2020 was as tumultuous in the tech and business worlds as it was everywhere else. What will 2021 bring? On the latest episode of the Pivot podcast, Kara Swisher and Scott Galloway discuss what next year has in store for health care (Amazon making its move?), social media (a Twitter subscription service?), consumer spending (more home goods?), and much more.
Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I’m Kara Swisher.
Scott Galloway: And I’m Scott Galloway.
Swisher: Scott, we’ve made it to the end of 2020.
Galloway: There’s still time to fuck it all up.
Swisher: It’s our annual end-of-year prediction show.
Galloway: That’s right.
Swisher: And we have predictions from our favorite friends at Pivot, and we’ll give some of our takes on how the world would change in 2021. But talk about how you feel about our relationship through 2020.
Galloway: I was thinking about you last night, about how sometimes when I expose myself, my emotions, you reach out and you jab, you jab. And your harsh words, several times this year, Kara, left me nothing but a hollowed-out soul of dust and tears, turning to dust. Dust and tears, Kara. Dust and tears. But on the whole, I think it’s getting better.
Actually, in all seriousness, I feel very grateful to you.
Swisher: I feel grateful to you too, Scott.
Galloway: I’ve had a wonderful year. We have the perfect relationship: We see each other maybe two hours a week, and we make each other money. What’s not to love?
Swisher: So let’s go on to 2021 then, I say. I say let’s try another year and see how that goes. Okay?
Galloway: Let’s do it.
Swisher: How about a year-to-year relationship? Let’s do that. Every year we’ll assess and say “This sucks” at the end.
Galloway: I’m signed up.
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Swisher: All right. Sounds good. All right. Well we have predictions from our favorite friends of Pivot. We’ll give some of our takes on how the world will change in 2021. But as I said, we’re also going put in some of our thoughts too. Are we going to do that too? Are we going to be reflective?
Galloway: No. You know us — we’re delicate little flowers, and we don’t like to comment. We’ll just let everyone else talk.
Swisher: We’re going to kick off with our dreamiest friend of Pivot, Andrew Ross Sorkin. He’s dreamy as ever, and he sounds very dreamy in this particular prediction. Of course, Andrew is the host of CNBC’s Squawk Box, where he takes on … Who does he take on? Those other two guys who are assholes.
Galloway: The dinosaurs? The prostate-cancer control group?
Swisher: Yeah, those guys. I got to say, Andrew, you had a great year doing that and gave us a lot of pleasure here on our show. He also was a guest host for one week.
Galloway: Super-impressive wife, too. You got to respect men who have really impressive wives. I’m sure there was something sexist in that. But anyway …
Swisher: Anyway, let’s listen to Andy — the founder and editor of Dealbook at the New York Times, too.
Andrew Ross Sorkin: Hey Kara and Scott, it’s Andrew Ross Sorkin here. 2021 is going to be the year of takeovers in tech. Now, I’m going to give you a list of names. I’m not promising you all of them are going to be involved in a merger, but I will promise you all of them will be involved in talks. And there will be lots of speculation about some of these names, all of which have been off the field but are now going to be right back on. On the list, Dropbox, Box, Twitter, Snap, and Adobe. Call me in a year, and we’ll see who’s taken out.
Galloway: I thought that was bullshit.
Swisher: Oh no.
Galloway: That’s like saying, “Okay, I’m pretty sure there’s going to be a hurricane in Florida.”
Swisher: He gave names. Listen, first of all, that was the most McDreamy voice.
Galloway: He was very sexy there, I got to give him that. He was very sexy.
Swisher: He was doing a McDreamy voice. I think he was trying to egg you on and make you jealous, as usual. What’s wrong with that? He gave some names — I hadn’t thought about Adobe or Dropbox.
Galloway: Andrew’s smart. He has basically made it impossible for that to be an incorrect prediction. He said, “There’ll be talks.” How could there not be talks about one or more of those companies? My prediction is the markets will be both up and down.
Swisher: All right. Now, listen. Listen, smart-ass. Which of the ones he mentioned do you think would be sold?
Galloway: Adobe’s probably too expensive. Snap’s an interesting one. What else did he say? Twitter?
Swisher: Box, Dropbox.
Galloway: I don’t know enough about Dropbox. What do you think?
