A (2:41)

That was like Two years ago.

B (2:42)

But we got a, we got a. When we did that, it was a lot of fun. We got a bunch of the guys. We got a bunch of the guys together. We said, we're making a monthly thing.

A (2:49)

Yeah, we were.

B (2:50)

We haven't done it since.

A (2:50)

At the start of the year, we were doing that.

B (2:52)

We were doing that.

A (2:52)

We were getting everyone together. Just like guys night out kind of, but to the movie theater. Because we were like, okay, what do you do if you're a guy and you have a bunch of guy friends and you want to, you know, go meet up, but you don't really like drinking, you don't know anything about sports. Like, what can you do on a Tuesday night?

B (3:09)

Suit up and head to your local movie theater?

A (3:11)

Head to the local movie theater. The reality is that theaters are going to change.

A (3:16)

There's a question of fast takeoff in AI, fast takeoff in streaming. It's been 20 years since you've been able to watch things on the Internet. You've been able to watch home. Box Office was a way to watch a movie at home. In some ways, the ability to put a TV in someone's house was the beginning of the end for the theater. They were immediately substitutes, although the difference was massive screen versus tiny CRT. And then it was like, okay, a 42 inch TV, flat screen, now that might cost a couple of grand and it was like a serious expense. It was a couple of grand. Now they're practically giving them away. And so of course that's going to be a competitive pressure, but also it's not going to destroy the theater immediately, but it's going to have an erosion, erosion of fact, over decades. And that's exactly what's happening. But it's nice that Netflix is not declaring this the end of the theater. They're going to continue to invest in support. And so Netflix signaled it would keep HBO Max as a discreet service while it also touted the addition of HBO and HBO Max content to its lineup. And so we're going to add the deep film and TV libraries and HBO to an HBO Max programming. Netflix members will have even more high quality.

B (4:23)

Will it be called Netflix Max?

A (4:26)

You need to be Netflix maxing, the article goes on. This allows Netflix to optimize plans for consumers enhancing viewing options and expanding access to content. Netflix says it expects to see 2 to 3 billion dollars in cost savings annually by the third year after the Warner Brothers Discovery deal closes.

B (4:45)

This is from Martin Pierce says Netflix's Warner purchase is an $82.7 billion blunder. Calling it a blunder, he says it will likely announce Friday morning will likely prove a stupendous error by a management team that until now has rarely put a wrong foot. Netflix paying a huge price 27 and a half times next year's expected earnings, well above prevailing multiples for film and TV companies. For businesses, that likely won't help it add many subscribers. Right. Martin continues, Moreover, the deal is likely to face severe regulatory obstacles again. So Netflix is not exactly Trump aligned. Right. They Netflix did the deal with the Obamas. And so I think that in a world where WB is going to Paramount, I could see that much more likely to get through. Whereas this, this is gonna make sure the Netflix team is gonna be spending like at least the next year, I would assume working on this.

A (5:42)

Yeah, I mean, it feels like it's so hard to make the case that this creates some sort of monopoly because Disney owns. It's like, yes, okay, now Netflix has Squidgen and they also have Batman.

B (5:53)

But Jason Kalar, who's a former WarnerMedia CEO, says if I were tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix. Ben Weiss says disagree. Hollywood is competing with Silicon Valley, Apple, Amazon, Google, Meta. Preserving some notion of competition in and between legacy Hollywood risk winning a battle and losing a war. The old media companies need to more of the right type of scale. This does it for wb. Jason says, when I use that phrase, competition in Hollywood, I'm referring to having a sufficient number of vibrant and robust entities that can and will aggressively compete against each other to produce and distribute films, series, live events and more for decades to come. I'm not focused on the legacy of it all.

