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Speaker 2: All right, guys, welcome back to Earn your Legion podcast
Speaker 2: Episode four. Uh time flies man, So yeah, we want
Speaker 2: to first first of all, thank you guys for rocking
Speaker 2: with us and you know we appreciate your feedback. Thank
Speaker 2: you for your support means a lot to us. So
Speaker 2: we're gonna jump right into it. We have a few
Speaker 2: things that we're gonna talk about this episode. The first
Speaker 2: thing that we're gonna talk about is streaming, but on
Speaker 2: a different on a different level. You know, we've covered
Speaker 2: streaming before, but on the musical side, So now we
Speaker 2: want to we want to cover it on the content
Speaker 2: side and talk about two major players in the streaming
Speaker 2: game as far as shows and movies are concerned, and
Speaker 2: that is Netflix and Amazon.
Speaker 3: Yeah.
Speaker 4: I mean, we reference them so much that it's only
Speaker 4: right that we take a look at the business side.
Speaker 2: Yeah, for sure. So, yeah, we talk about We talk
Speaker 2: about Netflix a lot because obviously it's revolutionized the way
Speaker 2: that we consume television.
Speaker 4: You know, it's well more so original programming, because TV
Speaker 4: that would be we're going to get into that too,
Speaker 4: but Hulu would be more of a television side, but
Speaker 4: movies and original content would be like a Netflix, right right.
Speaker 2: So we wanted to talk about it from a different
Speaker 2: standpoint though, because I want to kind of compare Netflix
Speaker 2: versus Amazon on the business side. I actually wrote about
Speaker 2: this on my Instagram a while back, but I wanted
Speaker 2: to go into depth about it because I don't think
Speaker 2: people fully understand the fight that's going on right now.
Speaker 2: To me, it's interesting we try to take a different
Speaker 2: approach on business and look at things from a different standpoint,
Speaker 2: not just report what's going on, but look at it
Speaker 2: from case studies, or look at it from the back stories,
Speaker 2: or look at it from in house fights and stuff
Speaker 2: like that. So there's a big fight going on right
Speaker 2: now between Amazon and Netflix. And just to kind of
Speaker 2: give you a quick summary, Netflix, you know, was soaring.
Speaker 2: Their stock was up one hundred and six percent midway
Speaker 2: through last year in June, and then after that it
Speaker 2: really started to tank. It was down thirty seven percent
Speaker 2: to end the year. So, long story short, a lot
Speaker 2: they have a lot of different issues Netflix, but one
Speaker 2: of the main issues is that Amazon is coming in
Speaker 2: and they're putting a lot of pressure on them.
Speaker 3: Yeah. Well Amazon is notorious for that.
Speaker 4: They see somebody's making money up down the street and
Speaker 4: they're like, all right, we got to figure out how
Speaker 4: we're en this, and usually we'll get into that is
Speaker 4: when they come into a space, they take over and
Speaker 4: dominate the space.
Speaker 3: Yeah.
Speaker 2: Yeah, the major players for sure. So last year Amazon
Speaker 2: spent five billion dollars on their original content for their
Speaker 2: streaming service. Right, So what that did was that made
Speaker 2: Netflix up there spending. So they up there spending from
Speaker 2: eight billion to twelve billion. So the problem with that
Speaker 2: now is that Netflix now spends more money on original
Speaker 2: content than any other American television network.
Speaker 4: And they've seen some benefits from it, like their shows
Speaker 4: have been well received, you know, Narcos and a couple
Speaker 4: of other things making up a Murderer. They've had great
Speaker 4: original content, whereas Amazon thus far has struggled with gain
Speaker 4: traction on some of this stuff.
Speaker 2: Yeah, so yeah, exactly. So you have Ozarks, you have
Speaker 2: you have Narcos, You have a lot of hit shows
Speaker 2: that are popular that our original Netflix shows, right, And
Speaker 2: like you said, Amazon, I don't think they really have
Speaker 2: that one show.
Speaker 3: They haven't had a stand up they.
Speaker 2: Hang their hat on yet. But I think their strategy
Speaker 2: is more of the long game. So what they're doing
Speaker 2: is so as I said, they put they so they
Speaker 2: spent five billion last year, right, So that made Netflix
Speaker 2: raise their spending from eight billion to twelve billions just
Speaker 2: to compete. So by spending twelve billion now now they
Speaker 2: spend more on content than any other American television network.
Speaker 2: Anybody ABC, NBC doesn't matter anybody. They spend the most.
Speaker 2: But the problem with that is that they work it
Speaker 2: on very thin margins, right, so they make very small
Speaker 2: profit because they're heavily leveraged. So they have a lot
Speaker 2: of debt, huge amount of debt. So last year that
Speaker 2: debt went up seventy one percent, right, So right now
Speaker 2: they have eight point three billion dollars in debt, right,
Speaker 2: So the problem is that going forward they can't sustain that.
Speaker 2: It's not sustainable. So one or two things that are
Speaker 2: gonna happen. They're going to keep borrowing billions of dollars
Speaker 2: and eventually they run the risk of going to bankruptcy
Speaker 2: or they raise subscription prices, which they actually already did.
