:35 ◼   ► if it's worth their while to, if it's a better decision to keep it annual

00:36:39 ◼   ► than a year and a half or two years,

00:36:43 ◼   ► maybe they will. I will also point out the problem with the 18 month cycle

00:36:47 ◼   ► with the watch is that the watch is an iPhone accessory. It is.

00:36:51 ◼   ► And so it really benefits from being announced with the

00:36:55 ◼   ► iPhone. Like, it should ideally always be

00:36:59 ◼   ► announced with the iPhone because they go together. So that would say

00:37:03 ◼   ► you're talking about either an annual or every two year cycle. I will

00:37:07 ◼   ► I don't, I can't see the future of the Apple Watch, obviously,

00:37:11 ◼   ► because Apple doesn't talk about future products. I keep getting reminded of that

00:37:15 ◼   ► every analyst call. But if we look at the last few years,

00:37:19 ◼   ► it's actually hard, it's hard to look at

00:37:23 ◼   ► the last three or four Apple Watches and not say they could have

00:37:27 ◼   ► gotten away with a two year cycle. Right? Like, it's been

00:37:31 ◼   ► so, the movement slows so much that I think it's worth having that conversation

00:37:35 ◼   ► internally and saying, do we, you know, do we really?

00:37:39 ◼   ► And looking forward then, you look at the, you look at the, the strategy and

00:37:43 ◼   ► what's on your product roadmap and you say,

00:37:47 ◼   ► do we really need to do this in this way? Or do we just, is there

00:37:51 ◼   ► just not enough here? We're not moving this forward. Like, there was a period in the

00:37:55 ◼   ► iPhone where it was like moving forward incrementally every single year with huge features.

00:37:59 ◼   ► And the Apple Watch sort of did that for like four years. And then since then, not so

00:38:03 ◼   ► much. So maybe, maybe not. But in the end, my answer is the same as

00:38:07 ◼   ► when people ask about the iPhone coming out every year, because most people don't buy a new iPhone every year. And the answer

00:38:11 ◼   ► is, it's worth it for them because there's a new model and there's

00:38:15 ◼   ► buzz about it and there's marketing about it. And that some people are going to be resistant

00:38:19 ◼   ► after having a phone for four years or three years to go buy a phone that's a year and a half old.

00:38:23 ◼   ► Because there's another phone coming soon. So I'll wait.

00:38:27 ◼   ► And you bat a lot of that down if you release every year.

00:38:31 ◼   ► Just, that's the truth of it. As wasteful as it might be in some ways, it can be useful

00:38:35 ◼   ► as a sales tool. Yeah, I just, you know, it's obvious, right?

00:38:39 ◼   ► In that like, you can just do more in an iPhone on an annual basis than you can do

00:38:43 ◼   ► in an Apple Watch. Like with the changes that you can make, I think if we see that, right?

00:38:47 ◼   ► Like the years where iPhones are considered to be like small upgrades

00:38:51 ◼   ► is still much more of an upgrade than the Apple Watch sees on a year to year basis most of the time.

00:38:55 ◼   ► Yes. The question that I would wonder, and I guess this is what they're battling,

00:38:59 ◼   ► is there is surely just an inbuilt

00:39:03 ◼   ► cost of there being a new version, right? Yes.

00:39:07 ◼   ► What it takes to have a new version and the

00:39:11 ◼   ► cost of like not being able to take

00:39:15 ◼   ► advantage of a longer term production cycle and like

00:39:19 ◼   ► the reduction in cost that that would take over time because like the longer you make something

00:39:23 ◼   ► the cheaper you can make it for. And so like, there's gotta be a balance, right?

00:39:27 ◼   ► Of like, how much money would we lose if we did it every two years instead of every year?

00:39:31 ◼   ► And how much would we save, right? And I

00:39:35 ◼   ► assume these are the conversations that they're trying to have, right? That's exactly it.

00:39:39 ◼   ► The argument is if we didn't do this, we would save

00:39:43 ◼   ► X. And they can probably guess. Like, what does it cost to iterate from

00:39:47 ◼   ► Series X to Series X plus one, not iPhone X or

00:39:51 ◼   ► Apple Watch X. Series N, okay, we'll say, to

00:39:55 ◼   ► N plus one. And it's like, well, what do we add to it? We added like

00:39:59 ◼   ► one thing. We added a sensor. Like, alright.

00:40:03 ◼   ► And they've done that, right? So they could do that math and say, well, it still costs all of this

00:40:07 ◼   ► design time, all this production change time. We gotta update all the packaging,

00:40:11 ◼   ► all the marketing, all those things. And then the more squishy question is

00:40:15 ◼   ► and then what do we get out of having an Apple Watch Series N plus one on the market for a year

00:40:19 ◼   ► instead of having the Series N stay on the market

00:40:23 ◼   ► for year two? What does that look like? And I'm sure there are spreadsheets and models

00:40:27 ◼   ► and they've tried this stuff out and they maybe looked at other products like the iPad Pro or

00:40:31 ◼   ► other products where they can sort of say that and come up with a guess.

00:40:35 ◼   ► And that's, you know, I think the moment that they look at it

00:40:39 ◼   ► and say, oh, we can save a lot of money. It's not

00:40:43 ◼   ► necessary, right? Look at how much money we would save if we didn't do this. Let's just not do it.

00:40:47 ◼   ► Then they'll do it, I think.

00:40:51 ◼   ► But I'm not entirely convinced that that's the case. And that's why when Mark Gurman

00:40:55 ◼   ► says there are discussions, these are the discussions that they're having.

00:40:59 ◼   ► I mean, it also doesn't surprise me that the conversations would start

00:41:03 ◼   ► now, right? Like, I feel like it's been enough time now. It's kind of like

00:41:07 ◼   ► especially if they're talking about like we have this huge one on the horizon.

00:41:11 ◼   ► It's like, should we just maybe do that every couple of years instead of like

00:41:15 ◼   ► the little ones? Yeah. Also, you could talk about what if

00:41:19 ◼   ► you have a new one that's amazing and

00:41:23 ◼   ► you've also got your Ultra and you've also got maybe your

00:41:27 ◼   ► classic one. Like the iPad line, right? There are

00:41:31 ◼   ► iPad refreshes all the time because there are multiple iPads.

00:41:35 ◼   ► A watch every year, not all of the watches every year. But not all the watches.

00:41:39 ◼   ► Yes. So it gives you the opportunity to talk about them all, you know? Like you

00:41:43 ◼   ► could say like, you know, we've added this watch to the existing lineup, which

00:41:47 ◼   ► includes these other watches, right? So you could talk about it every September if you really want to.

00:41:51 ◼   ► But it's not necessary to like

00:41:55 ◼   ► rep them all in the same way that they don't. You know, like the Apple Watch SE doesn't get a revision

00:41:59 ◼   ► every year. It's every couple of years. So maybe that's the way to go.

00:42:03 ◼   ► Maybe so. Mark Gurman has also laid out the information

00:42:07 ◼   ► he has about the M3 chip lineup. There's a lot of numbers here.

00:42:11 ◼   ► I'm going to try and burst through these as fast as I can.

00:42:15 ◼   ► And then we can pick on anything that you want to.

00:42:19 ◼   ► And so, you know, I recommend as well, I'm not including all of the information

00:42:23 ◼   ► that Mark has in his reports. You can go read it for more of that. But the

00:42:27 ◼   ► M3, so this is the M3 chip lineup. All of the four chips that we

00:42:31 ◼   ► are aware of. These are what Mark has been able to gather. So

00:42:35 ◼   ► the standard M3 will be an 8 CPU core, which is split into

00:42:39 ◼   ► four performance for efficiency and 10 GPU cores. This is

00:42:43 ◼   ► the same core count as the M2 completely. But I guess

00:42:47 ◼   ► because of the three nanometer process, we are expecting faster cores.

00:42:51 ◼   ► The M3 Pro chip, the base configuration will be 12 CPU and

00:42:55 ◼   ► 18 GPU. That's up from 10 and 18.

00:42:59 ◼   ► The top configuration that you would have in the Pro is currently a 14 CPU

00:43:03 ◼   ► core, sorry, that would be a 14 CPU, 20 GPU. That's

00:43:07 ◼   ► up from 12 and 19. The M3 Max, the base config, is

00:43:11 ◼   ► a 16 CPU, 32 GPU core that is up from

00:43:15 ◼   ► 12 and 30. The top configuration is 16 CPU

00:43:19 ◼   ► and 40 GPU. That's up from 12 and 38. So these are all

00:43:23 ◼   ► like, there's a couple of cores here or there. The M3 Ultra,

00:43:27 ◼   ► the base configuration would be a 32 CPU, 64 GPU core

00:43:31 ◼   ► that is up from 24 and 32. And the top

00:43:35 ◼   ► configuration would be a 32 CPU, 80

00:43:39 ◼   ► GPU core up from 24 and 76.

00:43:43 ◼   ► Yeah. A lot of numbers there.

00:43:47 ◼   ► It's interesting. So what they're doing is

00:43:51 ◼   ► they're keeping the cores the same on the low end, but we would assume

00:43:55 ◼   ► that there'll be some leaps in energy efficiency and/or speed for the

00:43:59 ◼   ► M3 generation. And then for the higher end models,

00:44:03 ◼   ► everything is getting cranked up a little bit. So in Pro, more CPUs.

00:44:07 ◼   ► And

00:44:11 ◼   ► maybe incrementally more GPUs.

00:44:15 ◼   ► In Max, which is, you know, Pros are the binned versions of the Max,

00:44:19 ◼   ► right? So really what they're doing is they're taking the Max

00:44:23 ◼   ► up to a maximum of

00:44:27 ◼   ► 16, 12 performance and 40

00:44:31 ◼   ► GPUs, right? So they're increasing their CPU and GPU count

00:44:35 ◼   ► a bit. And then Ultra is double, so you're gonna get

00:44:39 ◼   ► twice as much. So it goes from 76

00:44:43 ◼   ► to 80 because you went from 38 to 40.