A (6:35)

I mean, it might be high, but just in terms of like Hollywood filmmaking, these feel like extremely competitive areas. There are so many different. There are so many different streaming services and bundles that you can piece together. There are folks who are like, yeah, you know what? I order from Amazon, so I have Amazon prime. That's where I watch everything. There are still people that just go to Apple, you know, Apple TV and just buy a movie. You know, you can still just do that. You can be off in the Netflix ecosystem, you can be in the Hulu ecosystem. Like, it doesn't feel like there's of a crazy lack of competition in media right now. I would be somewhat surprised if this doesn't, if this doesn't go through. But I mean, you never know.

B (7:22)

I don't know. I think Netflix, again, we were before this, we were having Lunch with cable exec and he was kind of bringing up how Netflix had gotten caught up a little bit in kind of some of the woke stuff. And again, I just think in Trump America, it just feels far more likely that the Allisons could get a deal done. And they're notoriously absolute dogs. Yeah, there's a rumor that they're going.

A (7:51)

To go, that they're going to like, they're going to try it out. Bid.

B (7:54)

Yeah. So right now, this is Chris Gasparino over at Fox says scoop. As reported, Paramount and Skydance is now looking to launch a hostile bid for WBD because it feels it's $30 a share. All cash offer is actually higher than what Netflix offered in terms of cash stock and the value of the spin off of the cable business. So this is still developing.

A (8:16)

Before Netflix IPO in 2002, apparently Bezos offered $12 million to buy it. Can you imagine if Netflix had sold for 12 billion?

B (8:24)

Well, they also tried to sell the Blockbuster during that.

A (8:26)

So Blockbuster had a chance to buy it for 50 million and they laughed it off. But then it was just a DVD delivery service and they were like, we can build this. We have DVDs, we have all the infrastructure. We can just take it from the stores. We don't need to do this. But what they didn't realize was that actually building technology, actually building a real tech streaming service and scaling that platform. I mean, Netflix has some of the.

B (8:49)

Greatest just infrastructure and even the early recommendation engines. I remember my dad being like, yeah, Netflix just recommended. It knows what I like. And it sent me this totally. They said, you're going to enjoy this.

A (9:01)

You were making the point that putting Netflix and.

A (9:06)

Warner Brothers together, it doesn't like everyone's already subscribed to Netflix. I don't know if that's true. If the trends continue. Netflix has a fair amount of. They have their Squid games.

A (9:20)

They have some big ip, but if you just think about the drumbeat of HBO come back every season, oh, you're not watching Game of Thrones. You're out of the loop. Oh, you're not watching Succession. You're out of the loop. Like the conversation driving shows I feel like are on HBO much more consistently than Netflix. And in fact, I don't even know if I'm logged into Netflix on my phone right now.

B (9:44)

So you're, you're a true enthusiast. For me, as someone who's not an enthusiast, I'll go to prime because I'm like, I rarely watch movies. If I'm going to watch a movie. I want to just, I'm happy to just buy. I'm not like going, let me get the, let me get the free option on Netflix. I'm like, I will just buy. Sure, sure, sure. The thing that I want to fill this 90 minutes with.

A (10:04)

Yeah.

B (10:04)

Anyway, so the deal doesn't include WDD, WBD cable channels such as CNN, TNT, TBS and Discovery spin that. Which are being spun off. Even if Netflix gets regulatory approval, it will have to take on 50 billion in debt to complete the deal. And we'll spend a couple of years cutting costs to reduce that debt. Netflix does do around 10, 9 or 10 billion of free cash flow. Yeah. And so they can certainly spend service the debt Anyways. In the first nine months of this year, WBD studio and Streaming operations generated 2.3 billion in earnings. Next year, Netflix executives said they expected the Warner business to generate 3 billion in EBITDA. That's a price of 27 and a half times EBITDA. Netflix says the deal value represents a multiple of 14.3 times WBD. Traditional rivals Disney and Paramount Skydance are each trading around 11 times.

