Tricky Bits with Rob and PJ

Apple Vision Pro + Amazon and Alphabet Dividends

• Rob Wyatt and PJ McNerney • Season 1 • Episode 8

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We chatted about the Apple Vision Pro previously and now the reviews are in....how are they stacking up for the Vision Pro and how did our predictions work out for themselves, so far? And what predictions to we have from here?

Also...Meta announced dividends at its last earnings call...and now Goldman Sachs analysts are (maybe) portending that this will lead Alphabet and Amazon to do the same. But do we actually think that this is as imminent as the headlines suggest? 

As an aside....PJ published a blog post about this very topic on 2.7.2024...check it out here: https://trickybitsblog.github.io/2024/02/07/meta-earnings-report-dividend.html

Ierengaym. com ierengaym.

PJ:

Welcome back everybody. Tricky bits with Rob and pj. The day today is February 12th, 2024 and part of that is that we're gonna be doing a little bit of after action report on some of the things we've talked about in the past. So if you haven't listened to our AR episode, you might wanna go back and do that. If you haven't looked, listened to some of our discussions about the big tech companies and their layoffs, you might wanna listen to that one as well. You can obviously pick it up, right from here, and that's akay. But first off, we're gonna start with Apple. So. We had talked a little bit about the Vision Pro coming out. We talked about augmented reality and we had a few predictions, Rob, about what was gonna happen and now the reviews are out. So Rob, how closely have the reviews been tracking with what you have been with what you predicted previously?

Rob:

As I said before, AR has this massive wow factor. When you first pull it on your head, you're like, whoa, I've never seen anything like this before. And your head start, you start to go crazy with all the ideas that you think of. I could do this, I could do that. And in theory, you could do all of these things, whatever they may be. simply reality is the technology doesn't really fit any of those use cases. And I think over time you'll see it with the other devices, it's AR is boom, amazing. And then you've seen aliens come outta the wall plenty of times and you're like, okay, I'm fed up with this. the killer app? And I think exactly what's going on with the Vision Pro right now. It's people are like, yeah, it's really cool. It does a really good job at what it does. No killer app for$3,500 is a steep sell. And it may become an enterprise thing, it may become a business meeting thing just so you can make Zoom calls even more weird. I think that's where it's gonna go. Without a consumer killer app, people are not going to pay$3,500 for that device. the reviews kind of go along with that. All the initial reviews are, it's good, but, and some reviews now have, they've used it longer and it's like, well now what? So I think it'll play out exactly like we said it would. And I think it has to play out that way.'cause it's not gonna be, people aren't rushing out to buy it, so, and never were with that price tag. So it's not gonna be a market saturation device.

PJ:

Uh, I agree. One of the, one of the fun things, and we talked about this a lot in, in the AR episode on Vision Pro. Everyone who got a chance to use it. Got a chance to use it for like five minutes at the announcement last June and it was like, oh my God, like you said, it's exciting. It's like, oh, I can see where all this stuff can be and what, where can, what it can do. And we have had six, seven months of basically runup of anticipation where people have been using their imagination to like everything that it could possibly be. And to be fair, there are some reviewers that actually love it. and I think there's a lot of reviewers though that are trying to love it. Like they don't actually want to admit to themselves that they were wrong. And so there's a lot of couching of, oh, we can see where the future is going. Or we can see that this is first generation hardware. And I think they're really trying to satisfy that kind of emotional need to say, yeah, this kind of stinks, but I don't wanna admit that the thing I was looking forward to for the last seven months is a bit of a dud. I don't wanna admit that Apple basically may have just shipped, and this is from a different podcast that I listened to, but they may have shipped a new version of the Newton, which is something that's a little bit ahead of its time.

Rob:

I agree. And I think in 10 years we'll look back and we might have the same Newton story the hardware's great. The concept is great. It's just that we can't do the killer apps that I think we have to be able to do. The first killer app is take this thing outdoors and do outside things with it. And right now people are just using it as goggles when it's outside. But I did say in the AR episode, it won't take long for someone to drive in this thing. And I was absolutely right because some idiot. Did drive. It was a self-driving Tesla, so it technically wasn't driving, he had it on while driving his Tesla. It was guaranteed to happen, but it doesn't have good enough hardware to work outdoors. As we talked about in the AI episode, not gonna repeat all of that. Go listen to it. All the killer apps are outdoors

PJ:

Yep.