00:44:47 ◼   ► This is

00:44:51 ◼   ► incremental. I think that there will be improvements here, but it's pretty

00:44:55 ◼   ► incremental. So the benefits are gonna come in the

00:44:59 ◼   ► pure speed of what the CPU and GPU cores are like on the M3.

00:45:03 ◼   ► The biggest jump is the base configuration

00:45:07 ◼   ► M3 Ultra, the GPU. Because that goes from

00:45:11 ◼   ► oh sorry, I think I said it wrong, it's 32, it's actually 60. It's 60

00:45:15 ◼   ► and 64, and 76 and 80. So there's bigger GPU cores

00:45:19 ◼   ► there. Or more of them, I should say. Right, but those are

00:45:23 ◼   ► just double of the Max, right? Because it's just two of those. So you're going from

00:45:27 ◼   ► 30 in the base and 32, then it's 60

00:45:31 ◼   ► and 64. So you're doubling. But in the end

00:45:35 ◼   ► these are four more

00:45:39 ◼   ► CPU cores, presumably, and they're all performance.

00:45:43 ◼   ► So that's a...

00:45:47 ◼   ► Although what he's reporting more efficiency cores on the Pro than on the Max.

00:45:51 ◼   ► So I don't know, it's interesting to see how they

00:45:55 ◼   ► tell the story of what they did, because it feels like the M3 is going to be a storytelling

00:45:59 ◼   ► thing too, where they're going to say, we really made some changes to the architecture

00:46:03 ◼   ► based on sitting with the other architecture for

00:46:07 ◼   ► two or three years. So what that ends up looking like.

00:46:11 ◼   ► I think this is going to be very interesting because it's going to be this nanometer change

00:46:15 ◼   ► and then also giving more of them in a lot of cases.

00:46:19 ◼   ► I'm very intrigued to see what kind of jump are we going to see

00:46:23 ◼   ► here? That's going to be the interesting story. But if you want numbers

00:46:27 ◼   ► Mark Gorman's got them for you.

00:46:31 ◼   ► It is fascinating this difference between the Pro and the Max, because

00:46:35 ◼   ► either they're binning

00:46:39 ◼   ► CPU cores, because we're talking about

00:46:43 ◼   ► 12 performance and 4 efficiency in the Max, but in the Pro

00:46:47 ◼   ► it's 8 and 6 or 6 and 6. So I guess my

00:46:51 ◼   ► question is, is the Max still the source of the Pro?

00:46:55 ◼   ► And those are like bins, so they've got things that they have to, they can't rate

00:46:59 ◼   ► it, all those cores, so they downgrade it and they call it a Pro and they sell it for cheaper.

00:47:03 ◼   ► Is that what's going on there? Or are they making

00:47:07 ◼   ► a Pro configuration chip that's different from the Max?

00:47:11 ◼   ► I don't know, because that's a lot. The idea that you're

00:47:15 ◼   ► making them all to be 12 performance and 4

00:47:19 ◼   ► efficiency cores, but you're selling, well, you've got down to 6 efficiency cores

00:47:23 ◼   ► in the Pro, right? If that's the case, then they're different chips, presumably.

00:47:27 ◼   ► That's what Mark Gorman said. Yeah, so that's a change.

00:47:31 ◼   ► Because what you're saying is the way that it's done right now

00:47:35 ◼   ► is Apple produce the Max chips and then

00:47:39 ◼   ► take from the Max chip a Pro chip, effectively, is where you'd think, you know, they cut one

00:47:43 ◼   ► out, let's just say, right? Is what you're saying they're currently doing?

00:47:47 ◼   ► Which is different to the Ultra chip, where they take two Max chips and

00:47:51 ◼   ► just stick them together. Right, which are the high-end ones. But if there are,

00:47:55 ◼   ► Mark Gorman reports 6 efficiency cores on the

00:47:59 ◼   ► Pro, so unless they're doing something to convert

00:48:03 ◼   ► performance cores into efficiency

00:48:07 ◼   ► mode or something, which, you know,

00:48:11 ◼   ► I don't know whether they could do that or not, but otherwise it feels like this is just, you know,

00:48:15 ◼   ► they're making a different chip for the Pro than they are for the Max. And I wonder,

00:48:19 ◼   ► surely they sell more Pro chips than Max

00:48:23 ◼   ► chips, right? You'd expect so. I would think. Because it's the MacBook Pro, right?

00:48:27 ◼   ► Yeah, I mean, you can get Max configs, but they're way higher

00:48:31 ◼   ► end. They're very expensive. So I wonder if

00:48:35 ◼   ► they looked at this and said, "We'd be better off not making lots of

00:48:39 ◼   ► expensive Max chips and then binning them all down to Pro, and we'd

00:48:43 ◼   ► be better off kind of making a custom chip for the Pro line

00:48:47 ◼   ► and then having the Max chips be lower

00:48:51 ◼   ► manufacturing totals and doing it that way."

00:48:55 ◼   ► I mean, like, if you think about it now compared to how it's been in the past, there is

00:48:59 ◼   ► now a larger proliferation of Ultra chips

00:49:03 ◼   ► that we've had in previous generations. Like, the Ultra is available

00:49:07 ◼   ► in multiple computers now, which it wasn't before. And so maybe there is,

00:49:11 ◼   ► as you say, right? Maybe Apple are making an M3, an M3 Pro, and an M3 Max

00:49:15 ◼   ► which also becomes an Ultra? Maybe. I don't know. Because I agree with you, like,

00:49:19 ◼   ► the numbers don't add up anymore, right? Like, you can't,

00:49:23 ◼   ► in theory, you can't take four efficiency cores

00:49:27 ◼   ► and make them six. Like, how would you do that? Right.

00:49:31 ◼   ► Exactly. Exactly. So that's a different dynamic. And either, yeah,

00:49:35 ◼   ► either they've got a new method of binning Maxes down to Pros

00:49:39 ◼   ► or they have taken the Pro and made it a different

00:49:43 ◼   ► Maybe instead of binning it's recycling. You know, like, they're not throwing them away

00:49:47 ◼   ► anymore. They're, like, moving them around. So this isn't, they're not bin chips. They're

00:49:51 ◼   ► recycled chips. We'll go with it. Okay. They moved them out of the trash bin

00:49:55 ◼   ► and into the recycle bin. They're in the... Recycled them. It's like a compost bin.

00:49:59 ◼   ► It's composting. It's silicon composting. That's what we found. Okay.

00:50:03 ◼   ► Well, it's, it's, if these details are, are, uh, are true, it's, uh,

00:50:07 ◼   ► it's very interesting. That's, that's, uh, it's shaping up. Now, we won't know, probably,

00:50:11 ◼   ► for a year, right? Because the M3 rollout will be like the M2

00:50:15 ◼   ► rollout, where we might see some initial M3s this fall, but then it's going to be rolling

00:50:19 ◼   ► into next year. Remind me with the M2. What came first?

00:50:23 ◼   ► Like, what chip came first? Do you remember?

00:50:27 ◼   ► The M2. Was it just, like, the M2 and that was in the MacBook

00:50:31 ◼   ► Air, right? Yeah, and the, and the Mac Mini.

00:50:35 ◼   ► Right. And then it, then it was Pro and Max next

00:50:39 ◼   ► in the MacBook Pros, and then the Ultra came in the, in the, uh,

00:50:43 ◼   ► the iPad, and then the Ultra came in the, yeah, so it did go in logical order.

00:50:47 ◼   ► The base, the base M2s were, were last year, other than the

00:50:51 ◼   ► 15-inch Air, and the, the Pro and Max were part of the

00:50:55 ◼   ► MacBook Pro announcement, and then later the, you know, and, and the Mini in the

00:50:59 ◼   ► studio in 2023. Yeah. The reason I ask that is because, like, on some of Apple's

00:51:03 ◼   ► other products, they don't do them in logical order, right? Like, they've released some iPad

00:51:07 ◼   ► chips, which have the higher configuration before they did it on the iPhone,

00:51:11 ◼   ► I believe, if my memory's serving me right. It's like, I was just, I know it

00:51:15 ◼   ► seems logical, you would do, like, the base one and then go up, but, uh,

00:51:19 ◼   ► that is what they have done. Okay.

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00:53:39 ◼   ► It's time for a Summer of Fun topic, Jason Snell.

00:53:43 ◼   ► Summer of Fun! So I know that there's been a lot of talk about this. In fact, you

00:53:47 ◼   ► wrote about it on 6 Colors. Indeed. The conversation is back again.

00:53:51 ◼   ► What if Apple bought Disney? And I know this

00:53:55 ◼   ► is like so exasperating as a thing to people, right? Like this conversation.

00:53:59 ◼   ► But the actual, the situation right now is it's actually

00:54:03 ◼   ► more plausible than it has been in the past? I think in the past both me and you have agreed

00:54:07 ◼   ► that it didn't make any sense. Why would Apple buy Disney? Same as like when

00:54:11 ◼   ► people were saying why Apple should buy Netflix. It didn't make any sense at the time.

00:54:15 ◼   ► Why Apple should buy Netflix. It didn't make sense for Netflix. It didn't make sense for Apple realistically

00:54:19 ◼   ► considering where the companies were. But it is maybe

00:54:23 ◼   ► easier to make a case now for Apple buying

00:54:27 ◼   ► Disney. And Disney seems to be more

00:54:31 ◼   ► concerned with where they are

00:54:35 ◼   ► right now. And you know, downstream listeners will notice

00:54:39 ◼   ► we're talking about this, right? Like Bob Iger has been making a lot of

00:54:43 ◼   ► statements about like getting

00:54:47 ◼   ► rid of or looking for partners of. We were talking about the ESPN partner

00:54:51 ◼   ► on the last episode. Can you give like any more

00:54:55 ◼   ► detail of this? Of like what could potentially be happening

00:54:59 ◼   ► to Disney or what Disney might be doing right now which could make it seem like they want to be

00:55:03 ◼   ► acquired? Right, so the core thing to understand about Disney is that

00:55:07 ◼   ► one of the fuels for Disney in terms of profits, in terms

00:55:11 ◼   ► of cash over the last while, last few, last decade

00:55:15 ◼   ► is ESPN. So ESPN and ABC

00:55:19 ◼   ► the American broadcast company, the network in the US

00:55:23 ◼   ► of broadcast TV have been owned by Disney for quite some time.

