The Amazon of Entertainment

Scott chats with The Atlantic's senior editor Derek Thompson about Disney, Netflix, and who will win the war for content and distribution.
www.theatlantic.com/author/de...
/ dkthomp
Sources
(1:55) Sources: YCharts.
(2:03) Source: “KeyBanc Survey: Two-Thirds Of US Households Have Amazon Prime Memberships,” Benzinga, April 2018. bit.ly/2JPnaVe
(7:00) Source: “Number of Spotify Premium Subscribers Worldwide from 1st Quarter 2015 to 4th Quarter 2017 (in Millions),” Statista, 2018. bit.ly/2Ib8B0N
(11:04) Source: “Adobe Systems’ Quarterly Net Profit/Loss Worldwide from 2009 to 2018 (in Millions),” Statista, 2018. bit.ly/2FF4Jjj
(11:56) Source: Box Office Mojo.
(12:04) Source: “Number of Frequent Moviegoers in the United States in 2017, By Age (In Millions),” MPAA, 2017. bit.ly/2hBfxFM
(12:04) Source: “Theatrical Market Statistics: 2016,” MPAA, 2016. bit.ly/2zR36zW
Episode 173
RIP: Avicii - Waiting for Love
• Avicii - Waiting For Love

[@AccelerList]

This guys perspective and analysis is SPOT ON!

[@armentopchyan]

Agreed. His book is amazing FYI.

[@TheLifeIsJustALie]

Professor Scott asked him "introduce yourself cause you look 14 how you ended up here?" He goes on summarizing the book he wrote!

[@nomapb481]

When I clicked I was mad this was a 21 minute video...now I'm wishing it was even longer! Love your content

[@chiefenumclaw7960]

This dude is one sharp cookie. And this is coming from a guy who prefers pie.

[@MattSpeiser]

"The difference was Context and Distribution... once you've made something great, you're half way done." I love L2

[@fcaspergerrainman]

Good talk, great insight. One little point I see differently is when he mentioned about Netflix using the Amazon model. What is the essential to the Amazon model? Data. Rule 1 of AI: AI eats data. Netflix is gathering data, the more data they gather, the more specific shows they know to produce for "you". Remember Mr Hastings is a AI major. If Disney don't get the data model and get data direct from customer, in a few years, Netflix is going to go way higher, just like we saw with Amazon in the last few years. Mr Jeff wasn't selling books, he was gathering Data.

[@HashimWarren]

just snatched his book. Great interview.

[@Btt8]

So you're the kid that just robbed me outside the bookstore???

[@busyrand]

This gentleman is Very Sharp! Well done....

[@stul8449]

Fantastic interview Scott, keep 'em coming. Derek - you were incredibly impressive; snapped up your book five minutes in.

[@Omnicronnn]

Best understanding of the media industry I've ever heard from a 14-year-old

[@bdmock]

I’m not a big commenter on YT, but I had to give a shot out to this guest. Super smart guy, so well spoken. What a great interview.

[@HipHopMovieNews]

I could’ve watched 2hrs of this conversation. Great stuff.

[@adolfoforonda3363]

That was fantastic, thanks for making it.

[@thinkpiece4334]

Really fascinating stuff. Thanks! I wonder where this leaves KZbin in all this?

[@itspossible2015]

This is a fantastic discussion. Scott looks like he's talking to a younger version of himself in the mirror and is completely smitten! Brilliant, as always!

[@dylongarrett4779]

Content is great, but distribution is king!

[@Ausbos5]

digging that tribute for avicii there at the end

[@mikeg6988]

Scott "Amazon" Galloway with another great interview. Your guests are always captivating and insightful. Keep em coming.

[@austintoth7323]

This analysis is amazing! Looking forward in ways most people cannot comprehend.

[@WarMonkeyPlays]

This was fantastic! I think youtube is single-handedly proven why you want a family friendly platform separate from a mature audience platform though.

[@TheShortBear803]

Very insightful, appreciate the talk.

[@byrongardner7244]

Love the channel, but this interview is one of my favorites thus far.

[@jacoblester8477]

I really love this format. Keep making these!

[@ChristopherFreezeYT]

Always great questions from "the hipster goggles of knowledge"

[@joevero4568]

Question about that Disneyflix comment. Wasn't that the premise behind limiting the last Kanye West and Jay Z albums to be behind Tidal? People just signed up for trials, listened, and immediately left. The majority of people don't want to separate their media into multiple apps.

