Netflix Chief on the Future of Hollywood

Hello, Los Angeles. Today's number, 98%. The percentage of people in this chosen profession who do not make a living in their chosen profession. Acting. Welcome to ProfG Markets.

There we go. So, I usually start with a joke. I was trying to think of a streaming joke. Ed, true story. I broke up with my first girlfriend because she claimed that Netflix was the lowest price streaming media company. And I just couldn't have a relationship with someone who was a Hulu cost denier.

Hulu cost.

Yeah. Yeah, they get it. All right. You want a dick joke? Is that what we're looking for here?

Ed, I just have this sinking feeling my girlfriend has a dick. It's just something I feel inside of me.

Welcome to Prop Market from Los Angeles. That's good. It's very good to be here in Los Angeles, known as the center of Hollywood. That's what a lot of people think of LA, but it's also the center of a very exciting new technology. And before we'd like to begin, I just like to share some numbers of my own. You know, I love data Scott. On that technology and this historic city's relationship to it. So before we start, I just going to give you share some data here. So this today's number, the first number is 3,000. That is the percentage increase in California's GLP-1 prescriptions in less than 5 years. The next number is 1 in 10. That is the share of Californians who currently use GLP-1 drugs. The final number is $1.6 billion. That is how much the state of California spent on Ozic and WGOI in one year. More than the entire state park budget. Very impressive numbers, Scott. You know, I think maybe half of these people have probably lost their jobs to AI. But the one thing that I can see looking at the audience is everyone is very hot and very thin. So, let's just give it up for the crowd one more time, the city of Los Angeles, and then we're going to start getting into the show. Before we do that, we can't talk about GLP1 just for.

So, seriously, I think GLP1 is going to be bigger than AI. And AI is basically fear is the product. I'm so awesome. I've created this monster that's going to destroy the world after I've sold my shares and peace out to the code deserve with a bunch of Russian. That's not helpful. GL talk to anyone who's on a GLP-1 or use and uses AI every day and ask them what's had a bigger impact on their life. And while the incumbents and the current seniors or incumbent industry or politicians want to create this illusion of complexity around how difficult it would be to solve our problems, whether it's inflation, weakness, a lack of optimism for the future for young people, it comes down to our deficit. The easiest way, absolutely the easiest way to solve the deficit problem would be the following. In Japan, they spend $5,500 per consumer on per capita on healthcare. We spend 135. We spend $8,000 more than Japan on health care. Times 350 million people, you're talking about $3 trillion a year in incremental health care costs. Why? 40% of America is obese. 72% are obese or overweight. In Japan, 4% are obese. If you wanted to solve the deficit, you would go after the health industrial complex, hospital systems, kidney dialysis, statins, pharmaceuticals. And just just to piss off people on the left, the diabetes industrial complex has tried to convince us that people aren't obese. They're finding their truth. No, they're not. They're finding a ventilator. Obesity is the menace in this society. And we have we have a way to solve it. America should put out, the government should put out an RFP for a billion doses of GLP-1 and give it free to any household in any rural area making less than $60,000 a year. You would see slowly but surely our health care costs go down and for the first time we could really significantly address our deficit. But instead, the incumbents want to convince you that it's not a solvable problem. GLP1 is the technology that could revolutionize the West. Back to you, Ed.

I think you're preaching to the choir here. And now that we've done that, I'm going to move us on to our first story of the evening. We are live in the entertainment capital of the world. Here in Los Angeles, movies and TV generate more than 115 billion dollars every year and support nearly 700,000 jobs. Hollywood doesn't just drive culture here. It drives the economy itself. However, the industry is at a turning point. AI is rapidly changing how films are made and at the same time the traditional media model continues to erode. Last year, the combined viewership of broadcast and cable was surpassed by streaming for the first time in history. Meanwhile, short form video continues to surge as well. So, the big question that is hanging over this city is simple. What will the future of Hollywood actually look like? Here to answer that question, we are speaking with the man at the center of the industry. Ladies and gentlemen, please welcome Ted Sarandos, the co-CEO of Netflix.

Thank you for being with us, Ted.

I hope you weren't offended by Scott's jokes.

He was covering his ears.

Yeah. Is that the one that gives you a head of hair? If I had your hair, I'd be I'd l If I had his hair with my rap, I'd be the number two leading in the polls for the Democratic nomination for president.

Look at that hair.