Rob:

without the outdoor, and the outdoor features, it's not gonna work outdoors. And no, right now no one's gonna walk around with this thing on the head. Even if it has life pass through, it looks ridiculous. Unless you're skiing, you could probably pull it off skin.

PJ:

I actually listened to a podcast recently where someone, has done the skiing test.

Rob:

Somebody I watched a, I think it was New York Times

PJ:

Yes,

Rob:

left it on, left it on her head for 24

PJ:

yes.

Rob:

and, uh, I don't think she slept in it, but she did go skiing in it. But they did close the hill. It was all organized, so they

PJ:

Right, right,

Rob:

could ski by herself. Um, but at that point, you're just watching a video of what's in front

PJ:

right.

Rob:

app to assist you in skiing. It's like, can you wear this? Well, it's a camera feed, a display in your face. So technically you could do anything

PJ:

Yep.

Rob:

it. But why? I can see with my eyes, I don't need to see my eyes on a panel. That gives me eye strain. That's just a camera feed. If you're not gonna mark up that video feed with augmented reality

PJ:

Yeah.

Rob:

is the whole purpose of the device, then why wear it? It all? I'll just put a piece of glass in front of my face.

PJ:

One of the use cases that I keep hearing about where people are really excited about this is, oh, it's the best entertainment device ever because we have a huge screen, which I'll double down on my statement, which is that is a VR application, not an AR application. Like I don't, I don't care.

Rob:

could do the same

PJ:

Absolutely. And. I, I really want us to try and find someone who is actively using it right now, just to see their excitement in this moment, because I think this is the highlight. I think this is the high watermark of the excitement is right now, and my prediction I'm gonna make on this is that most people will not be using this on a regular basis in six months. If you've got it today, you won't be, I might, I might be like long, I might be, it might be three months.

Rob:

It might be a year, but it's gonna be a short time. unless they can get that price down to the Quest price where more people will buy it and you'll get more inherent users that way, that it's not gonna be a device. I guess that's the Quest could easily do the same video playback.

PJ:

Yes.

Rob:

the Vision Pro can do, doesn't have quite as good screens, but good enough. And the whole idea of having a big display, you're sitting on an airplane seat. You don't wanna deal with the airplane, you just put your vision pro on. You watch a movie on a big screen. Totally. Im immersed. That is fully a VR

PJ:

Absolutely.

Rob:

a VR application, it's just a, a side effect of having a display on your

PJ:

Yes.

Rob:

It doesn't track with your head. So it's technically not even vr, but we have a lot more r and d and a lot more app development experience in that vr. Space than we're doing the AR space. The AR space, like I said, isn't about technology. The technology has been around since Magic Leap.

PJ:

Yep,

Rob:

Magic Leap probably were the first ones to pull it together. The problem with AR is understanding what you are

PJ:

yep.

Rob:

Like I said, you put it on skiing and you go down the ski slope, like does it even know your on a

PJ:

Right?

Rob:

Which ski slope are you on? What information is it gonna give you If it's just gonna give you GPS speed, I can already buy a pair of glasses that give me GPS speed in my,

PJ:

Yeah. In your eyesight. Yeah.

Rob:

That's, that's not a, that's not an AR

PJ:

Agreed.

Rob:

AR applications through AR applications are few and far between and incredibly hard to develop and incredibly hard to contain that. They always give you the correct

PJ:

A hundred percent.

Rob:

AR apps break so easily.'cause like I said, my kitchen isn't your kitchen. So if I have an AR app that works in the kitchen, it's. It's gonna have a hard time knowing if it's a kitchen. Now there are some cool things on the Vision Pro. demo that I saw was the timers where you could put a timer on top of a saucepan and be like, okay, 10 minutes for this one and

PJ:

I heard about this one. Yeah.

Rob:

would just sit above the pans and you're wearing it in the kitchen and they away cooking. And the timers, you can basically place them in space, which is a, a novel thing. It's an AR thing. Having a timer attached to a thing in the real world is of nice. there are little, little bits of hope

PJ:

Yeah, I get it.

Rob:

AR can solve these things, but they're so, they're so insignificant. Trivial in, in the grand scheme

PJ:

They're niche. They're very niche.

Rob:

not gonna cook in my Vision Pro just so I can stick a timer to the

PJ:

Correct.

Rob:

when I can just shout across the room to Siri and make her do a timer

PJ:

Uh, uh, or, or, you know, or put a timer on your phone. You can do multiple timers on, on your iPhone.