Speaker 4: Yeah, Like they went from twelve dollars to sixteen dollars
Speaker 4: depending on your package. So if you've got the four K,
Speaker 4: it was sixteen dollars. If with that you can have
Speaker 4: four people sharing your account, it's like they lose money
Speaker 4: on that too, right, So like we have like I
Speaker 4: have an account, but there's like a few people that
Speaker 4: use it, right, and so those people that use my
Speaker 4: account now are not paid subscribers. So that's an issue
Speaker 4: that they've been combatant. But I'm just want to go
Speaker 4: back for a second because you said something that.
Speaker 3: Was really interesting about Amazon.
Speaker 4: One of their models and he Beosos wrote this in
Speaker 4: his nineteen ninety seven like letter, Jeff Bails. I'm sorry,
Speaker 4: Jeff Bayals said it in the opening of his company,
Speaker 4: is that they will They are about long term game.
Speaker 4: They really don't care about short term profit or loss.
Speaker 4: And we're going to see how that plays it apart
Speaker 4: in a company in a few minutes. But like, that's
Speaker 4: exactly what's happening now, right, we'll play this game with y'all.
Speaker 3: But I know that y'all to.
Speaker 2: Think about Amazon, it's the third biggest publicly traded company
Speaker 2: in the world, so they have a lot more resources
Speaker 2: and a lot more funding to, like you said, play
Speaker 2: the long game, right. They don't have to win this year,
Speaker 2: or even next year, even five years down the line.
Speaker 2: They can stretch it out for a long period of time.
Speaker 2: And if Netflix can't find a way to raise revenue
Speaker 2: at a faster pace, then they to be screw.
Speaker 4: Because stream is just a part of their business, like
Speaker 4: that cloud service iseah Amazon revenue.
Speaker 2: Yeah exactly. And then the last one that Netflix has
Speaker 2: to try to combat this is that they can cut content,
Speaker 2: so that would save the money, but that'll also compromise
Speaker 2: who they are, Like they're known for original content. That's
Speaker 2: why they spend so much money on content. So they
Speaker 2: have some issues, right. The debt is a major problem
Speaker 2: for them, and we have to see how it plays out.
Speaker 2: But it's interesting because Amazon Actually somebody said this to me,
Speaker 2: and it's true if you think about it. I'm not
Speaker 2: sure why Jeff Bezos named the company Amazon, but if
Speaker 2: you think about it, Amazon is the name Amazon means massive, huge,
Speaker 2: like the Amazon rainforest, you know. So that's really what
Speaker 2: the company has become, right. They're such a massive company
Speaker 2: that they they're willing to just spend massive amounts of
Speaker 2: money take over all the areas, right, whether it's shipping,
Speaker 2: whether it's books, whether now it's content. So that's really
Speaker 2: what they've become. They've become just the abominal snowmen. You
Speaker 2: can't stop them.
Speaker 3: It's like the big bully in business right now.
Speaker 4: And one of the companies that often gets left out
Speaker 4: sometimes in the streaming is Hulu. Obviously they don't generate
Speaker 4: as much money as Netflix. I think last say, they
Speaker 4: did eight point seven billion dollars. But they have a
Speaker 4: very interesting story. So Hulu for those are not familiar,
Speaker 4: they do offer original content, and some of the original
Speaker 4: content is really good, Like The Handsmaid's Tale is probably
Speaker 4: the most popular show.
Speaker 3: It's won plenty of awards for the acting in it.
Speaker 4: But they have live TV, which the other platforms don't
Speaker 4: really offer. Right, they can perform a lot. They have
Speaker 4: fifty channels. If you pay for their subscription, there's au
Speaker 4: premium subscription. I think it's like forty dollars. But what
Speaker 4: they do is to combat Netflix, who can't put on
Speaker 4: content that just happened. So like if you wanted to
Speaker 4: watch Power, you have to wait for that season to
Speaker 4: be over for it to even get to Netflix.
Speaker 3: They do it the next day, so they have that advantage.
Speaker 4: But one other thing that we looked at and studying
Speaker 4: Hulu is that and I looked at.
Speaker 3: Who owns it.
Speaker 4: It's split up between four companies, right, so Disney owns
Speaker 4: thirty percent, twenty first Century Fox owns twenty thirty percent,
Speaker 4: you have Comcasts that owns thirty percent, and I think
Speaker 4: Time Warner owns about ten percent. So you got one
Speaker 4: hundred percent of the company owned by four majority companies.
Speaker 3: Right.
Speaker 4: The interesting thing about that is that Disney's going to
Speaker 4: have its own streaming service too. So like if Netflix
Speaker 4: thought that Amazon was the problem, they have a big
Speaker 4: problem coming their way because Disney is about to take
Speaker 4: all their content, all of Netflix, right, So now they
Speaker 4: have they have the Marvel catalog, they have all their
Speaker 4: Disney catalog, they have Star Wars catalog. But they just
Speaker 4: are about to close on a deal I think the
Speaker 4: top of the first maybe sometimes this quarter, to acquire
Speaker 4: twenty fourth Century.
