WEBVTT - Tesla’s Annual EV Sales Drop 0:00:02.720 --> 0:00:10.560 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.560 --> 0:00:14.480 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.560 --> 0:00:18.520 Eastern on Applecarplay and Android Auto with the Bloomberg Business App, 0:00:18.600 --> 0:00:21.840 Listen on demand wherever you get your podcasts, or watch 0:00:21.920 --> 0:00:23.040 us live on YouTube. 0:00:24.040 --> 0:00:25.880 All Right, the other big news company news of the 0:00:25.960 --> 0:00:28.600 day had to do with Tesla. So apparently Tesla's annual 0:00:28.640 --> 0:00:32.040 EV sales drop for the first time in over a decade, 0:00:32.040 --> 0:00:33.879 with about one point seventy nine million. 0:00:33.760 --> 0:00:35.280 Vehicles sold in twenty twenty four. 0:00:35.360 --> 0:00:38.919 Steve Man, Bloomberg Intelligence Global Autos and Industrials research analyst, 0:00:39.400 --> 0:00:42.120 joins us, So the comparison of hey, this is the 0:00:42.120 --> 0:00:44.280 first time it dropped in over a decade sounds bad. 0:00:44.360 --> 0:00:47.200 Can you just walk us through the intricacies behind this number. 0:00:48.240 --> 0:00:50.400 Yeah, if you actually, if you look at the fourth quarter, 0:00:50.600 --> 0:00:53.800 it's actually up slightly by two percent. But you know 0:00:53.840 --> 0:00:57.760 they've done a lot throughout the quarter to drive that number, 0:00:58.480 --> 0:01:03.920 mainly on incentives, So we're likely to see that to continue. 0:01:04.160 --> 0:01:06.080 But if you look out at twenty twenty five, we 0:01:06.160 --> 0:01:11.399 expect the company that actually give you know, rosier guidance. 0:01:11.800 --> 0:01:14.600 They do have new vehicles coming out, the refresh of 0:01:14.640 --> 0:01:17.280 the model why, the popular model why. And then there's 0:01:17.319 --> 0:01:20.720 a new affordable vehicle being launched in the first half 0:01:20.720 --> 0:01:23.479 that should drive sales in twenty twenty five. 0:01:24.200 --> 0:01:27.680 So how important are incentives these days, Steve? For the 0:01:27.720 --> 0:01:29.120 average EV buyer. 0:01:29.959 --> 0:01:33.040 It is very important. It's not just on EV. 0:01:33.240 --> 0:01:37.319 We're seeing that throughout the auto industry, including gasoline cars. 0:01:38.080 --> 0:01:41.600 Affordability continue to be an issue. You know, if you 0:01:41.600 --> 0:01:45.360 look at delinquency rates on loans are they're rising, so 0:01:45.400 --> 0:01:50.640 the automakers have to come in and actually support demand. 0:01:51.160 --> 0:01:55.840 So we'll probably see that in twenty twenty five. But 0:01:56.560 --> 0:01:59.400 you know, there's there's reports out there that we, you know, 0:01:59.440 --> 0:02:03.440 including ours, we think that battery costs will continue to 0:02:03.440 --> 0:02:07.760 come down and then we'll see probably a better an upturn, 0:02:08.000 --> 0:02:11.519 likely in twenty twenty six, not so much in this year. 0:02:11.919 --> 0:02:14.480 When you mentioned that there'll be some product refreshes this 0:02:14.600 --> 0:02:17.440 year as well as an affordable Tesla, yeah, I've been 0:02:17.480 --> 0:02:19.080 hearing that for a while. What do we mean by 0:02:19.120 --> 0:02:22.639 affordable and do we trust this timeline? 0:02:22.880 --> 0:02:23.160 Yeah? 0:02:23.240 --> 0:02:25.639 So, you know, I think there's been a lot of 0:02:25.720 --> 0:02:27.880 questions out there in terms of how you know, if 0:02:27.880 --> 0:02:32.560 Elon must will actually meet his own projection. I think 0:02:32.639 --> 0:02:36.280 that he will launch the affordable EV and that's likely 0:02:36.320 --> 0:02:40.600 to be under a thirty thousand including the that then 0:02:40.639 --> 0:02:45.880 includes the seventy five hundred credit incentive by the federal government. 0:02:46.000 --> 0:02:46.840 Oh, it includes it. 0:02:46.880 --> 0:02:49.360 So if that goes away, it no longer becomes affordable. 