Rob:

you know what else you can do. You can buy

PJ:

They could do that too. Twist them.

Rob:

cost like 99 cents. have one for each burner on my stove for$4, I can spend the rest of it in the pub.

PJ:

It's probably, well less than the regulatory fee of buying the Apple Vision Pro.

Rob:

Absolutely.

PJ:

Uh, I,

Rob:

ridiculous. I don't think, I think we're gonna see it just taper away and it's like, okay, it exists. No one

PJ:

if, if there is any kind of enterprise, a applications for it. I don't think Apple will, jump on that. They are a consumer company. They wanna have consumer scale and we're

Rob:

agree.

PJ:

so I think

Rob:

the enterprise has already, like HoloLens still exists in enterprise space and

PJ:

yeah, it's like why bother?

Rob:

they're doing military contracts and things

PJ:

Right.

Rob:

I that space is taken, I think Magic Leap trying to get into that space. And Microsoft is like, no, we've. are the enterprise company.

PJ:

Agreed. Agree. I,

Rob:

all fronts. It HoloLens integrates with, uh, office backends and things like that, and

PJ:

yeah.

Rob:

The ecosystem for enterprise is the Microsoft ecosystem, and HoloLens is perfectly placed for that. I do believe there's a middle ground, though. It's not enterprise and it's not consumer, it's the business space. It's still consumer orientated, but you are in the business environment such as things like virtual avatars for Zoom calls and FaceTime and things like that. But like I said, it just makes it more weird.

PJ:

Yeah.

Rob:

the avatars that I've seen, it kind of does scan your face and it just kind of makes you look like this weird washed out

PJ:

Uh, I,

Rob:

it's bizarre in that it, the, the face that it makes, and I had my face scanned when I was at Apple doing this and. I never saw the results, so I, uh, I'd like to find that and I, if I can like that, I cannot have to do it again on a, on a, real device.

PJ:

I am disinclined that that's gonna work, and I actually believe that for where we're at currently, the uncanny value problem is something we have not solved. I. And if anything, We need to actually back away from the Ann Kenney Valley, if you wanna have something that has more empathy. I would love to get into this as a separate podcast by sort of thesis is that C3 PO has more empathy than some of these robots you see coming out today where they're supposed to be human based.

Rob:

think that's a market they, that's the only market that can afford it. This is why I think will be used'cause people will have it and basically need to use it. So it's like I'll just do a Zoom call in it. But like I said, it's gonna make Zoom calls more weird than they already are.

PJ:

More delightful and more isolating.

Rob:

if like, if you have

PJ:

So our per

Rob:

are they both gonna

PJ:

our,

Rob:

and just be isolated themselves for be in the same

PJ:

oh my God,

Rob:

Like you could just take those off and be in the same room and it looks of like virtual world, but it's real. And you can write on pieces, pieces of paper and give it to each other and you do all magic things. There's a whiteboard over there, I can write on that with a pen with no latency and you can see it in real time.

PJ:

reality is the ultimate virtual reality.

Rob:

Exactly. so. I think. I, I think it'll burn out and be like, okay, we're done. What I am interested in is this is the Vision Pro and based on Apple's naming conventions, will there be a vision without the Pro Monica, which is cheaper, and how much cheaper can it be and still be of that same quality hardware? The hardware, by the way, I worked on it, it is fantastic hardware. That's why it costs so much. Even if you factor in the Apple tax,

PJ:

Yep.

Rob:

still a a fantastic piece of hardware. I don't believe

PJ:

I,

Rob:

do anything remotely like that. Same experience for a lower cost.

PJ:

I agree.

Rob:

So it may be a time factor. Let technology get better, then we can make it better, it cheaper, but by then people will be

PJ:

I agree. So we should check in in three months to see what our predictions look like. Is the Vision Pro still a thing?

Rob:

Okay.

PJ:

check in at six. Um. Okay. Let us hop over to something that came outta the last 24 hours. People are chatting about it and it's a Amazon and Alphabet. So meta in its earnings call issued a statement that they're gonna be finally issuing dividends, and this caused the stock price to jump about 20%. I mean, they also had a a tremendous quarter. This is coming off of a year of efficiency as Zuckerberg called it, and they laid off a whole lot of people. Now at the same time, Amazon and Alphabet also did a whole slew year and then a bunch this year. So a story came out where Goldman Sachs analysts think that Amazon and Alphabet will have dividends in 2024. And I did write a blog post about this last week. I'll link it into the show notes. One of the things I find fascinating, Rob, is that, the headlines for this have been a little bit, I think, overblown where it seems like they almost have inside information. And I do wanna, temper this slightly. I'm not sure if you have a particular take on this before I start going into my own rants.