A (10:51)

Kramer said. So out of the box. Netflix as the world's biggest content creator, by far exciting, but not necessarily in a good way for shareholders. That's so funny. I don't think people realize the licensing business Netflix is about to have. If this deal goes through, Warner Brothers animated IP library alone would bring in billions in new merchandising revenue. Coupled with new versions of these iconic shows on the platform. Game Over. And he lists some of these out and one of them I think is hilarious is Foghorn Leghorn. They own Looney Tunes, so they have Bugs Bunny, Daffy Duck, Porky Pig, Sylvester, Roadrunner, Wile E. Coyote. These are, yeah, these are time honored.

A (11:33)

Iconic characters. I just think it's funny because very clearly there are a series of bankers out there that have a spreadsheet and somewhere they have a row. And on that row is Foghorn Leghorn. And attached to Foghorn Leghorn is the value of the intellectual property of Fog. Foghorn Leghorn, who's like a large rooster who talks with a funny accent. And I just imagine that they're out there saying like, yeah, Foghorn Leghorn. That's like 30 million. That's a $30 million business. Like Porky Pig. Porky Pig's 80 million. Let's do a sum of the parts. What about Snagglepuss?

B (12:04)

I don't even know. I thought you were making some of these.

A (12:07)

No, these are like the Hanna Barbera.

B (12:09)

Okay, so Poly Market has who will acquire WB at 86% today. Paramount is still only sitting at 6%. Mike Miraflor says we already have Nana Nano Banana Pro TVC commercials with decent paid media budgets behind them. Everything is moving so, so quickly. Okay, so James Harden is in an ad for my prize. I don't know what my prize is. Said this is the best commercial he's ever been in and he never stepped foot on the set. Let me show you how to crack the code on celeb deepfakes for this. My prize ad we did with James Harden. So this is a guy named Billy Woodward.

A (12:49)

Yeah.

B (12:49)

Who's been doing.

A (12:50)

I think they're actually putting behind this, this ad on TV because it looks like a TV commercial. But this also could just be a viral marketing campaign on.

B (12:59)

Wow. My prize is a premium online casino games play games. Wow.

A (13:03)

James Harden is getting in on the gambling trade.

B (13:06)

There's a very viral post right now that says breaking President Trump set to announce a new AI platform called Truth AI. There's not a, single, not a single legacy media institution has reported on this that I've found. So I would. Given that this is a story that they'd be very excited to cover.

A (13:22)

Yep.

B (13:22)

I would be wary that it's real yet, but that's not stopping J Bull T A R T from saying. And you guys think Google won the AI race. Talking about how Trump is set to unveil new AI platform Truth AI.

A (13:41)

You know what the crazy thing is? I keep laughing about this fact that it has got to be so hard to justify an in house AI foundation model training run. Now if you're a big platform when the rebuttal has to be okay, so you're saying that you need to do something special, you need to do something creative, you need to do some weird deal with some other people, put something together. But Apple can just work with Google.

B (14:04)

Yeah.

A (14:06)

It's enough for Apple to.

B (14:07)

Apple gets not good enough for you.

A (14:09)

Apple works to just buy tokens from Gemini, from Google. But you, your business is more, more special.

B (14:16)

I think. I think Apple is in the position where like they're like, we don't need to prove to like. I feel like an analyst can look at Apple and say like they will have leverage in AI.

A (14:26)

Yeah.

B (14:26)

At least.

A (14:26)

Yeah, yeah.

B (14:27)

Whereas where there's other businesses that feel like, okay, we need an AI strategy. It's not enough to just announce a partnership with a lab.

A (14:33)

Yes, yes, yes.

B (14:33)

We need to like actually own the weights.

A (14:36)

Yeah, yeah, yeah. The Wall Street Journal is Saying that Apple departures point to challenges for iPhones dominance. And I'm, I think it's too early to call the iPhone challenged. I feel like the iPhone's dominance has not been challenged yet. Maybe that is coming, you know. There have been several top lieutenants who have left in the past 12 months. Apple is facing a wave of executive departures as the company continues a period of transition not only among its leadership, but if rivals have their way for its businesses as well. On Thursday, the company announced that its general counsel and head of policy will both retire next year. On Wednesday, a top designer left for meta platforms. On Monday, Apple said its head of artificial intelligence strategy would retire. Its chief operating officer announced its retirement in July. And that seems CFO has transitioned into a new role. Are the heads rolling or are these retirements? There's a lot of like, you know, sort of management. It feels like Apple's just like not the place to let the drama kind of come to them.

