What s up guys! It s Jason here and welcome to my YouTube channel, Judge Judy Insight. Let s play
a game. Who do you think has more money? Question 1) Gordon Ramsay or Judge Judy? Pick your answer.
Question 2) How about this one Pamela Anderson or Judge Judy? And the last question Question
3) Robert Downey Jr or Judge Judy. If you guessed Judge Judy for all 3 choices, you re right.
Did you know, Judge Judy Sheindlin is worth an estimated $460 million? 460 million dollars! She
s even richer than the most famous celebrities we know on the big screen. Robert Downey Jr is worth
$300 million, Pamela Anderson $12 million and Gordon Ramsay is worth $220 million.
Today, we ll explore the business concept of Recurring Revenue to understand how Judge Judy
became one of the richest stars in the world, and how you can use this concept in your own
lives or business that you re starting. But before we begin If you wouldn t mind just
tapping that LIKE button for the YouTube algorithm, I would really appreciate it.
This video is quite unique because it s a collaboration with Michael over at Money Lemma.
So if you enjoy it or would like to see more, let us know! We would love to hear
your input. If you ever saw an episode of Judge Judy, be sure to subscribe and hit
that notification bell for new videos each week. Thanks for doing that and now let us continue on
with How did Judge Judy become so wealthy and What s happening to IMDB Judge Judy in 2022.
Part 1: What is so Great about Recurring Revenue At some point in the last decade investors became
obsessed with recurring revenue. Why take money from customers once when you can collect their
money more than once? The cynic in me likes to think that businesses like recurring revenues
for the same reason customers hate them: they end up charging more that way. I m still paying $25
monthly for my Blockbuster DVD rental subscription. I know, I know, I m going to
cancel it, just haven t gotten around to it yet. The less cynical explanation is that recurring
revenue reduces uncertainty. Uncertainty kills businesses. This is why Boardwalk is the most
overrated property in Monopoly. Sure, it s a huge payout when it hits, but it rarely hits!
Most businesses that enter bankruptcy do so because they run out of money, not because
they don t make money. Making money is different from having money. In 2016 Tesla announced its
Model 3 car. Over half-a-million customers put down $100 deposits to buy the car and vanquish
all their insecurities. Tesla was definitely going to make money. However, in the time it
took to actually manufacture the cars the company nearly went broke. That s not an exaggeration:
Check out this tweet - Hey Elon, How close was Tesla from bankruptcy
when bringing the Model 3 to mass production? - From Elon, Closest we got was about a month.
The Model 3 ramp was extreme stress & pain for a long time
from mid 2017 to mid 2019. Production & logistics hell.
Tesla survived to become a trillion dollar company, of course, but not all are so lucky.
Businesses play a perpetual game of Twister, constantly contorting themselves into positions
where they have enough cash to pay the bills. One misstep and they have to choose between calling
it quits and getting uncomfortably close to a hot cousin (or bankruptcy lawyer).
What is Recurring Revenue Recurring revenue means that cash
runs into a company s coffers like a river fed by melting glaciers. When cash flow is predictable,
running a business is infinitely easier. Investors will pay a big premium for a
recurring revenue business because they have a better chance of long-term success.
That s why so many businesses are eager to become recurring revenue businesses and will do so even
if it means sacrificing near-term profit. Check out this graph on Adobe. Back in 2010,
Adobe Creative Suite was $1,000. Then in 2011, the company migrated to a subscription
business for $50 a month. It was a painful transition, but well worth it in the end.
Recurring revenue is en vogue and it seems every company makes a claim to it. Six Flags
CEO Jim Reid-Anderson even told Jim Cramer that theme parks are a recurring revenue industry.
At first glance this feels like a real desperation move, the CEO equivalent of leaving a mixtape
inside Wall Street stock analyst s lockers. But he s not wrong. Most of their revenue is recurring in
nature. The same customers are coming back to the park every year. Somewhere, though, there
has to be a line in the sand. Do tents that sell Halloween costumes or Fourth of July fireworks
count as recurring revenue businesses? What about scholastically required TI-83 calculators?