Yeah, that's the problem. Yeah. All right. So, we're going to get into the questions here. Ted, I'd like to start with something I think is on everyone's minds, and that is the maybe acquisition, then not acquisition of Warner Brothers Discovery. Just to jog everyone's memory back in December, Netflix had agreed to buy Warner Brothers Discovery or at least the studios and the streaming assets for $83 billion. And at that point, it started something of a bidding war with David Ellison of Paramount. There was kind of a lot of auctioning happening and then eventually David Ellison bought the company for $10 billion. Netflix decided to walk away. So, first question to you. What was the thinking behind going after these assets and then what was the thinking in ultimately deciding to walk away from the deal?

What do you think the odds are of AI coming not even at Hollywood but at the creative community in general? Do you think do you think the fear is overestimated underestimated?

So, we always make a prediction at the end of the show.

Yeah. So, at the end of the show, we always make a prediction. And two years ago, I made a prediction that Netflix would merge with a large entertainment company and become the biggest media subscription company in the world. Except I predicted it was going to be Disney. I look at Disney, its stock is below where it was 10 years ago. And I see a combination between Netflix and Disney where you would take your unbelievable IP, you know, K-pop Demon Hunters, Wednesdays, Stranger Things rides, vertical eyes in what is a singular parks business. And then you you would own Family and Adult. You'd be the largest. And quite frankly, I would want to break up. I don't think that I don't think that merger should ever happen because I think you don't like these mergers. I know you don't. Yeah. Well, we're going to talk about inflation later, but corporations have been able to consolidate and charge everyone higher rents, but that's a longer talk show. But you could get it done in this administration.

Would you ever consider do or let me put it a different way academically? Do you see the industrial logic behind creating this unbelievable vertical juggernaut with your IP, their distribution with parks and owning subscription across family and adult? To me, that just makes all sorts of industrial logic.

Yeah. You mentioned Netflix House you said which recently launched in Philadelphia in Dallas. The plan is to Vegas coming soon. Vegas coming up. It seems as though Netflix is getting into the parks business. You said it's maybe a night out, but how central is physical venues? How central are live events to the business going forward?

Yeah, Netflix is one of the largest streamers in the world. It's certainly more popular than Disney Plus, Paramount, Hulu. There is one other, some would call it a streaming service though which is very popular and that is YouTube which is actually dominating in terms of television viewing time. How do you think about YouTube? Do you think of YouTube as a competitor? And if so, what is your approach to competing with them?

Yes. One thing you didn't mention on that point, you're competing with YouTube when you pick up the remote and you turn on the TV. Increasingly, people aren't even doing that. They're taking their phones out and they're scrolling on their phones. And for young people, for Gen Z, we're spending around 8 hours a day on our phones. To me, that's eating into content time. That's eating into watch time. And something we've been talking a lot about on on on the show is the idea that clips seem to be taking over. Short form content seems to be kind of king at the moment. Do you those are obviously dominated by basically Instagram you could argue YouTube shorts kind of and Tik Tok do you think of Meta and Tik Tok as competitors as well?

So, the good news is in 2008, I bought Netflix stock for $12 a share. Wow. Here we go. Yeah. But wait, now you listen to everything he says. So it's I think on a split adjusted basis it's now at 700. The bad news is I sold it three months later at 10 bucks a share for a tax loss. I literally want to find a time machine so I can go back find track my ass down kill me and then kill myself. Anyways, distinct to that your stock is up I think 850% in the last 20 years. So the last 5 years it's kept pace with the S&P but it hasn't outperformed and the last year has been not a tough year but you're a CEO of a public company and it's very much what have you done for me lately and I think the general sense is and you tell me if this is not correct is the clip economy that that Ed is talking about is just eating I mean the fear is of people our age is we don't know what we don't know and what I see with my kids and I think unfortunately right now the most powerful force in media I would argue is probably Instagram else and that is our brain. We have a generation of people being wired to consume content in 60 and 90 second for big format. You now have including debt the acquisition you passed up you technically after I I heard you were passing I texted I'm like you got $12 billion to go plan traffic now it feels like you do need to inspire some more growth. You're you're still growing, but I doubt you think of yourself as a mature company. And your growth your growth is still solid, but not the growth it once was. With that $112 billion, where are you going to find growth? Is it continuing to do what you do, or do you have do you have other ideas about new businesses you're currently not in?

But you don't you don't see a need or an opportunity to take your content and slice it up in some sort of new using new technology and create or play in the short form video space.

On this idea of I mean Netflix is sort of the premium product. It's better than free. I think everyone agrees on that. But there was a controversial decision that you made back in 2022 that I think you did not support, which is that you launched ads. You launched advertising. It seems to have been an enormous success. Ad revenue is on track to double to $3 billion, more than 250 million ad tier viewers. Talk about the decision to implement advertising in Netflix. A lot of people said, 'No, this needs to be a premium product. We don't want advertising on our platform.' But at the same time, a lot of people use it and a lot of people seem to like it.