Swisher: I think Adobe was really interesting. I hadn’t thought of that. And that was the one that stuck out for me. I don’t know what he means. Who would buy Adobe?
Galloway: Who has the balance sheet to take Adobe out? I think Adobe is more of an acquirer than an acquiree.
Swisher: Interesting. I don’t know, Apple? That’s too big for them. Snap? Snap with Apple? Apple Snap? Twitter?
Galloway: Twitter … Well, this is one of my predictions — finally a chance to turn it back to me.
Swisher: Okay, good.
Galloway: I think Twitter is going to 70-plus bucks a share on very simple moves. One, they get rid of the nose ring. And two, they —
Swisher: This is Jack Dorsey you’re talking about, still. You’re still working on that one. When he retires in 20 years, you need to go, “I was wrong.”
Galloway: I was right! And also, any signs of life around subscription, that stock is going up. Full disclosure — I bought the stock earlier this year.
Swisher: What about when Trump leaves, or moves along, or they kick him off?
Galloway: Yeah, I think that hurts. But I think Twitter is — we’ve said this before. Any social-media platform that has anything regarding anything close, any reasonable facsimile of their influence — Twitter’s the only ingredient brand that shows up on every other media brand in the world. It’s the new moniker for everyone’s name. The most influential people in the world have one thing in common: They’re all on Twitter. When the Fed announces a hike in interest rates, it takes to Twitter. And any other social-media network that has the same type of influence trades at 15 to 30 times the market capitalization. So if this thing shows some signs of life — it has some reasonable corporate governance, some reasonable move to subscription — it might go to 70 bucks a share. It could even go to 100 bucks a share. I’m very bullish. I’m talking my own book — I own the stock.
Swisher: Snap would be interesting. Dropbox, I don’t know.
Galloway: Who do you think would take Snap out, though? It’s gotten expensive. By the way, that’s a prediction I got wildly wrong. I thought they were going to be run over by Instagram.
Swisher: And who believed in Snap? Kara Swisher.
Galloway: You did.
Swisher: Thank you.
Galloway: Because you like Evan. Because that was your ovaries speaking. You want to make out with Evan.
Swisher: Oh please, I’m a lesbian. I have no interest in him in that regard. And I do not find him dreamy in any way.
Galloway: Kara, it’s a spectrum. It’s a spectrum.
Swisher: Anyway, our predictions in the dispersion of markets — you’ve said that SPACs are going to underperform and that Robinhood is the new menace.
Galloway: Never underestimate the market’s ability to provide product when people have cash. I described the financial markets as Manhattan when it starts raining. All of a sudden people pop up with umbrellas. Where did that guy come from? And the marketplace, the public markets, which traditionally let companies trade at a greater multiple, especially when they’re this frothy, have said, “Oh, there’s not enough IPO.” And what do you know, people show up and raise money, get through what is typically a six-to-nine month process in two to three months, get the SEC onboard, have a just-add-water IPO, and go find companies. And some have been very successful — they’ve actually outperformed the market. But typically, over the long term, they underperform. And the reality is, if you look at $70 billion in De-SPAC capital leveled up to 200 billion, there just aren’t enough good private companies out there. Which means they’re going to overpay. And these things are going to vastly underperform over the next two to three years. What happens in the next year? I don’t know. But SPACs are definitely a canary in the coal mine.
Swisher: Do you see any that you like?
Galloway: Well, I’m being biased because she’s a friend of ours, but I think BarkBox is an interesting one. Joanna Coles was involved in that SPAC, subscription revenue. Pet adoptions are up 40% year on year. Recurring revenue, a million subscribers at 30 bucks a month, $360 million in revenue. Is it worth five times revenue? I don’t know.
Swisher: You also were possibly waiting for Robinhood’s IPO.
Galloway: Yeah. I think that the dispersion of stimulus aid amid record savings ends up in the hands of bored and vulnerable young men, who put that money into story stocks, creating exceptional volatility, systemic risk, much less depression among young men. And when you have the CEO of Goldman Sachs saying it’s worried about froth in the market, and then they’re working with Robinhood to take them public, there’s some inconsistency there.