If every business is a recurring revenue business, then the term has no meaning.
Advantages of Recurring Revenue
The real advantage of a recurring revenue business is that cash flow is predictable.
The most extreme example is a mortgage, where a legally agreed upon fixed payment occurs
each month. Contracts aren t necessary, though. Netflix doesn t have a contract with customers,
but they still have highly predictable cash flows. That s because watching Season 1
Episode 1 of Riverdale is like licking a frozen telephone pole - you re not going anywhere.
nobody cancels Netflix halfway through season 1 of Riverdal
Judge Judy - The ultimate recurring revenue business
All of these leads to the real topic of today s video Judge Judy!
This is Judy Sheindlin, or Judge Judy. America s adjudicator. She s
Ruth Bader Ginsberg crossed with Lara Croft crossed with David Letterman.
She doesn t take BEEP from anyone, not a manicurist with a grudge against an ex-roommate
and not a deadbeat accordion player behind on alimony. America loves Judge Judy.
Anyone interested in understanding why should check out this fantastic profile from New York
Magazine, which is loaded with amazing and hilarious stories of Judge Judy Sheindlin
(who was a real judge before playing one on TV). This post isn t about the woman called Judge Judy,
though, it s about the show called Judge Judy. Judge Judy has aired over 7,000 episodes since
its launch in 1996. For the past 11 years it was the #1 first-run show in syndicated television,
meaning that every weekday almost 10 million Americans watch her show. That s 3 million
more than Dr. Phil and Ellen combined. Judge Judy even beat Oprah most of the years they overlapped.
Daytime television isn t just regular TV, though, it s highly routine-based entertainment. It s
less something people look forward to and more something they rely on. They vacuum with it on
in the background, they watch as they change their car s oil, they listen as they soak in a luxurious
tub and nibble French chocolates. Ok, I have no idea what people do when they watch Judge Judy,
but I know that they watch it with incredible consistency. From a business perspective,
that means whoever airs Judge Judy can basically guarantee advertisers the same each day, which in
turn means that revenue is highly predictable. In fact, the revenue is recurring. For such a gem,
CBS paid Judge Judy a reported $47 million per year (for 52 days of filming), and an additional
$99 million for the library of old episodes. In fact, pick a year, any year in Judge Judy
s 25 year run, and I guarantee you she s at the top of the ratings!
Judge Judy Streaming on Amazon All of that came to an end earlier this year when
Sheindlin s contract with CBS ran out and Amazon made her an offer for an undisclosed amount.
Rather than keep paying for new episodes, CBS has opted to play the hits - just air reruns. Will
anybody be able to tell? Sheindlin, meanwhile, is betting that her audience will follow her to
Amazon s IMDB TV. This sets up a fascinating recurring revenue experiment. How sticky is
Judge Judy s audience? Are viewers dependent on Judge Judy, have they so molded their routines
around a TV show that they ll keep watching even if it means watching episodes from 1999?
Or will the recurring revenue of Judge Judy prove to be more fragile than CBS predicted?
Signing up for IMDB TV and figuring out how to stream it seems like a small feat for the
typical viewer who spends 150-200 hours per year watching her show. However, it does mean work,
and it does mean changing a routine. Not being able to just flick on cable TV and watch a new
episode of Judge Judy isn t an inconvenience, it s change. People hate change! That s why behavior is
sticky, that s why recurring revenue businesses really work. This is one case that MoneyLemma
will be following closely. Expect a follow-up once viewership numbers start to flow in. Until then,
as judge Judy would say This is over! Goodbye! So with that said, thank you so much for watching
my video. There was a significant amount of research, and Judge Judy watching that went
into making this video possible. As mentioned again, today s video
is a collaboration with Michael over at Money Lemma. Be sure to subscribe for his substack!
Let us know what you think of the video or if you would like to see another one like it! If you
haven t seen already, check out my video on the Harley Davidson USA comeback of 2022 or Can Kmart
make a comeback in 2022. Those are my personal favorites on my channel. I highly recommend both.
As always, stay happy and healthy and stay tuned for another episode of Company Insight next week.