What do you think people are complaining about now that you need to solve?

Netflix recently launched video podcasts which is exciting. Who would do a video podcast lame? You've struck deals with IE art media bar stool and many other podcasts. And I just saw today that you just signed a deal with J Shetty who's going to be bringing his podcast over to Netflix. Talk a little bit about getting into podcasting. Why is that the move now?

Well, if you ever want to acquire a podcast with a strange professor and a guy with a weird accent, you'll find you'll have to work on that Hulu joke before you come over. Yeah, I think your insight on podcast is just just genius.

Remember the old like podcast where now video podcast. Now when you ask someone to be on the podcast, they got to they got to get dressed up. They got to go. They got used to turning into talk show. Everything's turning into TV.

So you could live anywhere you want. I mean, you could be the co-CEO of Netflix from anywhere given the way your industry is set up and the dynamic and the kind of the currency you have in the marketplace and you choose to live in LA and I I find I don't know because of social media, but I find all the posting of cities on the West Coast is just so overdone. I was in San Francisco yesterday. I was in the hellscape of San Francisco yesterday and just kept thinking, 'This place is beautiful.' And then, yeah, and by the way, it's added the GDP of Europe since World War II in the last 18 months. And then you come into LA, you fly over the Pacific Coast, you go to In-N-Out Burger, you see this collision of creativity, the Uber drivers are hot, right? It's an interesting insight there. Yeah, everyone is so hot here. Anyway, the you you choose to live in LA, so I'd love to hear just your views on why you could live anywhere and despite the very real problems that LA faces, you choose to live here. And also just what advice and I'm sure you've been asked by the governor and other people. What do you think LA could do to ensure I mean the creative community I don't want to say it's been gutted here but there's now more spending and production in Vancouver in Toronto there is in LA. So one why do you personally choose to live here continue to live here? And two what advice would you have for city officials and government and federal officials to try and yeah even recapture some creative creative juice here?

A lot of young men listen to this podcast trying to be without thinking it through too much. This is not an investor question. You don't have to think about the stock price. I whenever I talk to you, I try and pitch you on starting a Tik Tok competitor and you just sort of like humor me and then we end up talking about your kids. What advice would you have in terms of what you've gotten right and what you've gotten wrong or the learnings trying to be a good partner, good husband, and a good father?

Which is a myth, a myth I think, which is that there's any such thing as life-work balance.

And on raising kids, thoughts on... I mean, we just ultimately we always end up talking about kids. Thoughts on, you know, you want to be a good dad.

It's a good place to end.

Ted Sarandos is the co-CEO of Netflix. Thank you so much.

Thank you, Ted.

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So, if you haven't noticed, gas has gotten very expensive. Sounds like they have noticed. In the state of California, gas prices have risen to more than $6 per gallon. And here in Los Angeles, it is even higher. It's $6.12. Unbelievable. But higher prices aren't just a California story. Across the US, inflation is accelerating at a historic rate. National gas prices are rising at their fastest pace since 2022. And the personal consumption expenditures index, which is the Federal Reserve's preferred measure of inflation, that just came out. It just hit 3.8%, which is the highest number in almost 3 years. Consumers are now feeling it. The consumer sentiment index just dropped to an all-time low, worse than the Great Recession, worse than the COVID-19 pandemic, the lowest score we've ever seen. And the big question for investors now is, are consumers reaching a breaking point? That's the question to ask yourself if you're invested in the market. Scott, I'm just going to rattle through some of the inflation data here. So PCE inflation, I said it hit 3.8%, highest since May 2023. CPI 3.8%. PPI, this is the producer price index. This measures wholesale prices that just hit 6% inflation year-over-year. Services inflation up 3.3, shelter inflation 3.4, energy inflation 17.9%, gasoline inflation up 28.4% year-over-year. I don't know if it's just me, but I think it is fair to say at this point that inflation has officially gone out of control. Or maybe I just have Trump derangement syndrome and I'm just reading into it too hard. Maybe I'm just political. What do you think, Scott?