0:02:50.360 --> 0:02:51.000 It still is. 0:02:51.000 --> 0:02:53.920 It's still one of the cheapest EV's out there. I 0:02:53.960 --> 0:02:58.560 think the new EV's that they're launching coming going forward 0:02:58.720 --> 0:03:02.640 will actually be much lower costs than the current model 0:03:02.680 --> 0:03:06.320 three Model Y, so there's still some room for them 0:03:06.400 --> 0:03:11.680 to cut prices and also, you know, help help maintain 0:03:12.080 --> 0:03:15.640 the automotive gross margin around the you know, eighteen to 0:03:15.680 --> 0:03:16.280 twenty percent. 0:03:17.800 --> 0:03:22.000 Steve, twenty twenty four feels like a year where the 0:03:22.040 --> 0:03:25.520 evolution towards electric vehicleles hit kind of a speed bump 0:03:25.600 --> 0:03:28.239 at there A. Is that in fact the case? And 0:03:28.400 --> 0:03:32.200 b how do you think about the industries continued evolution 0:03:32.320 --> 0:03:36.480 to EV's over the twenty twenty five Yeah. 0:03:36.280 --> 0:03:39.000 I think twenty twenty five EV sales will probably be 0:03:39.080 --> 0:03:42.680 grown at a single digit and you know, incentives still 0:03:42.720 --> 0:03:45.920 going to be a bigger part of the story. But 0:03:46.040 --> 0:03:48.600 I think long term, you know, beyond twenty twenty five. 0:03:48.800 --> 0:03:51.960 That means twenty twenty six and beyond, I think EV 0:03:52.120 --> 0:03:54.520 sales will recover, battery costs. 0:03:54.360 --> 0:03:55.520 Will continue to come down. 0:03:56.280 --> 0:04:00.560 More automakers, not just Tesla, GM and Stilentis are launching 0:04:01.320 --> 0:04:04.800 newer and cheaper evs. That's going to be that's going 0:04:04.800 --> 0:04:07.280 to resonate with a with a mass market. You know, 0:04:07.320 --> 0:04:10.160 a lot of the early adopters have bought evs, and 0:04:10.200 --> 0:04:12.600 I think the next leg up is really to get 0:04:13.000 --> 0:04:16.800 the general population to buy evs and make it more 0:04:17.040 --> 0:04:18.039 affordable for them. 0:04:18.800 --> 0:04:21.000 I guess I just wonder, like without the tax credit, 0:04:21.560 --> 0:04:23.880 if that goes away, I appreciate that Tesla's still the 0:04:23.920 --> 0:04:25.839 cheapest one out there, but that's not going to be Like, 0:04:25.839 --> 0:04:28.800 there's no way Paul's buying a thirty eight thousand dollars Tesla, right, Like, 0:04:28.880 --> 0:04:31.920 that's not happening. So what has to happen for that 0:04:31.960 --> 0:04:33.960 price to get even lower? And I know that it's 0:04:33.960 --> 0:04:35.640 a chicken and an egg thing, right because you need 0:04:35.640 --> 0:04:39.120 the demand in order to trigger the production, which then 0:04:39.400 --> 0:04:43.200 releases lower prices. But that's just not materializing, particularly without 0:04:43.200 --> 0:04:45.080 that tax credit, right. 0:04:45.320 --> 0:04:47.839 You know, I think we talked about battery costs is 0:04:47.880 --> 0:04:49.920 being one of them. The other thing is really. 0:04:49.720 --> 0:04:51.080 The charging infrastructure. 0:04:52.120 --> 0:04:54.960 You know, I don't think the charging infrastructures has been 0:04:55.000 --> 0:04:58.440 expanded to a point where it's convenient for a lot 0:04:58.480 --> 0:05:02.200 of the for owners or potential owners of EV's, but 0:05:02.240 --> 0:05:04.680 there's a lot of money being poured into it. There's 0:05:04.680 --> 0:05:07.159 one company called ev Go. They just got a huge 0:05:07.160 --> 0:05:10.640 loan from the federal government to expand. We got a 0:05:10.720 --> 0:05:14.040 lot of automakers, major ones, GM. 0:05:13.800 --> 0:05:14.279 Ford and. 0:05:15.800 --> 0:05:20.120 Hyundai and the likes are actually joining forces together, pulling 0:05:20.200 --> 0:05:24.599 capital together to expand the infrastructure. So that's why, you know, 0:05:24.760 --> 0:05:29.479 I think, you know, beyond twenty twenty six to beyond 0:05:29.480 --> 0:05:32.680 twenty twenty five, we're going to see improved uptick on 0:05:32.839 --> 0:05:36.760 EV demand because of not only cheaper EV's, but an 0:05:36.760 --> 0:05:38.760 expanded charging infrastructure. 