00:55:27 ◼   ► ESPN, because it is the worldwide leader in sports

00:55:31 ◼   ► as they say, is a must have

00:55:35 ◼   ► on local cable and satellite systems.

00:55:39 ◼   ► So the way that works, and it's tied to ABC right? Because

00:55:43 ◼   ► there's a, it's like a package deal. They own all

00:55:47 ◼   ► this stuff. So like if you want to be your cable company locally and they want to carry the

00:55:51 ◼   ► ABC station and ESPN, right? Like they've got to make a deal

00:55:55 ◼   ► with Disney. And because ESPN has huge

00:55:59 ◼   ► amounts of sports, Disney says you can't carry ESPN

00:56:03 ◼   ► on like a higher tier. It basically

00:56:07 ◼   ► needs to be on all, maybe you've got like your special like super cheap

00:56:11 ◼   ► locals only tier, but like for your regular cable

00:56:15 ◼   ► you can't add a sports pack and put ESPN in it.

00:56:19 ◼   ► So only sports fans get it. It's got to be part of your main thing.

00:56:23 ◼   ► And you got to pay us $8 or $9 per person for it. And what percentage of people

00:56:27 ◼   ► use, of cable viewers uses ESPN? Less than half, certainly.

00:56:31 ◼   ► Probably a lot less than half, but guess what? A hundred percent of them are paying $8 a month to ESPN

00:56:35 ◼   ► inside their cable bill. That's just what happens. It's

00:56:39 ◼   ► a great racket to be in if you're ESPN. You build up

00:56:43 ◼   ► a must have brand and they can't not have it. And this is true for

00:56:47 ◼   ► a lot of the, you've got a hundred channels on your cable system, but there are only about

00:56:51 ◼   ► eight or whatever that are must haves and the rest of them

00:56:55 ◼   ► are part of the package with the eight must haves.

00:56:59 ◼   ► So like CNN,

00:57:03 ◼   ► you're not going to have a cable company without CNN. So CNN

00:57:07 ◼   ► is making money per subscriber because they're not going to make that a special package

00:57:11 ◼   ► and Fox News is the same way, MSNBC is probably the same way,

00:57:15 ◼   ► right? And you end up with these sort of must haves and that's where your cable bill

00:57:19 ◼   ► money goes. Well, cord cutters are meaning that the number of people

00:57:23 ◼   ► subscribing to cable are going down. And while some

00:57:27 ◼   ► of those people are ESPN viewers potentially, most

00:57:31 ◼   ► of them aren't. So you're losing people who were never really your customers, but still

00:57:35 ◼   ► gave you a lot of money. So they made huge profits

00:57:39 ◼   ► on this, but what's happened recently is the cord cutters are bringing

00:57:43 ◼   ► that number down and sports rights are getting more and more expensive. And so

00:57:47 ◼   ► you look at ESPN and say

00:57:51 ◼   ► this is still throwing off billions of dollars in profit, but

00:57:55 ◼   ► it's going down and it's going to keep going down.

00:57:59 ◼   ► Simultaneously to this, Disney has

00:58:03 ◼   ► launched Disney+ because they want to be in the direct to consumer market and spend billions

00:58:07 ◼   ► of dollars on content for Disney+. So what's happened

00:58:11 ◼   ► is they've been losing money in order to establish Disney+ and Hulu, which they also

00:58:15 ◼   ► own in the US. Most of that content is on Disney+ everywhere else.

00:58:19 ◼   ► So they're losing money in order to establish themselves.

00:58:23 ◼   ► And they're big ass that ESPN is going down. So

00:58:27 ◼   ► that puts a huge amount of pressure on Disney. They

00:58:31 ◼   ► transitioned from Bob Iger to Bob Chapek as the new CEO.

00:58:35 ◼   ► This all started happening. They fired Chapek and brought back Iger,

00:58:39 ◼   ► but Iger still has to deal with this reality. So Iger is out there now

00:58:43 ◼   ► making weird deals like he made a deal that ESPN

00:58:47 ◼   ► said they were never going to do, where they made a deal with a

00:58:51 ◼   ► gambling company to brand their sports books as

00:58:55 ◼   ► ESPN branding, which they were like,

00:58:59 ◼   ► "No, no, no, no. We're family friendly and gambling is not going to be in." And then they're like,

00:59:03 ◼   ► "No, actually you're going to pay us how much? Please give us that money. We need that money

00:59:07 ◼   ► right now." So they're in a little more desperate state, I would say. So

00:59:11 ◼   ► one of the conversations that's going on here is, and

00:59:15 ◼   ► prompted by Iger saying he was open to it, is, do we get a strategic partner for ESPN

00:59:19 ◼   ► and what parts of our business are not core to us, including

00:59:23 ◼   ► ABC? And people are

00:59:27 ◼   ► reacting to that saying, one, he's looking for cash. If he sells some stuff off

00:59:31 ◼   ► that helps because he gets money back to pay down debt or deal

00:59:35 ◼   ► with things like having to buy out the last portion of Hulu that they don't own,

00:59:39 ◼   ► which they're going to have to do next year. And there's some

00:59:43 ◼   ► speculation about is he prepping potentially for a sale? And

00:59:47 ◼   ► to bring it all the way back around, Mike, when we talked about Apple buying Disney

00:59:51 ◼   ► for many, many years, the reason I roll my eyes is that it just seemed like

00:59:55 ◼   ► it was a non-starter, that it didn't make sense. There were so many parts of Disney that

00:59:59 ◼   ► didn't make sense for Apple or that Apple wouldn't want to be in that business.

01:00:03 ◼   ► But when Iger starts to talk about selling off parts of Disney, I start to think,

01:00:07 ◼   ► is he, is the goal here to sell off all of the

01:00:11 ◼   ► fallible stuff for a tech giant so that a tech giant

01:00:15 ◼   ► would buy them? And the reason I say that is, one,

01:00:19 ◼   ► Apple and Disney have a relationship going way back. Iger was on Apple's board. Steve

01:00:23 ◼   ► Jobs was once the biggest single shareholder of Disney

01:00:27 ◼   ► after he sold Pixar. He obviously, Steve Jobs' connection with Pixar

01:00:31 ◼   ► to Disney from back in the day. A lot of connections there. They still,

01:00:35 ◼   ► they had him, Iger was on stage for the Vision Pro announcement. Like, there

01:00:39 ◼   ► are so many ties between these two companies. -I saw this recently in Iger's

01:00:43 ◼   ► memoir, he said that if Steve Jobs hadn't died, he assumed

01:00:47 ◼   ► that Disney and Apple would merge. -Yes. -He just felt that that would have been

01:00:51 ◼   ► a natural thing that would have occurred. -So, okay.

01:00:55 ◼   ► So all this is out there, but there's one other piece that I want to put in here, because

01:00:59 ◼   ► even so, you're like, yeah, but Disney selling out at all seems so strange.

01:01:03 ◼   ► And it does. It seems very strange.

01:01:07 ◼   ► However, this was all, this conversation was prompted by an article in Hollywood Reporter

01:01:11 ◼   ► where they did a very good job of covering the ways it doesn't make sense

01:01:15 ◼   ► and the ways it does make sense and how it seems to make more sense now than maybe

01:01:19 ◼   ► it did even a year ago. So, really good article by Kim Masters and

01:01:23 ◼   ► Alex Weprin. We'll put a link to it in the show notes.

01:01:27 ◼   ► That made the point, one of the points

01:01:31 ◼   ► made in that article is, I think, really good, which is

01:01:35 ◼   ► some people in Hollywood strongly believe

01:01:39 ◼   ► that the entire industry is going to be swallowed

01:01:43 ◼   ► by tech giants. That the tech giants have all the money

01:01:47 ◼   ► and in the end, these

01:01:51 ◼   ► entertainment companies that seem big to us, because they loom large in our minds,

01:01:55 ◼   ► are actually so much smaller, especially in

01:01:59 ◼   ► something like Market Cap. So much smaller than the entertainment companies.

01:02:03 ◼   ► Or, than the tech companies. These little entertainment companies. That it

01:02:07 ◼   ► seems almost inevitable that they're all going to get swallowed

01:02:11 ◼   ► and if they're going to get swallowed, they

01:02:15 ◼   ► think it should be by Apple, right?

01:02:19 ◼   ► Disney thinks it should be by Apple because they are the most kind of like aligned. They have so much

01:02:23 ◼   ► in common. So the quote I wanted to say this from some

01:02:27 ◼   ► one industry veteran who said, "There will

01:02:31 ◼   ► end up being three or four platforms and everybody else gets hollowed out and acquired.

01:02:35 ◼   ► There will be Apple, Amazon, Netflix, and

01:02:39 ◼   ► one other. If you could put together NBC, Universal,

01:02:43 ◼   ► Warner, and Paramount, you probably would have enough to survive."

