Netflix’s New Entertainment Venues & Scott’s Takeaways from Cannes

. That's how much Ferrari's first ever electric car will cost. True story. I came up to Ed, I drove up in a Ferrari, and I said, Ed, if you bust your ass, work really hard, and devote your entire life to properties, someday, someday, I will have two Ferraris, bitch.

And then I go, in this total baller moment, I take a Zodiac into the Palais and then I tell ad people the Arab brand is over and for some reason, they keep bringing me back. And it's amazing, Elon is here with Linda Iaccarino and we'll talk more about that. Yeah, I've been to this conference more than any conference ever. I wouldn't come to Cannes just for Cannes, I wouldn't come for Alliance just for Alliance, but the combination together is absolutely wonderful.

. And we went, and my dad, after the divorce, took me and his new wife, my new mommy.

It was like opening stuff just to try it. And then he walked in and he saw that. And I thought, my dad, it was the threat of violence that scared me more than anything. My father actually never beat me.

And every time he'd be like, and Pringles are $3 at fucking A. And he'd get like all emotional. It was so torturous. Anyways, hold me, Ed. And you wonder why I wanna pay you minimum wage.

You wonder why. All right, get on with the news, break out the news.

The S&P 500 topped 5,500 for the first time. The dollar was flat, Bitcoin hit a one month low and the yield on 10-year treasuries was volatile, shifting to the headlines. Inflation in the UK fell to its lowest level in almost three years and hit the Bank of England's target rate. Prices rose only 2% in May from a year earlier. That's down from 2.3% in April.

And that metric will also be a key talking point ahead of the election next week. Apple has reportedly stopped working on the new generation of its Vision Pro headset. The company is still developing a cheaper version with fewer features, but, according to the information, it has deprioritized the next generation of the device due to slowing sales. And finally, Nvidia is now the most valuable company in the world, with a market cap of roughly $3.3 trillion. The company's rise to the top is among one of the fastest in market history, adding $3 trillion in market cap over the past 20 months.

It's just insane. Scott, where should we start?

I wouldn't be surprised if it unfortunately goes negative. I mean, the UK economy is just, the bottom line. is. this is really fucked up. After spending a bunch of time in the UK, I think, okay, whoever's running the economy here is not, I don't know, what's the term?

They have their head up their arse. Look, I'm happy. I think this is great. I think inflation across the West is coming down. I don't know if it's energy prices.

Do you have any color on what brought inflation down in the UK?

It's not totally clear. This is clearly a global trend. I mean, prices are, generally speaking, coming down. And I think we're gonna see a lot more of these positive inflation headlines start to roll in. But I do also think we need to take all of them with a grain of salt.

And the UK is a great example of that. because, yes, 2% inflation last month, that sounds pretty good. But a year ago, it was 9%. And the year before that, it was also 9%, which means that in the past three years, prices of everything have risen more than 20%. So it's compounded.

So I think what people in the UK should think about is if your salary hasn't increased more than 20% in the past three years, you are literally falling behind economically.

So I'm trying to think like what's come down in price, Range Rovers or energy, or what is actually keeping that number down? The CPI inflation is nearing the 2% target in several G7 economies, including the UK, France, Germany, and the Euro area. So that's good news. The good news in the US, I think, is that wages actually rose faster than inflation, meaning that purchasing power is actually starting to go up again reasonably. But I don't know if that's the case in Europe.

I wonder what wages have done.

So I just think, when it comes to inflation, it's very easy to see the headline number that says inflation's coming down or inflation's going back up again. And we're so quick to judge, but the reality is, if you care about this, I think the best thing to do is to just go to the national statistics website in the US, that would be the Bureau of Labor Statistics, and read the whole thing for yourself, because it's always a bit more complicated than it seems.

And it just infuriates me that people still aren't willing to call this the ultimate stillborn technology. I mean, this thing never even crawled for God's sakes. I mean, this thing was literally DOA. And people, all these Apple acolytes, all right, you can respect Starlink and still feel like, okay, but Elon Musk should not be spreading homophobic conspiracy theory. You can say, all right, Apple's an amazing product, but they haven't cooperated with the government around child safety.