0:05:39.120 --> 0:05:41.720 Steve above the auto companies you own, what's the best 0:05:41.760 --> 0:05:43.920 position here do you think for what's going to be 0:05:43.920 --> 0:05:46.800 a bumpy several years, arguably as as transition continues. 0:05:48.200 --> 0:05:51.240 Yeah, I still you know, if I look at the company, 0:05:51.279 --> 0:05:56.240 I still prefer Tesla in terms of their fundamentals. There's 0:05:56.240 --> 0:06:00.679 still the lowest cost producers. The next one is GM 0:06:00.720 --> 0:06:03.440 and Shanday. You know, they have the best offering at 0:06:03.480 --> 0:06:06.800 the moment, and they continue to launch more affordable evs. 0:06:07.640 --> 0:06:10.800 On the other end of the spectrum, Ford is actually retrenching. 0:06:11.360 --> 0:06:15.680 They're more focused on commercial EV business rather than the 0:06:15.720 --> 0:06:21.839 consumer EV business. So commercial evs there's demand, but obviously 0:06:22.000 --> 0:06:25.000 the market is not as big as the consumers. 0:06:25.360 --> 0:06:27.039 All right, thanks so much, We appreciate that. 0:06:27.080 --> 0:06:30.560 Steve Steve Man Bloomberg Intelligence, Global Autos and Industrials research 0:06:30.560 --> 0:06:33.919 analysts joining us on those Tesla delivery numbers. 0:06:35.640 --> 0:06:39.520 You're listening to the Bloomberg Intelligence Podcast. Catch the program 0:06:39.640 --> 0:06:43.039 live weekdays at ten am Eastern on Applecarplay and Android 0:06:43.040 --> 0:06:46.039 Auto with the Bloomberg Business app. You can also listen 0:06:46.160 --> 0:06:49.400 live on Amazon Alexa from our flagship New York station. 0:06:49.960 --> 0:06:52.640 Just say Alexa play Bloomberg eleven thirty. 0:06:53.720 --> 0:06:56.240 All right, we started your year green on the screen. 0:06:56.279 --> 0:06:59.000 The question is do you stick with what got you here? 0:06:59.080 --> 0:07:00.760 Kind of the mag set in some of the big 0:07:00.800 --> 0:07:03.640 tech themes that have worked for equity investors so well 0:07:03.680 --> 0:07:06.520 over the last couple of years, already trying to branch 0:07:06.560 --> 0:07:08.200 you out and find some value in other places. Let's 0:07:08.240 --> 0:07:10.320 check out with our next guests, on that issue, Kathy 0:07:10.360 --> 0:07:13.800 and Twistle Managing Director Morgan Stanley Private Wealth and Management, 0:07:14.640 --> 0:07:17.120 joining us via zoom. So, Katy, what are you telling 0:07:17.120 --> 0:07:19.080 your clients this year? I mean, you know, from an 0:07:19.120 --> 0:07:23.520 equity respective, the market's really delivered outstanding returns over the 0:07:23.560 --> 0:07:25.600 last two years, but again a lot of that was 0:07:25.680 --> 0:07:27.800 skewed by a handful of names. 0:07:27.800 --> 0:07:29.120 Here. What do you do this year? 0:07:30.480 --> 0:07:32.560 Hey, thanks for having me on today. Happy New Year. 0:07:32.840 --> 0:07:34.920 There's a lot to talk about and a lot to 0:07:34.960 --> 0:07:38.520 do for clients first day of the year, and with 0:07:38.840 --> 0:07:43.320 the mag seven really outperforming, we are telling our clients 0:07:43.360 --> 0:07:48.680 to consider like reducing a lot of those positions with 0:07:49.080 --> 0:07:51.920 tax harvesting and thinking thoughtfully. A lot of clients are 0:07:51.920 --> 0:07:55.880 starting the year off, obviously with the zero tax sum gain, 0:07:56.240 --> 0:07:59.400 and it's a good time to start reducing those positions 0:08:00.120 --> 0:08:02.560 looking at other areas because there will be other areas 0:08:02.560 --> 0:08:06.720 that will become more robust and better opportunities for clients 0:08:06.720 --> 0:08:10.000 going forward. So it's just about diversification in some ways. 0:08:10.080 --> 0:08:13.200 Kathy, though this exact conversation could have taken place today 0:08:13.240 --> 0:08:15.680 at this exact same time one year ago, and it 0:08:15.720 --> 0:08:18.360 still wouldn't have necessarily worked out because you still had 0:08:18.360 --> 0:08:20.320 the big guys getting the big gains. 