01:02:47 ◼   ► And this is, yes, there would need to be federal approval of

01:02:51 ◼   ► mergers like that and they might not be, but the funny thing is, Apple and Disney have very

01:02:55 ◼   ► little overlap. So, I'm not saying that this is going to happen,

01:02:59 ◼   ► but I am saying it feels way more plausible than it has

01:03:03 ◼   ► ever before. Like, leaving the realm of being a non-sequitur and entering

01:03:07 ◼   ► like, we could at least think about it as a possibility. And

01:03:11 ◼   ► if you accept that industry veteran's premise that it's

01:03:15 ◼   ► inevitable that tech money will swallow the entertainment industry

01:03:19 ◼   ► whole, if that's true, Disney and

01:03:23 ◼   ► Apple are actually the best pairing. So, if that's true, I think it

01:03:27 ◼   ► follows that Bob Iger would, if Bob Iger really believes that, that

01:03:31 ◼   ► he would be selling off all the assets that Apple doesn't want so that Disney

01:03:35 ◼   ► looks really good to Apple and that then they can sell out to Apple. And

01:03:39 ◼   ► not impossible, for sure, not impossible. If you believe, if you are

01:03:43 ◼   ► Bob Iger and you believe that this future is coming, even a little bit,

01:03:47 ◼   ► sell it. Because the longer you wait, the worse it's going to

01:03:51 ◼   ► get. You don't have to tell me, I'm a fan of the Pac-12 Conference. Don't wait.

01:03:55 ◼   ► Don't wait. They had an offer last year from ESPN for 30 million

01:03:59 ◼   ► per school and they're like, oh, we'll wait. And then they're like, well, they're gone now. They blew up. So,

01:04:03 ◼   ► yes, if you're Bob Iger, you think, clock is ticking. ESPN's

01:04:07 ◼   ► revenue stream is only going to get lower over time, so it's got more value to

01:04:11 ◼   ► a venture capital firm now.

01:04:15 ◼   ► One of these firms that will swoop in and take ESPN and make it as profitable

01:04:19 ◼   ► as possible by bleeding it of all of its expenses

01:04:23 ◼   ► and cutting it and cutting it and cutting it and taking all the value out of it. Like, if you're

01:04:27 ◼   ► going to do that, now is the time to do that, right? Not when ESPN is no longer

01:04:31 ◼   ► has any of that sweet, sweet cable money coming in.

01:04:35 ◼   ► So, in the spirit of the Summer of Fun, what I want to

01:04:39 ◼   ► do with you here, Jason, is take a look at some key parts of Disney portfolio

01:04:43 ◼   ► and work out what we think Apple would keep,

01:04:47 ◼   ► how it could make these things work, or what it would get rid of.

01:04:51 ◼   ► Disney's portfolio, I was looking on Wikipedia, is massive,

01:04:55 ◼   ► right? Like, it's huge. Ever since they bought

01:04:59 ◼   ► most of 20th Century Fox, right, they got even more of it than they had before.

01:05:03 ◼   ► So, I've taken what I think are some of their key assets and we're going to talk about

01:05:07 ◼   ► how they can make those work. And we'll start off by just talking

01:05:11 ◼   ► about film. Film will include Walt Disney Pictures, Walt Disney Animation

01:05:15 ◼   ► Studios, Pixar, Marvel, Lucasfilm, and 20th Century Studios.

01:05:19 ◼   ► This feels like the, I think, probably the easiest part?

01:05:23 ◼   ► This is the reason, right? Like, this is the reason. This is the reason you do it.

01:05:27 ◼   ► You've got your own studio, you've got huge amounts of intellectual property,

01:05:31 ◼   ► yeah, exactly. That's the easiest piece of all, right? Apple is trying to build

01:05:35 ◼   ► something from the ground up, which is great and admirable, and I think they've done a really good job

01:05:39 ◼   ► with it, but you have this, um,

01:05:43 ◼   ► opportunity, potentially, to get the whole

01:05:47 ◼   ► shebang, and it's not just the intellectual property, but it's the actual

01:05:51 ◼   ► studios, and yeah, I think that's an easy one. Apple,

01:05:55 ◼   ► and you might say, "Where does Apple want to be in the film business?" It's like, "They're already in it, everybody."

01:05:59 ◼   ► This is why that studio executive says, um,

01:06:03 ◼   ► it's inevitable, right? It's because Amazon and Apple are already

01:06:07 ◼   ► in it. They're already part of the

01:06:11 ◼   ► AMPTP, right?

01:06:15 ◼   ► Yeah, they're already in the negotiations, in the strike negotiations, right? They're already

01:06:19 ◼   ► there, so this is just a logical extension of that. Yeah, I'll include

01:06:23 ◼   ► in this, there was another section that I had that I didn't put into the film part, which is Disney

01:06:27 ◼   ► Studio Production Services, which I assumed was like all the lots, right?

01:06:31 ◼   ► Like, all of that stuff, which is just like, "Oh, imagine having all of Disney's

01:06:35 ◼   ► lots," like, way more space than Apple would be able

01:06:39 ◼   ► to find in Hollywood, right? Like, they're finding their spaces, and they're, you know, we were talking

01:06:43 ◼   ► about that ages ago, like, they've bought some space, but like, imagine all of that, plus

01:06:47 ◼   ► Disney? Yep. Like, as you said, this is the easy

01:06:51 ◼   ► one, right? Because this is like, the biggest franchises in the world, they're now yours,

01:06:55 ◼   ► and you can, you own their IP, and if you own their IP,

01:06:59 ◼   ► like, if you talk about Pixar, Marvel, and Lucasfilm, it's not just

01:07:03 ◼   ► the ability to make film. You now own these characters. You can do

01:07:07 ◼   ► whatever you want with them, right? Like, you can make Pixar

01:07:11 ◼   ► phone cases, right? Like, you know what I mean? Like, you can make Toy Story

01:07:15 ◼   ► Apple Watches, you don't need to watch, you can just do any, all of this stuff, it's there now, your

01:07:19 ◼   ► characters. Spider-Man, give me a Spider-Man Apple Watch, Mike, give it to me.

01:07:23 ◼   ► But like, they have the ability to then do all of that, and like, they don't even need

01:07:27 ◼   ► to do the work of trying to build their own IP. I want to

01:07:31 ◼   ► throw in Disney Music Group, is another part, they didn't have a lot of music

01:07:35 ◼   ► stuff. This, again, just feels like an easy one, right? It's like, great, like,

01:07:39 ◼   ► Apple Music is now, you can now do, you don't need to worry about the fees

01:07:43 ◼   ► anymore. I would have to, I would just have to look at that business and say, do we,

01:07:47 ◼   ► that one might be like, well, we don't, we're going to throw that overboard because we want

01:07:51 ◼   ► to be running our music streaming service, and we, you know,

01:07:55 ◼   ► That might be a conflict of some kind. Maybe, or, you know, I,

01:07:59 ◼   ► that, that in me, to me, that's in the category of

01:08:03 ◼   ► I would need to open the books and like, see what that business looks like, and decide

01:08:07 ◼   ► whether that's something that Apple wants to keep or wants to get rid of. It's kind of on the fence

01:08:11 ◼   ► on that one. A lot of it is, I mean, things

01:08:15 ◼   ► I haven't heard of, like, there's Disney Music Publishing, which is like the

01:08:19 ◼   ► music labels for the movies, right? Which obviously you would want to keep.

01:08:23 ◼   ► But then it's like, Buena Vista Recordings, Walt Disney

01:08:27 ◼   ► Records, like, a lot of their stuff, the Disney Music Group portion seems

01:08:31 ◼   ► to be like, a lot of the music for the movies. You look at the future value of that

01:08:35 ◼   ► and decide whether it's better off selling that to somebody who you can use as a partner rather than doing it yourself.

01:08:39 ◼   ► And that's just a, yeah, that's a super insidery kind of question, I think.

01:08:43 ◼   ► TV. I think this, I think this one might be

01:08:47 ◼   ► the most complicated of all of these, but we can see.

01:08:51 ◼   ► ABC, Hulu, potentially. I'm moving Hulu.

01:08:55 ◼   ► We're going to talk about Hulu and the streaming services. Yeah. Alright, so let's do ABC Freeform,

01:08:59 ◼   ► which is their free ad-supported fast

01:09:03 ◼   ► thing, right? It's a cable channel. All the kids' programs, so Disney Channel,

01:09:07 ◼   ► all that stuff. FX and National Geographic.

01:09:11 ◼   ► I'm going to say, with the exception of ABC,

01:09:15 ◼   ► which we're also going to need to talk about in conjunction with ESPN, but

01:09:19 ◼   ► more generally what I will say is, sell.

01:09:23 ◼   ► Sell. Apple doesn't want to be in

01:09:27 ◼   ► cable TV. What about, but like, FX and National Geographic.

01:09:31 ◼   ► So, okay, so here's the issue is like, the studios

01:09:35 ◼   ► and the channels, right? Yes. So like,

01:09:39 ◼   ► I would say what you would want to do, split out FX

01:09:43 ◼   ► and National Geographic, right? That you're going to keep the

01:09:47 ◼   ► shows that they own. Yeah, so this is what I would say is, I want to

01:09:51 ◼   ► keep, I want to keep the

01:09:55 ◼   ► content that is being generated, the video

01:09:59 ◼   ► content that's being generated by FX and National Geographic,

01:10:03 ◼   ► and make a deal with whoever buys it that they can have a license to the content for some period

01:10:07 ◼   ► of time, that they will pay me, basically, for content

01:10:11 ◼   ► that will, for linear rights, essentially, is what we're talking about,

01:10:15 ◼   ► for streaming content. So you'll say to FX, "Look, we're taking John Landgraf and the

01:10:19 ◼   ► entire FX studio, and you can't have them, but

01:10:23 ◼   ► we will, you know, you will have a license

01:10:27 ◼   ► to the linear rights for these shows ongoing for some period of time."

01:10:31 ◼   ► I believe some of this actually happened in the Fox Disney sale,

01:10:35 ◼   ► because Fox, as it currently is constituted,

01:10:39 ◼   ► you know, doesn't own The Simpsons anymore, but it's on the Fox network.

