Support for this show comes from Virgin Atlantic. A lot of people dread flying. I've been on some bad flights and I've been on some truly miserable flights. But it's a whole different story when an airline shows up for you and the crew treats you like a VIP. Virgin Atlantic offers warm, one-on-one service from the moment you step on board. Its upper class cabin features four course meals, fully lay flat seats, and drinks delivered on demand. Make the journey as exceptional as a destination when you fly Virgin Atlantic. Go to virginatlantic.com to learn more. There's no one like you and there never will be. From the producer Bohemian Rhapsody, there are many legends, but there is only one. Michael in IMAX and Cinema's Wednesday, April 22. Indeed presents. Highers you can't afford to get wrong, like payroll manager. Hi, I was just checking my pay slip and it's all in Japanese yen. Yes, you're welcome. Sorry? Given the exchange rate between the pound and the yen, you're technically a millionaire now. Don't spend it all in one place. I can't really spend it anywhere. This is a job for sponsored jobs. This is what happens when you don't sponsor your job on Indeed. So the next time you need someone to get the job done right, get matched with quality candidates with an Indeed sponsored job. Visit Indeed.com slash NextHire and sponsor your job today. Today's number, 4.5. That's how many gallons of alcohol are the average Romanian male drinks each year. That's roughly 70% more than the average American, but it's 70% less than Kashpatel. Welcome to Prodigy Markets. I'm Ed Elson. It is April 21. Let's check in on yesterday's Market Vitals. The major indices fell as relations between Iran and the US remained strained ahead of the ceasefire deadline. Oil prices rose, but still remained below $100 a barrel. Shares of Fermi, the AI data center company that we predicted back in October would implode, plunged 20% after several top executives, including the CEO, resigned. And finally, Apple stock dropped roughly 1% after hours on news that Tim Cook is stepping down in September. He will be replaced by senior vice president of hardware engineering, John Ternes. OK, what's happening? The US-Iran ceasefire expires tomorrow and tensions are mounting. Both countries' delegations are headed to Pakistan to engage in talks ahead of the deadline. President Trump said it's, quote, highly unlikely that the ceasefire would be extended if a deal was not reached before Wednesday. He also said the US would continue to blockade the Strait of Hormuz until a deal is signed. And the meeting follows an active weekend of fighting. On Friday, Iran announced it would reopen the Strait of Hormuz after Israel and Hezbollah agreed to a ceasefire, stock soared to record highs on that news. However, Tehran reversed course after the US refused to lift its own blockade. Then on Sunday, the US Navy fired on an Iranian cargo ship and Iran threatened retaliation. Oil prices rose yesterday and stocks slipped. So here to give us the update on the war and what it means for us and for the economy, we're speaking with everyone's favorite, our favorite, Justin Wolff, who is professor of economics and public policy at the University of Michigan. So Justin, the ceasefire might end tomorrow. That's at least the deadline. I mean, there's a lot to get into, but I guess my first question is, does that even matter? Because this weekend, we heard from Trump that Iran violated the ceasefire. Iran said that we violated the ceasefire. We saw this news where we actually did fire at an Iranian cargo ship. So I just can't tell if this is even meaningful at all. What do you make of it? Does this change things for you? Yeah, I think none of us can make anything of anything. So I want the audience to feel really good about themselves if they feel lightly confused right now. Now, there's a reason we've always felt lightly confused about the Middle East, which is it's a long way away. If you miss a day in the news cycle, 17 things happen. Some of the nut words and the places are very long. It's not central to our lives. Many of us lose track of many Middle East stories. In fact, I have been trying very hard to keep track and not let anything go by. And still I'm confused because we have one extra layer that we don't normally have, which is we have no idea what the truth is. I'm not being funny. There was a time when someone said the following is a red line. You would understand it to be a red line. There was a time when someone said these are the conditions. You understood it to be the conditions. There was a time when someone said we've reached an agreement. You would understand that they'd reached an agreement. So none of those things are true right now. And we've seen in many cases that no one, including markets, knows whether to believe the American president or the Iranian leadership more. That's actually not a joke. OK, so that makes our lives hard. But no one cares about you and I, Ed. We're just two extraordinarily handsome blokes talking about the world. But I think what makes it harder is how do you resolve this? In some sense, let me describe something completely unrelated that happened to me this week. And hopefully we can draw