B (15:41)

Apple was overdue for a full executive reset. Just need to add Cook to the list and for a replacement for stall is only 56. Time for a comeback. Ooh.

A (15:50)

Oh, that'd be very interesting. Yeah, there's a lot of Forstall fans out there who think that he didn't get it, he didn't get it right or he didn't get the, the opportunity he deserves.

B (15:57)

Cook can't catch a break.

A (15:58)

He's like, I think, I still think Cook's done a lot of good, good stuff. I'm still, I'm still bullish on Cook. The executive departures underscore a changing of the guard underway at Apple, even as Executive Chief Executive Officer Tim Cook himself shows no sign of stepping down, even though everyone is leaking a variety of rumors to the contrary. Cook and his new lieutenants face a critical test preparing Apple for the era and a wave of new competitive devices that result.

B (16:28)

SpaceX tells investors it's aiming for a late 2026 IPO. Apparently Elon Musk SpaceX has told investors and financial institutions that it is aiming for an IPO in the second half of next year. The talk comes as Space X considers holding a sale of shares held by investors and employees that would value the company at 800 billion, quite the markup. Double its valuation in a sale this summer. And what would make it the most valuable private company? He's got to be the most valuable private company. It probably candidly makes him sick that that OpenAI has briefly eclipsed. Marc Benioff is saying that he might rename the company Agent Force Trace Cohen says just Force. Why not just Force?

A (17:10)

Oh Force. Well isn't there a. Isn't there force in the F1 team from a couple years ago? BYT or BWT? Force India. That was like a team.

B (17:20)

Benioff is on a tear. His pinned Tweet right now. LLMs are the new disk drives commodity infrastructure. You hot swap for whoever's cheapest and best. The fantasy that the model is a moat just expired.

A (17:34)

People are really going wild.

B (17:35)

They're going off down here. Why not just Sales? I like just Sales. Just be Sales Inc.

A (17:41)

I don't think you can be. I think that's too generic.

B (17:43)

I don't know if you do. I mean he would have to update. The ticker is the bigger one. Nothing else is working. Go for it brother.

A (17:52)

A name change sometimes will fix you.

B (17:55)

For anyone who doesn't understand, Cursor processes more tokens than Salesforce all time figure every six days Salesforce has 20 million users. Yeah, I mean credit Cursor has a similar amount of users. I think.

B (18:09)

Assuming same average token count per active agent Force user count is 40,000 to 60,000 truly active users aka 0.2 to 0.3% adoption three years after launch.

A (18:20)

All tokens are not created equal. You can generate so many, so many tokens if you're doing these deep research reports and if you had Agent Force going around and effectively running a deep research report on every contact, every CRM.

B (18:36)

Under like every conversation, every conversation, every time you get a new email from a lead.

A (18:41)

Right. The token generation could be incredibly high and also deliver very little value. On the flip side, you could have a really fine tuned model that is laser focused, more of a scalpel and you could be getting a lot of value out of those tokens that you are generating. So I don't really know.

B (18:59)

Logan, Paul, Jake Paul and Jeff Wu are starting an eight week air accelerator. It's a 25k safe followed by $100,000 price round for a total of 7% equity. A lot of people are confused about doing it as a price round for 100k. A founder could easily end up spending like 30 grand. You know like depending on, depending on who their lawyer is. Like actually so it's like 100k investment and then you have like let's assume you're like super efficient and it's like 10 grand. It's like yeah. Kind of annoying and then yeah, it's, it's, it's, it's annoying. That said, I think there's a lot of interesting businesses that could go through this. That would really benefit from working with Jake and Logan and Jeff.