You can hold two ideas in your head at once, and these Apple acolytes, evangelists, cultists refuse to believe that they're gonna get it wrong on certain pieces of hardware. This thing never made any sense. They're trying to pretend that, oh, we're still gonna have this. They've. basically, I'll tell you, folks, you wanna be fired?

You want an easy way to get severance? Working at Apple on the Vision Pro is a good way to get severance eventually.

Okay, so let me get this. Let me get this. No one will have sex with you, because you clearly don't have kids. You don't know what this is like. I just think it's hilarious that people think my kids listen to me.

I love that, yeah. And they're really into World War II, history and CrossFit, not. Anyways.

When I first time I saw a film on IMAX, I'm like, wow, this is amazing. I go to IMAX once every two years and it's a shitty business. So they will let it die a slow death. It's cool. They manage the press really well.

But this is stupid. As smart as Apple intelligence is, this was that stupid. And like, and who predicted this first, despite all the Apple people coming for me? Who predicted this first, Ed?

Having said that, I think there are two main huge issues for me that you kind of bring out. One was the thing was way too heavy. It's like uncomfortable. My neck got tired. And two, it's way too expensive.

It's $3,500 plus tax for something that is at most like a fun gadget, which is why I do think it's interesting that they're not working on upgrading this edition of the Vision Pro, but they're working on a new Vision Pro headset still, which is one, lighter, and two, half the price. It's gonna cost $1,500.. And if both of those things are true and they don't sacrifice on quality, I might buy it. I think I will buy it, actually.

Oh, I love that. I love, oh, you just got that. Welcome, Ed. Welcome.

Anyway.

Okay, so headsets, look.

This company is an extraordinary example, I think, of where the economy is headed. The thing I don't like about this, or the thing I think we have to be thoughtful around, is that, if you look at the NASDAQ, this company is now responsible for something like 45 or 50% of the NASDAQ's gains for the year. And I hate the NASDAQ and the S&P indices because they give people the illusion, and it is an illusion, that the economy is really strong. Really, what they are at the end of the day is they are indices on the super rich, because the super rich own a disproportionate amount of the stocks. And, spoiler alert, the super rich are killing it.

They're at all-time highs. In the last 10 years, we've gone from 500 billionaires to 2,500.. So I worry a little bit that this really is a bit of a, not only a distraction, but it's an unhealthy distraction that masks over some of the bigger issues at ALS. What are your thoughts on it?

And suddenly they are the superstars who are being rewarded, basically as if they are the founding employees of a startup that's about to go public. And to illustrate this, Mia found this great stat. If you joined this company five years ago, say as like a mid-level project manager, and at that level, it's pretty reasonable to assume that you'd be getting a stock grant of around $70,000 over four years. So, assuming that five years ago, $70,000 stock grant, that initial grant today is now worth $10.5 million. So I would bet that there are hundreds, maybe thousands of employees in this exact position who have basically been made millionaires overnight.

And if we can take this a step further, if you look at the workforce, there are roughly 30,000 employees at the company. overall. It's got a market cap of 3.3 to $3.4 trillion, which means that the market cap per employee of this company is $113 million. That's six times higher than Apple. It's eight times higher than Microsoft.

It's one of the highest in the world.

We cornered the luxury market for digital benchmarking. All the moons lined up. We got a bidding war going, and I sold this company for $158 million. We had, I think, 80 or 100 employees, so that's $1.6 million per employee, not $113 million. So basically, one employee at NVIDIA has created the market cap of just slightly less than the entire company felt.

And let me move to financial advice. Anyone at NVIDIA that is listening to this podcast, listen to me very closely.

Sell. Now, okay, and let me acknowledge, this stock might double. It doesn't matter. If you have more than 90% of your net worth and more than a million dollars in this company, and this is what I didn't learn, you need to diversify because this company could go down easily, easily 80%. It might double, but the pain of losing, of going from being worth 5 million, right, to 1 million, is much more severe than the joy of going from 5 million to 10 million.