the analogy. And I was talking to a young fellow about Mexico. He was talking about how Mexico should behave and what they should expect when NAFTA, which has been renamed several times, comes up for a negotiation. What should Mexico look for? What should they be worried about? What's going to happen? And at face value, that seems like a very sensible and important question. But a different view is that the president has unilaterally torn up NAFTA now four or five times, which is another way of saying any time NAFTA yields outcomes that are not perceived to be in America's best interests, the president doesn't abide by it, whether it's in Mexico's best interests or not. Another way of saying that is we've lost the ability to contract over time. There is no NAFTA. There literally can't be a NAFTA. If I were to say, Ed, I'm going to marry you, which would be beautiful. But I just didn't come home on Tuesday. And then I came back a week later and then I didn't come home on Thursday and I didn't cook dinner for you on Friday. Are we married? So there's sort of two types of agreements you can do. There's a Papers, Scissors, Rock agreement, which is I'll do something and you'll do something and we'll both do it at the same time. Not really Papers, Scissors, Rock. And it's in both of our best interests, right? For instance, this interview, you said, just not meet your four. It's not live folks, sorry. But Ed said, I'll meet your four PM and I said, OK, I'll meet your four PM. And we're able to contract intra within time. At this time, I'll turn up and you'll turn up. But Ed, if you'd developed a reputation for never turning up on time, I wouldn't have turned up and vice versa. And so we've lost... Let me bring all this from Mexico and from you and I back to the Middle East. If we never do what we say we're going to do, we can't form agreements over time. We can't say, you give something up today and I'll give something up tomorrow. It becomes impossible. And so therefore, the range of plausible outcomes narrows and it takes off the table every outcome in which we ask the Iranians to do something good in stage one and we get something good in stage two because they know we will not deliver in stage two. And this is the deep sense in which this is the exact opposite of the art of the deal. You think about all the possible futures that could occur and the president has taken off the table a whole bunch of them. That worries me deeply. Yeah, I mean, it seems as though we can't really trust anything that's being said. In addition, the deals that are being, quote unquote made, don't really turn out to be deals. They break the agreements of those deals and then they say that the deal is off but then they continue to say that there's a deal and say that there's going to be a deadline for that deal and then talk about extending the deadline and we're renegotiating the deal, et cetera, et cetera. And so we're supposed to kind of play this game of, oh, let's follow along with the story. There's going to be a ceasefire and then they're going to extend it. But ultimately, as we kind of began, none of it really means anything. So the question becomes for us, how do we actually determine what is real and what isn't? And I mean, one thing that I do consider to be real and I'd like to get your views on this is the fact that the administration has proposed a one and a half trillion dollar defense budget for 2027, which makes me think, okay, this is all noise. This is all nonsense. Gas prices are continued to be elevated. I think they're up more than 30% since the war began. It seems as though this is only going to continue. At least that's my sense, but maybe I'm being pessimistic. What do you think is real? Like what are some real signals as to what will happen versus fake or meaningless? Great. There's a lot of me in the questions you just asked. So let me come back to what you said about deals. I have a proposal for you, Ed. Let's agree to never use the word deal again. And I mean that in the interest of honesty. What the president calls a deal is not, I promise I will give up this and you will give up that. Promise means I'm going to follow through. Right. What he has at the moment is press releases. And what is capable of delivering is, if you do this and I do this and it's in your best interest and it's in my best interest, we can get there. Which is basically a small set of possible outcomes. The stuff where that we can get around to do the stuff Iran wants to do and in return America will do the stuff America wants to do today. That's it. You don't even need a deal. You could just send someone a text message and say, hey, have you thought about doing this? So deals are a bad idea. I wanted to take you away from your question then I promise to come back to it. What is the president's duty over the last week? I actually think he's achieved something. So Iran showed that it has control over the state of Amos. Yeah. That's actually very important and a major loss to the United States. When someone reveals a weakness that you had, that's as bad as them creating a weakness. And so if eight weeks ago, Iran didn't understand itself to have leverage. It had never had the opportunity to test