Scott Galloway · 42:34
Six packs at the end cap. That stuff is hugely... That's a bigger business than advertising. That's a bigger business than advertising.
Kara Swisher · 42:41
I think that's what Jeff Bizis and I argued about a hundred years ago at a TED. He said they'd never do it, then they did it, and I called it out.
Scott Galloway · 42:48
I everybody talks about AWS, but Amazon Media Group is probably alone out of 50 or a 100... Probably more than that, probably a 100 or 300,000,000,000 in market capitalization. It's an unbelievably powerful company.
Kara Swisher · 42:59
It's found money is what's on the floor. It's money on the floor.
Scott Galloway · 43:02
So the big winners, I mean no shocker here, Facebook, Google, and Amazon, they pick up money. What'll be really interesting is to see what happens to the guys one level below that. Pinterest, Twitter, like what happens? Because Twitter's usage is off the charts, but their advertising tools just don't nearly, they don't rival Right?
Kara Swisher · 43:25
Could.
Scott Galloway · 43:25
They haven't been nearly as innovative. I think they do too. Oh, full disclosure, I'm a Twitter shareholder. But like Pinterest, like what happens to the guys one level down? I think that's the more interesting question, but radio
Kara Swisher · 43:37
And what about what happens to the big cable companies, the radio companies?
Scott Galloway · 43:40
Especially without sports, you gotta think cord cutting is getting accelerated. People were holding onto cable because of sports, and now with no sports.
Kara Swisher · 43:49
There will be sports, though. Again, it'll be back. Sports will be back.
Scott Galloway · 43:53
Yeah, but it seems like it's gonna take a while, right?
Kara Swisher · 43:56
Yeah, but they'll be back. Like, that's not
Scott Galloway · 43:58
gonna But in the meantime time. In the meantime, do you cut the cord, and then the OTT guys have the incentive and the money to finally say, Okay, NFL, let's sit down and let's get serious. Okay, NBA. And Amazon is already streaming some NFL and some, I think it's Premier League games. So, look, cable
Kara Swisher · 44:16
is They've got these wrapped up for many years. I get confused when I think about all the sports ball stuff, but they do, I think a lot of these companies have it wrapped So who is in trouble? Is it the News Corp? It DSCs, the Comcasts?
Scott Galloway · 44:33
You know who doesn't get talked about a lot in media that's really in trouble, and this goes into my prediction today. Everybody talks about the terrestrial guys. I think the cable companies are consolidated enough, they have such incredible cash flow, they're really well run businesses. You know, their stocks might go down, but I think they're gonna be okay. The smaller guys, the AMCs, the Viacom's, they get gobbled up. I think the media companies that are in the most trouble, radio's gonna go chapter 22 again. They're gonna have a difficult time. What you're gonna see though, that people don't talk about, they assume that digital is immunity to anything. The guys who are being really hard hit here, and this goes to my prediction, is the secondary digital players.
Kara Swisher · 45:16
All right, we're gonna get into So we have predictions next. But I wanna know who of the big TV companies, these big companies are gonna get hit. The ones that are the big... NBC, ABC, CBS, Fox News
Scott Galloway · 45:32
CNN. Would think, well, okay. MS. When you're talking about these guys, when you're talking about NBC or NBC or NBC, you're talking about Comcast. Yes. Which they have unbelievable assets, incredible cash flow, cable.
Kara Swisher · 45:46
So less town cars at NBC.
Scott Galloway · 45:48
Yeah, but the little guys, the AMCs, quite frankly Viacom, I don't know what happens to Viacom in this. Have CBS All Access as a bright spot. You just mentioned Comcast, News Corp. I think it's fine. I think Fox has carved out such a crazy following. I think that they will figure out. Also, ad supported TV has a market, but it has a market for personal injury attorneys and
Kara Swisher · 46:13
Yeah, and MyBioGuy. The MyBioGuy
Scott Galloway · 46:15
And opioid induced constipation medication, and there's a lot of old people out there, and most of them are watching Fox.
Kara Swisher · 46:20
Actually, CNN has a lot of that
Scott Galloway · 46:23
CNN is AT and T. So I believe over time AT and T re spins Time Warner because there... I can't see any synergy between this content and telco that was supposed to materialize to support what was a rich acquisition
Kara Swisher · 46:39
price.
Scott Galloway · 46:39
Well, they're just spinning out again. I mean, these are incredible assets. I just don't see what leverage or synergy they're getting attached to a
Kara Swisher · 46:45
phone company. Then they live off of opiate stuff like like
Scott Galloway · 46:49
Well, HBO. Whatever those drugs. Okay. HBO on its own is worth a ton of money. HBO still
Kara Swisher · 46:53
The Hurricane.