Inflation brings down societies or starts revolutions. People think when you're unemployed, you're depressed. But what causes a revolution or a change in a society is when you're working two jobs and you're still hungry. And if you think about inflation, it really has been very pernicious. If you're not making more, if you're not making 25% more than you were in 2000, between inflation and a lack of strength in the US dollar, you're behind. And what inflation does is we've had more so than I think in the last probably 30 years recently. What you essentially have is a transfer of wealth from earners to owners. Because if you're making $100,000 a year working as a makeup artist in Hollywood, and you aren't making 120 within 5 years, your quality of life has gone down. But meanwhile, the person who owns assets, owns a building, owns real estate, in fact, they're just fine. So again, it's another transfer of wealth from the earners to the owners. Now, the problem is, well, okay, great. What do we do about it? It's the boring stuff that moves the needle and we don't want to have an adult conversation about what's required to reduce inflation. We're spending 7 trillion on 5 trillion receipts in our government. Essentially, inflation is too many dollars facing too few products. And when you're spending 7 trillion on 5 trillion, you're just going to have inflation. It's reeling in government spending, which is going to cause a lot of pain. And quite frankly, it probably means kissing and making up with China and figuring out a way to have the probably the biggest tax cut in history would be if we kissed and made up with China. Because you're going to... I mean 88% of our toys under the Christmas tree are from China. These tariffs are just... it would be difficult to think of a more elegant way to raise prices across the board than tariffs. That's just literally... I taught macro and microeconomics when I was at graduate school in Berkeley and we used to use tariffs as an example of how just stupid they were 100 years ago. I mean we were just... so inflation is literally how you start a revolution and I think it's already happening. I think we're having a small, a number of small forms of revolution, but it requires an adult conversation around long-term policy planning, which America and to be blunt, American voters just don't want to have. But this is how societies fail.

And at the same time, you're protected from inflation if you're earning more money because you can decide to downgrade your purchases. And this is the other big problem that we're about to see. If inflation is rising, then you could decide and you're making a lot of money, 'Okay, maybe I won't eat out tonight. Maybe I won't order the beef tonight. Maybe I'll go for the chicken. Maybe I won't take that vacation.' You can really adjust your lifestyle in accordance with inflation. For the lowest earners in society, you're already at the floor of the spending and you can't downgrade any further. The floor just continues to rise. And that is exactly what we saw in 2022 where for the lowest earners in society, inflation actually rose 8% faster than it did for the rest of us, than it did for the average of the CPI. Again, because they couldn't make any lifestyle adjustments. They couldn't do that. Now, on the policy point, you make the good point that there are a lot of, you know, complex and important discussions that we could have on how to reduce inflation, how to prevent this. And most of the time I'm in agreement. We need to get people together. We need to get a think tank together. Get all the expert economists and figure out what are we going to do about inflation on this round of inflation? I have two ideas on what we could do. One, what has been the most inflationary thing that we've seen in our economy today? It's been one thing. It was tariffs that added 1 percentage point of inflation. We were at 2%. You added one percentage point, you got us up to 3%. Very easy fix there. Get rid of the tariffs. Done. Policy solution. One of the easiest solutions ever. And then what was the second thing that this president did? The second thing that he did was in February he decided to launch this war in Iran. He did not plan on how he would execute it. He did not plan on what he would do about the Strait of Hormuz. He didn't plan on what he would do about the fact that gas now cannot get out of the Strait of Hormuz and now gas prices are up 50%. And what did that do? It added again 1 percentage point to inflation. So we were at two, tariffs took us to three, Iran took us to four. The Federal Reserve's target inflation rate is 2%. I have two ideas to get us back down to two, back to where we were supposed to be. Get rid of the tariffs. Get out of Iran. Those are the solutions. And it's unbelievable how we have manufactured this problem for ourselves. We talk about the inflation that we saw during COVID which was really bad. And we should recognize that. I mean we had 8 and 9% inflation at one point but the reason that happened was because there was a pandemic that showed up which gunked up supply chains and then we had to figure out what to do about the fact that we couldn't get together in person that we couldn't physically interact with each other. That's why you saw those price rises. That was the problem. And it was something that we couldn't do ourselves. We couldn't address it ourselves. This one is all our own doing. And as I said to you before, this reminds me of Brexit. This is exactly what happened in Britain. Just decided, you know what? We're going to put up barriers and make life harder for ourselves. Those are the policy solutions for me.

Ed, you give me hope. I think you're wonderful. That was perfect. I have nothing to add to that.

Well, one thing that we should also think about then is what are investors thinking about this? Because we've talked about on the show, inflation is a problem for the economy, but the economy isn't necessarily the stock market. And investors so far haven't been so worried about this inflation problem because ultimately stocks go up. So at this point, how are you thinking about inflation as it relates to the equity markets and how it could affect stock prices going forward?