it. Today it does. So it's as if they'd created an American weakness. As if they'd won it in war. Right. By the way, we saw the same thing happen in the trade war with rare earth minerals. I was just gonna say, that's exactly what happened there. Yeah, what if we, there's two data points is too much to draw a law from, but what if we learn that this world is wildly interdependent, more so than most of us appreciate? Yeah. The moment you try and chop off an arm, all of a sudden you discover interdependencies and there seems to be at least those two stories tell us that that may be a fairly general thing. Okay. The president has also showed that we have the ability to blockade Iran. Now, we probably knew that two weeks ago, but we definitely know it today. I wanna just enjoy a moment of irony with you Ed, because you are the person in the world I most wanna share this with. In 2025, the president started the trade war, which made it harder for ships or more expensive for ships to enter at the United States. And retaliatory tariffs made it harder for ships to exit. Effectively, in 2025 then, the president imposed a small bore blockade on the United States. He blockaded the American people and he did that because he loved them. In 2026, he's imposing a blockade, even more severe. It's no longer a 30% tariff, it's now a LaBombe de Smytherine's tariff, but it's still a big tariff. He's blockading the Iranians. He's blockading the people he hates. Yeah. Guys got one hammer, blockade. And it turns out you blockade people you love and you blockade people you hate. I have a feeling you're not gonna succeed on both missions. In fact, it could be. My view of the world is a blockade hurts both sides. And so it hurt Americans last year and it's hurting Iranians this year. But even if I'm wrong, if it was helping Americans last year, it's gonna be helping Iranians. Or if it's hurting Americans last year, it's hurting Iranians. But it does suggest these are wildly incongruent policies. Yes. Okay. You asked about one and a half trillion, is that right? Yeah. Let's go there. There is over deep feeling from studying history that wars are really, really, really important moments. That we rewire the world in deeply important ways. And it's not as simple as like, with a trade war, you throw on a tariff and you take it off and you hope that we can hug it out and all that back to normal. I have a sense from history that wars are turning points. Yes. I don't know what the turning point is with this war. But your question points to one of them. So just to bring everyone up to speed, the United States had a military budget last year of roughly 900 billion. The president has just proposed in his budget, 1500 billion, one and a half trillion. So 600 billion dollars more. That's for next year. Normally when we talk about budget numbers, we're talking a 10-year period. So if the question in your mind is, how much more dangerous did the world just get? And how much more has the United States made it? So other countries feel they have to arm themselves. And therefore, if we want to maintain military superiority, how much more do we have to spend in this arms race? And we call it an arms race for a reason. We have an answer from the White House. We need to spend another 600. billion a year. Now, you're very good at long division, right Ed? You're always with the math questions live on it. My long division, come on. Long division is a superpower. I wish someone had told me this in school. We're spending another 600 billion dollars. And I'm gonna make it easy for you. I'm gonna say there's 120 million American households. How much more are we spending per household? I can't do this live on edge, Justin. You're killing me with these math questions. Do you know the answer? Can you tell us? Well, no, I just did it in my head. Please tell us. Because it's easy, Ed. It's $5,000. 5,000. Okay, cause you can just divide both sides by a million. Now you got 600 divided by 120. That's why I chose 120. It's actually 130 million. So $5,000 per household. Per year. Okay, and I'm now gonna give you the easiest one. If the president keeps this up for a decade, how much does that add up to for a typical household? 50,000. You are so good at this. You should be less self-conscious about doing math on air. That's incredible. And I hope your audience understands and appreciates your mathematical acuity. That's right. So basically, the president has decided that he has made the world so much more dangerous that he needs to spend it over the next decade and extra $50,000 per household. Yeah. By the way, if you spend $50,000 per household, you have to tax $50,000 per household. That is just accounting. Yeah. So another way of saying this is the president is imposing a $50,000 tax hike because of this adventure. Now, I'm not gonna go the next step and say that's bad or wrong, that's a question of personal judgment. If we were freeing 90 million people from a life of oppression, that's a price that might be worth paying. Probably not if you're an America first guy, but you might be a humanitarian first guy. But this is the point of your question, and I think it's really significant, is if you believe the president about our future