0:08:21.400 --> 0:08:24.880 Absolutely, Alex. When I speak with my clients, I ask them, 0:08:25.440 --> 0:08:27.240 you know, what, how are you going to feel at 0:08:27.280 --> 0:08:31.040 the end of the year if these positions are much higher, 0:08:31.640 --> 0:08:32.920 and then how are you going to feel if they're 0:08:32.960 --> 0:08:35.680 much lower? And which one feels worse? And if you 0:08:35.840 --> 0:08:38.680 think that if they go down tremendously and that's going 0:08:38.679 --> 0:08:41.320 to feel worse for you, that probably means you're taking 0:08:41.320 --> 0:08:43.640 too much risk for your you know, for your for 0:08:43.679 --> 0:08:46.520 your own risk tolerance and portfolio. And by reducing some 0:08:46.640 --> 0:08:49.520 of that risk and putting those assets in other areas 0:08:49.520 --> 0:08:52.640 of your portfolio, you're actually giving yourself a sleep at 0:08:52.720 --> 0:08:56.280 night formula and still having the opportunity to grow your portfolio. 0:08:57.679 --> 0:09:00.880 Is sixty forty Is that still a reasonable fuller construction? 0:09:00.960 --> 0:09:06.000 Sixty percent equities, forty percent bonds or alternatives something. 0:09:06.840 --> 0:09:09.920 It's it's it definitely has changed over the years, so 0:09:09.960 --> 0:09:12.720 sixty forty. And it used to also be like sixty 0:09:12.760 --> 0:09:16.360 percent of equities or equity percentage should be what your 0:09:16.360 --> 0:09:19.400 age is, and that has also changed tsentry over the years. 0:09:19.520 --> 0:09:22.600 So now we're looking at clients' portfolios, we're looking at 0:09:22.640 --> 0:09:25.120 a couple of different things. The first thing is do 0:09:25.240 --> 0:09:27.920 they have enough money today in order to you know, 0:09:27.960 --> 0:09:30.640 reach all of the goals like living comfortably, doing the 0:09:30.679 --> 0:09:32.559 things that they want to do, making an impact in 0:09:32.600 --> 0:09:34.360 the world, whatever it may be. We want to make 0:09:34.400 --> 0:09:37.120 sure they have enough money. So the first thing is 0:09:37.200 --> 0:09:39.840 protecting you know, the wealth that the client is built 0:09:40.120 --> 0:09:41.920 and being sure that we can create the cash flow 0:09:41.960 --> 0:09:44.960 and the income for them, and then secondly being able 0:09:45.080 --> 0:09:47.240 to grow it enough to keep up with inflation and 0:09:47.280 --> 0:09:50.520 also take advantage of growth opportunities in the market. So 0:09:51.240 --> 0:09:54.440 if a client has enough money to do a fifty 0:09:54.480 --> 0:09:57.400 percent equity portfolio or fifty five percent equity portfolio, will 0:09:57.440 --> 0:09:59.760 do that too. We are mixing in other areas of 0:09:59.800 --> 0:10:04.640 them markets though, other than just cash, equities and stocks, 0:10:04.720 --> 0:10:07.760 in order to achieve some of the target returns that 0:10:07.760 --> 0:10:10.720 we're looking for, and that includes alternative investments. 0:10:11.240 --> 0:10:12.800 What does alternative investments mean. 0:10:12.679 --> 0:10:16.640 To you guys, Well, to me, it means just like 0:10:16.760 --> 0:10:20.800 a non correlated asset class. Earlier in the program, I 0:10:20.840 --> 0:10:25.280 think I heard conversations about hedge funds and hedge funds performing, 0:10:26.000 --> 0:10:29.080 So we do want to have where it's appropriate some 0:10:29.160 --> 0:10:31.319 of those asset classes in our client's portfolio. So it 0:10:31.360 --> 0:10:34.080 could be hedge funds, it could be private equity credit. 