So the Dow and the NASDAQ I think are two of the most damaging metrics ever invented because they create the delusion of prosperity. 90% of the stocks are owned by 1% of the populace. So essentially the Dow and the NASDAQ are not a proxy for the well-being of America. They're essentially a wealth index for the top 1%. And spoiler alert, they're killing it. We don't track suicide rates among teens. Does anyone know what that is? It was at an all-time high two years ago. It's actually come down the last two years. Opiate deaths. Does anyone know per 100,000 what that is? That's actually wonderful news that's come down the last two years. My point is we don't track the things that impact the well-being of Americans. We're obsessed with... we've been told that the well-being of America is essentially what is the well-being of the top 1%. And the reality is America is now a giant bet on AI. And that is effectively 93% of GDP growth and now 40% of the market of the S&P is based on the capex of 10 companies that have made a giant bet on AI and they're not subject to tariffs. They are... I mean it's obviously an unbelievable technology, they have access to capital, but the reality is the majority of Americans aren't participating in the uplift of the NASDAQ or the S&P. And going back to the notion of revolution in this country, I think that when you see people traveling 100 miles to protest a data center, data centers have essentially become a vessel or physical manifestation for income inequality. And people are just incredibly angry because what they see is all I hear is that the NASDAQ and the S&P are going up. All I hear about AI companies going public at a trillion dollar market capitalization and I'm trying to figure out, you know, I'm sitting there and I'm one of the 40% of US households. You want to hear what's criminal about the United States right now? The S&P is on an all-time high. Housing prices here, the average house has gone up, I don't know, I think 40% pre-COVID and 40% of American households have medical or dental debt. And so, you translate that down to a household, that's a single mom whose 15-year-old daughter wakes up in screaming tooth pain and has to go to the emergency room or emergency dental visit and has to borrow the money to get a root canal for her daughter. I mean, think about the shame of that, right? And we don't track medical and dental debt. Like, quite frankly, who the fuck cares that the NASDAQ's at an all-time high when our team... So, we need different metrics and we need... once a metric becomes kind of universal, it ceases to be relevant or important. But the general sense is or my sense is that we are really... I mean effectively we're moving back to where we've been throughout history and it's the following. The American middle class is an accident. From 1945 to 1995, America had 5% of the world's population and we had 40% of the economic growth. So we had eight times the prosperity and we did it through diversity, competitiveness, incredible distillation of rights across our population such that they can enter the workforce and make good money and felt confident to buy homes, felt confident to take risks and those types of things. We're returning to where the world usually is and where most economies have been for 99% of history and that is a small number of hardworking, talented, fortunate people who sometimes garner a lot of the resources through inheritance, create regulatory capture, invest money. We do it through Citizens United in the government and start aggregating more and more capital and they basically run away with the game. And in our nation, we've essentially decided to embrace that and move back to the laws of the jungle. We have lower taxes on people who sell assets versus people who earn assets. So, we've made a conscious decision in this country to move back to sort of this Darwin law of the jungle that most of the world has lived through. And the reason why we vote for it and tolerate it is that America's superpower is our optimism. It's also our Achilles heel because the majority of us think at some point we'll be in the 1% and so we're somewhat tolerant of this massive aggregation of the 1%. It's like that Simpsons cartoon where the guy is applauding this billionaire and he says, 'You know we're poor, right?' and he's like, 'Yeah but wait till you see how I treat the poor once I'm rich.' So I do think we're at a breaking point here. I think when six families own more wealth than the bottom 50% we've decided we're no longer about America. And where I am, and I'm a capitalist, I believe in private property, but the greatest economic growth, the greatest positive sentiment in America was in the 60s, 70s, and 80s when incremental tax rates above a certain amount were 60, 70, and 80%. And where I am is that I think we absolutely need to move to a point and I'll wrap up around happiness. I think a lot about happiness and trying to optimize it. And there is a relationship between money and happiness. 'Money can't buy you happiness' is a lie. It can. That's the bad news. The good news is according to Daniel Kahneman, an Israeli-American psychologist and a role model of mine, did a lot of research on the relationship between money and happiness and it tops out at a certain point. Where you can own a home, health care, take nice vacations, absorb an economic shock. That's supposedly in America is around $150,000. I think in LA it's probably more like $800 or $900,000. But above that, you get no incremental happiness. So then the question becomes and what I would put forward is why wouldn't you have, say, pick a big number, over $10 million, over three or $10 million in income, why wouldn't you have incremental tax rates of 70 or 80%? Because here's the thing, the key to tax code is having taxes that are least taxing. If you taxed health care, food, and say you taxed education, those taxes would be really taxing because people would become less healthy and less educated and more depressed. But if you get no reduction in happiness making 7 million a year instead of 12, but that incremental $5 million can provide say child care for 500 homes, their incremental happiness is enormous. So I have become a little bit socialist on this. I think it's time we have an alternative minimum tax. I'm sounding very... I realize I'm sounding very AOC here, but I've come full circle on this. I do think there's something to the notion of massively increasing an alternative minimum tax above a certain amount of money. We also need to start shaming people who hoard wealth. I just don't think there's just no reason people should be worth what nation states are. It's not going to make them any happier. Anyways, I think it's probably a problem if you've got inflation rising at 4%, people in, to your point, one in 10 Americans still living in poverty and at the same time this is the year if this SpaceX IPO all goes to plan we'll see a $2 trillion valuation, I don't really buy it, if it all goes to plan we're going to be the world's first generation to witness the world's first trillionaire in Elon Musk who we ran the numbers on this, we looked at how much money he's going to have, again, if the IPO goes to plan, we'll see. He's going to be worth 3.2% of US GDP. The richest American in history before Elon Musk existed was John D. Rockefeller. John D. Rockefeller at the height of his wealth was worth, wait for it, 1.5% of GDP. So Elon Musk is about to be more than double as wealthy as the wealthiest American that has ever existed in John D. Rockefeller. And at the same time, we're experiencing this inflation. And at the same time, we still have huge numbers of Americans who are struggling, who are struggling to put food on the table. And then I think about my generation and why young people are so upset and why young people are going to these data centers and protesting them. And the fact that half of us don't even believe in capitalism anymore. They prefer socialism instead. And this is essentially what this entire podcast is about, is capitalism. It's about markets. And increasingly we have decided that we no longer believe in that system. We just want to opt out of the whole system itself. The fact that those two things are true at the same time to me at some point you have to acknowledge the elephant in the room. You have to call it quits at some point. Acknowledge this is a problem. We cannot continue on this path. So I think that you're probably correct that we're moving in something of a difficult direction and probably reaching a breaking point.