military needs, he's imposing very, very, very large, very meaningful costs on the American people. Which is likely a signal, it seems that this is going to continue for some time. I mean, whether it's this or something else, something related to this, I mean, it's hard not to assume that we're not approaching the end game here, especially when nothing meaningful happens in these headlines. And I think the next question, although we do have to wrap it up here, is what this impact would be and will be on the economy. The big question for investor seems to be not whether oil prices will be high, they already are high, we already know that. The question is whether they will remain high and remain elevated. And from what I'm hearing, it wouldn't be a bad bet to assume that they will. Right, so when the president declared war, the thing that was interesting, he said we're gonna go in for four to six weeks. But 2027, 2028 and 2029, oil price futures all rose. Yeah. Now, actually last Friday, when it looked like peace was about to break out, they felt quite substantially. And so it looked like people really genuinely believed there was something good happening on Friday. Just before I came on here with you, I checked the latest betting markets on Colchee where you can bet on how long until the straights reopen and the flow of oil is back to normal. And for sure, no one believes that four to six weeks was ever going to be true. But they're talking about months rather than years. So let me break that down there. That says the direct, what's going on in Iran with the straight of Amours is a months long issue. The world though is more dangerous and will remain more dangerous for years. And I think the thing that's really, and so that's why you're gonna continue to see oil price futures substantially elevated because there's no risk. We don't know who's gonna do what, but there could be a next chapter in this story. Exactly. And then the final deeply depressing thought I wanna leave you with is, if 2025 is the year of the unprovoked trade war and 2026 is the year of an unprepared war war, it's time for folks in markets to think about what 2027 holds in 2028. If you extrapolate, then you should be building in a pretty big risk premium. And if you're an optimist, you think, well, the bloke has rulled the dice a couple of times, surely you'll learn by now. And we're gonna go back to incredibly competent technocratic economic policy any day now. And I got all my fingers in ties crossed. Justin Wilf as professor of economics and public policy at the University of Michigan. Justin, we always love having you. Thank you for joining us. Pleasure, mate. After the break, an update on the streaming wars. And by the way, we are heading out on tour at the end of May. So for more info and to get your tickets, head to ProfGMarketsTour.com. This is advertiser content brought to you by Virgin Atlantic. A couple of weeks back, I got you a birthday gift, not to pat myself on the back, but it was a pretty good one. It was indeed. You surprised me with Virgin Atlantic upper class tickets to London. So tell us all about it. It was pretty incredible. From the moment I entered that upper class cabin, I have to tell you, I felt like a VIP. Anything I needed, a drink, snack, assistance with the seat. Flat seats. Flat seats. Exactly. Had the four course meal, got my champagne. Very delicious, enjoyed the food. And the journey home. The journey home was great. I went to the Virgin Atlantic LHR Clubhouse. That's the Heathrow Clubhouse. Heathrow Clubhouse was awesome. Got myself a coffee, headed over to the meditation pod that they call the Soma Dome. Kind of felt like a sort of spaceship where you relax and think nice thoughts. So I did that for a little bit. Then we went over to the wing, which are these acoustically sealed booths where you could do some work. You could even record a podcast. I didn't do that, but maybe I should have. It was a very enjoyable experience. So Ed, the real question here is, what are you planning to get me for my birthday? See the world differently with Virgin Atlantic. Flying should be more than just transport. It is part of the adventure. Go to virginatlantic.com. To learn more. Tickets and lounge access provided by Virgin Atlantic. At Hymns, you can lose up to 20% or more of your body weight when combined with diet and exercise. And it helps you regulate your appetite and eat less so success is within reach. And now we GoV is available in a pill. So there are no needles needed. Ready to reach your goals? Visit hymns.com slash markets to get a personalized, affordable plan that gets you. That's H-I-M-S dot com slash markets, hymns.com slash markets. Weight loss by hymns is not available in all 50 states. We GoV is the registered trademark of Novo Nordisk AS. To get started and learn more, including important safety information, we GoV clinical study information and restrictions, visit hymns.com. Immigration may be Donald Trump's signature issue. President Trump is now targeting predominantly Democratic cities for ICE raids and deportations. Dozens of protesters clashing with immigration and customs enforcement agents in Minneapolis Tuesday. We will begin the process of returning