Rob:

Uh, go on on your ran and I'll, I'll interject.

PJ:

Okay. So, a lot of my insights that I wrote into the blog post were, trying to. Piece out that Meta was one of the largest tech companies that hadn't paid a dividend out. apple has done it for years, you know, after Steve Jobs death. Microsoft has done it for years. It, it is a hallmark of, let's say, a company that's ending its growth period and entering into a more mature blue chip period. Not, and it's always a little bit fuzzy, so the statements that are made of the headlines are like, yes, they think Amazon and Alphabet will have dividends in 2024. When you actually start trying to dig in, and I'm trying to find the actual Goldman Sachs note on this. It's a little bit more tempered because, you know, the, the statements, and this is from, I, I got this out of Seeking Alpha Kostin, who's the, the analyst, the chief analyst I believe of Goldman Sachs said. Google and Amazon are the two largest stocks that currently don't pay a dividend, but have fundamentals that are historically implied, higher odds of initiating a dividend relative to peers. And that's a different statement because you're just saying historically these companies in these similar positions would initiate a dividend. I agree with the notion that I think Wall Street will be putting more pressure onto Amazon and Alphabet to start issuing dividends, but there's not a smoking gun here for me, like this is not saying there's some new information that we've been given. It's basically like historically this has been true.

Rob:

I agree. And that's what I was gonna say at the start. It's, it's, they're in a position to pay a dividend

PJ:

They are.

Rob:

been, have been for years. And you've gotta think that

PJ:

Yeah,

Rob:

has to be a quite strong position. You're committing to several billion dollars in cash

PJ:

a hundred percent.

Rob:

and and they both have that. They both, they both make enough profit that they could pay that. It does signify that transition that you talked about. And it, it signifies it. Like I says, the whole new way of thinking of it becomes a more driven by shareholders than driven by growth. And you've gotta think, we talked about this before, like meta run out of people. So it has little

PJ:

Yep.

Rob:

growth. It now has to expand the platforms to make them more usable to get growth. But it's still a massive advertising platform, so it has a huge amount of cash. Let's pay some of that back. I also think there's a bit of a me too here, the analysts are just looking, well, meta did it with these.

PJ:

I, I agree.

Rob:

criteria. And I go, who else could do it? And it's the obvious suspect is the answer. Didn't take an analyst to come up with that one. And there's a bit of me too here. It's like maybe Amazon can do the same thing and get a 20% stock boost and that's where the Wall Street pressure will come from. And maybe they'll do it, maybe they won't. But it's only a blip in time over time. It's changes how the companies work internally. Money that was earmark for this is now earmarked for, dividends and Amazon doesn't have that much cash though. So is Amazon may not, in my eyes, wouldn't be the one who

PJ:

I,

Rob:

for

PJ:

there's a.

Rob:

I, I don't really look that closely at their, at their numbers, but they've always been the one who like, kind of doesn't make any money. They just put it all back into growth, maybe that's changing, but yeah, Google for sure is, the one you would think would pay a dividend and currently doesn't.

PJ:

I'll tell you my take on it is this, is that, you're right, Amazon has no, never had a lot of cash on hand. They have tended to reinvest and they've reinvested really heavily in logistics. They've reinvested in their products, they've reinvested in AWS, which they're still the leader in that space. They have done a tremendous job at the same time of being very fiscally responsible. Amazon, I mean, has a graveyard of its own of products. And the reason those, it has a graveyard is that it tried those products in the marketplace, wasn't able to create a profitability story from it, and then killed it. And they were always really clear about that. Like, these are about profitability. Can we make this something sustainable economically? So it's, it's fascinating because you're right, Amazon doesn't have a lot of cash on hand for this sort of thing yet. They've been much, much more fiscally disciplined than Alphabet. Alphabet has got a huge amount of cash, and they're similar in some, I mean, they're similar in that way to Apple, but they really only have a small offering of products that actually provide profitability. You know, search ads, YouTube two ads, and they're trying to build a business out of GCP. So it it like on if one company had the fiscal discipline and the money, yes, I would see that as being like really obvious in terms of taking the path of giving a dividend. But each of them basically have this sort of orthogonal set of characteristics that, indicate that, you know, Amazon is not in a position in my mind to be paying out a dividend and. Alphabet is still running, I think fairly inefficiently to be paying out of a, a dividend. And there's one other bit to alphabet that I'll get to in a second.