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This has gotten so boring. Let's get to questions. So let's see. Our first question is from Shane. So, it turns out it's Shane Smith.

Shane Smith from Vice Media.

Yeah. Hey, Shane.

Long time listener, first time caller. Just back from Iran. It's fucked up. As one of the sort of poster children for the... I saw a podcast that you guys did. It was amazing about the sort of death of independent/new media of which I get kicked in the face a lot for. So I'd like to say it feels like we're heading towards a world where a handful of companies control what gets made, what gets seen, how it gets distributed. And in that world, independent media doesn't have a meaning. So what do you guys think is the future of independent media? And is there one? And it's sad that Ted's gone because I'd like to hold his feet to the fire.

Yeah, he would be the guy to answer that. I don't know what Scott's thoughts are. My... I've made my thoughts pretty known and perhaps I should have made it known to Ted, which is I think the future of media is one word and it's clips. That's it. I simply look at the amount of time that young people especially are spending on our phones. It's coming out to around eight hours a day at this point. If you actually annualize it, if you count up the days over the course of a calendar year, the amount of time that we're spending on our phones, it comes out to 118 days per year looking at the phone. And we spend 122 days asleep, which means that we have 125 days left over to do everything else with our lives, to meet people, to establish relationships, as Scott has talked about, to establish a network. People wonder why are young people underperforming? Why can't they get their act together? Something that I often say is like we're operating with 40% less time than our parents did. We just don't have as much time to live our lives because we are addicted to the phones. To me, that means that the only opportunity in media, you have to go as hard as possible at social media, as hard as possible at the phone. Ted mentioned that he's thinking they're integrated vertical clips. That is going to be sort of the way to get the marketing material to get you to watch the show. My view is the vertical clips. That is the main content. That's where people are spending their time. That's where you need to be invested. So, that's how we've thought about it with our business. I mean, we do this podcast and it's really fun to be here, but honestly, a lot of me is thinking, what were the best clips from this podcast show? How are we going to get it out on social media, on Instagram, on TikTok? To me, that is the future. And if you're a new independent media brand, you need to be thinking about how do I dominate the algorithm because if you don't do it, someone else will. And the people who have been dominating are not the best role models, not the best people we want influencing the minds of young Americans. So that would be my advice. Clips.