Speaker 2: Well, the interesting thing also is that now Apple's getting
Speaker 2: in the streaming game. Yeah, so Apple this year they're
Speaker 2: gonna put as out a billion dollars to their new
Speaker 2: streaming service. So Apple's interesting because Apple a lot of people.
Speaker 2: Majority of people have iPhones, right, and the way we're
Speaker 2: consuming content now is more and more on our mobile
Speaker 2: devices and not on television. So if you now they
Speaker 2: have a unique advantage because it's going to be free.
Speaker 2: They probably factor in the court somewhere in the phone,
Speaker 2: but it's going to be free. Everybody's gonna have it
Speaker 2: on their phone, right, like iTunes something like that. So
Speaker 2: now like how you watch YouTube on your phone, you'll
Speaker 2: be able to watch the Apple streaming on your phone.
Speaker 2: So they'll have shows that they just gave Kevin Durant
Speaker 2: some money for a show that he's gonna put out.
Speaker 2: So they're putting more into into different shows, original content.
Speaker 2: But the advantage that they have, like I said, they
Speaker 2: already have the platform.
Speaker 3: Billions of users.
Speaker 2: Yeah, they already have the billions of people that already
Speaker 2: have iPhones and iPads already. So now when they put
Speaker 2: the content directly on your phone, it even makes it
Speaker 2: easier easier to consume because now you don't have to
Speaker 2: go to the app, or you don't have to you know,
Speaker 2: I mean you have an app, but the app is
Speaker 2: already on your phone. It's not something that you even
Speaker 2: have to download.
Speaker 4: So so I mean, those are two major competitors that
Speaker 4: are coming in this lane and within the next year
Speaker 4: or so. Right, because if Disney goes through with that,
Speaker 4: I think seventy one billion dollar purchase of twenty first
Speaker 4: century Fox.
Speaker 3: Of film and TV division.
Speaker 4: Now they own sixty percent of Hulu, right, that's number
Speaker 4: three in the streaming service. They own sixty percent of that,
Speaker 4: plus they're going to bring their own content. I mean,
Speaker 4: that's a goliath.
Speaker 2: Yeah, and it's important too for people that you know
Speaker 2: are creators, is that right now is a brilliant time
Speaker 2: to get funding in your programs, right, because it's a
Speaker 2: race shows. So you have all of these different companies
Speaker 2: that are spending massive amounts of money and they're looking
Speaker 2: for original content.
Speaker 4: So like you even that, like some of them are
Speaker 4: catered toward kids, right, and then some are catered toward
Speaker 4: the adult population and middle aged people.
Speaker 3: So it's going to be an arms race.
Speaker 4: But one of the interesting things that we the fact
Speaker 4: that we even have this conversation is that people are
Speaker 4: not doing cable service anymore, Like people have cut the cord,
Speaker 4: and like these are the results of that. We can
Speaker 4: see that, like these companies are existing because people have decided, listen,
Speaker 4: one hundred and sixty dollars a month for me to
Speaker 4: watch five to ten channels, it's just not worth it anymore. So, right,
Speaker 4: So then HBO has their own streaming service, Showtime gets
Speaker 4: their own streaming service. Right, you can subscribe just to
Speaker 4: those things now you don't even have to go through
Speaker 4: cable vision over rising now, So like that's a result
Speaker 4: of cord cutting that this conversation in itself.
Speaker 2: Yeah, yeah, the landscape has changed. Just like I said,
Speaker 2: we talked about music. Music landscape has changed, but also
Speaker 2: television TV landscape has changed and probably will continue to
Speaker 2: be changed.
Speaker 4: I mean, you're not a big TV guy, but like,
Speaker 4: how many channels do you watch when you are watching TV?
Speaker 2: Yeah, I don't watch that. I watched sports ESPN.
Speaker 4: Like I watched maybe four channels and I pay for
Speaker 4: seven hundred of them.
Speaker 3: Right, So like this is this is the way. This
Speaker 3: is going to be the way of the future obviously.
Speaker 2: Yeah, okay, okay, all right, So anymore to add about that.
Speaker 4: Or yeah, I mean, let's let's say with Amazon, because
Speaker 4: something that's happening, especially in our area right now, is
Speaker 4: people are starting to realize that this Amazon effect and
Speaker 4: what that really is is just like like you said,
Speaker 4: like they encompass everything. So the Amazon effect really just
Speaker 4: means a complete domination or disruption of a market.
Speaker 3: And we've seen them do this and companies have disappeared.
Speaker 4: I'll get you there's an example of in twenty ten
Speaker 4: and your father, I'm a father, there was a company
Speaker 4: called diapers dot com.
Speaker 3: Yeah heard of them?
Speaker 4: No, I know, So diapers dot com pretty much was
Speaker 4: an online site to help parents you order deliver pampas
Speaker 4: to your house, and Amazon decided, hey, we want to
Speaker 4: get in this game.
Speaker 3: We're getting in this game.