Scott Galloway · 46:54
HBO Max I think they totally fucked up in my opinion by crapping up all that gorgeous content with The Big Bang Theory. But in terms of the big media players, they're gonna be fine. I don't think they're great places to invest. They will continue to leak shareholder value to Facebook, Google, and Amazon. But they're not in any sort of dire straits. Have such incredible franchises, such great human capital.
Kara Swisher · 47:13
Okay, but it's the big ad spent ad companies like you were talking publicists
Scott Galloway · 47:17
it and
Kara Swisher · 47:19
is the amount of money they have to spend on things that they're be
Scott Galloway · 47:23
They'll all be under pressure to reduce costs, and the place they'll turn is they'll go back to their ad agencies and say I need you, know, and G and all these guys will go back to their agencies and say, I need you to optimize or I can spend the money with someone who's optimizing for me and that is Google or Facebook. So it's the services guys that are that are gonna get, I think, hit really, really hard.
Kara Swisher · 47:47
Alright. We're gonna make one more quick break, and then we'll be back for predictions. Scott has already started on his, and we'll about that in more detail.
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— Predictions segment begins —
Kara Swisher · 48:44
Okay. We're back. Scott, between your Uber predictions and my Amazon to buy theater predictions are truly are truly on fire. You just started a prediction about the the second tier digital companies such as Vox Media, maybe BuzzFeed. They closed their UK and British operations, for example. Tell me more.
Scott Galloway · 49:04
Yeah, well your instincts are right on. I think there's gonna be news very soon that involves Yelp, BuzzFeed, potentially our employer Vox. These are smart people that right now don't have the scale.
Kara Swisher · 49:20
Merger. You're talking merger. I've heard
Scott Galloway · 49:22
that Yes, something. Yelp every year Yelp loses power currency and shareholder value, and it's a great company with interesting technology. Vox, BuzzFeed both have really good audiences, really good, you know, they've been really good.
Kara Swisher · 49:38
Vice? Vice is in there speaking.
Scott Galloway · 49:39
Vice. They've actually got an outstanding new show, so that that will save their ass. What is Vice? I don't know. Anyways I
Kara Swisher · 49:53
don't know why they didn't just fire you now.
Scott Galloway · 49:54
Everyone else does. I mean, it's gonna happen sooner or later.
Kara Swisher · 49:57
Like, Nancy Dubuque, let me... Call me.
Scott Galloway · 50:00
I've never even met her.
Kara Swisher · 50:01
I used to explain. She's great. She's she's a tough lady.
Scott Galloway · 50:04
Let me just... I'm used to those.... Lady. I'm used to those lady. The dog is... It only goes to households run by tough ladies.
Kara Swisher · 50:12
She's a tough lady. I think you... We need to... When when we are out
Scott Galloway · 50:15
of pandemic, you, me, her
Kara Swisher · 50:18
are going for a train....
Scott Galloway · 50:19
Powerful than Williamson.... My boss.
Kara Swisher · 50:20
No. I don't know. I know her because I cover her
Scott Galloway · 50:23
for years. You give each other pedicures.
Kara Swisher · 50:24
Think you make fun of me for having done my job, which is to get to know the people I cover. But I'm not gonna I'm not gonna... Like, it's fine that I know a lot of people. I... But apparently not Elon Musk anymore according to his mother. But let me just say, she's a tough lady. But what happens to those? So you're talking about a merger. I've heard this rumor just the other day.
Scott Galloway · 50:43
None guys make of any sense alone without cheap capital, without the consensual hallucination that these companies are the next Amazon with cheap venture capital money. They all have to get together and say, all right, we have to hold hands. The panzer tanks have rolled in, and they are coming up on Moscow, and they are they are bombing the shit out of London. And the British, the Russians, and the Americans have to figure out a way to get along.
Kara Swisher · 51:08
Well, know, the Germans did not win in that battle, but go ahead.
Scott Galloway · 51:11
That's a fair point.
Kara Swisher · 51:12
Okay. A a fair metaphor. I'm trying to keep you historically sound. I just interviewed John Meacham, so I'm very historically oriented right now. But let me just, talk to me about what the merger looks like. What And is the why together are they better than apart?