Look, media is obsessed with itself and wants to go back to the good old days. I was called today and asked about CBS. I'm like, who cares about CBS? Like the average age of a CBS viewer is dead. I mean it's just seriously the average age of CNN viewer is 64, Fox at 69, CNBC at 64. And I see a lot of incredible alternative independent... Puck, Semaphore, Axios, the guys at The Bulwark are doing a great job. I'm very open about our economics. We'll do 20 million this year at very strong EBITDA margins, growing 20 to 30% a year. I do think there is probably a need for a BBC-like tax where there is an attempt to have just straight up news that just calls it as it is and attempts to call it straight down the middle if you will. But I don't... media tends to have... I wish the Washington Post would just die already. I'm sick of talking about it. And I think a lot of those really talented reporters are going to find really good work at independent media companies. We tend... the media tends to think of itself as so precious and so self-obsessed. So I don't... the death of traditional media. Yeah. It's going away because it's fat. And I go into Rockefeller Center to go on NBC and I see these huge buildings. Podcasts are essentially 80% of a television show for 10% of the price. It's an arbitrage of the means of production where you can offer the vast majority of ABC News Nightly. I'm not as good-looking as that guy, but we can be unfiltered and we cost 3 to 5% of what it costs to produce that show. But I think media is actually... I don't want to call it a golden age, but I think there's huge opportunities for independent media. And if you love to write, if you think you have a different view or spin on things, fire up a podcast, fire up a Substack. I think that you can make a... you know, it's really hard. It always has been hard, but you don't need to be as good-looking, which is nice. Anyway, Shane, I'm actually excited. Shane, you've got a great podcast. I've been on your podcast a couple times. I think it's a great business to be in and I think there'll always be... right now I think the future's bright for great content and people who are fearless and hold neither fear nor favor around power.

Yeah. Another question from Rabbi Steve Leder.

My question is in a society and a culture and in a nation like ours whose DNA is individuality and autonomy and volition and whose politics are petty and coarse. What are the mechanisms if any by which we can strive for and hopefully achieve greater unity and the common good? What are the tools that exist in a culture essentially built upon individuality and autonomy and volition?

So, we're going with the easy stuff first. Look, I know the answer. I'll just let him... So, I'm an atheist, but I do think we need more religious institutions and more church and attendance at temple and mosques. I think getting together and serving in the agency of something bigger than yourself, especially for young people with shared values and a code is really important. One thing I would love to see across our nation, if there was one policy I could have and have a magic wand, it would be mandatory national service. As screwed up as we have in this country, I don't think young people really have any sense that the best thing and the smartest thing they could have done was to be born in America. And I think that even still, and I think the way we create a sense of unity and some of that character you're talking about is giving young people the opportunity to spend time with people from different religions, different political backgrounds, different ethnicities, different incomes, and just see how incredibly wonderful other Americans are. Because I think social media basically says, 'What's your identity? What are your political beliefs?' And then go to that corner. And the enemy isn't Russians pouring over the border in Ukraine or income inequality or climate change. The enemy is your neighbor who doesn't share your political beliefs. So there needs to be a unity, a greater unity between all of us as Americans. That's where I go is how do we just learn to love each other again and the flag.

I would also add just on that, I think we're starting to see signs that that might actually be happening naturally. If you look at church attendance among young people, among Gen Z specifically right now, it's actually started to go up. And I was walking through the streets of New York and I was in the West Village and I looked and saw a church on the side and I saw a line of young people going around the block and extending for two blocks just to get into church on Sunday. And I think what we're starting to see, I mean, I felt for a long time that we needed to institute some sort of policies to get us out of our screens, get us off of our phones, get us in rooms together with one another like we are today. And I still kind of believe that we need to sort of push that along perhaps with some sort of policy, but it might be happening naturally. And we're even seeing this. I mean, we talked the other day about the attendance at these in-person sauna raves and young people getting excited about going out to these run clubs and getting together. I wonder if the pendulum is starting to swing back and if we can get to a place of community and being with one another naturally versus having to force it. Probably what we want is to do both. But I feel optimistic about it. All right, we have one final question and then we're going to call it a night. And our question is from Adelaide on floor two.

Hi Scott. Hi Ed. My name's Adelaide. I'm 10 years old. Ed, great to see you again.

So I just want to interrupt. Can you come into the light? Everybody wants to see you. Adelaide I got on a Zoom with a few months ago. Adelaide is 10 years old and she's come all the way out to Los Angeles with her dad. Adelaide, I'm so glad you're here. I just want to give you a round of applause and please continue with your question.

Thank you very much, Ed. Scott, you and Ed represent two completely different generations. For someone my age, looking ahead, what is the biggest advantage my generation has over older generations? And what is the biggest trap we need to avoid?

I think the trap and this theme has recurred throughout this conversation throughout the night. The trap for your generation, for my generation, for both of us. It is the screen, it's the phone, it's technology. The amount of time that we are spending in person with our friends has plummeted over the past two decades. And people keep wondering why is that happening? Why aren't people hanging out with each other? It's because we're not spending enough time with our friends, which has been overtaken by the amount of time that we're spending on the phone. And so there's a reason why one in five Gen Zers today say they have zero close friends whatsoever. The loneliness numbers are really bad throughout America, but it's especially bad for younger people, and it's because of the phone. That is the trap. That is the thing that you have to avoid in my view. I hope Scott has talked about this. We've talked about this. I hope that maybe we can create some social policy, some age-gating rules such that we can keep that out of schools, keep young people off of social media as much as possible. But it has taken over our lives and your superpower could be to not let it take over yours. So I just want to start with the trap. That would be my recommendation to you and it's so good to see you. Thank you so much for coming.