So you have thousands of employees that have millions, even tens of millions of dollars that are highly concentrated, and you want to remember what Kahneman wrote about loss aversion theory. This needs to be a win for you. Take as much off the table as you can, as you can, and hope you're wrong. Leave a little in the company, fine, and I hope I'm wrong for you, but you want to make sure this is a win no matter what. And I could have sold in 1998, when I was 33 years old, I could have sold 10, 15, $20 million in red envelope.

stock, stuck that away, and had economic security for the rest of my life. But instead I'm like, no, this company is amazing, and I'm amazing, and I'm devoted to this, and the markets, champagne and cocaine. Don't be stupid, Scott Galloway. Be smart here. Take some, if not most, off the table.

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What do you make of this move from Netflix?

Netflix has created Stranger Things, Bridgerton, Umbrella Academy. They just, you know, I see pop-ups for Stranger Things. I can see, you know, afternoon tea with Bridgerton, where people come in in corsets and then start fucking. That's what I'd like to see.

But Stranger, you could see like a haunted house for Stranger Things. And my guess is, one, it's probably good for the brand. at a minimum. It'll create some excitement. They'll get a lot of press.

And if it ends up that this thing has staying power and it becomes a choice, they're really, assuming at some point you actually mate and you have children, which I'm doubtful around if I read the stats around young men. But assuming that happens, you'll find there really isn't a lot to do with your kids. And I remember my dad picking me up on weekends. He used to come to my, pick me up for my mom's. Every other weekend.

I'd get in the car and he'd say, how's your mom? And I'd be like, fine. And then there'd be a pause and he'd say, that bitch.

Anyways, anyways, a little memory, a little walk down memory lane. But other than taking me to LA Kings games to watch Marcel Dion and Whitey Whiting and Rogie Vachon, these are great hockey players you'll never think of again. He would have to take me to the movies. There was just nothing to do with a kid. And I think there's just a huge economic opportunity here.

So if, I mean, I can tell you, if the Netflix thing opens and there's an Umbrella Academy thing and there's a Stranger Things, I mean, we're the Galloways are gonna be there and we're gonna spend a lot of money there. And if they find it sustainable and that they can, it's not just a one-time sugar head, like the Museum of Ice Cream, right? Eventually, that's gonna go away, right? Where you explore your creativity by jumping into a ball pit and then eating pistachio ice cream. Yeah, that was worth my $38..

That was money well spent. Anyway.

And you walk into a room and you give your personality traits and it says, oh, you're chartreuse. And like, oh wait, I'm chartreuse. And it tells you what color you are. And you're like, and you all talk to each other and you think that there's some sort of insight there. Anyway.

We're gonna reinvent Disney. instead of buying maybe 7 million acres in Orlando and getting into fights with, you know, Joey Bagadonat's governor. We're going to develop these things in urban centers, reinvent the theme park concept. And it could be this multi-channel and leverage your IP and start to get a little bit of that flywheel.

They brought in $8.

5 billion in revenue last quarter. That's 40% of their overall revenue. As a percentage of their operating income, it's 60%. So it's highly profitable. Having said that, Netflix appears to be making a different move here.

And that is, they haven't called it a theme park. They're specifically calling it this experiential entertainment venue. And so it's not clear that there's going to be actual rides. It's going to be more of, you know, hanging out at the mall, and there are, you know, Stranger Things themed events, but it's not a theme park. So I'm just, would like to get your take, your strategy.

take. Why do you think they're trying to differentiate themselves from the theme parks that Disney have proven work? And how do you think it's going to be different from Disney?

I was there, first off, what are the pain points of Disney? One, it's extraordinarily expensive. Extraordinarily expensive, right? To take a family of four to Disney and the hotels, you're looking at five to 10 grand. Two, it's the seventh ring of hell in terms of time cost.

You can't really go for one day. When you have a line for three hours for the Avatar ride, it's not really accessible either. It's in, you know, it's not in the city center. They need huge swaths of land outside of, you know, in a suburb of Orlando or Paris or Tokyo. So one, smaller, cheaper and cheerful, something.

maybe you can go in and get out in two hours, maybe three hours, something that costs 100 or 200 bucks for a family of four, not five to 10,000.

. So I think there's a lot of pain points that they could solve where they say, okay, how do we give people 30,, 40, 60% of the Disney experience for 10% of the price and 5% of the time commitment? So I think this is really brilliant. I don't know if it's gonna go anywhere, but, like I said, this is, what is scenario planning? Scenario planning is trying to develop a strategy that, across a number of scenarios, has the best outcomes.