A (19:42)

It's so interesting that it's like, if you need Safe and then $100,000 price around, like, why not just 125 for 7%, like on a, on a, on a safe with a cap that ensures they get 7% no matter what. Like that feel. I would love to talk to them. I think hopefully we're gonna be able to get Jeff Woo on the show at some point. We can ask him about how he is, you know, thinking about that particular term. Oh, 7% for 125k. That's low and that's certainly lower than YC. YC? You come in with like I think a $10 million valuation. This is more like a $1 million valuation. But you know, if you're an earlier in your career, you're not ready to go to a different, higher valuation. Like, this could still be a good.

B (20:24)

Or you don't need a lot of capital for your business. You do need a lot of attention. Like, I could see some consumer brands getting started this way.

A (20:30)

I mean, I just remember like, like YC was my North Star for like what I wanted to get into with my first business. But like I got denied the first time I applied and I was like, if you gave me $5,000 for 10% of business, like, I would take it because I want to work on my thing and I want to keep going. And like, yes, at some point it can be predatory, but like with some of the first ideas that I was coming up with, I definitely didn't deserve 125k for 7% because they were like slop companies that were very unlikely to succeed. So I do wonder if they will position this as, okay, you're going to be able to accelerate on the go to market side, you're going to be able to accelerate on the creator side. Creator partnerships. This will be. There's a whole bunch of different ways. It could be something where you are, you're going through this accelerator because you get to ask Logan and Jake about their media creation, their creator work, and then you're, you're launching your company more likely to go viral because these guys really understand virality. On the other side, it could be you're coming in and you're taking a crack at building something that might wind up being more like an incubation for them.

B (21:36)

The remaining remaining Apple leadership team, who is Travis Scott, Tim Cook and Mr. Beast. Mr. Beast. Mr.

A (21:44)

Beast did say that he's going to film on iPhones. I'm not sure what the Travis Scott connection is. Has he done a partnership with Apple in one way? There are still plenty of folks. Eddie Q is still there. Apple leadership team is still stacked. Don't you worry. Don't you worry.

B (22:00)

Apparently OpenAI must turn over 20 million chat logs to plaintiffs. Judge Ona Wang has ruled.

A (22:06)

Yeah, you have to send an email to. To a server that adds a chatbot response in with your lawyer, CC that's how you maintain confidentiality.

B (22:17)

Harvey, who Keith also also mentioned. Yes, raised 160 million at a $8 billion valuation.

A (22:22)

This is why Keith was talking about.

B (22:24)

2% dilution round from a 16C 3X revenue this year. 250 million. They raised 300 million from Sequoia at 3 billion in January, 300 million at 5 billion from CO2 and K JP in June and then 160 at 8 from a 16Z Shout out to Spencer and the boys at. At Kotu. Yeah, a little markup there.

A (22:48)

I feel like, I feel like law firms have got to be pretty discerning on making this purchase decision at this point. Like it's not, it's not entirely exploratory budget anymore and it's not viral. Like something that's like, oh, it's like a flash in the pan and then all of a sudden like not going.

B (23:02)

To be able to. Yeah. My question is like, do you like, if anybody that wants to say, like, oh, this is like out of control. It's like, do you think they'll be able to get to like $8 billion of revenue?

A (23:12)

Legal industry is pretty big and it's been traditionally pretty hard.

B (23:16)

And they actually, they actually. So. So the labor displacement thing does feel real here because I do think a law firm would say, hey, currently we have 100 associates. We can condense that down to about 20 and do the same amount of work by working with something like Harvey. And again, the vibe had, at least with a lawyer buddy of mine had shifted drastically with Harvey. A year ago he was saying we're like using it a little bit now he's like, it's one shotting stuff that I didn't think it would.

A (23:45)

I'm one shotted actually by it.

B (23:48)

I'm one shot. Thank you for tuning in with us today and yesterday from the Nicee and we will be be back here soon.

B (23:56)

Cheers.

A (23:57)

Thank you.