0:10:34.160 --> 0:10:36.520 You know, the whole banking system has this shadow banking 0:10:37.480 --> 0:10:40.880 system behind it now with private equity firms and coming 0:10:40.920 --> 0:10:46.560 in and providing credit to borrowers, and we are also 0:10:46.840 --> 0:10:50.360 providing the opportunity for clients to invest there as well. Again, 0:10:50.440 --> 0:10:52.760 it depends on the client and their risk tolerance and 0:10:52.800 --> 0:10:56.200 their appropriateness for that type of investment, but it can 0:10:56.320 --> 0:10:59.640 make a big difference in terms of not doing exactly 0:10:59.640 --> 0:11:02.200 what the more mart does non correlated asset class and 0:11:02.280 --> 0:11:05.560 also providing some nice income returns, especially for those who 0:11:05.559 --> 0:11:07.959 are looking from you know, they're in the allocation phase 0:11:07.960 --> 0:11:10.280 and now they're going into like the disbursement phase. They're 0:11:10.280 --> 0:11:11.920 getting ready to retire, and they want to make sure 0:11:11.920 --> 0:11:15.000 they have enough money to live on and not run out. 0:11:15.400 --> 0:11:17.840 Kathy, how about in the fixed income space, how much 0:11:17.880 --> 0:11:20.960 credit risk are you suggesting clients take these days? I mean, 0:11:20.960 --> 0:11:22.440 if you consider it in a to your treasure and 0:11:22.440 --> 0:11:24.920 get four point two five percent, do you need to 0:11:24.960 --> 0:11:25.680 do much more than that? 0:11:27.000 --> 0:11:29.680 Yeah? What you want to think about is the way 0:11:29.679 --> 0:11:32.520 the rates are changing right now as we're seeing is 0:11:32.960 --> 0:11:36.880 shorter rates are starting to come down and longer rates 0:11:37.000 --> 0:11:40.120 are staying higher. So we're trying to move some of 0:11:40.120 --> 0:11:44.320 our clients that have cash or short term cash like 0:11:44.400 --> 0:11:48.480 investments like to your treasuries into longer investments so that 0:11:48.520 --> 0:11:51.440 they can lock in those higher rates for longer. And 0:11:51.520 --> 0:11:53.960 I think that's a very simple and easy move to 0:11:54.000 --> 0:11:56.880 make right now for clients. So that's what we're trying to. 0:11:56.840 --> 0:11:59.880 Do, all right, Kathy, Thanks Lott, really appreciate Katy and 0:12:00.080 --> 0:12:04.079 still Managing Director Morgan Stanley Private Wealth Management, appreciate that 0:12:04.160 --> 0:12:05.160 really very much. 0:12:06.840 --> 0:12:10.520 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:12:10.600 --> 0:12:14.000 weekdays at ten am Eastern on Applecarcklay and Android Auto 0:12:14.120 --> 0:12:17.160 with the Bloomberg Business app. Listen on demand wherever you 0:12:17.200 --> 0:12:20.640 get your podcasts, or watch us live on YouTube. 0:12:21.600 --> 0:12:25.560 Let's talk about some fun stuff here, some digital media streaming, 0:12:25.640 --> 0:12:27.680 all that kind of stuff. Where's this business going to 0:12:27.679 --> 0:12:30.600 be taking us in twenty twenty five. The best person 0:12:30.600 --> 0:12:32.920 to chat with that is Mark Douglas, President and CEO 0:12:32.960 --> 0:12:36.439 of Mountain. Hey, Mark, I want to start with sports. 0:12:37.040 --> 0:12:38.960 We had a time as recently as I don't know 0:12:39.000 --> 0:12:41.679 a year, year and a half ago when Netflix says 0:12:41.800 --> 0:12:47.319 we're never getting into sports, Well, that's changing, and it's 0:12:47.360 --> 0:12:49.920 changing in a big way. How do you think this 0:12:50.080 --> 0:12:53.600 last bastion of broadcasting, cable network television in terms of 0:12:53.600 --> 0:12:57.000 audience attraction live sports, how do you think that's going 0:12:57.080 --> 0:12:59.680 to migrate this year to streaming? 0:13:00.800 --> 0:13:03.560 Well, I think you're seeing a few things happening at 0:13:03.600 --> 0:13:06.640 the same time what you just mentioned, which is Netflix 0:13:06.679 --> 0:13:11.040 getting into sports. Also ESPN is coming like fully to streaming. 