Speaker 4: So they decided to have Amazon Mom and their subscription
Speaker 4: was if you join Amazon Mom, you get Amazon Prime
Speaker 4: free for three months, plus discounted prices. So like, if
Speaker 4: you know Prime, I'm a Prime member, you get free
Speaker 4: two day shipping and you're getting discounted on the on
Speaker 4: what you're ordering. Right, so whatever whatever Baby supplies it as,
Speaker 4: let's just say there's diapers, you're getting discounted. So it
Speaker 4: was maybe forty dollars a bucks now it's maybe twenty
Speaker 4: five dollars a box. They did that to just combat
Speaker 4: with diapers dot Com was doing and they saw that
Speaker 4: they were losing money by doing it. But while they
Speaker 4: were lo and money, Typers dot Com losing money too
Speaker 4: because two things that parents always look for affordability and accessibility.
Speaker 4: Is it going to be affordable for me to get
Speaker 4: these pampers. Yeah, it's fifteen dollars cheaper and it gets
Speaker 4: delivered directly to my home in two days.
Speaker 3: I'm taking that route. So they lost money, right, but
Speaker 3: in the end, Typers dot com get shut down. Guess
Speaker 3: who buys them?
Speaker 4: Amazon buys them out goodbye, Right, So like just completely
Speaker 4: come into a space, take a loss, right, but then
Speaker 4: all right, we'll buy you, thank you, We'll take it.
Speaker 2: Like I watched the Nature Channel sometimes and one of
Speaker 2: these animals, I think it's either a crocodile or an alligator,
Speaker 2: maybe both. But how they kill their prey is that
Speaker 2: they smother them and then they drag them into the
Speaker 2: road and they just keep going deeper and deeper soil.
Speaker 2: You can't breathe anymore. Right, And that's pretty much the
Speaker 2: business strategy that Amazon is doing, right. It just yeah,
Speaker 2: take you out further and further into the deepen. You
Speaker 2: can't breathe anymore, and eventually you're going to have to
Speaker 2: just give up. Yeah, we'll take it over for a minute.
Speaker 2: But they so they try that again in the home
Speaker 2: home service.
Speaker 4: Market, Like there was a company called Porch and they
Speaker 4: were deciding.
Speaker 3: Hey, people needed help doing things.
Speaker 4: If you needed plumbing, if you needed lighting, if you
Speaker 4: needed anything fixing your home TV mountains. They were providing
Speaker 4: that service. Amazon saw that and said, you know what,
Speaker 4: We're going to provide home service. Right, So rather than
Speaker 4: folding like diapers dot Com did. Porchs decided the only
Speaker 4: way we're gonna survive is to try to compete with them,
Speaker 4: just for the short term. So what they did was,
Speaker 4: you know what, we'll go to your competitor. So they decided, Hey,
Speaker 4: we're going to go to home Depot, We're gonna go
Speaker 4: to Lows and we'll partner with them, and that's how
Speaker 4: we'll keep our business going. So that's another way like, hey,
Speaker 4: rather than just folding short term, let's just keep afloat
Speaker 4: until they just say, you know what, you're.
Speaker 3: Drowning and you have an other choice. Yeah, it's interesting.
Speaker 3: Amazon's in the news now in our area because most
Speaker 3: people know and if you don't.
Speaker 4: They're looking for a second headquarter and they chose two
Speaker 4: cities and New York City was one and Virginia Crystal City, Virginia,
Speaker 4: which is the DC metro area. Yeah, and it's interesting
Speaker 4: because Long Island City is where it's going to be.
Speaker 4: And when people think Long Island City, they probably think
Speaker 4: that is out in Long Island, and we know that
Speaker 4: it's in Queens.
Speaker 3: So this facility is going to be built in Long
Speaker 3: Island City.
Speaker 4: But the interesting thing about it is that Long Island
Speaker 4: City where the site.
Speaker 3: Is going to the construction is going to take place
Speaker 3: if it goes.
Speaker 4: Through, is one down, one mile down the road from
Speaker 4: a place we know very well in hip hop music.
Speaker 2: Yeah probably not even well. No Long Island City all right,
Speaker 2: so Queensbridge Project the biggest housing projects in North America
Speaker 2: right home of legendary rappers Na Nas, Mob Deep, Molly
Speaker 2: Ma Pamega and then also run our test yes so yeah,
Speaker 2: so a lot of it's been a lot of backlash
Speaker 2: that that will lead to further gentrification of the area.
Speaker 2: Change it, But Long Island City is already gentified if
Speaker 2: you know the area. It's an interesting case study that
Speaker 2: we actually have a whole different discussion about that certification
Speaker 2: and real estate and things of that nature. But not
Speaker 2: to stay on this topic for too long, but that's
Speaker 2: an interesting case study within itself, because you know, I
Speaker 2: travel and I see different places, not just in New
Speaker 2: York but all over the world where.