Rob:

So do you think if they do pay a dividend, it's gonna be purely Wall Street pressure? After Meta did the buyback of shares, which boost the stock price and the dividend, which also boosted the stock price resulting in a 20% boost, that's a huge

PJ:

It, so let's talk, let's,

Rob:

think the institution at Whole oldest don't care about the dividend. They like, oh, if it's going to instantaneously boost me 20%, we can, uh, can time some, quick

PJ:

I,

Rob:

that and make a crap ton of money and then put it in some other stock.

PJ:

I gotta talk about this in the, in the, the blog post. So Amazon has only ever issued one type of stock, common stock. There's a plurality that's owned by Jeff Bezos, but the reason why it's important is that that stock, it's only one type of stock, like, as far as I know, it doesn't have any special classes of stock for voting shares. So there is more opportunity, I think, for Amazon to have a vote that actually would vote for something like the dividends. I, and I, I apologize, I don't know the exact, you know, breakdown of who owns what stock but there, there's an actual opportunity for a forum to take place to vote whether or not the shareholders want to have dividend. Why am I stating this? I'm stating this because Alphabet is different. Alphabet. Alphabet has actually three classes of stock A, B, and C. B is not traded on the open market. A and C are, A, has voting rights, B has voting rights, C does not. The thing about the B class though is it has 10 x the voting rights. So even though like Larry Sergey, Eric and a few, a few of the board of directors I think have this, this small amount of B class stock, they have the ability to have outsized voting rights over the A side of things. So why am I going through all of this? The decision whether or not to pay out the dividend is gonna be completely up to Larry, Sergey and Eric and a few others. And I think if they decide to do it, they're gonna do it because like, look, there's a huge boost that we can have to our personal fortunes by effectively saying, we got, we want to have dividends. So it, the, the Wall Street pressure, I think is really going to be whether or not they want to increase their fortunes, frankly.

Rob:

Like you said, you went into the whole hiring thing in the past of like how this affects hiring. I don't think it makes any difference in the long term. You still get a stock grant, you still get this, you might get less because the shares are worth more, blah, blah, blah. I don't think it it directly affects the hiring and firing of people. I do think it, uh, it might change who wants to go there and it, it does change at the backend, the amount of money available for projects that these programmers may be working on, or not necessarily programmers, but anybody who goes

PJ:

Yep.

Rob:

there it's. It just literally changed the allocation of the cash and if one division starts to generate all the money, which is what happens in Google quite a lot, is one

PJ:

Yeah,

Rob:

money. One division pays the dividend, it basically becomes a A to B transfer, and all the teams do start to get left out. So I think there are subtle things that can happen along the way, but I think immediately it's not gonna

PJ:

so

Rob:

on the hiring and fire in

PJ:

I, I'm, I'm actually, I'm gonna keep doubling down on my statement that I think this does change the hiring and firing, and the reason why is that meta spent the last year in which they called the year of efficiency, and they let go 20% of their staff. It was a large number. So I think they were planning on this dividend thing for a long time, at least a year with.

Rob:

It's not something you just pull out your ass one day and be like, let's pay a dividend.

PJ:

And, and so if Amazon and Alphabet are gonna be feeling similar pressure, then I think what would be the sign of this coming would be, Hey, we have to do a similar thing that Meta did. We're going to actually keep doing layoffs. So I think it actually accelerates the number of layoffs we would see from these companies if they're planning on doing a dividend. Now, my only data point is that prior to the meta announcement, Sundar had sent off an email, again, this got leaked. So this is not private news that there were gonna be more layoffs at Alphabet. They didn't say exactly when yet, but, or how many or how big or whatever. But this was something that was going to be happening. it's impossible to run the scenario both times, but. Does that mean that, we'd see even more layoffs now because Google slash Alphabet wants to catch up to what Meta did, or like signal to the marketplace that, hey, we're gonna be paying out a dividend and we're going to be doing our own efficiency by laying off a whole bunch of people. I still think that the layoffs are the sign, like we start seeing significant percentages of alphabet getting laid off, Amazon getting laid off. I think this is the sign for a dividend coming. And I think that this would be, it's a little harder to do now as a surprise. Like I don't think you'd see a one day run up of 20% for these companies. But I do think that the market would basically over the next year, start increasingly rewarding these companies for doing layoffs because they believe a dividend's coming. So I think that's another approach that could be happening here, is that they will do layoffs that makes the market think, Hey, a dividend's coming, let's increase the stock price.'cause meta did it.