0:13:11.160 --> 0:13:15.640 So I think the advertisers really like they still are 0:13:15.679 --> 0:13:18.640 addicted to kind of like big audiences watching at the 0:13:18.679 --> 0:13:22.600 same time so they can create big moments, and so 0:13:22.840 --> 0:13:25.320 these networks they want to commodate that. But they're going 0:13:25.400 --> 0:13:28.160 to start accommodating that on streaming in twenty and twenty five. 0:13:28.200 --> 0:13:29.120 It's already happening. 0:13:29.160 --> 0:13:31.840 But now you hear from Disney, you hear from Netflix, 0:13:31.840 --> 0:13:34.079 they're really going all in on it. I think ESPN 0:13:34.160 --> 0:13:36.720 on streaming, really going full in on streaming is a 0:13:36.720 --> 0:13:37.200 big deal. 0:13:37.760 --> 0:13:40.640 Will the ad revenue for that live streaming of sports 0:13:40.640 --> 0:13:42.360 follow I. 0:13:42.360 --> 0:13:42.959 Think it will. 0:13:43.600 --> 0:13:44.120 I think the. 0:13:45.640 --> 0:13:48.720 Netflix in particular is a big advantage because so many 0:13:48.760 --> 0:13:51.440 people go to Netflix as a first source so they 0:13:51.480 --> 0:13:54.800 can turn something that might not have been that big 0:13:55.640 --> 0:13:58.280 into a big moment. They did that with the Tyson 0:13:58.440 --> 0:14:01.160 Jake Paul fight. I think they're going to do that 0:14:01.200 --> 0:14:05.319 with WWE on Monday, where people who normally wouldn't watch 0:14:05.480 --> 0:14:08.120 WWE are going to turn on the TV and that's 0:14:08.120 --> 0:14:10.000 what they see, and they're going to you know, click 0:14:10.040 --> 0:14:13.719 and watch, and so they able to kind of amplify 0:14:14.120 --> 0:14:17.439 these sports events. But Disney with ABC and all the 0:14:17.520 --> 0:14:21.320 other and especially ESPN, also has an ability to deliver 0:14:21.360 --> 0:14:22.080 a big audience. 0:14:22.120 --> 0:14:23.120 I think they'll do the same. 0:14:24.440 --> 0:14:27.080 You were bullish, really you were really early on on 0:14:27.120 --> 0:14:31.200 the Netflix story, Mark. Are you still as bullish about them, 0:14:31.280 --> 0:14:35.240 because one could argue it's a whole new competitive landscape 0:14:35.240 --> 0:14:36.680 here these days. 0:14:37.040 --> 0:14:41.400 Yeah, I think where you go first, you know, in 0:14:41.440 --> 0:14:44.680 some sense the modern day TV guy is. 0:14:44.640 --> 0:14:46.320 A really really big deal. 0:14:46.440 --> 0:14:49.640 And as long as Netflix owns that spot, I think 0:14:50.200 --> 0:14:53.800 there's data to show that, well more than fifty percent 0:14:53.840 --> 0:14:57.000 of people when they turn on the TV, the first app, 0:14:57.080 --> 0:15:00.000 because now you like start an app rather than change a. 0:15:00.080 --> 0:15:02.560 Channel, the first app they go to is Netflix. 0:15:02.920 --> 0:15:06.560 As long as you own that spot, you will own, 0:15:06.720 --> 0:15:10.400 you know, kind of be the leader in streaming, and 0:15:10.560 --> 0:15:13.840 but it requires a big investment in content. People go 0:15:13.920 --> 0:15:16.520 there first because that's the first place they think there's 0:15:16.560 --> 0:15:19.160 going to be new content. So Netflix is going to 0:15:19.200 --> 0:15:21.800 have to keep beating that machine. And they're doing it now, 0:15:22.080 --> 0:15:24.560 and they're doing it profitably. So you know, all of 0:15:24.600 --> 0:15:27.720 that combined, I think keeps them in the lead until 0:15:27.760 --> 0:15:30.840 they they until they make a strategic error essentially, and 0:15:30.880 --> 0:15:33.960 maybe you know, get cheap about how much there willing 0:15:33.960 --> 0:15:36.040 to spend on content, people abandon them. 0:15:36.080 --> 0:15:39.480 So you guys, I found the one movie that's not 0:15:39.560 --> 0:15:41.960 on streaming really, Yes, I tried to bring it up 0:15:42.040 --> 0:15:44.920 yesterday to show my daughter and it was nowhere. You 0:15:44.960 --> 0:15:48.560 couldn't even buy it on Apple TV. Okay, Well, Nuns 0:15:48.600 --> 