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Speaker 2: Out of public housing developments were put in prime real
Speaker 2: estate locations, right and Queensbridge is actually a perfect example
Speaker 2: of that because if anybody's familiar with New York, so
Speaker 2: Queensbridge projects is literally right on the water in Queens
Speaker 2: overlooks Manhattan East River. It's one of the best views
Speaker 2: that you can have. Yeah, it's amazing. So I'm pretty
Speaker 2: sure when they were building that they didn't fully think how, yes,
Speaker 2: exactly how valuable that real estate is. Right, It's one
Speaker 2: of the most valuable real estates probably in the world perhaps,
Speaker 2: so they can't just tear down the buildings. So what
Speaker 2: they did was they just built around it. Right. So
Speaker 2: if you go there now, you have five star restaurants,
Speaker 2: you have Amazon moving there, you have million dollar apartments,
Speaker 2: and you would never know that it's the largest housing
Speaker 2: project is right in the middle of all of that,
Speaker 2: because it's kind of hidden almost in a sense.
Speaker 4: And that's part of the issue that a lot of
Speaker 4: people are having they're saying, look, you're building this one
Speaker 4: billion square foot almost little town a mile down the
Speaker 4: street from the largest housing projects in America. The median
Speaker 4: income is fifteen thousand, right, and we know that when
Speaker 4: prime real estate comes in like that, what happens to
Speaker 4: the rest of the real estate that surrounds it. It's
Speaker 4: going up, right, But that's what the people own, right,
Speaker 4: the people in Queensbane projects, they're paying rent.
Speaker 2: Well, the thing with that is that so it's it's
Speaker 2: it's owned by the government. So it's interesting because so
Speaker 2: in Brazil, right, and the favelas in Brazil, if anybody's
Speaker 2: not familiar with that, that's like the slums of Brazil,
Speaker 2: and the favelas were built on hills. Right. So in
Speaker 2: Rio they have like Christ the Redeemer and they have
Speaker 2: Epanima Beach.
Speaker 3: So you got.
Speaker 2: So long story short. Now they realize that those hills
Speaker 2: where the favelas are are actually prime locations because it's
Speaker 2: overlooking some of once again the most expensive real estate
Speaker 2: in the world, right, Like it's overlooking Panima, it's overlooking
Speaker 2: the beaches, is overlooking Christ of Redeemers. So now you
Speaker 2: have a million, a million and a half people living
Speaker 2: in slums in the hills who at the time they
Speaker 2: probably built it saying that we're going to keep the
Speaker 2: people in the hills away from you know, everybody else.
Speaker 2: But now they realize that those hills are actually valuable.
Speaker 2: So now they're trying to move people like five hours
Speaker 2: away into different locations because now they want to build
Speaker 2: luxury apartment buildings and hotels in the hills.
Speaker 3: So this sounds like you're making a forecastle. What could happen?
Speaker 2: Well, that's why, you know, we talk about every the
Speaker 2: world is flat, right, so the same thing that what's
Speaker 2: going on in Brazil is relevant in New York, what's
Speaker 2: going on in Chicago is relevant in Africa. So it's so.
Speaker 2: But it's interesting as far as, like I said, the
Speaker 2: real estate play in that regard, because gentrification has a
Speaker 2: lot of different complexities to it. But you know, that's
Speaker 2: something that I don't think people fully understand how valuable.
Speaker 2: It's interesting because some of the most expensive real estate
Speaker 2: is where the poorest people live, and that was done
Speaker 2: on purpose. So now they realized that, you know, they
Speaker 2: made a mistake.
Speaker 4: Yeah, So I mean the pluses that they're saying that
Speaker 4: they'll bring twenty five thousand jobs.
Speaker 3: I think it was.
Speaker 4: The promise was fifty thousand jobs and twenty five in
Speaker 4: the DC area, twenty five thousand come to the New
Speaker 4: York area.
Speaker 3: But the people in Queensbridge are like, that's great, but
Speaker 3: are we It's.
Speaker 2: Not just queensbridg either.
Speaker 4: I'm just saying like, yeah, how do we do it?
Speaker 4: So that thing is saying, hey, we'll provide drop training
Speaker 4: and we'll.
Speaker 3: Offer affordable housing.
Speaker 4: But even affordable housing is subjectives, right, because what's affordable
Speaker 4: to one may not be affordable to another family. Yeah right,
Speaker 4: it's not income based housing, it's affordable housing.
Speaker 2: Yeah. And like I said, New York is a perfect
Speaker 2: example of that because not just like I said, not
Speaker 2: just Queensbridge. You have a lot of different pockets where
Speaker 2: it was prime location. Look at the Lower east Side, right,
Speaker 2: if anybody familiar, that's the Lower east Side of Manhattan.
Speaker 2: And at one point in time that was a very
Speaker 2: bad neighborhood. Now it's changed because they realize how valuable
Speaker 2: that real estate actually is. Right, That's that's the that's
Speaker 2: the thing with gentrification. They realized now that that that
Speaker 2: real estate is actually valuable, So everybody moved out the
Speaker 2: neighborhoods got torn apart.
Speaker 3: I think I said that right, Well, he's like, what
Speaker 3: is our rolling?