So I think if investment banks actually want to live up to this business-roundtable aspiration, they need to start thinking about stakeholders, not just shareholders. We have a menace here, so I’m hopeful that people realize this dispersion and removal of friction, in this instance, is a negative externality.
Swisher: I like your “menace companies.” I think that should be your next book.
Galloway: The menace economy. Agreed. But what do you think? How do you feel about the markets and Robinhood?
Swisher: I think Robinhood needs to clean itself up, and it won’t. They just love to shove this crap out of us all the time. And some parts of it are good. I always liked E-Trade and things like that, but again, they’re sloppy. They’re sloppy, sloppy, careless young men. I don’t know how else to put it. Sloppy, careless young men are the problem we’ve had the whole time. And that’s why these antitrust hearings are coming up for Big Tech. Sloppy, careless young white men, mostly, but not always. I just think that they are careless people who rush ahead and call it innovation. And a lot of the time, it’s actually just sloppiness. And other people pay the price for their sloppiness. And that’s not just because my son didn’t clean up his room this week.
Galloway: Our economy has gone from agrarian to manufacturing, to service, and to innovation. And the scary part is, Have we moved to an exploitation economy?
Swisher: Exactly. Anyway, let’s move on. We also have predictions from our friend of Pivot Aminatou Sow. Aminatou is the best-selling author of the book Big Friendship, and you can find her newsletter, Crème de la Crème, at aminatou.substack.com.
Aminatou Sow: Hello, I’m Aminatou Sow, and I am very nervous about making predictions. If anything, COVID has taught us all that nothing goes according to plan. But anything for you, Kara and Scott. Here is my prediction/wish for 2021. I really want to see America embrace automation in cool and new ways. This country is so behind — you go anywhere else in the world, and they are doing contactless and touchless mechanisms for consumer and employee interactions. The automation is just better everywhere else. And America likes to act like we’re a rich country, but we’re just a poor country in a Gucci belt. So I am hoping that next year, we live up to our status of being a rich country and get some automation up in here. We really need it. And it would be nice. And also, the coronavirus has really shown that automation is really meant for times like these. So that’s what I want to see. America, get it together. Happy New Year, everyone.
Swisher: That’s an interesting issue, because when you are in Europe and other places, they do have better systems. I don’t know how else to put it, like in terms of buying, in terms of all kinds of things that you do with your phone. What do you think about this?
Galloway: It’s interesting, because what Aminatou said — my first reaction is that automation has been, to a certain extent, incredibly damaging to the middle class. Because it’s not immigrants that have taken American jobs, it’s basically robots. Automation is really interesting — you go into a European airport, you put your passport and your boarding pass there, and it lets you in, as opposed to speaking to someone who’s just waiting for their job to be destroyed. So I think there’s tremendous opportunity. What I would hope is that we come up with some sort of tax on the technologies and the robots. Because what’s happened in America is it’s more tax efficient for a company to figure out a way to outsource the human to a robot, even if the robot isn’t as good or as productive as the human. Because we don’t have to pay payroll taxes on them. So I think automation is a very loaded term.
Swisher: It is a loaded term, but a lot of it is great, like the contactless stuff. I think a lot of the ways we do businesses are old-school. When you go to other countries, in almost any country, South Korea or China or Japan or Europe, it’s just a very different world of how things work. You sit there and you go, Oh, this is the easy way to do it. And so, you feel that the U.S. should be ahead on this. Now, you don’t necessarily have to eliminate jobs when you do these things. You could deploy workers to do better customer service if they didn’t have to do the rote tasks. It doesn’t make them better to have a person doing them. In fact, they’re just dead-end jobs.
And so I look at some of the warehouse things, like an Amazon or something like that, and some of them are just so clearly going to be automated that it’s not pretending otherwise. It’s kind of silly, but I think the idea is to figure out what people can do better. There are lots of ways people can do things better than robots. And so that’s really where I think the issues around automation have to be discussed, not just made a bogeyman for everything. We have to really start to think about where jobs should be and how we should train people for that.
Galloway: Yeah. Look, automation’s coming. I don’t want to be a Luddite. The question is, Do we take some of the prosperity that comes from that progress and help to retrain the cashier into someone who understands robotics?
Swisher: You know who wants a robot tax? Bill Gates. You and Bill Gates.