01:10:43 ◼   ► And this is the concept, right, which is, well, we are parting

01:10:47 ◼   ► and we're taking the studio and our property with us, but

01:10:51 ◼   ► your channel is still an outlet for us. So The Simpsons are on Disney Plus,

01:10:55 ◼   ► but they're also on Fox. And I would imagine that they would try to make a deal

01:10:59 ◼   ► with whoever bought their cable channels that were similar, where for some period of time,

01:11:03 ◼   ► for the shows that are existing, that you would continue to

01:11:07 ◼   ► broadcast them and we would get to put them on streaming, and they would make it

01:11:11 ◼   ► work in some way. So there's some complexity there. But yeah, I would take the studios.

01:11:15 ◼   ► You can't, right, like, I'll take the creative side

01:11:19 ◼   ► of FX and Nat Geo, but not the cable channels.

01:11:23 ◼   ► I would take the, like, even the magazine, National Geographic, I mean, you're buying Marvel comics, right?

01:11:27 ◼   ► You've got some publishing things, you can have a publishing group. Don't worry about it. Forget about it.

01:11:31 ◼   ► Just don't worry about it. But I wouldn't want the cable channels.

01:11:35 ◼   ► I will actually ask you that now, because you've brought that up and talked about that

01:11:39 ◼   ► a little bit more. Would you keep the publishing? Like, would you keep the comics?

01:11:43 ◼   ► I would.

01:11:47 ◼   ► Warner has kept DC Comics, even though they're subservient.

01:11:51 ◼   ► I would keep them, it's a small business, but it's also where

01:11:55 ◼   ► you're generating a lot of your new intellectual property. You could license

01:11:59 ◼   ► them out, right? Like, you could say, like, we're buying, I mean,

01:12:03 ◼   ► I find that hard to believe, like, the idea that you'd sell, you'd essentially sell Marvel

01:12:07 ◼   ► comics to somebody and then say you can have the license

01:12:11 ◼   ► to our characters, but, like, the advantage that they have,

01:12:15 ◼   ► okay, this is esoteric, but the advantage that Marvel Comics has as a standalone entity

01:12:19 ◼   ► is that they can coax comics creators into creating new intellectual

01:12:23 ◼   ► property for Marvel. If it was a license,

01:12:27 ◼   ► I think you wouldn't, right?

01:12:31 ◼   ► If it was a license and they're like, oh, Image Comics is now making Spider-Man comics,

01:12:35 ◼   ► well, that's great, but are they going to spend money creating new characters

01:12:39 ◼   ► that will then feed back into Marvel movies? Probably not. Probably

01:12:43 ◼   ► not the game that they want to play there. So the advantage of keeping it in your

01:12:47 ◼   ► territory is that it's, like, it's

01:12:51 ◼   ► where they're growing new intellectual property. Like, when Stacey and

01:12:55 ◼   ► Miles Morales are both relatively recent creations of Marvel

01:12:59 ◼   ► Comics, they're still generating new intellectual property

01:13:03 ◼   ► for Disney. So I think you keep them around and you've got a publishing

01:13:07 ◼   ► group and they don't cost very much and you just let them go. And if you want to do that

01:13:11 ◼   ► with National Geographic, you could, or you could just license it out, whatever. I mean, I'm sure there's a way

01:13:15 ◼   ► to make it work. - ESPN. - Well, this is

01:13:19 ◼   ► the question. ESPN, so, ESPN is

01:13:23 ◼   ► cable but going down, and ESPN is sports rights and streaming.

01:13:27 ◼   ► I'm not a negotiator, so I don't know

01:13:31 ◼   ► what all the in-depth details are. I will say off the top of my head,

01:13:35 ◼   ► I look at ESPN and I say, I want the sports rights.

01:13:39 ◼   ► The future of sports rights is streaming

01:13:43 ◼   ► with a linear partner. Future of

01:13:47 ◼   ► sports rights is streaming with a linear partner. So my question is,

01:13:51 ◼   ► do I sell ESPN to somebody

01:13:55 ◼   ► and like I just said for FX and stuff like that

01:13:59 ◼   ► and ABC potentially, you

01:14:03 ◼   ► are our linear partner. So we're gonna sell those rights

01:14:07 ◼   ► over the top. We're gonna sell those rights to a streaming service

01:14:11 ◼   ► where you can get all those sports that you want to watch.

01:14:15 ◼   ► But, because some people don't want a streaming service

01:14:19 ◼   ► and they have cable, you will be our licensee, our linear

01:14:23 ◼   ► partner for that. You, ESPN or ESPN and ABC. I don't know whether that

01:14:27 ◼   ► negotiation works or not. I don't know if that makes the people who are buying

01:14:31 ◼   ► ESPN potentially say, "You're selling us an empty bag. You're selling us all your expenses

01:14:35 ◼   ► and none of your successes because your successes are this." But I believe,

01:14:39 ◼   ► and maybe I'm wrong, I don't know, I'm not in this business, I believe

01:14:43 ◼   ► that some of those hedge funds, some of those investors who like

01:14:47 ◼   ► to suck, you know, it's the private equity stuff where they suck

01:14:51 ◼   ► all the value out of properties like newspapers and let them die.

01:14:55 ◼   ► I think they would view buying

01:14:59 ◼   ► more like broadcast TV and cable channels, especially

01:15:03 ◼   ► something like ESPN and having this partnership

01:15:07 ◼   ► with Disney. And Disney's like, "We don't want--Apple, we don't want to

01:15:11 ◼   ► be in this anymore, but we'll be your partner." Because the truth is,

01:15:15 ◼   ► we learned in the Pac-12 negotiation, part of what the partners want is

01:15:19 ◼   ► visibility. And if you put everything behind a paywall of a streaming service,

01:15:23 ◼   ► there's no visibility. This is why the Premier League in the US

01:15:27 ◼   ► is not all on Peacock. Some of it is on NBC and the USA

01:15:31 ◼   ► network. This is why the

01:15:35 ◼   ► World Series is on FOX, not just on FX

01:15:39 ◼   ► or FS1. They want--this is why

01:15:43 ◼   ► all the big college football conferences and the NFL have their games

01:15:47 ◼   ► on broadcast TV and huge cable channels. So you

01:15:51 ◼   ► need that free or free-ish, cable

01:15:55 ◼   ► TV-ish visibility that having ABC

01:15:59 ◼   ► or ESPN as a partner will get you. So

01:16:03 ◼   ► my gut feeling is if you can get away with taking the streaming rights

01:16:07 ◼   ► and saying, "For the foreseeable future, you'll be

01:16:11 ◼   ► our preferred partner on linear," that's the deal that

01:16:15 ◼   ► I would do, is sell ESPN, keep the

01:16:19 ◼   ► streaming rights to live sports, and

01:16:23 ◼   ► maybe even share the ESPN brand, which is why--sometimes that's what

01:16:27 ◼   ► I think that Bob Iger is talking about when he talks about a strategic partner, is can he find

01:16:31 ◼   ► somebody to be his partner on linear

01:16:35 ◼   ► and let him walk away and

01:16:39 ◼   ► set up a license where they're paying a percentage of what you're paying for your

01:16:43 ◼   ► sports rights? I don't know. This is the most complicated

01:16:47 ◼   ► one, and I would say even--this is why I said ABC is part of the

01:16:51 ◼   ► equation--there is also advantage to being on over-the-

01:16:55 ◼   ► year broadcast, which is free if you can put up an antenna.

01:16:59 ◼   ► And I feel like there's a trend toward more sports on free broadcast

01:17:03 ◼   ► because it helps you get eyeballs, it helps you sell

01:17:07 ◼   ► ads, because lots of people are watching those big events.

01:17:11 ◼   ► So ESPN is great because it's on all the

01:17:15 ◼   ► cable systems. ABC is also great because it's a broadcast

01:17:19 ◼   ► network. It's very high-profile. And I'll give you an example.

01:17:23 ◼   ► Monday Night Football was a stalwart of ABC

01:17:27 ◼   ► over-the-year TV for years and years and years. And then at some point

01:17:31 ◼   ► it moved to ESPN

01:17:35 ◼   ► and is less successful on ESPN than it was on ABC. It's still

01:17:39 ◼   ► successful. NBC, another network, started their own

01:17:43 ◼   ► primetime Sunday Night Football. It's the top-rated show in America.

01:17:47 ◼   ► Recently, ESPN's been experimenting with putting some of their

01:17:51 ◼   ► Monday Night Football games back on ABC. Or in addition to ESPN,

01:17:55 ◼   ► there's a different game playing at the same time on ABC. So they're already

01:17:59 ◼   ► sort of feeling this, like there's potential there. So there's power in having those things, but

01:18:03 ◼   ► also they're going down, right? Their value is going down rapidly. So

01:18:07 ◼   ► in the end, long story short, I would try to make a deal

01:18:11 ◼   ► where I keep the streaming sports rights for ESPN and ABC

01:18:15 ◼   ► and make them my preferred partner, but my partner is going to walk off with

01:18:19 ◼   ► basically the linear channel rights to those things.

01:18:23 ◼   ► So for me, I agree it's just a complicated one. I would

01:18:27 ◼   ► sell it all and just play the long game. Get rid of

01:18:31 ◼   ► ESPN. Gone. And if I'm Apple,

01:18:35 ◼   ► I'll wait until I can get the deals that I want.

01:18:39 ◼   ► NFL's going to come around again.

01:18:43 ◼   ► MLB's going to come around again and I'll wait until I can get a deal like

01:18:47 ◼   ► I have with MLS with the other leagues.

01:18:51 ◼   ► That's what I would do. Just wait it out. It's going that way anyway.

01:18:55 ◼   ► Because I think it would be complicated to get that deal, right?

01:18:59 ◼   ► To sell the channel and keep the streaming.

01:19:03 ◼   ► You just want the rights if you can afford it, right? You want the rights. But the other way to go, yes,

01:19:07 ◼   ► is to let it go and then start bidding for rights and then choose your linear

01:19:11 ◼   ► partner. Because I think you still want a linear partner, right? But you could say, "Well, okay."