Scott Galloway · 51:27
Because they can fire a shit ton of people. Because take, they have one CFO, they have one producer across all other podcasts, they have more power with people like you and me. They have the money to invest in technology to do the type of ad tools that Facebook and Google have. These guys have to triple their audiences and have to cut their costs by 40%. And then they're viable interesting companies. These are all units of a bigger, the whole is greater than the sum of its parts or none of these companies have gotten to the scale they need to. And they're smart people. Our guy is a great deal guy. I thought New York Magazine, us acquiring, I say us, I had nothing to do with it. But I think Vox acquiring New York Magazine was one of the gangster deals of the last year. It made a ton of sense. You and I are doing better. This podcast is doing better because of New York Magazine. So times three, BuzzFeed, The Atlantic, Yelp, these guys all have to come together and say, alright. And and and probably because the DOJ has its head so far, it's asked, it'll decide that that's a competitive I
Kara Swisher · 52:29
think that that you're right. It has to get bigger. It has to get bigger. It has to it has to get bigger. And and it has to get bigger with some sort of protection like from a Lorraine Powell jobs. You know, you you left out, interestingly, the Washington Post and New York Times.
Scott Galloway · 52:44
Well they're family owned, they're not going anywhere. They have deep pockets. They have I mean especially obviously the Post has the deepest pocket in the world but the New York Times and I know this family as long as they're making money they have no interest in letting anybody else into the room. They're just not... That's just not the way they roll.
Kara Swisher · 53:01
Alright. So it's these other businesses. Atlantic, what else? What what other what other companies are in there? I don't know. Vice is in there?
Scott Galloway · 53:09
Oh, Vice is a 100% in there. Vice makes no sense as a stand alone company. They have some assets, but it doesn't make any sense as
Kara Swisher · 53:14
a stand alone good content. They... And they all interestingly have money from companies like NBC and Disney and other things. What happens to that?
Scott Galloway · 53:22
Well, yeah, well, they get to hold on to the money, but I mean, it's not aspirational, but basically these are companies that can hold on, they merge, they hold on to 100%, maybe even they grow their revenues faster, and they cut their costs by 20 to 40%.
Kara Swisher · 53:35
All right, that is fascinating prediction. And it affects us. How does it affect us? I think really that's what I'm more interested in because everything is about you and I and our hegemony.
Scott Galloway · 53:46
We go from being the tallest midget to the second tallest midget. I don't know. Think that at
Kara Swisher · 53:51
Don't the end the day use that
Scott Galloway · 53:54
Tallest little person. Anyways, look it's strange but what I've seen through this is that talent if you will still commands a disproportionate amount of the revenue stream. I can't get over how brown to me everybody is now that I'm quote unquote now considered talent. That part of the ecosystem, what's weird though is that again it's more of a Hunger Games economy. The top 1% gets 90% of all the revenues around talent. But you're gonna see a merger across some of the tier two guys. What would be interesting, it would be interesting, I don't know, it'd be interesting if Twitter had a full time CEO they could do some interesting acquisitions cause their currency is still inflated and they could probably show up and buy a few of these things and try and figure out some sort of offline online, like, they need to do something there, but I don't know. Look, there's something... A crisis is a terrible thing to waste....
Kara Swisher · 54:47
I don't know what it is, but it is gonna be great. That's not...
Scott Galloway · 54:51
My gosh.
Kara Swisher · 54:52
West Side Story is supposed to be released in theaters and it has not, unfortunately.
Scott Galloway · 54:56
Remind me to to never go see it now. But look Great. Prediction, some of these online content companies are gonna start merging or doing something interesting. There's assets there, there's management Soon,
Kara Swisher · 55:10
how soon?
Scott Galloway · 55:10
I don't know, next thirty to ninety days.
Kara Swisher · 55:13
Alright, that's a big one. That's a big one, Scott Gallie. I like it, it's interesting, it's off the beaten path. I like the whole prediction situation.
Scott Galloway · 55:21
You have any predictions?
Kara Swisher · 55:22
Oh, every now and then I get a good one. I do not this week, but I haven't thought about it. I'm having some interesting interviews next week. I'm talking to Brian Chesky from Airbnb. I am talking to Dara Khosrowshahi, so I may have some predictions after that, after I talk to them as I glean. They are talking to me. And by the way, Brian Chesky's mother thinks I'm Grant. So that's a good thing, I guess. I've never met Dara's mother
Scott Galloway · 55:50
in any case. Got that.
Kara Swisher · 55:51
Scott, that was a great prediction, but we gotta get out of here.
— Predictions segment ends —
Scott Galloway · 55:55
We do have to get out
Kara Swisher · 55:55
of here. So don't forget there's a story in the news you're curious about and wanna hear your... Our opinion on. Email us at pivot@voxmedia.com to be featured on the show. And, Scott, please read us out.
Scott Galloway · 56:05
Today's episode was produced by Rebecca Sinanis. Our executive producer is Erica Anderson. Special thanks to Drew Burrows and Rebecca Castro. If you like what you heard, please subscribe or download wherever you listen to podcasts. Tune in next week for a breakdown of all things tech and business. Have a great weekend, Kara.
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