Speaker 2: Well, Ti, I was saying that we didn't value the
Speaker 2: community enough to buy property when it was And that's
Speaker 2: what even when Jay said, you know, I could have
Speaker 2: brought a place in Dumbo for two million, he said
Speaker 2: that same place now as worth twenty five million, kind
Speaker 2: of feeling Dumbo. So you know, like I said, that's
Speaker 2: a that's a conversation that we can go on and
Speaker 2: on about. But it's interesting. And yeah, Amazon's definitely playing
Speaker 2: a part in coming in and changing the face of
Speaker 2: the community. We have to see whether it's going to
Speaker 2: be for the better or for the worst. But only
Speaker 2: time will tell.
Speaker 3: Yeah, we will see, man, But I.
Speaker 2: Want to go to something else. The Finity. A lot
Speaker 2: of times we talk about male entrepreneurs, yeah, and you know,
Speaker 2: business a lot of times like male driven. But we
Speaker 2: are not male chauvinists. We appreciate women. We appreciate women entrepreneurs.
Speaker 2: So I wanted to talk about the cosmetic industry, and
Speaker 2: I thought, what better way to talk about the cosmetic
Speaker 2: industry than to talk about, you know, two very successful
Speaker 2: entrepreneurs on their own which is Rihanna and Kylie Jenner.
Speaker 2: So you want to just go into that.
Speaker 4: Yeah, So, I mean it's kind of awkward that they
Speaker 4: when we talk about the two of them, it's usually
Speaker 4: in a verse type of situation, right, like Rihanna verse Kylie.
Speaker 3: But it really isn't like there's enough space.
Speaker 4: And there's enough money for everybody everyone to be successful.
Speaker 4: It's it's like we see that in our music, right.
Speaker 4: We can't have two successful females like we have that.
Speaker 2: And that's the thing too. Yeah, it's important to understand that,
Speaker 2: whether it be race, like they can't be too top
Speaker 2: black entrepreneurs or they can't be two women or whatever,
Speaker 2: there's enough for everybody. So I don't really even like
Speaker 2: the because somebody had commented the comparison, and I'm sure
Speaker 2: it's done in good nature. Yeah, but we just want
Speaker 2: to look at both of them, right, because they are
Speaker 2: both very successful, right, and they're both two people that
Speaker 2: we can learn from.
Speaker 3: Yeah.
Speaker 4: So, Rihanna's company, her cosmetic company, Fancy Beauty, started in
Speaker 4: twenty seventeen, did some amazing numbers. I think within the
Speaker 4: first forty days they grossed one hundred million dollars as
Speaker 4: a company. She had a line forty Foundations of forty
Speaker 4: shades of Foundation, which was hugely popular. It celebrated diversity.
Speaker 4: Mimen of all colors, shapes, and creeds could use it.
Speaker 4: And what's interesting about Fency Beauty is that although it
Speaker 4: hasn't made the most, I mean it did pretty well,
Speaker 4: but it hasn't made the most, it's average customer spends
Speaker 4: four hundred.
Speaker 3: And seventy dollars a year on the cosmetics. Well.
Speaker 2: The thing another interesting thing about fenty is that they're
Speaker 2: not limited edition, right, So like you know, we talked
Speaker 2: about that model, Like even if you look at Supreme
Speaker 2: or like Kanye when his sneakers comes out a lot
Speaker 2: of times in business, it's limited, right, which leads to
Speaker 2: a higher demand which you can drive prices. But fenty
Speaker 2: doesn't have. It's not their business model.
Speaker 4: Yeah, and even with that, even though it's not limited,
Speaker 4: it sells out, like if you go try to find.
Speaker 3: It, but they replenished, replenished.
Speaker 4: But the average person spends more money on their brand
Speaker 4: than any other brand. So like even with like Kim
Speaker 4: Kardashian West's line or Kylie's line, like, the average amount
Speaker 4: of money spent per year is maybe one.
Speaker 3: Hundred dollars less.
Speaker 4: So that shows you that there's loyalty to this brand
Speaker 4: and people are supporting it because the product must be good.
Speaker 2: And they've done a good job with social media. So
Speaker 2: there's a company called Cherry Picks and what they do
Speaker 2: is they track online purchases based off of social media engagement.
Speaker 2: So they have actually outpaced Kylie Cosmetic, which is Kylie
Speaker 2: Jenner's company, towards the end I think the last quarter
Speaker 2: of last year. So that's a big milestone for them
Speaker 2: because they fairly knew they just started, so they actually
Speaker 2: outpaced them in that department, so they've they've done a
Speaker 2: good job. I mean, of course you have Brianna.
Speaker 4: Yeah, and I like people are like, oh and obviously
Speaker 4: we know her from being a great musical artist and
Speaker 4: like a lot of people like Alan Wisdom new work,
Speaker 4: and she's been focused on just getting her cosmetic line
Speaker 4: off the ground.
Speaker 3: She has the lingerie line that she did as well.
Speaker 2: She has a lot of It's like we're talking about
Speaker 2: George Clooney when he made he made two hundred and
Speaker 2: seventy million off of the tequila company.
Speaker 3: And then you saw it, right, we had seen that.