[@Dreamprism]

Very intriguing conversation. I like this guy.

[@303Lyons303]

Wonderful insight, thank you.

[@Thonking]

Great video. Thank you.

[@elitistsport2567]

Wow. That was fascinating

[@zipop5617]

Solid content, Scott. Nice work.

[@MyLuggage12345]

Scott's getting invited to trivia night next Tuesday.

[@Salah-qu4cs]

Wow! .. Minute 18 onwards. Less than one year after this video, Spotify includes Hulu subscription in their prime membership! Spot on indeed 👌

[@tyvaughnholness1985]

That was excellent, keep it up

[@FreedomBliss-gx7iu]

Fascinating!!

[@ziprun2005]

Wow. Fascinating analysis.

[@tannerkent5446]

Does this kid have a channel or a Podcast? I'd love to follow.

[@hardcorepanzy]

He's a writer for the Atlantic and they link his twitter in the description. All his articles are here www.theatlantic.com/author/derek-thompson/

[@leep3488]

"Kid" lol

[@TheHellogs4444]

MrRoniGaming How does he manage to look like 14 yo lmao. Grow some wrinkles at least!

[@cheut]

Miracle on 34th St didn't become a classic until it became incredibly cheap (or free, not sure, maybe became public domain) and was aired incessantly on television around Christmas time. Went from a flop to being viewed as one of the greatest Christmas movies of all time.

[@cheut]

Nother comment. Spotify should incorporate bandcamp, meaning become the distribution network for physical merchandise, tickets, music videos, etc. for bands. Edit after finishing the video: Spotify could be the Disney Prime of music. Discounts, built in KZbin-ish style artist pages with more prominent merchandising, tickets, same as above.

[@cheut]

I don't have a real grasp of the inner workings of Spotify (like it being more of a co-operative) but *(edit: ideally and subjectively) it should become it's own label giving artists direct say over the company, instead of their labels being more in control (hopefully increasing the awfully low streaming revenue artists receive, or at least increasing merchandise sales)

[@bradspicer6159]

Such a smart and entertaining video. Great content L2

[@teamestes1367]

Thanx!

[@yovalks]

Phenominal stuff as always. I'll be in SPOT stock when it sheds a few more dollars from its absurd valuation.

[@mpileggif]

Huge fan and 1st comment: The 4 is great, but having weakly updates to it is awesome!

[@foolsreflection]

Bought his book off the back of this video, very interesting stuff.

[@TravisHuff]

So much REAL TALK knowledge!

[@RicoCordova]

Yup. Zero paid TV in close to 2 years here...I just can't stand ads.

[@LambertxMc]

Can these 20 min pieces be put in a podcast form? Thank you in advance 😊

[@MrGiggity890]

This video makes me want to continue accumulating Disney shares.

[@MrJimoney]

I disagree with the notion that just because Disney starts a subscription model for their movies, people are going to 100% replace their Netflix subscriptions with a Disney subscription. The two subscription models can be complementary in nature especially in the US since Disney focuses on movies and Netflix is more about their shows. Also, Netflix has already moved onto international expansion, and have translated their best shows with voice-over acting in different languages. The Disney subscription model might work in the US but how will that model be received overseas? Also, for Spotify, why don't they just start their own record label and sign artists? This way they can pay more royalty directly to their artists and own their music. After that, they can venture into live shows.

[@teddygamel727]

> I disagree with the notion that just because Disney starts a subscription model for their movies, people are going to 100% replace their Netflix subscriptions with a Disney subscription He didn't really say that though. Specifically the idea was the day "DisneyFlix" releases an earnings report of say 10M subscribers is the day investors see real evidence that Netflix is no longer a monopoly. So everything else you say can coexist with what he says.

[@michaelfey1313]

I agree, people can easily have both and probably will unless the price changes. Going from 150 for cable to 25 for two streaming services is still a bargain.

[@williamforbes6919]

Because the whole Adobe and Autodesk monitisation switch was mentioned. I'm sure it is much more profitable for the company. But requiring these always connected continuously updated software packages is really really bad for long term projects. Backwards compatibility is sketchy at best, and files that did open previously have ended up where I couldn't open them any more due to the updates that I physically cannot avoid since it is tied to the network registration requiring it to be on a current version for the liscense to validate. You can't cold storage an image of a workstation drive any more. This Is really unfortunate for product development.

[@uchwepheshe]

Great insights but i believe if Disney ever releases exclusively on their on their platform to force subscribers to sign up, it'd be a bad move. People are gonna pirate the shit out of it . Making content as conveniently accessible as possible will win the future. The question is how.