It's not predicting the future. It's saying, all right, let's look at three or four possible futures and then develop a strategy that fits best and has the best outcome across all of these potential futures, or the majority of them. So one, it's a cute idea, but, and it gets some awareness and some press, but it's not really a sustainable business. All right, don't spend too much on it. Open it, short-term leases, position it as a short-term thing.

so people don't start shitposting. you like me, if you're the Apple Vision Pro 2.. Don't say we're going, we're gonna try and create the next Disney parks, but be better. No, just say it's a marketing thing. We think we're experimenting.

And then what if it's big? Well, we're in a position, with our IP, to really go crazy with it. And we'll immediately start looking at locations all over the world. These things could be hugely profitable. I went, oh my God, I went to life-size monopoly in London.

Think about that. Think about how desperate parents are. You. go to this place where the guy in the top hat and all these characters from Monopoly, and you roll a giant dice, and then you have to have, and then you have challenges with strangers and these people with thick accents from the North of England. You're like, what the fuck are they saying?

I'm supposed to work with these people and your kids get really into it. And you do these games and you pay 50 bucks and then you go downstairs and maybe they order you like a ham and cheese sandwich for 18 quid.

But there's a lot of opportunity in the space for kids because it is on weekends, it is especially with little kids.

We're back with Profit Markets. Scott, you've been at Cannes Lions all week, an international festival where thought leaders from the advertising industry get together. It is essentially the Oscars of advertising, except it's set in the French Riviera. Can you share just some of your main takeaways from this festival, and especially your thoughts on the state of advertising right now?

Anyways, Cannes. First, it's really Cannes as a conference. It's the only conference I've been to every year for 10 years. It's actually growing in importance and a lot of non-traditional companies are showing up. So there was this, the hottest beach was something called Sports Beach, and all of these sports firms are becoming media companies.

The Kelsey guys, that guy came up and hugged me and he was standing like Paul Rebile, the Michael, literally the Michael Jordan of lacrosse, who's I would call a friend, said, do you want to come to Sports Beach? I'm like, yeah. He took me in and this enormous bear of a man with a big beard came up and hugged me. And it's the Kelsey guy that's retiring. I know nothing about football and his agent offered to bring me and my sons to a Cannes, and they couldn't be nicer.

I'm sitting there looking at these two and I'm like, these two are a different species. That was my first observation. Like, I can't believe I'm part of the same genome as these guys. Anyways, the LA Rams are at Cannes in force. And it just struck me that marketing and brands are having a bit of a resurgence and people want to come here.

And I think it's wonderful because the entropy, the serendipity of running into people and saying, hey, do you want to grab a latte? I ran into so many people. I ran into former students and everything's like their guard and their screen is down. I ran into a former student who said, do you want to grab a glass of rose? I'm like, yeah, sure.

And we caught up and it's like the most lovely woman and she's working at Roku. That happens like 10 or 20 times. It's really wonderful. They do a great job. The South of France is extraordinary.

But I think the biggest stories coming out of Cannes will be amongst the following. One,

the Musk Yacarino Apology Tour, which I think is going to go over as well, as if Milli Vanilli showed up at the Spotify beach and rushed the stage and tried to put on a, you know, tried to sing. It was, I thought, I've been joking. I've been saying this all week, which I'm sure didn't help things. I've been, you know, I've been a total whore speaking at everything. These people love abuse.

I'm like, you're all going to be out of fucking work. Why are you here? Anyway, and they keep inviting me back. Anyways, I'm like, would anyone like to join me for a glass of rose at Twitter beach? They've renamed it the Nazi Porn de Plage.

And so I just don't think that's going to work. And the question I've been asking everyone at this conference is how are you more likely to get fired? Okay, and I'll give you three options. Putting in the communal refrigerator, you know, in a snack room, mushroom chocolates, and saying property of Ed Elson,

referring to your assistant as jiggles,

or deciding to advertise on X, where you might end up next to a swastika. And then they call you in and say, this is really bad for the Sesame Street brand. Why did you decide to do this? This is really bad for Cheerios to be next to a swastika. And you go, well, it's Twitter.