Speaker 2: Yeah, he made that off of tequila company, and like, well,
Speaker 2: why is he not acting? Why do you think he's yea,
Speaker 2: So the same thing with I mean, I'm sure she
Speaker 2: loved for music. Yeah, but you got a chance to
Speaker 2: be a Reilly cash out off this. It's like, Okay,
Speaker 2: music is cool, but.
Speaker 3: Touring is great.
Speaker 2: This is this is different.
Speaker 4: Yeah, and like I said, it's done extremely well. Twenty eighteen,
Speaker 4: they reported five hundred and seventy three million in sales,
Speaker 4: which is interesting when you look at it because when
Speaker 4: they showed her net worth, Rihanna I think went from
Speaker 4: like eighty million to two hundred and ten million dollars
Speaker 4: because of her deal with Fancy Beauty.
Speaker 3: Now, the interesting part about Fancy Beauty is not she doesn't.
Speaker 4: Own one hundred percent of it, and that's something we've
Speaker 4: been talking about a lot, Like on one hundred percent,
Speaker 4: she olds a stake in it. The parent company is LVMH,
Speaker 4: which is really Louis Vaton mot Hennessy, and they are
Speaker 4: they're a luxury conglomerates, so like they combined, they see
Speaker 4: value in something will put money behind it, so they
Speaker 4: own they're the parent company, they own majority of the
Speaker 4: stakes in it. Whereas Kylie kas medics completely different story. Right,
Speaker 4: So when Travis is like big Mama color Forbes like
Speaker 4: nine hundred million, like this is like this woman has
Speaker 4: a chance to be the youngest billionaire in the history
Speaker 4: self made billionaire in the history of the United States,
Speaker 4: like within the next year.
Speaker 3: I think she does it before twenty three.
Speaker 2: So we can't discredit. We can't discredit College John. We're
Speaker 2: not going to do that. It's been a lot of backlash, yeah,
Speaker 2: on her, like she's not a self made because obviously
Speaker 2: she comes from a wealthy family. And of course, but
Speaker 2: how many wealthy children squandered their parents' gifts, right, So
Speaker 2: you still have to have some self drive, some business acroman.
Speaker 3: She has a better start, but it is still still
Speaker 3: have to go somewhere.
Speaker 4: So twenty fifteen, like she starts out with just the
Speaker 4: lip kits, like that was her company she and that
Speaker 4: was funded from I think, like she had a milent
Speaker 4: deal and the TV show had just started, so she's
Speaker 4: got money from that.
Speaker 2: So she put she's leveraged her social media presence, she's
Speaker 2: leveraged her family name, and I mean supposed to do that.
Speaker 2: That's what she's supposed to do like.
Speaker 4: She's getting paid a million for an ad, Like we
Speaker 4: spoke about her sister a couple of weeks ago geting
Speaker 4: two hundred and fifty for the ad.
Speaker 3: She's charging a million per ad.
Speaker 2: No, she's not. And she owns a company one.
Speaker 4: Hundred percent so they did eight hundred million dollars in sales.
Speaker 4: Like so if she owns one hundred percent of the company,
Speaker 4: who she's paying, right, The only person that gets a
Speaker 4: cut of that is a mom who's the manager. She
Speaker 4: gets ten percent of you know, all the things that
Speaker 4: she makes. So she does a billion, mom gets one
Speaker 4: hundred million. But like you're twenty three with nine hundred millions.
Speaker 2: Yeah, it's amazing, No, No, it's it's definitely something to
Speaker 2: marvel at. Yeah, and it's not easy to run a business,
Speaker 2: especially a business that large, especially that young, right, because
Speaker 2: there's a lot. I mean, you give somebody, you give
Speaker 2: a twenty two year old ten million dollars, they might
Speaker 2: just go crazy. They're not worrying about turning that ten
Speaker 2: million into a billion right now, you know. So so yeah,
Speaker 2: I think that both of them are success stories. But
Speaker 2: I also wanted to talk about an the success story
Speaker 2: that a lot of people may not have heard of
Speaker 2: in the cosmetic industry. A woman named Pat McGrath.
Speaker 3: Have you heard of her? So?
Speaker 2: Pat McGrath is a UK citizen, She is a child
Speaker 2: of Jamaican immigrants, and she's a celebrity makeup artist. So
Speaker 2: the interesting thing about her is that she's been celebrity
Speaker 2: makeup artist for years now, and she started her makeup
Speaker 2: line two years ago and it actually reached a billion
Speaker 2: dollar valuation last year. So the valuation on paper is
Speaker 2: actually worth more than Kylie Jenner's company. That's something that
Speaker 2: to applaud as well, because she's not a celebrity, she's
Speaker 2: not famous. She comes from humble beginnings and you know
Speaker 2: she yeah, her cosmetic company is now valued over a
Speaker 2: billion dollars and like I said, not even to compare
Speaker 2: it to Kylie, but since Kylie's in the news, you know,
Speaker 2: we have to use that as framework. But it's actually
Speaker 2: on paperworth more than colleague generous company. So that's something
Speaker 2: to keep in mind as well, because you know, we
Speaker 2: do talk about sports entertainment a lot because it's kind
Speaker 2: of the theme of the show, but we want to
Speaker 2: highlight you know, regular every day entrepreneurs as well. People
Speaker 2: that don't come from you know, sports, entertainment, celebrity backgrounds,
Speaker 2: and you know, I think that's important as well because
Speaker 2: it encourages anybody to you know, say, you know, if
Speaker 2: you if you follow your dreams, then you can do
Speaker 2: this as well. So cosmetic industry huge, huge, and it
Speaker 2: has been a huge industry for forever and it probably
Speaker 2: will will always be a huge industry. So there's always
Speaker 2: money to be made in cosmetics, in beauty, and we
Speaker 2: do not have to pin ourselves against each other. There's
Speaker 2: enough for everybody.