millions and millions of criminal aliens back to the places from which they came. But what we want to do in this space is talk about America and politics beyond the current president. So what do most Americans think about deportation and border security, period? I think that Americans are definitely against the kind of violent displays that we've seen in the street from ICE. When it comes to the question of deportation, the answer is more complicated. My sense is that people want border at the border. They don't like the idea of having no idea who's coming into the United States at any given time. The view on immigration from the bottom up instead of the top down. That's this week on America Actually, every Saturday in your audio and video feeds. We're back with Proffview Markets. Two of the biggest names in entertainment hit a rough patch last week. Netflix reported relatively strong first quarter earnings. Revenue rose 16% and net income jumped nearly 83%. But those results were overshadowed by weaker than expected second quarter guidance, which sent the stock down 10%. Additionally, co-founder and chairman, Reed Hastings, announced that he will leave the board in June, ending a nearly 30 year run at the company he built. Meanwhile, at Disney, the new CEO, Josh Demaro, has begun laying off roughly 1,000 employees. Marvel Studios was among the hardest hit as nearly its entire visual development team was shown to the exit. So, here to help us break all of this down, we are joined by Rich Greenfield, co-founder and TMT analyst at Lightshed Partners. Rich, good to see you. Thank you for joining us. I want to start here with Netflix earnings. Seemingly strong quarter, when you look at the revenue, when you look at the earnings, but ultimately Wall Street hated it. And I can't quite tell if it's the guidance or if it's Reed Hastings leaving, or maybe something else. What do you make of it? I think it's a combination of both. I mean, look, they did better than people thought, just a little bit, but they did a little bit better than people thought in Q1. I mean, growing 16% is certainly nothing to sneeze at. That is a very healthy growth rate. Remember, it was just a couple of years ago where growth sort of went sub 10%. That's when they launched advertising. And there was sort of this entire panic of like was growth over for Netflix. And then launched advertising content sort of to do really well again and growth surged back into the teens. And I think, Ed, the problem right now is that investors are worried when you put up a good quarter and you don't raise the full year, you sort of signal the second quarter is going to be a little slower. What does everyone assume? They go, well, 16, 14, 12, 10, and then eight, like they just start assuming the worst. And I think, we've been through this before where investors fear sort of a meaningful revenue slowdown. I think Netflix is very, very focused on maintaining mid-teens-ish revenue growth over the long term. And I think, it's still very early in the advertising. I mean, you think about it, this is a 50 billion plus revenue company and advertising is a few billion. So it's still very early days as they ramp up their advertising, not just in the US, but in the 12 markets where they have it around the world. And so I think you add in the fears of not raising guidance in a stock that had sort of bounced off the bottom from the whole Warner situation. And then you pour salt in the wound by having Reed Hastings leave the company, which no one expected. And the reality is, I find it very hard to believe that Reed Hastings would be leaving if the company was in trouble. And so I feel like this is probably a sign of his confidence in the long term. Whereas I think the street is obviously concerned that, oh my God, is he leaving because the growth story is over. And I just, I can't imagine the company that he is synonymous with and built and created a fortune off of, I don't believe he would be, quote unquote, abandoning ship if he wasn't very comfortable in the direction the ship was heading. What do you think is sort of the long-term vision for the company right now? Because it seems like they're at this, almost like an inflection point where, I mean, they were looking at Warner Brothers and that seems to be sort of more of a legacy IP original content play. But at the same time, they're experimenting with ads or more than experimenting, and they're really growing it into a real business line at this point. And I even saw recently that they're looking at short for, like a short form video feature. It seems like there are these two kind of trajectories. And perhaps you could even put in talks about getting involved in parks or physical assets in some capacity. I mean, when you look at the business right now, what is the long-term trajectory? What are they trying to do at this point? I think it's still relatively simple. Ed, they are sub 10% of time spent on televisions. Forget about phones, we'll get to that in a second. But they are sub 10%. YouTube is substantially larger. Yeah. You know, obviously TV in totality is far larger. I mean, yes, Netflix dwarfs everybody, but YouTube in a streaming world. But when you look at it on