I thought we'd be fine. Okay, you're fired. This is the dumbest brand. If you're looking, literally, if you're looking to be fired, and I said this, be on the Vision Pro team or decide to spend money on Twitter. I think the apology tour will probably be the biggest story that didn't work.

His brand, he's much, actually, much better liked outside of the US than it is inside of the US. Some people have said, to be fair, that small and medium-sized business, now that the prices have come down because no one wants to advertise there, that it is a good, a decent ROI medium for a quote-unquote smaller brand. that's maybe not as worried about brand safety. I mean, keep in mind, if you're a Unilever, if you're a Unilever, you have a good job, you basically just don't want to get fired. It's like, okay, be smart, hire talented people, talented agencies, which they have access to, and don't fuck up.

And so these smaller brands probably can, they target more niche audiences. It might have a second life there. But look, I just don't think it works. I think she comes across as just-.

He had a company called MediaLink. that would. basically, it was kind of like the mafia. If you were a small up-and-coming tech firm that wanted to sell into brands and everything, he'd say, okay, give me $100,000 and I'll take you to a boat party. And he'd throw parties, and the only people that could come in were clients of his.

It was a total mob thing. But he's a nice man. And for some reason, he's always been really generous to me. I've never been a client of his. I've never paid him any money.

But I spoke on a panel with him, actually, just a few hours ago at that, I think it was called the Collins House. He's two really nice people, have a brand innovation firm, whatever it is. Anyways, and so Michael's always been really nice to me. But Michael, basically, out of falling out with UTA, who bought MediaLink, he was unceremoniously fired. He's then filed a defamation suit against them.

Michael is launching a new firm and decided to have the launch dinner on the deck, overlooking MediaLink's biggest party. I think it's literally like little. Sarah crashes Rachel's Bat Mitzvah because she wasn't invited.

All right, enough of that bullshit.

I think there's a difference between male and female leadership. No woman would have done this. It was just like, I literally said to him, this is the definition of a dick move. Yeah. You don't get in the way there.

You don't get in the way of their party. Just, whatever boss, compete against them, but don't get in the way. But anyways, I do like Michael and he's been very generous to me. And then I also think the story that is sort of overhanging everything, but may or may not be written, is that the most valuable company in the world isn't here. And I really appreciate that, because Meta used to come here and pretend to be the partner to the media world and run their fingers through their hair before they shot them in the fucking face.

And Nvidia could own the whole fucking thing. I mean, Nvidia could just say, I know, let's take a hundred million dollars, or the yesterday's share appreciation between 330 and 331, and own it. And they're not even pretending that they're your friend, because the reality is, if you think about an industry that'll probably, or a job that'll be disrupted at the low end, it'll probably be like a low level media planner. I would think that AI is gonna be able to just get all over efficiency around media planning.

Come on, they're literally serving you your last meal and asking you to pay for it. Anyway, everything here is sunshine and roses and rainbows, that brands are coming back, media spending is up and we've learned an AI is gonna be good for us. And so it's definitely not, it's a celebration. It really is, this is more a convocation and a gore and a chance for people. And I think this is really important to see, touch and feel each other.

And I think that we're desperate for that coming out of COVID, and it's in a beautiful part of the world. But I think Nvidia, I feel like, is overhanging everything.

Everyone's talking about AI, full stop. And also just sports, that was a big theme here, just the power of sports marketing. But no, I haven't heard a lot of people talk about TikTok, but I'm not, I've noticed two years ago, either my brand is waning or people are worried about what I'm gonna say. But I was invited to three panels. this time.

I usually get invited to like several panels every day. So maybe I'm losing my luster. I don't know, I probably fucked up doing this pod with you. That's probably what this all says.

I think it's healthy. I think it'll bring down costs. It's good that the NYC and the NASDAQ are gonna have competition, but my prediction for 2025 is what I loosely refer to as exchange wars, as the biggest IPOs of 2024 and 2025 are on the LSE and this new Texas exchange, specifically SHIN and SpaceX, respectively.

Join us on Thursday for our conversation with Ben Miller only on Prof G Markets.

♪ You held me in kind reunion as the world turned. ♪. ♪ As the clock strikes 11, ♪.