Rob:

But meta also did the whole year of efficiency thing, which was more than just layoffs. It was literally a year of efficiency, which included layoffs. are the other companies doing anything else other than laying off and calling it efficiency? Uh.

PJ:

Yeah, it's a good question. I mean, I've stated this before, pretty, pretty blatantly, on the layoffs episode unless I start to see Sundar actually like, turning down whole product areas where it's like, Hey, we're selling off this division. We're not gonna do maps anymore. We're not gonna do drive, or we're not gonna do, you know, pick anything that's not making money for them. To actually make bigger signals like, hey, we are actually like getting into something that's much more efficient, much more lean, much more focused on our core offerings here.

Rob:

Did they kind of do that with the division of saying they're not gonna fund it internally anymore, they're gonna look for external venture funding.

PJ:

It's a,

Rob:

isn't that a step in that direction?

PJ:

um, I mean, I think it's a drop in the bucket in my mind. I mean, the structure of Alphabet as it is always had this desire to have, if you're under the alphabet umbrella, then anything that's not Google has this opportunity for outside investment. I think Waymo might be getting outside investment from somewhere else as well, it's a good question though. Basically, if it's like, Hey, X, you gotta go find your own money, we're not gonna fund anyone.

Rob:

said. It wasn't like you can get your own external funding, it was, you kind of now have to go and find your external funding.'cause Google and the venture arm of Google, I assume, isn't gonna fund the internal projects anymore. So it's kind of, it's, it's, going down that path in my eyes.

PJ:

You make bring up a really good point, which is like, look at the flotilla of companies that are under Alphabet and they will probably, be the ones that get hit first, where it's like, go find funding. If you can't find funding, we're gonna be letting you go. And the more you see of that at the, the sort of edges of Google, if you will, where I'm talking about, I think the big things that need to be done are within Google, which is like, look, we only have a few product areas that are really actually making money. And the ones that are not are either that are gonna be reduced. Or sold off or gotten rid of. And that's the areas I'm not cert I think those are the area, those are the things that need to be done to get it into something that's lean. I don't know if it's, if it is the moves that Sundar's got the guts to do.

Rob:

I guess we'll have to wait and see.

PJ:

yeah. Amazon I think is, is gonna be more interesting in this arena because if they are going to end up going down the route of dividends, I think there's some more trimming that they would do. Who knows, maybe they decide, we're not gonna make you know Lord of the Rings anymore because that's costing us several billion dollars to actually go do. And so maybe their content division is an area where that would be something either they would let go of.'cause it's a lot of money getting dumped into that with, I'm not sure exactly how much return. Or we go back and say like, Hey, content should be everywhere. So Amazon starts putting its stuff on Netflix and Hulu. I think similar things will be done with Amazon in terms of trimming if it wants to pay out a dividend. I

Rob:

do agree that content is king, but. To a limit. It's, I think a lot of these companies make content because they want to be the next killer content. they're now the owner of the next Lord of the Rings. If you step into a content such as a Lord of the Rings at its midlife end of life, wherever it is right now, it's incredibly expensive. It's incredibly valuable. I don't think you get any return from that.

PJ:

yeah,

Rob:

if you were the owner, like the founder and developer of Lord of the Rings, sure, massive returns, but stepping in at the end game is, is not what I mean by content everywhere. But

PJ:

I agree. I agree, and I think this is where there's gonna be a lot of scrutiny about what the return on investment of this content development really is

Rob:

I also think that Amazon are looking at a lot of other content they have, like starting to be a more traditional games publisher. think easier to cut that content. For small developers than it is to cut a lot of the ring content, which will have a huge public, optics problem. And also it's potentially like better lawyers who make the deal so it can't be cut or at least huge paybacks if it gets cut, which some of the smaller developers may not have. So I think it may affect the smaller developers in the content realm more than the Lord of the Rings, even though Lord of the Rings is taking all the money and it's not gonna make anywhere near enough money.