a total TV, meaning if you were to take ABC and ESPN and Disney Plus and Hulu, Disney's still bigger than Netflix in total. So, you know, like that's why the whole story during the whole WBD acquisition attempt when people were saying, oh, Netflix is a monopoly. I mean, it's sort of absurd. They're still sub 10% of the market for TV content. And so I think the goal, honestly, is to capture more time spent. I mean, I think that is, you look at something like K-pop Demon Hunters. I think Netflix got its first real taste of a true franchise. Sure, Stranger Things was very successful. I don't mean to diminish the power of that content in any way, but when you look at the K-pop Demon Hunters and how this thing has, even when there isn't a fresh piece of content movie around it, you look at how like McDonald's has happy meals around it right now. I mean, everywhere you look, this content is resonating around the world. Right. You know, I think trying to build more franchises, they obviously understood how important it was and how much value it drove. And so I think that's a big piece of it. But then look, I think the other piece that you really have to think about in terms of Netflix's future is, there's still a relatively lightly used app on phones. And, you know, most of the viewing is really on TVs, a little bit on laptops, but they are not what you do on your phone. You do TikTok on your phone. You watch clips of Pro-Professor G Markets on Instagram, right? You're doing that on X, but like, you know, how many times do you turn on and watch a full length, you know, I'm watching Night Agent right now. I'm watching it on my TV, not on my phone, right? Like, sure, there are certainly examples where there's live sports events that are happening and you wanna watch it and you're not home and you can watch the fight, you know, you could watch that Mike Tyson fight on your phone, for sure, and it works great. But I think figuring out how to capture more of your time spent on your phone is a huge focus. And so they just launched a new kids platform called Playground, trying to actually create more for kids to do in a safe, controlled way on phones. They're also, you know, investing in, you know, video games. There's no doubt that they see that. And then vertical video. And again, if it's just clips, I mean, Disney's done the same and I know you mentioned Disney earlier, they've recently launched something called Verts, both in their ESPN app and inside of the Disney Plus app. No real original content that I've seen. It really looks mostly like reformatted and often not even so great reformatted because you're sort of squishing 16 by nine into vertical. I think, you know, over time, it'll be interesting is does Netflix, when they launch this, do they come out with actual original content? Like are they going into the, you know, we've seen of these micro dramas and different types of sort of vertical video native content made for a vertical viewing audience. Yes. I have no idea if Netflix is gonna do that or not. But I think whichever media company, tech platform, replicates what we've seen on some of these overseas platforms. I think that could be a big unlock, not to the ultimate subscription business, but I think, you know, time spent on mobile. And I think right now, time spent on mobile is not any of these major media companies, streaming companies, right? Like it is not Disney Plus, it is not Netflix. Like the winning on mobile is all of these sort of very specific platforms like TikTok that are made for mobile. And so I want to see these companies compete in mobile content consumption. It hasn't happened yet, but I'd love to see it. 100%. Yeah, it's sort of a question of like, what is the golden goose for these companies? And to your point, they've been treating it as the TV. I think the TV versus phone dichotomy is a good one. But there is a question. It's where you make your money. It's where you make your money. I mean, there's no doubt it's where you make your money. But everyone who has Netflix probably has it on their phone. They're not using it all that much. How could you increase time spent? And especially now that you're in the ad business. Once you're in the ad business, more time spent has a direct correlation. It's not like, hey, more time spent builds value so you can raise price, sure, you don't churn. But now actually view time has a direct correlation to revenue because you can actually drive advertising. And so, I mean, as you know, obviously, with what you do all day, whether it's sponsorship or advertising, there's a huge opportunity. And you see Netflix getting more into podcasting, right? Which also fits well in a vertical environment. They're getting into even a little bit of news. I mean, you saw the Brian Williams pot, it's gonna be called like a weekly podcast, but again, you're inching into new formats and new genres of content. And I think the goal is, again, time spent. I honestly believe this is all they care about is how do they win time spent? And I think that this is a huge part of that push. And sure, longer term, do they wanna do more Netflix houses? They've opened up two of them. There's more on the way, in terms of destination or location-based entertainment. But I don't think that's gonna be the bread and butter for a long time. I think this is still, capture more time on TVs, grow the user base, especially outside the US, where there's still a lot of room to grow outside, especially in Asia, and then figure out how you win in mobile. And the initial way they thought was gaming, I wonder if now kids slash vertical video might be a better answer than mobile games. 