Ted Sorandos on Prof G

The first 40 minutes of this podcast is an interview with Netflix Co-CEO Ted Sarandos.

Ed Elson: 1 in 10 on Ozempic. $1.6 billion on Wegovy and Ozempic more than the spending on state parks.

Scott Galloway: Ask anyone who is o GLP-1 and uses AI everyday which one impacts their lives more. The US spends $8000 more per capita on healthcare than Japan - $3 trillion. Why? 40% are obese, 72% are obese or overweight. Scott suggests: Give away GLP-1 for any household under $60k.

A discussion of the possible acquisition of Warner Brothers. It eventually went to David Ellison for $110 billion. 

Ted Sarandos: He sees AI as helping writers but not to replace because it gives you the most predictable outcome possible. Writers are 1% of cost so it doesn't make sense to target writers to save costs. AI helps with safety on sets. 

Scott floats the idea of Netflix acquiring Disney. Ted says the DNA of Netflix back in the day of DVD's was to be all things to all people so they are a general entertainment brand. Disney can't get into prestige and HBO can't get into family. Netflix is trying escape house and KPop Demon Hunters going on tour. He showed no enthusiasm for Disney.

Ted sees anyone who uses a remote control as a competitor, therefore, YouTube, who gets more minutes of usage than Netflix is a competitor. Ted talks about watching SNL on YouTube to make the point that is that considered NBC or is that considered YouTube. 

Ted sees more room to grow in current markets and very much overseas. 

Ted doesn't see much of a desire to go to short form content. 

He says back the day they had to be better than piracy. ME: It's not now? I have not had Netflix in two years and haven't missed it. Anything I really want to see on Netflix I have had no problem acquiring. 

The ad supported tier has been successful because young people are used to seeing ads on Youtube so ads on Netflix don't bother them. 

Ted is happy with podcasting and implied it is better move than Netflix hosting talk shows. I wonder if this where we will see Stephen Colbert pop back up.

Scott asks Ted why he chooses to live in LA. Ted has lived in LA for 30 years. California is not competitive with other states and other countires. Netflix has 30 productions in LA. He gave an example of how the system is difficult: He talks about how hard it is to shoot a scene that takes LA to Venice to Beverly Hills I need three different permits... New Jersey has created the best production incentives in the world. says his productions have hired 150k people. $400 million brought into LA by Lincoln Lawyer alone. 

Scott changed the topic to talk about family and being a father. Ted, "There is no such thing as work life balance because there are times you have dedicate yourself to your job." He says kids are always watching. He credits his ex-wife on her saying "Those are not are values" when kids use the why can't we do what other kids are doing?

How Screwed are We>

Every day the Strait of Hormuz is closed at least 10 million barrels is not being produced. (Estimates have it at as more like 14 million.) Combined with destruction of some oil facilities, and its around 1 billion barrels not produced even if everything went great starting now. 

As the war started there was glut of oil. That glut is running out quickly. That means in the next month it is possible to have oil jump to $200 or $300 barrel. In other words the day of reckoning is near. 

Now how big of a deal is this? For today I want to summarize an interview on ProfG Markets podcast. Professor Aswath Damodorin is a professor of Finance at NYU's Stern School of Business. The guy wins teaching awards left and right and I love reading his work and watching his interviews. 

Six months ago Aswath went on the Pod and was more pessimistic than I've ever heard him. He predicted the market was going to go down. Since then the market has skyrocketed. Was he wrong? No, he made the point then and repeated it here that timing the market is a fool's game. Underlying fundamentals do matter but the market is moved by forces that don't look at the underlying market conditions.

To save you two hours of watching his interview back then and his interview yesterday I will summarize his take on where we are:

Isn't is our current situation the same as the dot com bubble in 2000?

The impact will be greater because the dot com downturn was cased by collapse of expectations… thus time it will be caused by a collapse of capex spending… therefore a greater impact on the GDP.  

But it may not impact jobs as much because the AI buildup is dependent on job destruction so if the bubble pops because AI proves to be not so good at replacing workers it means the stock market drops while unemployment doesn't.  

What if Taiwan is invaded?

Markets have not priced in catastrophic risk based on military fears... but that’s not as bad as not pricing it in the oil markets because that directly impacts spending. 

How screwed are banks? Are we looking at a repeat the 2008 financial crisis?

Banks trying to diversify debt because of this AI spending buildup won’t be as impacted so that's good... but diversification doesn’t work if all banks are doing it…. In other words since all banks are participating there is nowhere to hide. 

Example of an industry where it may be impacted?

Higher education. For higher education the impact may be on the research side because AI can do it. What excuse do you have to teach only 2-3 classes per semester and recursive the salary you are receiving?