Galloway: Yeah, I think it’s where to go.
Swisher: We have another prediction, from Baratunde Thurston, the creator and host of the podcast How to Citizen with Baratunde.
Baratunde Thurston: What’s up, Pivot producers? Thank you for having me on the show a couple of times in 2020. Here are my predictions for 2021 in response to how big business will or will not change its work culture. Big business will continue to increase the volume of its talk about diversity, equity, inclusion, and even the new kid on the block, anti-racism. We’re going to see more hashtags, more initiatives, more pictures of Black people in the recruiting imagery. Some of these businesses will even make meaningful changes in the form of financial contributions or recruiting or retention approaches.
But many of those same businesses will continue to perpetuate exploitative business models that extract data and value from their customers. They will continue to talk about being good corporate citizens while taking advantage of every possible tax-avoidance scheme, thus indirectly defunding the very society they claim to be a part of. They will continue to put profits over people because they’ll feel stuck in the cycle of short-term shareholder-value creation while failing to expand their definition of shareholder adequately and rapidly enough. Oh, and they’re going to talk a lot more about how they want their employees to bring their full selves to work. A few of them might even mean it.
Swisher: That was so smart. Baratunde’s so smart. Let me just say, I just had this conversation with a bunch of people the other day about how the Black Lives Matter and systemic racism discussion fell apart — or rather, it went away and has been quieter now suddenly. Obviously, it’s because of the constant fire that Trump prompts and the election and everything else. But they were talking about whether it was going to come back, whether that’s going to be something meaningful. What do you think about this?
Galloway: It’s complicated, but you can be hopeful. Where I see progress is at the board level. As I’ve always said, we’re a tribal species. Boards of directors typically are white men. We pick a white man to be the CEO and white male CEOs have a tendency to surround themselves with other white males. It just trickles down. And so, I think, a lot of the change has to start at the board level. In Germany, one of the ways they’ve supported a middle class is that they have federal mandates that a certain percentage of your board of directors has to be represented by workers. And, what do you know, workers in the middle class have done better in Germany. The CEO doesn’t make 350 times what the average worker does in Germany. So the NASDAQ has said, “If you don’t have one woman on your board, you can’t be listed on the NASDAQ.” If we’re waiting for their better angels to show up, I think it’s happening, but it’s happening too slowly.
I’m not a fan of regulation, but I do think that certain indices, certain ambassadors — I like the fact that they’re saying, “If you don’t have some reasonable semblance of diversity on your board” — and I do think that’s where it all starts — “we’re not going to list or give you access to the capital markets.” There has been enormous progress every day, and until the pandemic, where we’ve seen this economic apartheid explode, where Black and Hispanic households have an average wealth of around 20 grand and white households have 160 grand. Bill Clinton summarized it. He said it in the early ’90s, that systemic racism is the biggest issue our country faces. So, I think this is going to continue to be a huge issue.
Swisher: It’s interesting because I was watching All the Way, the L.B.J. movie. I’m interviewing Bryan Cranston, so I was watching the HBO version of it. It’s so resonant with today, these struggles between and among the different groups. It’s the same discussions we’re having today. I do think what happens is these things come upward and there are protests and everything else. And then these corporations just slow-roll everybody and put it into the drawer again. I just see that happening on lots of issues. Not just that, because this pandemic, if it has shown anything — this was an interview I did with Nikole Hannah-Jones — we have made people sacrificial workers. You call it the menace economy. I call it sacrificial workers. We call them essential but they’re really sacrificial.
Galloway: They’re the expendables.
Swisher: They’re the expendables. We just do that, and it tends to be people of color because they’re in a lot of these jobs, in some of these jobs. The people that did well in this pandemic are people who can work at home like ourselves, by the way, who have no problem doing Zoom, who are in the information economy. We don’t talk enough about this continuing cycle of short-term shareholder-value creation without being the stakeholders. You hear it’s compassionate capitalism, inclusive capitalism, stakeholder capitalism. Let’s actually do it versus repeat the talking points. This pandemic and the gig economy, the way it takes advantage of workers, it’s just screaming out for serious change finally.