01:19:15 ◼   ► If I'm selling you ESPN and ABC and you're like, "Oh, I don't know. I really want to

01:19:19 ◼   ► control all the sports rights." What I would say is, "No.

01:19:23 ◼   ► Forget about streaming. The deal here is that you are hedging

01:19:27 ◼   ► on the cash cow of broadcast and cable

01:19:31 ◼   ► that's going down but making money on the interim and we're taking

01:19:35 ◼   ► the streaming piece and walking away." But the other way to do it is to say,

01:19:39 ◼   ► "Okay. Fine. You take it all, but here's what's going to happen next. We're going to

01:19:43 ◼   ► bid for the NFL and we're going to get it and then we're going to choose a broadcaster/cable

01:19:47 ◼   ► partner and maybe it won't be you or maybe

01:19:51 ◼   ► it'll be you but you're going to pay us more money than you would in this deal." And that's

01:19:55 ◼   ► the counter argument there. Yep. I like that. I think we're going to

01:19:59 ◼   ► get these days next three. There's two in one category and one on its own. I think these are the easiest.

01:20:03 ◼   ► Two in the one category. Disney Plus and Hulu, the streaming

01:20:07 ◼   ► services. Those are

01:20:11 ◼   ► keepers. But, so yes, they're keepers but it's all in TV Plus. That's

01:20:15 ◼   ► what I would do. It's just all in TV Plus, right? I, yeah, maybe.

01:20:19 ◼   ► I mean, there's a branding conversation to be had about that. Well, have a Disney

01:20:23 ◼   ► like how I get Hulu in Disney, right? You just get Disney and Apple

01:20:27 ◼   ► TV Plus, right? So it's just like a Disney tile. Yeah, I could

01:20:31 ◼   ► argue the other way which is that you keep Disney Plus because it's got more subscribers

01:20:35 ◼   ► and you have an Apple TV Plus tile inside it that's your HBO. Although

01:20:39 ◼   ► that said, Hulu is also your HBO or at least FX Network is also your

01:20:43 ◼   ► HBO. They're making some great shows over there. I watch Hulu more than any other

01:20:47 ◼   ► streamer right now. They are great. So

01:20:51 ◼   ► all to be worked out but basically this is a deal for streaming content. So yeah, I want it

01:20:55 ◼   ► all. I'm going to put it all in one place. Maybe it'll be a bundle. Maybe you can

01:20:59 ◼   ► subscribe to Disney Plus separately but also it's bundled inside of, you know, for

01:21:03 ◼   ► an extra fee inside of Apple TV Plus or something like that. They'll have to work that out. But

01:21:07 ◼   ► I think that's the whole point of this is to take that stuff and create a

01:21:11 ◼   ► product or a package of products that people are going to give you money for.

01:21:15 ◼   ► Disney Interactive which is like video games

01:21:19 ◼   ► keep that. Like this is taking the IP that you have

01:21:23 ◼   ► and making it into Apple Arcade games and stuff like that.

01:21:27 ◼   ► Disney has never been

01:21:31 ◼   ► successful at video games. So part of me wants

01:21:35 ◼   ► to say what there is in Disney Interactive. I mean, you

01:21:39 ◼   ► could keep it around but like I think with your intellectual property you want to find partners

01:21:43 ◼   ► or you want to build a studio yourself. So maybe that's another

01:21:47 ◼   ► initiative for Apple is to really just take something like Disney Interactive and say we're going to just start

01:21:51 ◼   ► building a game studio with our intellectual property.

01:21:55 ◼   ► There's one element of Disney Interactive which is Marvel games and Marvel games

01:21:59 ◼   ► is doing it right. So Marvel games, they don't make the games.

01:22:03 ◼   ► Marvel games pick who makes the games. Well that's

01:22:07 ◼   ► what I'm saying is that's that kind of a strategy. But like that's

01:22:11 ◼   ► a place where I know we say Apple's bad at games. Disney also bad at games.

01:22:15 ◼   ► So figure something out. They got to figure something out there.

01:22:19 ◼   ► But I would say like you keep it and rework it but like the idea

01:22:23 ◼   ► of like you have a team that decides who's making video games for you is

01:22:27 ◼   ► like good. Of course. Alright. Of course. This is probably the one that

01:22:31 ◼   ► people have been waiting for. Theme parks.

01:22:35 ◼   ► I'm gonna maybe surprise some people.

01:22:39 ◼   ► Absolutely keep. I 100% agree.

01:22:43 ◼   ► Like this is an easy one to me. Keep the theme parks. This feels

01:22:47 ◼   ► I know it feels weird and I said on

01:22:51 ◼   ► another podcast last week about this like would this

01:22:55 ◼   ► is all about like with the Apple of 2008 a lot for a lot of us Apple of 2008

01:22:59 ◼   ► is what's in our minds. Apple of 2010.

01:23:03 ◼   ► When Steve Jobs died Apple was a much smaller

01:23:07 ◼   ► and different company than they are now. Apple of the 2020s is just not

01:23:11 ◼   ► Apple of 2010. It's just not. And

01:23:15 ◼   ► if you think of it as a computer company like

01:23:19 ◼   ► I get it but it's not. It's not the computer and iPhone company.

01:23:23 ◼   ► It is this huge services thing. It is it is a motion picture

01:23:27 ◼   ► and television producer. It is a sports rights holder.

01:23:31 ◼   ► It is just not what it was. And I think that Tim Cook

01:23:35 ◼   ► and company do think big picture. So if they were to

01:23:39 ◼   ► acquire Disney like theme parks first off they're very

01:23:43 ◼   ► they can be very profitable. They are expensive.

01:23:47 ◼   ► There's some nice high margins there. Well Apple's really good at that. There's a huge

01:23:51 ◼   ► tech investment that Disney makes in theme parks

01:23:55 ◼   ► in terms of things like the customer experience. It is a controlled experience.

01:23:59 ◼   ► I would argue like Disneyland and other Disney parks like

01:24:03 ◼   ► they're very Apple like in lots of ways in terms of

01:24:07 ◼   ► trying to delight the consumer and control the consumer and get as

01:24:11 ◼   ► much money from the consumer.

01:24:15 ◼   ► And I would throw it to something like imagineering the people who

01:24:19 ◼   ► build the technology behind the theme parks. Like

01:24:23 ◼   ► that couldn't be more Apple because it is the merger of creativity

01:24:27 ◼   ► and technology. It is right there. The

01:24:31 ◼   ► Imagineering building is also on the intersection of technology and the

01:24:35 ◼   ► liberal arts. It is the building across. It is like catty corner from Apple.

01:24:39 ◼   ► They use the same Starbucks. It is also on that corner.

01:24:43 ◼   ► You should see the foam on the lattes at that Starbucks. Whoa!

01:24:47 ◼   ► It is amazing because they are right there at the intersection of technology and liberal arts. It is a very busy

01:24:51 ◼   ► intersection. So I think that it is actually culturally

01:24:55 ◼   ► a pretty good fit. And so of course

01:24:59 ◼   ► a reformed Apple that includes all the Disney intellectual property, of course you keep the parks.

01:25:03 ◼   ► Like you would have a different division. And it would be... Let me... If I went back in time

01:25:07 ◼   ► and explained to you that there is a division of Apple in Santa Monica that is a

01:25:11 ◼   ► motion picture and TV producer and there are these two guys down there and they report to Eddie Kiew

01:25:15 ◼   ► up in Cupertino but they would just stay in LA and they work in LA and they have produced

01:25:19 ◼   ► dozens of TV shows and movies now. If I went back in time and

01:25:23 ◼   ► did that you would be like, depending on what time I went to, you mean carpool karaoke?

01:25:27 ◼   ► Or you would just look at me like I was crazy.

01:25:31 ◼   ► Like what is that? But that is the reality of Apple now.

01:25:35 ◼   ► So you can't come to me and say, "Oh, Apple will never do theme parks."

01:25:39 ◼   ► Because it is so far out of the realm. Because Apple is so far out of the realm

01:25:43 ◼   ► already that the Apple that

01:25:47 ◼   ► trust me, the Apple that most of us have in our minds is not what Apple is now.

01:25:51 ◼   ► Apple is one of these giant companies with huge revenues and

01:25:55 ◼   ► money who is eating all sorts of aspects

01:25:59 ◼   ► of our lifestyle, especially when they are adjacent to technology.

01:26:03 ◼   ► And it is actually hard for me not to

01:26:07 ◼   ► get more enthusiastic about it when we talk about theme parks because I think it is actually

01:26:11 ◼   ► intuitively, depending on what you are thinking, a bad fit

01:26:15 ◼   ► I actually think it is a great fit. No, I 100% agree with you. I think

01:26:19 ◼   ► this is something that when we last spoke about this,

01:26:23 ◼   ► we couldn't conceive of it. It just didn't seem like a good fit. But now

01:26:27 ◼   ► it is like if you now just take away all of the pain points

01:26:31 ◼   ► because as you say, Apple is so big they have so many of them anyway, just add more

01:26:35 ◼   ► of them and then take all the benefit. And there is a lot

01:26:39 ◼   ► of benefit here. Especially if you buy Disney and

01:26:43 ◼   ► don't take the theme parks, you probably shouldn't buy Disney.

01:26:47 ◼   ► I agree. There is a real argument to be made that, and this is very

01:26:51 ◼   ► Apple actually, which is don't rely on somebody else for things that are key to you.