Speaker 4: And speaking on the topic of entrepreneurs that was like
Speaker 4: one of the questions and a lot of feedback people
Speaker 4: on the nose, like what does it take to be
Speaker 4: an entreneur? How what what is that like? And you
Speaker 4: want to touch on that, I.
Speaker 3: Mean you are, yeah yourself.
Speaker 2: Yeah, briefly, we'll end it. We'll end it with this. So, yeah,
Speaker 2: entrepreneurship is something that is not for the faint of heart,
Speaker 2: and it's not it's not easy. A lot of times,
Speaker 2: you know, it's glamorized. We see it's becoming very trendy now,
Speaker 2: it's very popular and it's a good thing that you know,
Speaker 2: more people are encouraging to go out there and create
Speaker 2: a business, but I wanted to just talk. You know,
Speaker 2: a lot of times we have to show both sides
Speaker 2: of the coin. And you know, think about being an
Speaker 2: entrepreneur is that it's something that financially there's there's no guarantees, right,
Speaker 2: Like you you have the same bills every single month,
Speaker 2: but cash flow is not the same every month.
Speaker 3: You don't know, you don't move your feet, you don't eat.
Speaker 2: And not even that. Sometimes it's not even up to
Speaker 2: you know, you can do everything right and still not
Speaker 2: get paid. Things just fall through, right, So it's like
Speaker 2: you might go two three months without getting paid. Your
Speaker 2: rent has still get paid, your mortgage will have to
Speaker 2: get paid, your kids got to still eat, So that
Speaker 2: pressure is different, and it can be lonely. You know
Speaker 2: a lot of times people don't fully understand. Like if
Speaker 2: you work at it a workspace, you know, you have
Speaker 2: coworkers and things of that nature, so that provides a
Speaker 2: certain level of social engagement and interaction. But when you're
Speaker 2: an entrepreneur, a lot of times you're by yourself, and
Speaker 2: you're by yourself all day trying to figure things out.
Speaker 2: So you know, it is rewarding because you know, you
Speaker 2: do have freedom and it can be financially rewarding as well.
Speaker 2: But it's just important, I think, to keep the mind
Speaker 2: people like you said, ask the question, like what's the
Speaker 2: first steps? How do you get started? De really is
Speaker 2: no first steps of blueprint. You just got to go
Speaker 2: out there and figure it out, right. I mean, of
Speaker 2: course you want to set up your LLC, set up
Speaker 2: your company, do your market research, see you know, have
Speaker 2: a mentor have a couple of mentors. But ultimately you're
Speaker 2: gonna have to just jump out the airplane and just
Speaker 2: kind of figure it out on your own because there
Speaker 2: is no no set science to it. There's no roadmap
Speaker 2: or no book that you can actually read that's going
Speaker 2: to give you the real world experience. Only real world
Speaker 2: experience is going to give that to you. So yeah,
Speaker 2: I just wanted to touch on that for a couple
Speaker 2: of minutes. But that is where at the end time flies.
Speaker 2: You want to have a final word before we Yeah.
Speaker 4: I just want to say just that honesty that you
Speaker 4: just shared. Man, Like I watched you go through that process,
Speaker 4: so like everything is saying is one hundred percent honestly,
Speaker 4: and you were completely transparent about it. And networking is
Speaker 4: one of the things you did. And one of the
Speaker 4: things when I was listening to you was like that
Speaker 4: was so important. I remember when you started. I was like, Yo,
Speaker 4: I don't care what you're doing. I'm your first client.
Speaker 4: And like that's been true. And that network that we
Speaker 4: have is like important, and it's time for us as
Speaker 4: a community to like start sharing it, right, Like Pac said,
Speaker 4: like I got love for my brother, but we can
Speaker 4: never go nowhere.
Speaker 3: Lets's we share with each other.
Speaker 4: It's like time for us to start sharing resources, sharing knowledge,
Speaker 4: you know what I'm saying, sharing experiences so that we
Speaker 4: can all grow.
Speaker 3: Yeah, so networking and let's sharing with each other.
Speaker 2: Man, all right, guys? That is episode four. Spread love,
Speaker 2: Spread spread love. I how you want to spread love?
Speaker 2: Thank you for rocking with us. We see you next week.
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