[@calvinfield6678]

Disney already has a streaming service in the UK called DisneyLife.

[@dvd7826]

Damn was hoping it would be XVIDEOS.....to be honest

[@HorrorFreak1408]

I agree with Scott; break it up between Hulu and Hulu kids similar to Netflix and KZbin and Disney will be able to get far more subscribers and make the marketing so much easier for themselves. The only other thing left would be a question considering the branding of it. Will they keep it as Hulu or announce that it's owned by Disney by placing their name on it?

[@JPannafino]

I am watching 2 and a half years later, right after Disney Plus announced a ton of star wars shows in the future ... even during a pandemic when no one can go to their parks, their stock went soaring. Adobe was a great analogy, you have to rip off the band-aid of sorts and change one of your core business models. Disney is doing that and a few years ago people would say it would of been crazy for them to put streaming first before theaters and this guy predicted it for the most part.

[@PerezTheDev]

yea, its crazy how accurate he is!

[@kml.]

Impressive. Super smart guy. Until Disney consolidates its content and distribution strategy, Netflix will win.

[@ZubairKhan-tt8ev]

wait wait wait...people are still watching HBO and Showtime shows - does that not count as paid TV media??

[@riceandpotatoes]

“Spotify is on the bottom of peoples phones” .... *looks at the bottom row of my phones app - sees Spotify* Well dang; I’m just another sheep

[@wilydingus]

lmao, major oof

[@jiyongkim7267]

This video aged well.

[@GlossyHooks]

"Netflix is not going to spin off Netflix+, the stuff we think might get Emmy consideration." Hilarious and brilliant.

[@BlackDoveNYC]

I join those who see Disney as a potential complement to other streaming services (at least in the U.S.). If content isn't important (or as important) then why cards does Disney have at the moment? That's their strongest asset according to what this guy said. He also does that thing regarding Netflix that I had noticed analyst do regarding the TV/streaming/media market. Over emphasize film content when the money and loyalty is based more on the TV type content, particularly serialized content. He's right about Disney being able to monetize across other areas (retail and the parks/cruises etc)... but what will keep Netflix in the running is its content which is still substantial. Again, here he makes much of Netflix's content as not being on par with Disney but he's talking about film. Netflix has had many popular as well as highly regarding TV shows (whatever the proper term is for the serialized shorter form filmed storytelling). With a pure play like Netflix, they have the data to help them to keep refining their content selection... and it is happening internat'lly not just domestically.

[@Turin90Turambar]

Avicii tribute at the end!

[@dmlong47]

would they really be competitors? I currently have netflix, hulu and HBO i would just ad Disney

[@AkoKyle]

Nice touch at the end there #Avicii #AMZN #DIS.

[@elliotcurry2284]

No discussion on Roku?

[@amitpatel321]

No mention of CBS and Viacom!!

[@zoobear9783]

Love the avicii ending

[@jfjoubertquebec]

Yoohoo!

[@scottdiamond3023]

what if distribution is decentralised in the very near future?

[@HockeyVictory66]

Spotify will be interesting to watch. Amazon music is moving into their space and I am sure that scares the shit out of them.

[@Lamaison40]

Agree with potential of Disney-flix but, tied to the 'streaming all over the place' comment, is the complexities, politics and 'redtape' across Disney's businesses. The biggest hurdle will be getting out of their own way to be successful in Disney-flix

[@ca8824]

Here's the thing Disney can already make high performing content without the analytics setup that Netflix has. Imagine what will happen when they mix that instituonal compentence with just a little of the data they can amass from a streaming service. Disney has already succeeded with box office, cable, and a network channel. Not sure if you noticed by their pretty good at making entertainment. They have all the IP one could want. I don't know if Netflix beats them or vice versa, both can survive. I'm sure Amazon and apple will to if they make good stuff. They have the distribution. The question is, is there room for much else.

[@MH-us2ye]

Imagine if the disney streaming service offered new releases for a premium. I'm sure they can pull a considerable amount of revenue from that.

[@c.t.8614]

Disney is making a streaming service now

[@ilackabettername]

19:25 Disney’s media is the same concept as their multi-park strategy in Disney-world. Spread it’s good content around so you begrudgingly by a more expensive ticket. Get ready for a “site hopper” pass

[@iscorechicks]

soo disney long or????