100%. Which is very competitive. Yeah, really interesting. Before we let you go, new Disney CEO, Josh Damari, he's about a month into the job. He just laid off 1,000 employees. If you had to give him a grade on how he's done so far, maybe it's impossible, but what do you make of his tenure so far? And that's like you laying off two employees, just to be clear on an analogy basis, right? Like they did not lay off like, you know, it's not like Meadow, right? Meadow's talking about laying off 10% of the company. This was not a 10% layoff. So they probably could do 10x that pretty easily at Disney and no one would know. I mean, I would feel bad for those employees, but the point is all of these media companies have accumulated far too many employees over the years. That's part of the huge opportunity facing, you know, David Ellison as he acquires Warner Brothers, right? It's just tons of duplicative employees and lots of middle layers of management. I think for Josh Damaro, this is a great first step. I mean, it's showing you he's willing to make moves. I think the bigger move that everyone has their eyes on is what is the right structure for Disney? Does Disney need to be in the linear TV business? You know, that, while at the end of the day, Paramount is buying all of Warner Brothers, the big unlock that set off this bidding war was being willing to separate out linear television. Obviously you saw that is what Versint and NBC did. I think a big question is, is Disney's ABC and ESPN long-term part of the company? Or is Josh, you know, again, this is a small layoff in the scheme of things, but is it signaling a willingness to sort of rewrite the strategic future of Disney? And I think he hasn't had his first earnings call. I mean, there's a lot to come over the course of the next several weeks and we'll see. But it's an exciting time to sort of see when Bob Iger took over, you know, he made a very strong right hand turn from Disney as an animation company to going, hey, we don't have the tooling inside, we've got to go out and buy Pixar. And then of course Marvel and Lucas after that. But there was a big strategic decision in buying Pixar that set off a huge run at Disney over the years. I think we're going to be all eyes on whether there's something strategic up Josh's sleeve as he starts out, or whether it's sort of just continue on with the path that Disney's been on. All right, Rich Greenfield co-founded and TMT analyst at Lightshed Partners. Rich, appreciate your time. Thank you. Thanks for having me Ed. Here's a question for you. Who in America is more excited about AI than fearful? Well, a recent poll suggests the answer is quite simple. Rich people. Yes, it turns out when you ask Americans if they think AI will do more harm than good and you categorize them by income, the only demographic group whose majority believes it will be a net positive for society are people who make more than $200,000 per year. Meanwhile, among people who make less than $100,000, only a third believe it will be a net positive. And then among people who make less than $50,000, only a quarter believe it will be a net positive. In other words, how you feel about AI is almost directly proportional to how much money you make. If you make a lot of money, you feel good about it. And if you don't, you feel bad. And the question is why? Well, to us, the answer is quite obvious. And that is that AI stands to make rich people very rich and keep poor people probably poor. This isn't really conjecture. This is based on what we already know. Since chap GPT was released in 2022, the top 1%, which owns half of the entire stock market, has added a collective $15 trillion to their net worth. Meanwhile, the bottom 40% of Americans who don't own stocks haven't seen any of those gains. And their electric bills have risen 17% in part because of the extraordinary energy consumption of data centers. Now we've talked a lot about the AI industry's popularity problem, how that might or might not have led to the violent attacks on Sam Altman last week. But I would argue that all of this isn't so much about Sam Altman or open AI or AI at all. When you get down to it, all of this is about wealth and equality and the proof is clearly in the polling. I talk more about this in my latest edition of my newsletter Simply Put, which is out today. You can read it at simplyput.prophgmedia.com. OK, that's it for today. This episode was produced by Claire Miller and Alison Weiss, edited by Joel Paterson, and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is Dan Shalon, Isabella Kinsel, Chris Nodonegu and Mia Silverio. And our social producer is Jake McPherson. Thanks for listening to Prophogy Markets from Prophogy Media. If you liked what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow.