I got the hard one. I feel like if you're here, it means you're here with your dad. I think it means you have engaged parents. You're clearly an incredibly impressive young woman. I don't know. I feel like you should be mentoring me. And I'll just end here because I don't have a... I think your... This is going to sound trite, but I think your ability to potentially be in service of others has never been greater. I think that young people can have such an impact on other young people and people they've never met with all of these new mediums and opportunities to communicate and get involved in other people's lives. I wish I'd learned when I was your age how rewarding service is. I didn't figure that out until older and with technology you can inspire other kids and communicate with them. So I would say it sounds right, service. But let me go back, let me just indicate or out my generation, the way you express... there's something called your love language and it's acts of service, acts of affection, gift giving. Dudes in my generation and men my age used to do this to me, my love language is money. Can I give you a bunch of money to take your dad out to dinner while you're here?

The answer is yes. You should say yes. I'm just telling you you should.

This couldn't be any tactic.

How much was it? How much was it this time?

It was $34.

That's all the time we have for questions. But before we go and thank you all so much for coming. It's great to be here. Scott, I think you have some important people in the audience who deserve a shout out.

Yeah, sure. We always try and highlight a nonprofit. I'm going to highlight the Big Brothers and Sisters of America. So, there's a waiting list of 30,000 boys and girls looking for mentors. And unfortunately, if you were to reverse engineer, we talk a lot about struggling young men. If you were to reverse engineer, when a boy comes off the tracks and becomes a young man with issues or problems, it's when the boy loses a male role model through death, divorce, or abandonment. And at the moment, and we have the most single parent homes in the world right now. And at the moment that that boy loses a male role model, at that moment he becomes more likely to be incarcerated than graduate from college. What's interesting is that young girls in single parent homes have similar outcomes as dual parent homes. Same rates of college attendance, same rates of self-harm. It ends up that while boys are physically stronger, they're emotionally and mentally much weaker than girls. And we can have an app now that can with a photograph register the emotion of your dog, but we can't find enough 30-year-old men to throw a football around with a 12-year-old boy. So, this is the call out to whenever we have an event like this, we have so many impressive young men and women in the audience. The ultimate expression of humanity and I think the ultimate expression quite frankly of masculinity is to get involved in the life of a child that isn't yours. So you don't need to be CEO of Goldman Sachs. You don't need to have a degree in child psychology. You just need to be someone who's trying to live a virtuous life that wants to spend time with a boy or a girl. And unfortunately men of my generation aren't stepping up. There are three times as many women in LA applying to be big sisters as there are men applying to be big brothers. So if we want better men, we need to be better men. Anyway, I talk a lot about testosterone. I think it's a wonderful substance. When you're young, you got a lot of it. Makes you aggressive, makes you take risks, which I think mostly results in valor and wanting to be a better man. I think it's been demonized. But then as you get older, your T levels, and I can speak to this, dramatically decline. And that has a lot of downsides, but I think one of the upsides is you get softer. And what do I mean by that? You find yourself getting reward in softer things. And one of the things you really enjoy on a different level is reconnecting with old friends. And this is something I wasn't very good at. From the age of 25 to 45, if you weren't going to make me money or date me, I didn't have much interest in you. And what I realized as I started getting into my 40s, I started finding so much joy in reconnecting and investing in friendships. And there's a bit of a friendship crisis now amongst men. One in seven men doesn't have a single friend and one in four men can't name a best friend. And what's interesting is that in the study... this is a picture of mine from my fraternity. Weird things happen in your 50s. Two of these young men are no longer with us. Weird things happen in your 50s. Strange diseases pop up. I'm sure many of you know this and you lose people you just weren't expecting to lose. And so I would recommend men in their 40s and 50s if you're in this audience or even earlier if you're mindful, get so much joy and unexpected reward and purpose from reconnecting with old friends. I don't know if there's a way to lift up the house lights here, but would you stand if I met you at UCLA 45 years ago? All right. Not as many people as I'd hoped. Still time. Anyway, where I'll leave is there's a study that just came out and it says it took one group, men who smoked a pack of cigarettes a day and had a lot of friends, and men who didn't smoke and didn't have friends. And the men who smoked a pack a day and had friends lived longer. So, my last piece of advice here is start smoking.

Thank you, Los Angeles.

This episode was produced by Prop Media. Thank you for joining us live in LA. Make sure you're following us on YouTube, Spotify, wherever you get your podcast. We hope to see you again soon. Good night, everyone.