[@eddydavies7618]

The tribute to avicii was nice

[@comp10]

Netflix better be careful with their balance sheet. The amount of debt they are borrowing is concerning.

[@robm2681]

They're getting more and more profitable. They've added like 25 million subscribers in the last four quarters. Multiply that by $10 a month and you got an increase of 250 million a month or 3 billion more in annual income. 2017 to 2018, Netflix raised it's content budget by 2 billion for the year. It's getting easier and easier for them to balance their budget, because subscriber growth has easily been outpacing they're spending lately.

[@victorespino5650]

I've been saying for years spotify should have video

[@chambersdesign1289]

lots of people have videos on youtube (distribution) but nobody watches them (because content stinks).

[@zakkloves]

Content is still king, but distribution is the queen. In the context of chess, I suppose.

[@PhemiK]

Why wouldn't Netflix buy Spotify? In your scenarios it doesn't come and I'm wondering why not.

[@wesleymorton2995]

I bought disney stock. This video is fucking smart.

[@TheDrLeviathan]

Disney is nuts when it comes to their name being put towards anything adult. They hate it. That's why they made Touchstone Pictures back in the day.

[@felixdacat32]

wrinkly shirt guy has got some good points

[@eric4946]

Once the great sports ball barrier for TV falls and gives way to Disney/Netflix or whoever it’s going to be a maelstrom. Sports is the only thing keeping TV alive no good apps exist for it.

[@BlackDoveNYC]

Isn't Amazon making a play for live sports?

[@stickyfings]

Amazon should just buy Disney. There's the content for your distribution. Boom!

[@johndepaix8946]

3:14 viral myth, 5:37axios , 6:35 Spotify , 7:40 death match

[@josenieves1230]

I will probably not drop Netflix for Disney but I will drop Amazon Prime for Disney

[@augurcybernaut4785]

Uuuuh that would be To Sir With Love

[@djfxonitg]

I think this guy has a very old outlook on distribution Still, the Internet has revolutionized distribution since the 1950’s like his example.... it’s mostly about content in 2018. Distribution is becoming less relevant because of ease of access to the internet now.

[@djfxonitg]

Why else would everyone be fighting over content right now (Disney, Netflix, Amazon, ect)? It’s because they all have the equal access of distribution on the internet now.

[@braydenmoore3101]

Derek is who Ryan from The Office thinks he is.

[@loteque]

Disney is going to buy crunchy roll if that offer isn't already on the table...

[@loteque]

www.recode.net/2017/12/14/16771712/hulu-disney-acquisition-fox-means-dis-foxa-21cf

[@GGGGG-ec2ef]

Using a hit song from the 50s to prove you need music distribution? It's 2018.

[@lefthandwave]

Netflix share price is price for a take over by a big player!!

[@rvenners]

I watched this whole thing in order hear Rock Around The Clock at the end. What gives?

[@GradyHouger]

Reeb Venners They went with a more relevant song

[@GadgetReviewVideos]

My prediction for most growth in 24 months is T-Mobile Layer3 TV distribution combined with partnerships from content creators. It’s all part of the push for 5G and what they can do with 5G. T-Mobile will go from a cell hone company to a broad band wireless internet service provider with phone service, TV, already has the partnership for movies with Netflix, and others will join in. Why bundle your cable TV, phone and internet when people don’t use home phone that often unless you have a fax machine when you can get the same bundle with alac-cart TV, phone, broadband internet tethering to multiple devices while being all mobile and wireless. T-Mobile and Sprint “merger” is not being pushed as a cell phone merger like Metro PCS was, its being pushed as a multiple service wireless provider merger. Just watch the T-Mobile and Sprint merger video on KZbin. It’s his they are selling it that may allow the merger to get approved using AT&T as an example of cell phone, home phone, internet, Satalite TV, U-Verse TV. They compare this merger to AT&T, or Comcast, or Spectrum and the only difference is your phone in the bundle is your cell phone. They promote jobs as helping the economy for rolling out and supporting 5G and these new services they will offer. So unlike the T-Mobile and AT&T that was denied because it was sold as just cell phone service T-Mobile is putting a completely different spin on it to be a wireless media service provider.

[@zzzman68]

torrent-putlocker effect

[@Joe30pack]

I can't tell if this guy is really smart or if he has OD'ed on Ginko Biloba.

[@user-in6js6lt3t]

I think you just want Disney to get bigger so that you can then call for it to be broken up.

[@bestintentions6089]

Netflix is building the culture base for their Custer base

[@Zeegoner]

RIP Avicii