01:26:55 ◼   ► One of the key values of your intellectual property, honestly

01:26:59 ◼   ► if you are Disney, is the theme parks. And they have learned in

01:27:03 ◼   ► buying Marvel that they didn't have control

01:27:07 ◼   ► over a bunch of the Marvel intellectual property because Marvel had licensed it to Universal

01:27:11 ◼   ► or other places. So I think

01:27:15 ◼   ► it is part of your core. It is like we are going to keep the publishing business even though

01:27:19 ◼   ► it is not what you think of as our business because the intellectual property is part

01:27:23 ◼   ► of our business. We are going to keep the theme parks. I mean, we can make

01:27:27 ◼   ► jokes about Disneyland looking like an Apple store and all of that, but fundamentally

01:27:31 ◼   ► there is a lot in common in terms of the

01:27:35 ◼   ► customer experience and the control and the money making that happens

01:27:39 ◼   ► and it just seems like a fit.

01:27:43 ◼   ► Cruise ships? I don't know. I don't know enough about that business.

01:27:47 ◼   ► I am going to put that in with the music business. My guess is that they would probably

01:27:51 ◼   ► be better off with a partner, but somebody can prove me wrong. They are better off

01:27:55 ◼   ► to have somebody buy, like with the cable channels, have somebody buy them out

01:27:59 ◼   ► and have a license that you are our

01:28:03 ◼   ► partner for this. But we are not. It is Disney Cruise Lines

01:28:07 ◼   ► operating. In fact, I am actually a little surprised that that is not already the case. That Disney

01:28:11 ◼   ► does Disney own all those ships instead of just subleasing them? No, they do.

01:28:15 ◼   ► Licensing the content to Carnival or something?

01:28:19 ◼   ► I believe they own the ships. I believe they own the ships. But that is

01:28:23 ◼   ► a cool part of the Disney experience, what they own, but I don't think

01:28:27 ◼   ► this one makes sense. Alright, let's recap Mike and Jason's Disney

01:28:31 ◼   ► Apple. We are Apple and this is what we are buying.

01:28:35 ◼   ► We are buying the film production studios and the actual

01:28:39 ◼   ► production services, the spaces. We are keeping

01:28:43 ◼   ► the content from the TV networks. We are keeping the

01:28:47 ◼   ► publishing. Streaming rights for sports if we can get

01:28:51 ◼   ► them, but we probably won't so we will just let those go. We are keeping the streaming platforms.

01:28:55 ◼   ► We are keeping the games and we are keeping the theme parks. That is our Disney.

01:28:59 ◼   ► That is our Disney. Apple Disney. To wrap this up,

01:29:03 ◼   ► I just want a simple yes or no. Do you think

01:29:07 ◼   ► Apple will buy Disney? Is there a time frame

01:29:11 ◼   ► on this? Five years.

01:29:15 ◼   ► Oh wow.

01:29:19 ◼   ► I think it comes back, I think it's the core question

01:29:23 ◼   ► which is what that industry veteran

01:29:27 ◼   ► said in the Hollywood Reporter article.

01:29:31 ◼   ► Which is, do we believe that the tech industry

01:29:35 ◼   ► is going to eat the entertainment industry whole?

01:29:39 ◼   ► Keeping in mind that a lot of the

01:29:43 ◼   ► money that has kept the entertainment industry going

01:29:47 ◼   ► has been like the sweet, sweet cable stuff that's all going to go away. We are entering

01:29:51 ◼   ► a market where everything is direct to consumer so you have got to get them.

01:29:55 ◼   ► You don't get all those people who paid you for ESPN anymore because they don't want

01:29:59 ◼   ► ESPN. So you have to convert them into an ESPN subscriber if you want their money.

01:30:03 ◼   ► It's a lot harder business to be in. Everybody in the entertainment

01:30:07 ◼   ► industry is struggling with this. Oh, I

01:30:11 ◼   ► in five years, if you ask me will somebody

01:30:15 ◼   ► buy Disney in the next five years, I think

01:30:19 ◼   ► I'd say yes. Is it, and I think Apple

01:30:23 ◼   ► is the most likely of all of those.

01:30:27 ◼   ► I think there's truth in what that industry hand said

01:30:31 ◼   ► about just because of, again, not that it makes sense emotionally

01:30:35 ◼   ► but it makes sense economically. There's so much money and power in the

01:30:39 ◼   ► tech industry right now. And as we've gone to streaming

01:30:43 ◼   ► the entertainment industry has appeared more and more to be a subsidiary of

01:30:47 ◼   ► technology, essentially. So

01:30:51 ◼   ► I would make a small bet on it. I wouldn't make a large bet

01:30:55 ◼   ► on it. But I would make a small bet. I would love, if you can give me some good odds, I would

01:30:59 ◼   ► probably make a bet there because I think that there's definitely a chance that it will happen.

01:31:03 ◼   ► I think it will happen.

01:31:07 ◼   ► I feel pretty confident that it will happen. Because like

01:31:11 ◼   ► building on what you were saying, I think if Disney sell they probably only sell to

01:31:15 ◼   ► Apple. Like I don't really see it happening in five years.

01:31:19 ◼   ► I can't imagine the situation getting so bad in five

01:31:23 ◼   ► years that they had to. Like this is more just a case of like let's do

01:31:27 ◼   ► it while we should do it, like within that time frame. Don't forget

01:31:31 ◼   ► that Disney's a public company so like if Apple wanted them and could

01:31:35 ◼   ► make an offer, like with

01:31:39 ◼   ► Elon Musk and Twitter, if they want it and they can make an offer at a price

01:31:43 ◼   ► that the shareholders

01:31:47 ◼   ► may value Disney as an independent brand but ultimately what they value

01:31:51 ◼   ► more is money. Well I imagine the only way it happens

01:31:55 ◼   ► is Apple have to come in and make an offer like that. Well sure

01:31:59 ◼   ► but like it could be Bob Iger

01:32:03 ◼   ► doing a handshake deal with Apple and saying this is what we're going to do

01:32:07 ◼   ► and we've got the number and then you have to go to the shareholders anyway but I don't think it's going to be Apple coming

01:32:11 ◼   ► in and saying stamp aside Bob, it's ours now.

01:32:15 ◼   ► It's Tim's Apple. I don't think that is the way that it would

01:32:19 ◼   ► work. But I do think it will happen.

01:32:23 ◼   ► I think there's a lot of logic to it. In the last week since this article

01:32:27 ◼   ► came out I've seen a lot of commentary where people are like oh this again and like believe

01:32:31 ◼   ► me I understand the tendency to say

01:32:35 ◼   ► I can't believe we're having this conversation again, it'll never happen.

01:32:39 ◼   ► And all I can say is as somebody who has tried

01:32:43 ◼   ► to keep my eye on what Apple is becoming as a company

01:32:47 ◼   ► and what is going on in the entertainment industry right now

01:32:51 ◼   ► with companies like Disney, keeping those two things

01:32:55 ◼   ► in mind, I cannot shrug this off. This is serious.

01:32:59 ◼   ► And I would ask you if you roll your eyes at the whole Apple/Disney

01:33:03 ◼   ► discussion to update your priors

01:33:07 ◼   ► a little bit about what Apple is trying to do in the 2020s

01:33:11 ◼   ► and where Disney is sort of located right now in terms of their assets

01:33:15 ◼   ► and in terms of their liabilities. And I'm not saying it will

01:33:19 ◼   ► happen but like if you look at this and just pooh-pooh it and say oh

01:33:23 ◼   ► that would never happen, update your priors because

01:33:27 ◼   ► you are making, I'm not saying you're wrong, I'm saying that if you

01:33:31 ◼   ► dismiss it out of hand you don't understand

01:33:35 ◼   ► where these companies are right now. Because if you understand where these companies are right now you

01:33:39 ◼   ► can't dismiss it out of hand. You could say it doesn't fit, it's a little too far, it's

01:33:43 ◼   ► not going to break that way. I'm totally open to that. I don't know if I would

01:33:47 ◼   ► say that it's greater than 50% likelihood, but boy it's so much more likely than

01:33:51 ◼   ► it used to be because these companies aren't what they were and the environment isn't what it was

01:33:55 ◼   ► and the world has changed. That's the bottom line. You know you were saying about

01:33:59 ◼   ► the E-TAN Entertainment thing, that I agree with.

01:34:03 ◼   ► It's obvious that the technology companies have decided they

01:34:07 ◼   ► want to be in the entertainment business and the technology companies

01:34:11 ◼   ► have so much more money, just so much

01:34:15 ◼   ► more money. And so it's kind of a situation of like, well they're just

01:34:19 ◼   ► going to do it. And you've seen it, we're watching it happen in front of our eyes right?

01:34:23 ◼   ► Netflix is included in this. They're just going in and

01:34:27 ◼   ► they're giving all the money to all the people they need to give the money to. They're

01:34:31 ◼   ► making a lot of stuff that isn't good but they're making a lot of stuff that is really good.

01:34:35 ◼   ► And so they're taking the pie, they clearly polluted

01:34:39 ◼   ► the minds of all of the existing entertainment companies to the point that they all

01:34:43 ◼   ► decided they needed to have their own streaming services, which I think history has shown

01:34:47 ◼   ► was a bad idea, that they all have one.

01:34:51 ◼   ► They shouldn't have all had one. Peacock shouldn't exist. Paramount

01:34:55 ◼   ► Plus probably shouldn't have existed. There are a bunch of these streaming services

01:34:59 ◼   ► that they shouldn't have done it but they did it because they all thought they had

01:35:03 ◼   ► to do it. Well they were trying to be one of the last ones standing. That's always

01:35:07 ◼   ► what you do. You lose a lot of money upfront because the goal ultimately is not to make money in the first

01:35:11 ◼   ► five years. That's the problem is that they've all pulled back now. The goal was to spend a huge

01:35:15 ◼   ► amount of money like Netflix but end up as one of the giants

01:35:19 ◼   ► who is established. One of the four. You want to be one of the last ones standing.