0:15:52.520 on the Run nineteen ninety British comedy with Eric Idel 0:15:52.560 --> 0:15:55.120 and Robbie Coltrane could not find it. It was very 0:15:55.160 --> 0:15:56.840 upsetting interesting putting this up. 0:15:56.960 --> 0:15:58.760 That's what that's what you were searching for. 0:15:59.000 --> 0:16:01.080 Yes, well, we went on a whole eighties movie thing, 0:16:01.120 --> 0:16:02.920 which then brought us some of the nineties movies. So 0:16:02.960 --> 0:16:05.200 we did Clue and then Clue got into Back to 0:16:05.240 --> 0:16:07.760 the Future and then you know, Robbie Coltrane was Hagrid 0:16:07.760 --> 0:16:11.120 and Harry Potter. It's all derivative plays at the room anyway, 0:16:11.640 --> 0:16:13.880 apropos of absolutely nothing. I just thought it was amazing 0:16:13.880 --> 0:16:16.160 that I found the one movie that wasn't on streaming. 0:16:16.880 --> 0:16:20.400 Mark when it comes to the next step, then are 0:16:20.400 --> 0:16:21.520 we gonna see bundles? 0:16:21.560 --> 0:16:24.200 Like you said, it's Netflix is like basically raced to 0:16:24.240 --> 0:16:25.840 lose at the end of the day. So do the 0:16:25.880 --> 0:16:27.200 other guys start bundles? 0:16:28.240 --> 0:16:32.000 Yeah, I mean consolidate bundles in the form of acquisitions. 0:16:32.000 --> 0:16:32.480 I think. 0:16:33.440 --> 0:16:36.880 So there's some loose bundles now that don't involve acquisitions. 0:16:36.920 --> 0:16:40.120 But I mean what's happening in twenty twenty five is 0:16:40.280 --> 0:16:42.640 every network is all in on streaming. 0:16:42.680 --> 0:16:43.560 I mean I. 0:16:43.640 --> 0:16:46.640 Talked to executives at all these networks. This is pretty 0:16:46.680 --> 0:16:49.320 regularly all that I mean, linear doesn't even come out 0:16:49.320 --> 0:16:50.160 of their mouth anymore. 0:16:50.200 --> 0:16:51.480 That's a legacy business. 0:16:53.280 --> 0:16:55.160 You know, the viewers are still there, so they still 0:16:55.160 --> 0:16:57.120 have to migrate them, but they only want to talk 0:16:57.160 --> 0:17:00.520 about streaming and the you know, the big one. I've 0:17:00.520 --> 0:17:02.640 said this many times are the ones where I can 0:17:02.720 --> 0:17:03.720 name them and you can. 0:17:03.600 --> 0:17:06.160 Tell me why you go there and watch them, and. 0:17:06.119 --> 0:17:09.560 So those winners are going to started consolidating the buy content, 0:17:09.720 --> 0:17:13.280 and it's already under way, and that that that's kind 0:17:13.359 --> 0:17:15.560 of what's going to have that bundles in the form 0:17:15.640 --> 0:17:19.159 of let's just start buying content and buying these brands 0:17:19.160 --> 0:17:22.359 which are going to disappear like old you know, car 0:17:22.400 --> 0:17:26.440 companies that that you never hear about anymore. 0:17:26.160 --> 0:17:27.680 Something you know, similar to that. 0:17:28.400 --> 0:17:32.840 So are the economics Are they as good in streaming mark? 0:17:32.880 --> 0:17:34.480 Do we know that? I mean, it seems like they're 0:17:34.480 --> 0:17:35.440 pretty good for Netflix. 0:17:36.560 --> 0:17:39.040 They're good for Netflix, and I think starting to get 0:17:39.040 --> 0:17:42.439 good for Disney and you know, it's when do you 0:17:42.520 --> 0:17:46.800 reach a critical mass of subscribers that is more than 0:17:47.000 --> 0:17:49.919 your cost of acquisition for the consumers and the costs 0:17:49.920 --> 0:17:53.399 of the content. And Netflix is clearly at that point. 0:17:53.440 --> 0:17:56.640 I think Disney is. If not, I think I think 0:17:57.000 --> 0:18:01.000 Disney Plus is now profitable. I hope they don't underinvest 0:18:01.080 --> 0:18:05.400 in content to maintain that profitability and so and a. 0:18:05.359 --> 0:18:06.600 Few others are going to follow. 0:18:06.720 --> 0:18:09.719 I think the business is going to become very, very profitable, 0:18:09.960 --> 0:18:12.320 and it's going to go back to being a growth business. 