PJ:

to make up for it. I, I, so I'll agree with you. I think the, the, the game developers will be affected. I think the lawyer agreements are probably what holds this stuff together. I have never been convinced on the, oh, people will get upset with Amazon if they kill Lord of the Rings. Part of my premise is that like, no one's gonna, if if they killed Lord of the Rings, no one's gonna stop buying Amazon. Like that to me feels like a, a silly argument. Like I've never, and, but I made this about Google, like, it's like if Google let go of any major thing, like Google Drive or photos or, you know, pick anything except maybe YouTube, uh, but that makes money for them. If you, if they let go of any product that wasn't making money, it's not as if people are gonna stop using Google as a search engine. So I, I've always thought there's been this particular fear, and I've heard it multiple tech companies now, where, oh, we can't cut that'cause it's bad pr. It's like, eh, not really. You'll piss off a few people, but. You know most people, the vast, vast majority of people are still gonna use your core services that are making you money.

Rob:

The A, the Amazon one's an interesting one because I did stop using Amazon Prime because. The ads on Amazon video, it annoyed me so much I stopped using it. I actually made a spreadsheet and went through all my orders of the last things for the last year

PJ:

Yeah.

Rob:

up the shipping cost of like, if I actually bought this and paid for shipping, would it have cost? The cost about the same. I don't buy much on Amazon. It cost about the same as Prime, so I got rid of Prime. I still do use Amazon a little bit, but I did get rid of Prime and that's kind of how it'll stay. I don't see the point of,

PJ:

Well.

Rob:

the services of Prime enough, and if now I've the hard numbers for the shipping, it's also like, eh, it's not worth it.

PJ:

Well, what's fascinating, Rob, is that you're still paying money to Amazon. You're just not paying as much money, so,

Rob:

Depending on what type of product you're buying, and a lot of those have free shipping without any subscription service. So, if, if if

PJ:

exactly. So,

Rob:

and it's not much

PJ:

yep.

Rob:

like open two web browser tabs and see who has the best price and factor the whole price in, not just the stated price, then buy from there. And so that'll make me buy less from Amazon. that's basically all for adding ads to Amazon video, which I didn't even use to begin with. The biggest thing that pissed me off for Amazon, and this is what started the whole thing, is like I now dislike Amazon, is I bought every season of Top Gear on Amazon. I paid for it, I owned it, I had it in my library and I could go watch it and then at some point, half of it disappeared. Because rights or whatever, and it's like, oh, they didn't gimme my money

PJ:

Yeah, yeah,

Rob:

already owned that. If I'd have owned A DVD and you would change your licensing, you can't come and take the DVD back, but you could take back

PJ:

yeah.

Rob:

version.

PJ:

get into this one.

Rob:

that's utter bullshit. So I kinda stopped using Amazon video at that point. I've never been back and now they've added ads. It was just like salt in the wound. So I looked at the other stuff. So I think people will look at services

PJ:

get into this one.

Rob:

and start to back away them, not because the service isn't

PJ:

We should get into this one.

Rob:

because of the salt in the wound. Like, no, you screwed me once. I'm not going back. But, I do think they're more connected than black and white would say they are.

PJ:

I'll agree. I'll put the alpha value somewhere between zero and one, but, closer to zero for me in terms of correlation than one. so. With this, again, we've got these analysts that have basically released a statement. My comment on it is, you know, there's not a lot of new information. The prediction I've got is if we start seeing more layoffs, that probably portents the dividend. So it's something we'll be able to track throughout the rest of this year.

Rob:

I think the analyst announcement was just analysts being analysts, and like I said, it doesn't take a rocket science.

PJ:

I agree.

Rob:

uh, or an analyst to be like, well, meta did it. Who else could do it? Oh, look, Amazon and Google.

PJ:

Agreed,

Rob:

You have an

PJ:

agreed,

Rob:

me that. I could have told you that the day of the meta announcement. I could have told you all three of them the day before. It's like, it's not difficult to pull some stats and be like, well, these people should pay dividends, but don't.

PJ:

agreed. A lot of the commentary I've seen is much more about what it would do to the overall marketplace rather than an analysis of the companies themselves. So in that, I think we're ahead of them. Cool. All right. We'll come back to this one as news comes out, frankly, we'll sort of see exactly how well this is playing out in the next month, two months, six months, basically. We'll see how our predictions do, and we'll grade'em then.

Rob:

Cool. That works.

PJ:

Cool.