01:35:23 ◼   ► The problem is that Apple and Amazon especially, and Google is involved to some

01:35:27 ◼   ► degree too with sports rights and may be more involved down the road, these

01:35:31 ◼   ► companies have more money than the entertainment companies can ever do. Disney is not

01:35:35 ◼   ► going to be completing. Disney owns ESPN in a few years. They're not going to

01:35:39 ◼   ► be competing with ABC and CBS for sports rights. They're going to be

01:35:43 ◼   ► competing with Apple and Google and Amazon and guess what? They have more money

01:35:47 ◼   ► than Disney. They all have more money than Disney and if they want to

01:35:51 ◼   ► play in that game, the giants are

01:35:55 ◼   ► on the playground. You can't compete with them so you're basically

01:35:59 ◼   ► left to join with them and I think that's the truth of it. Because it's like every time

01:36:03 ◼   ► we talk about one of these tech companies not winning a war, it's probably because

01:36:07 ◼   ► they just decided not to go higher. Like they could have, they just decided not to.

01:36:11 ◼   ► The one thing we haven't talked about in this conversation is why would Apple

01:36:15 ◼   ► do it? And we've gotten at it sort of from the side

01:36:19 ◼   ► but I'll say the reason Apple would do it is because Apple clearly

01:36:23 ◼   ► sees entertainment as sports and services

01:36:27 ◼   ► and relationships with customers who are giving them money on an ongoing

01:36:31 ◼   ► basis as one, a huge growth area, a huge

01:36:35 ◼   ► area of success for them and two, part of the ecosystem.

01:36:39 ◼   ► And this is why it is arguably inevitable

01:36:43 ◼   ► that a company like Apple will invest even more in

01:36:47 ◼   ► entertainment and services is because

01:36:51 ◼   ► Apple is not doing the math of Disney of like, "Oh my God,

01:36:55 ◼   ► we need money from ESPN and money from Parks and money from Disney Plus subscriptions in order for us to

01:36:59 ◼   ► make a profit." Apple is like, "We get them in with

01:37:03 ◼   ► the iPhone, we sell them a service. We get them an Apple Watch, we sell

01:37:07 ◼   ► them a fitness service, we upgrade them to the bundle. They open

01:37:11 ◼   ► the TV app, we put our content in front of them, we sell them another service."

01:37:15 ◼   ► And Amazon is playing a slightly different game than that and Google as well,

01:37:19 ◼   ► but they're all playing like at a higher level where the entertainment industry

01:37:23 ◼   ► is just a little piece of the puzzle. If a pure entertainment player

01:37:27 ◼   ► it's a lot harder to make that, right? It's a lot harder to do that because

01:37:31 ◼   ► you don't have all of those other aspects.

01:37:35 ◼   ► And now there's an argument to be made that that's not really right or fair,

01:37:39 ◼   ► that you're leveraging your success and your money in selling smartphones

01:37:43 ◼   ► to take over the entertainment industry. Yeah, I mean

01:37:47 ◼   ► that's a fair argument. That's not the world we live in, unfortunately. That is not where we live.

01:37:51 ◼   ► They have the money and money talks.

01:37:55 ◼   ► Well, I know we're going super long on this, but this is really interesting. There was one other thing I wanted to bring up about the eating

01:37:59 ◼   ► entertainment thing, like the idea of entertainment and tech. One of my favorite

01:38:03 ◼   ► podcasts, The Town, by Matt Bellamy, he had an episode

01:38:07 ◼   ► a couple of weeks ago about, and he had

01:38:11 ◼   ► an agent on who's been in Hollywood forever, about like,

01:38:15 ◼   ► "Why are all the executives in Hollywood so old compared to how

01:38:19 ◼   ► they've been in the past?" And basically this guy, Rick Nacita,

01:38:23 ◼   ► who was the former head of CAA,

01:38:27 ◼   ► was saying, "Oh, because

01:38:31 ◼   ► back in the 60s and 70s and the 80s, Hollywood

01:38:35 ◼   ► was like the best place to go. It was the most

01:38:39 ◼   ► exciting." He said, "But now it's tech. Tech is where people go.

01:38:43 ◼   ► All the top executives, all the top minds, the people that don't, that just

01:38:47 ◼   ► want the best jobs or are the smartest, they'll just go to tech

01:38:51 ◼   ► now where they used to go to Hollywood because it was where the most exciting, most money

01:38:55 ◼   ► could be made. But that's not the case anymore." And so

01:38:59 ◼   ► that's one of the reasons why there are fewer and fewer younger

01:39:03 ◼   ► executives now in Hollywood, because the talent pool

01:39:07 ◼   ► is different. I thought it was an interesting perspective.

01:39:11 ◼   ► Matt Bellamy did a follow-up in his newsletter at Puck.News about this,

01:39:15 ◼   ► where he talked to a bunch of interns and stuff about their

01:39:19 ◼   ► perspective as members of Gen Z

01:39:23 ◼   ► about this industry. And yeah, several of them pointed out the same thing, which

01:39:27 ◼   ► is, the fact is, modern medicine and the fact that the

01:39:31 ◼   ► Hollywood of the 60s and 70s was maybe more hard living

01:39:35 ◼   ► than as we went on in time a little bit,

01:39:39 ◼   ► that you end up with these people who are the executives surviving and being

01:39:43 ◼   ► very old in some cases and still doing it, which is fine on one level,

01:39:47 ◼   ► but it does end up being an additional roadblock, which is

01:39:51 ◼   ► why would I want to get into this business? Politics is the same way right now in America,

01:39:55 ◼   ► where everybody's in their 70s and 80s or 90s.

01:39:59 ◼   ► It isn't just that those people aren't-- I mean, it's not like those people

01:40:03 ◼   ► aren't distinguished and maybe even knowledgeable about what they're doing, but it puts

01:40:07 ◼   ► up such a barrier that if you want to make a name for yourself as a younger, up-and-coming

01:40:11 ◼   ► executive, you're like, "Well, I can't do that, so I'm going to go over here." It's an interesting idea.

01:40:15 ◼   ► But it does make you think, if

01:40:19 ◼   ► it's exemplary of a shift

01:40:23 ◼   ► in attitude that goes along with a shift in money, we get

01:40:27 ◼   ► back to that same thing, which is, has the time come where

01:40:31 ◼   ► the big tech money is just going to take these little morsels and say--

01:40:35 ◼   ► Literally, Amazon looks at something like Paramount, the studio that's

01:40:39 ◼   ► been around for ages. I would say this about the Pac-12 conference. It's been around for 100 years.

01:40:43 ◼   ► It doesn't matter. Money talks. In the end, it doesn't matter. If they look at Paramount,

01:40:47 ◼   ► somebody looks at Paramount and says, "Oh, I'll have that. It costs what?

01:40:51 ◼   ► And I get all this intellectual property and stuff? Great. Let's take it."

01:40:55 ◼   ► That whole legacy of what that brand stood for

01:40:59 ◼   ► may stay in some form, but probably not, because

01:41:03 ◼   ► the eater of Paramount doesn't have those priorities.

01:41:07 ◼   ► They're thinking about a big picture. So, yeah, could Disney,

01:41:11 ◼   ► this amazing company that lives in the minds of so many people worldwide,

01:41:15 ◼   ► end up being an ancillary part of an iPhone strategy?

01:41:19 ◼   ► I know that sounds ridiculous. The answer is yes. It absolutely could.

01:41:23 ◼   ► We went long today. We'll come back to upgrade

01:41:27 ◼   ► Ask Upgrade. That's what it's called. We'll come back to Ask Upgrade next week.

01:41:31 ◼   ► If you would like to send in your questions for us to answer in a future episode.

01:41:35 ◼   ► Lasers have been-- Lasers deactivated.

01:41:39 ◼   ► Well, but it's also like you've got to fire them off a little bit so they don't explode.

01:41:43 ◼   ► Yeah, but we fired it into a little block of

01:41:47 ◼   ► cinder blocks or something. Just to stray into a cement block so it

01:41:51 ◼   ► doesn't reach us. By the way, those lasers, they are the questions.

01:41:55 ◼   ► They are the questions being fired into our brains.

01:41:59 ◼   ► But this time, the questions were just shot into a cinder block.

01:42:03 ◼   ► Right, it's canon. I guess so. We don't have them for us now.

01:42:07 ◼   ► But you can fire up-- You can load the laser cannons

01:42:11 ◼   ► by going to upgradefeedback.com, sending your questions for us there.

01:42:15 ◼   ► We'll talk about them on the next episode. You can also send in your follow up and your feedback

01:42:19 ◼   ► there at upgradefeedback.com. You can check out Jason's work at

01:42:23 ◼   ► sixcolors.com. You can hear his podcast at The Incomparable and here on Relay FM.

01:42:27 ◼   ► You can listen to mine here on Relay FM too and check out my work at cortexbrand.com.

01:42:31 ◼   ► We're on Mastodon. Jason is at Jason now on zeppelin.flights.

01:42:35 ◼   ► I am at iMike on mike.social. You can also find the show on Mastodon

01:42:39 ◼   ► as upgrade@relayfm.social. You can watch

01:42:43 ◼   ► video clips of the show there over on Mastodon but also on TikTok and Instagram.

01:42:47 ◼   ► We are @upgraderelay on both and we're also on threads. I am

01:42:51 ◼   ► @iMike, I am YKE and Jason is @jasonljsnell.

01:42:55 ◼   ► Thank you to our members who support us of Upgrade Plus. If you would like longer,

01:42:59 ◼   ► ad-free versions of the show each and every single week, go to getupgradeplus.com.

01:43:03 ◼   ► Thank you to our sponsors of this week's episode, ZocDoc and ExpressVPN.

01:43:07 ◼   ► But most of all, thank you for listening. Until next time, say goodbye Jason Snow.

01:43:11 ◼   ► Goodbye Mike Early.

01:43:15 ◼   ► [Music]

01:43:19 ◼   ► [Music]

01:43:23 ◼   ► [Music]

01:43:27 ◼   ► [BLANK_AUDIO]