Swisher: When you hear people like AOC and others — I know she’s become a bogeyman for the right, but when she starts talking about the worker, it makes sense to people like my kids and to everybody else. What she’s talking about makes a lot of sense. Now, you may not agree with how to get there. She may struggle to get legislation through, but her basic building blocks are correct, in terms of how to think about workers going forward.
Galloway: Yeah. I love AOC. I think she’s an inspiration, but she brings a certain contempt for corporations.
Swisher: She’s had it with them.
Galloway: Yeah. But, I think some of it is unhealthy, because I think she’s playing into their hands. Capitalism and companies and profits and people becoming wealthy — there’s something very noble in that. That is, we take the prosperity and, hopefully, share it. We haven’t been taking the prosperity and sharing it. To be blunt, I think AOC is at fault. What I mean by that is that we should have minimum wage at 20 bucks an hour. We should have corporations paying their fair share of taxes. We should have the wealthiest man in the world paying taxes. Guess who gets to decide that? Our legislators, the houses of government. And so, yeah, I understand, but it’s on you to figure this shit out. It’s on us to elect representatives that not only have the ideas but have the ability to form a consensus and reach across the aisle instead of going on Twitter and insulting each other to get shit done. The reality is they haven’t gotten anything done.
Swisher: I agree with that. It’s in elections that you win these things. It’s who you put in place. There’s that three-martini lunch thing in the stimulus bill, and every economist is like, “This doesn’t help the economy.” But, Trump wanted to get it through, and they probably had to give it to him. How ridiculous is it that rich people can deduct their lunches? And then what the Democrats got in return was money for poor people. It’s insane that that was the GOP’s priority. It’s insane. It’s insane.
Galloway: The stimulus bill is a separate show, but I do think that the American corporation, when left to the full-body contact of competition and Darwinism, creates incredible prosperity. So, I think contempt for corporations is … Anyway, it’s a complicated topic.
Swisher: I do think Baratunde is right that they’ll try to put it in the drawer if they can. It’s not so much that they don’t care; it’s that it’s no. 15 on their list, and they have a big list of other stuff.
So let me just very quickly run down some of Scott’s predictions in dispersion of home and work. A co-working Renaissance is one of them. Airbnb is worth more than the top five hotel chains combined because people are going to be working in different places. You also say Restoration Hardware becomes a $1,000 stock and Apple acquires Peloton. So what do you think will happen post-pandemic, when the vaccine does get to actual people in a CVS?
Galloway: There are a lot of young people who want to find mentors, friends and mates at work. There is a serendipity and a creativity that happens when people bump off of each other. Unfortunately, it’ll create greater inequality, just as firms are on their heels and saying, “Go all remote,” and using those cost-savings to help them get through the pandemic. Google, Facebook, and Amazon are actually leasing up space in Manhattan because they’re going to offer a form of Xanadu for any 25-year-old from MIT and say, “Come live in New York,” in this Tinder-meets-Ted-meets-Billions kind of work environment. So I do think there’s going to be a co-working Renaissance because small and medium-size firms are going to want flexibility around office space, only less of it, but they’ll need it more on-demand, if you will. That’s what co-working is.
Airbnb, we predicted, was going to be a $100 billion company. It went public. It was at a value of $18 billion earlier in the year. It’s already at close to $100 billion. I think it’s somewhere between 90 and 100 right now. Commercial real estate is a $12 trillion asset class. We’ll move out of commercial and into residential. When you think about commercial real estate, to a certain extent, everything from Herman Miller Aeron chairs to Microsoft to Oracle, these are all great brands in the workplace. There really aren’t that many great brands in the home. Think about how many great apparel brands there are. The thing that always struck me is, you’d see a real-estate tear sheet and they’d be selling a $3 million home. They would advertise that it had a $3,000 Sub-Zero freezer or refrigerator. There are so few great, iconic brands in the home. Restoration Hardware is one of them. A lot of people are just saying, “You know what? I didn’t realize how old and ratty that carpet is. My corporation has given me money to stay at home. I’m saving money and buying a Sonos.”
Swisher: I just bought a carpet, Scott, for the home. I just bought a big TV too. So there you have it.
Galloway: Sonos is another great brand in the home.
Swisher: It’s cheap.
Galloway: You’re about to see a couple of trillion dollars transferred from commercial to residential.