0:18:12.320 --> 0:18:15.280 That's been the story of linear is it grows at 0:18:15.280 --> 0:18:18.240 one percent a year, and streaming has obviously grown a 0:18:18.240 --> 0:18:20.600 lot faster, so hopefully the whole industry is going to 0:18:20.640 --> 0:18:21.399 grow a lot faster. 0:18:22.720 --> 0:18:25.639 If everyone's talking about streaming, are the ad pricing that 0:18:26.280 --> 0:18:29.000 a streamer can get as good as linear? 0:18:29.280 --> 0:18:31.879 And then if not, when does that ship turn? 0:18:33.000 --> 0:18:34.560 Yeah, it is as good. 0:18:35.240 --> 0:18:38.439 The ad load is not quite as high, and so 0:18:38.560 --> 0:18:41.320 consumers are probably happy about that. They see fewer ads, 0:18:41.359 --> 0:18:44.480 but the ad load will probably catch up, and so 0:18:44.600 --> 0:18:47.080 the pricing is about the same, meaning how much money 0:18:47.080 --> 0:18:51.240 can you make per consumer is about the same. One 0:18:51.240 --> 0:18:54.440 thing also just switching back gear, so you know, kind 0:18:54.440 --> 0:18:57.800 of the previous topic. The interesting thing about Netflix is 0:18:57.840 --> 0:19:00.520 they're profitable while they're bringing one out of every two 0:19:00.680 --> 0:19:05.360 subscribers is paying the lowest possible price with ads supported, 0:19:05.520 --> 0:19:08.760 and they're not selling many ads right, They're still relatively 0:19:08.800 --> 0:19:12.320 small in the ad game, and so it bodes well 0:19:12.400 --> 0:19:14.560 for how profitable this company is going to become. I 0:19:14.560 --> 0:19:16.920 think it's five pot ninety nine price point is the 0:19:17.000 --> 0:19:22.560 cheapest price point to join Netflix, and they remain profitable, 0:19:23.040 --> 0:19:26.359 not actually expanding profits at that price point, and the 0:19:26.440 --> 0:19:28.879 media dollars are going to show up and make this 0:19:28.960 --> 0:19:33.560 company incredibly profitable. So that's back to the question about 0:19:33.600 --> 0:19:36.439 you know, is the industry going to grow, Is the 0:19:36.480 --> 0:19:38.320 profitability going to be there? Yeah, it's going to be 0:19:38.359 --> 0:19:40.960 there pretty big and particularly pretty large for Netflix. 0:19:41.119 --> 0:19:43.480 Is there a sense mark how many streamers can be 0:19:43.600 --> 0:19:48.080 economically supported in this marketplace? 0:19:49.920 --> 0:19:54.080 You mean, in terms, there's I wouldn't call it unlimited 0:19:54.119 --> 0:19:57.000 demand for TV advertising, but there's a lot of demand. 0:19:57.040 --> 0:20:00.119 The pricing has been coming down a bit because of 0:20:00.160 --> 0:20:03.359 the competition you had in twenty you know, like Netflix 0:20:03.359 --> 0:20:07.440 started to really come on board, Disney plus Amazon Prime. 0:20:07.680 --> 0:20:11.040 Now every subscriber receives ads. There's not even a way 0:20:11.080 --> 0:20:15.080 to opt out, and so all of that news inventory 0:20:15.280 --> 0:20:18.399 is definitely bringing prices down, triggering a little bit of 0:20:18.400 --> 0:20:21.359 a price war, But I think that'll shake out when 0:20:21.400 --> 0:20:24.199 you combine that with the acquisition spree that's probably going 0:20:24.280 --> 0:20:27.200 to happen over the next few years. I think pricing 0:20:27.240 --> 0:20:30.040 will temporarily dip then start to go back up. And 0:20:30.080 --> 0:20:31.760 the main thing is you have a lot of new 0:20:31.800 --> 0:20:35.480 advertisers coming in and market a lot smaller younger, mid 0:20:35.560 --> 0:20:38.800 sized companies, smaller companies and bringing new revenue that will 0:20:39.320 --> 0:20:42.040 drive up revenue for the whole industry, Mark, are. 0:20:41.960 --> 0:20:44.359 We ever going to see the streamers get really into 0:20:44.440 --> 0:20:46.399 news talking about live I know that some of them 0:20:46.440 --> 0:20:50.600 have their own streaming news part, right, like CBS now, 0:20:50.640 --> 0:20:51.080