Speaker 1: So first and foremost, what's your take on this? Seems like an odd time to add an ad tier. We're expecting an economic downturn. So two questions. Is there enough ad money out there to support it? And are people willing to keep Netflix in a potentially recessionary environment,

Speaker 2: especially with ads? Well, I think you saw some announcements today that indicated the state of play here, that they are coming in. The ad tier is going to be a dollar less than Disney Plus and Hulu ad supported, and that's no coincidence. And what we're really seeing, the bigger pressure on the marketplace ahead of their Q3 earnings is that the subscription growth might not be great. We saw in the second quarter that they had their biggest show ever, Stranger Things Season 4, and they still lost subscribers. So what was before this year a subscriber arms race is now really becoming, I would call it an ARPU arms race, an average revenue per user arms race, where these companies are desperately trying to figure out how do we drive revenue into this company because we've hit the domestic ceiling, the North American ceiling far faster than we were expecting. And Netflix, just to remind everyone, is the sole major that's just reliant on streaming. It's not Disney. It's not Warner Brothers. It doesn't have some flywheel of theme parks and consumer products that can feed the beast. They are

Speaker 1: reliant on one revenue stream. Yeah, Netflix also has one other thing. They're also just relying on content. You see a lot of these other streamers, they have sports like the NFL. If you look at Paramount Plus, Peacock has NFL, Prime has NFL. And also it seems like, and correct me if I'm wrong, Netflix is very event driven. You mentioned Stranger Things. I know a lot of the women in my life were watching Bridgerton, but when those shows end, it seems like people just stop subscribing to Netflix. Is there something they can do to hold people longer?

Speaker 2: Well, this is what I think you're saying with, for example, the HBO Max discovery strategy they're trying to do, which is bring people in who love discovery, who keep it on as background TV, for the tentpole programming that they're used to on HBO. Netflix needs to get out of, in some ways, the only event programming that they currently are in. And so, yes, you're absolutely right. You see sports and live coming into all the other streamers. And this is what I say about Netflix all the time. They are the never say never company. They said never theatrical, never advertising, and they've said never news and sports. And I'm going to guess that never

Speaker 3: eventually becomes a possibly. Janice, it's nice to see you. It's Tyler here. Janice, by the way, is one of the legendary magazine editors of our generation. Congratulations on your many accomplishments. It's really true. I mean it. No, I mean it. No, I really mean it. No. You raised something that was interesting there, and that was that here is this streamer that has one stream, and that is streaming. They do not have theme parks. They do not have cable subscription revenues. They do not have merch and so forth. So I follow that thought, and I go, does that mean they either need to buy that to have multiple diversified revenue streams, or do they need to sell so that they're inside of a company that has diversified revenue streams?

Speaker 2: Well, I think one of the things people should start thinking about is who's on the board of directors of Netflix, and what kind of defensive mechanisms do they have to hold off an acquisition. The price is so low now that it has become possible that someone could acquire them. And I think word around town here in LA is that, boy, what would have happened if Reed Hastings back in the time machine of 2019 had thought to buy a library, had thought to do what Amazon did when they acquired MGM, maybe buy a Lionsgate, a Sony, someone with the intellectual property, so they don't have to sit there and every year spin up some franchise that costs $200 million like Greyman that people didn't really love. And I think when you look at a movie that they've launched recently like Blonde, which is more than two hours, it had a lot of buzz, NC-17, about Marilyn Monroe, it had, I think, like a 36% on Rotten Tomatoes and a very, very low audience score. So you can come for these tentpoles, but if nothing's making you stick around, you have the cancellation problem in streaming is it's one-button cancellation, and that's really tough to compete with.