Swisher: Anyway, moving on. We have a prediction, speaking of the pandemic, on health care from Andy Slavitt. Andy Slavitt is the host of the podcast In the Bubble, and he was head of Obamacare under the Obama administration.
Andy Slavitt: Hey, guys. Prediction for 2021: Well, it’s going to start as chaotically as 2020. The pandemic has a few more surprises left in store for us, and it’s going to be rough for a while. But we are going to exit the year at a much better spot. We are, of course, going to be moving into the Biden-Harris regime. I think we will see quality people focused on real results, putting their heads down, and I think that’ll be nice for a change. Biden’s big challenge, of course, is how does he deal with the next president and a loud group of people that don’t want him to succeed. I think he’ll do as well as anyone can. I think competence and compassion will help rule the day. I wish everybody the best 2021 possible.
Galloway: Can that guy adopt me?
Swisher: No, he can’t.
Galloway: I went on his podcast. He and his son are both really impressive. The one thing I thought, which I was angry about, when I got off — I thought, This is the kind of competence we had in the Obama administration.
Galloway: We had thoughtful, competent people. They literally got run out of D.C.
Swisher: Now, we have Peter Navarro. Anyway, I’m glad he thinks that. Your predictions on health care are really interesting. Walmart gets into health care via acquisition, and you also said Amazon sucks a hundred billion dollars from top health-care firms. So talk a little bit about that. And then we’ll talk about pharmaceutical companies, how they come out of this — looking good, I guess.
Galloway: Someone reminded me that Walmart is already a big player in health care, but I think the proxy battle to end all battles is taking place right now. And that is Amazon and Walmart going after each other in health care. It’s 17% of our economy, $3 to $4 trillion. And it’s up for grabs. And the level of consumer-behavior change, the level of regulation change, the amount of venture-capital funding going into remote medicine … The most exciting, probably the biggest silver lining coming out of this cloud we call COVID-19 is the opportunity to embrace or disperse health care past or away from doctors’ offices and hospitals, which are intimidating and expensive — and get into primary care and service people on their smartphones, so that the rash doesn’t become an infection and someone doesn’t end up in the ER, and so we can start managing people’s weight better, their diet better, and offer a level of primary care that’s unprecedented.
So I think the opportunity to disperse 17 percent of our GDP and have it reach people who traditionally haven’t had as much access to health care is the most exciting thing in our economy. It’s also the most exciting thing from a stakeholder level. And in terms of Amazon, Amazon can perform Jedi mind tricks. When they acquired PillPack, CVS and Rite Aid hemorrhaged tens of billions in value. You’re about to see, over the course of 2021, the ten largest health-care companies, in my view, probably lose 100 to 300 billion in combined market cap. And it’s all going to go to Amazon. I don’t know if you saw, but Amazon today announced that Amazon Health is going to be rolled out to other companies, through which they connect you with doctors for chats and can prescribe you medication, and they’re going to start offering it to other companies. Amazon just needs to give another industry the stink eye and begin suffocating and asphyxiating it without touching it. And you’re going to start to see that Jedi mind trick come into health care.
Swisher: I agree. And the pharmaceutical companies, I think they’re going to come out very well. They’ve shined up their sometimes very tarnished reputations about high prices and stuff like that. So they certainly can swing into action when they need to. And I think this will be an interesting case study, in terms of how quickly these vaccines were made and the real story about how it happened. I’ve been reading all these stories.
All right, next prediction — finally, we’re moving into media. Our next friend is very close to our show. Our executive producer, Erica Anderson, is leaving us at the end of the year. Here’s what she has to say about the future of podcasts.
Erica Anderson:Hey Kara and Scott, this is Erica Anderson, your executive producer. This is my last show. So first and foremost, I want to thank you both for being incredible friends and mentors and hosts. This has been an incredible ride, and I can’t wait to see what you guys do in 2021. All right, so let me just share my take on how the podcast market will shake out in 2021. No. 1, Netflix is going to make a major play for narrative podcasting. It’ll terrify the competition. No. 2, Spotify will begin to show far less interest in pods that aren’t made for or by them, especially of the talk-show kind. No. 3, Amazon Music is going to become a major contender through content acquisition. Most importantly, as the platforms start to get serious about highly produced audio content, the era of everybody having a podcast will close out. Only the best content will survive and be amplified.
And on the topic of the talk shows, shows like Pivot, which is largely driven by the personalities of its hosts — they’ll become major franchise,s as they should be. And this is my last prediction: 2021 is going to be a huge year for Kara Swisher and Scott Galloway. Thanks for having me on as your EP, and don’t forget to take my calls when you move to Los Angeles, replace Bill Maher, and become bigger than Howard Stern. Love you both.
Galloway: She’s a charmer.
Swisher: She’s a charmer. Kissing up to us to the end. Let me just say her first prediction is entirely wrong. Netflix is not going to embrace its role as a media company and make a major play at podcasting.
Galloway: You don’t think so?
Swisher: I do not. I have asked them about this directly and rather in detail, and that is not the case. They’ve got their hands full with international. I think they’re really leaning into international quite heavily. I don’t think they’re even slightly interested in podcasts, not even a bit. Spotify, you take that one.
Galloway: Well, just more broadly speaking, if you look at Apple, Spotify, and Netflix, and at when their stocks accelerated fastest over a short period of time, and then you try to backward-integrate to what was the catalyst, the catalyst was the launch of original owned IP or programming.
Swisher: Yes, original for sure.
Galloway: When Netflix did House of Cards, when Spotify did the deal with Joe Rogan, and also when Apple launched Apple TV. And I think there were other catalysts there, but all of this vertical ownership and control of content, as opposed to being the distributor of the content — that seems to be the gangster move.
Swisher: So who’s getting in on podcasts? She’s talking specifically about podcasts. Netflix is not getting in, 100 percent.
Galloway: Yeah, I didn’t understand that one either because I don’t know the device that Netflix would play it on. But, oh my gosh, Amazon, Spotify, and Apple will get into the business. I think there’s going to be bidding wars. Because the thing is, nine women can’t have a baby in a month. It takes a long time to build Call Her Daddy or whatever that podcast is. It takes a long time to build that affinity, that good will, and that subscriber base, and those companies are going to go for irrational multiples to these really deep pocketed bidders who’ve recognized that their House of Cards could be Joe Rogan. So let’s start looking at other podcasts.
Swisher: I I think you’re right. If you want to link it to Netflix, Netflix has really come into its own. But it’s not just because of IP like House of Cards. They’ve got stuff all over the globe that they’re doing. And that’s really where their strength is. Is not just IP, but international IP, IP that jumps globally.
And you’re right — I think Spotify, if it gets it together, will certainly be a big player. It’s not much of an editorial company, but they’ve hired some people who are very editorial-minded there, which is great. A friend of mine, Lydia Polgreen, works there. And that was an interesting move, I thought. She’s from the New York Times; she ran HuffPost. So yeah, we’ll see. We’ll definitely see. I think she’s definitely right about this idea of daily habits, and everybody having a podcast is sort of over.
Galloway: But podcasts jump geographies. And I don’t know if you know this, but we’re the 23rd most popular podcasts in the United Arab Emirates, for some reason. What you’re talking about with Netflix — it’s such an impressive company. They have 10,000 people in Madrid, and what they do is, they pay up for the best screenplays, they pay up for the best production value, and they do a car chase in Copenhagen and say “Cut.” And they swap in the most popular Romanian actor. So they’ve said, “Okay, what we’ve found is that local content, local with international scale and production values, is the gangster cocktail.”
Swisher: Interestingly, I just did an interview with Bela Bajaria, who is the head of all global TV for Netflix. You don’t know who she is, but she’s the one who has been behind all of this. It was a really fascinating interview. I think they’re totally focused on that, but nonetheless, there will be a lot of players in the podcast space and therefore — yay for Kara and Scott. I also did a podcast with an astrologer, and apparently we’re going to have a big deal this year, Scott.
Galloway: Really? I’m not sure what that means.
Swisher: The astrologer is predicting great financial success for you and me.
Galloway: The dog is ready. The dog wants more big bucks.
Swisher: A business partnership I have is going to be huge this year by mid-year.
Galloway: Awesome, bring it on.
Pivot is produced by Rebecca Sananes. Erica Anderson is the executive producer.
This transcript has been edited for length and clarity.
