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Speaker 1: Welcome to another episode of Strictly Business, the podcast in

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Speaker 1: which we speak with some of the brightest minds working

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Speaker 1: in the media business today. I'm Andrew Wallenstein with Variety.

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Speaker 1: I don't know if it's possible for a podcast to

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Speaker 1: have a returning champion, but if it can, our guest

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Speaker 1: today is the closest thing we've got back for an

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Speaker 1: unprecedented fourth time since twenty nineteen, is Navin Sarma, Managing

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Speaker 1: director of S and P Global Ratings, a veteran credit

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Speaker 1: analyst focused on the media business. Why you ask well,

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Speaker 1: and there's a lot of big existential questions facing said business.

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Speaker 1: We've got to bring in maximum firepower. So fasten your seatbelts,

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Speaker 1: light up, whatever it is you choose to light up

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Speaker 1: when you listen to podcasts, and we'll be right back

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Speaker 1: to dig deep. The break and we're back with Lavine Sarma,

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Speaker 1: a veteran credit analyst who focuses on the media business.

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Speaker 2: Thank you for being with us, Thank you for having me.

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Speaker 1: So let's get right to the biggest guessing game in

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Speaker 1: Hollywood right now about who's going to acquire paramount. I

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Speaker 1: know you don't know the answer to that, but I'm

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Speaker 1: just curious as you hear lots of scenarios. You know

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Speaker 1: all the names out there, sky Dance, Warner Brothers, Discovery.

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Speaker 1: How do you think this is going to go down?

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Speaker 1: I mean, what makes sense to you as you hear

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Speaker 1: all the names out there.

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Speaker 3: It's a tough question. Yeah, nothing particularly makes sense. Yes,

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Speaker 3: I will say, I don't think it's going to be

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Speaker 3: as easy as we all think initially. I think there

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Speaker 3: are a number of people who would be interested in

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Speaker 3: parts of the business, but I don't think there's anyone

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Speaker 3: who would be particularly interested in buying the entire thing,

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Speaker 3: and that complicates any transaction because you don't want to

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Speaker 3: be selling off parts of the business individually. You really

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Speaker 3: want to be able to have kind of a transaction

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Speaker 3: that takes care of the entire thing.

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Speaker 1: Yeah, I mean the thing is Skuidance, which seems to

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Speaker 1: be the leading candidate. They are interested in the studio

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Speaker 1: part of the business. They don't seem to be interested

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Speaker 1: in the streamer side of things. And then you've got

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Speaker 1: the Byron Allen of the world, who someone counterintuitively seems

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Speaker 1: to be into the linear assets, which I say counterintuitive

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Speaker 1: because you talk to a lot of people like yourself

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Speaker 1: a lot of people on Wall Street who seem to

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Speaker 1: think that that's not the assets that have much life

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Speaker 1: in the long.

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Speaker 3: Term, right, It's kind of true, but you have to

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Speaker 3: dig a little deeper into those assets. So, yes, we're

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Speaker 3: talking about a studio in Paramount which is over one

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Speaker 3: hundred years old, or relatively one hundred years old. There's

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Speaker 3: a lot of content there and a lot of IP.

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Speaker 3: And then when you start digging into the television business,

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Speaker 3: you've got a broadcast network in CBS, there's only four

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Speaker 3: of them. And so if you want to be in

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Speaker 3: linear television and you want to own one of those

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Speaker 3: broadcast networks because it's got the NFL. If you look

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Speaker 3: at some of the cable networks, actually the real value

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Speaker 3: there in some of the cable networks is the studios

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Speaker 3: affiliate and the library is affiliated with some of those

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Speaker 3: cable networks. If you think about Nickelodeon, for example, it's

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Speaker 3: got a studio, it makes a lot of content. A

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Speaker 3: lot of that content, whether it's SpongeBob or Blues Clues

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Speaker 3: or my kids are old, so I'm going to date

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Speaker 3: myself right quickly, but a lot of that content is

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Speaker 3: new and refreshed, and there are a number of streaming

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Speaker 3: companies out there who have not done very well with

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Speaker 3: children's content. This would be a you know, a good

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Speaker 3: asset for somebody to own. TV studios is the same

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Speaker 3: thing they make movies, and so it's not necessarily the

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Speaker 3: linear TV business, which has value, but it's the content

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Speaker 3: behind them.

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Speaker 1: And by the way, you mentioned the NFL, and that's

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Speaker 1: where I think Warner Brothers Discovery makes a lot of sense.

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Speaker 1: A lot of these other assets, that's a lot of duplication.

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Speaker 1: I don't know why David zas Left, for instance, wants

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Speaker 1: CBS News if he's got CNN, But I'd say the

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Speaker 1: biggest thing he lacks is the NFL. He doesn't have

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Speaker 1: the biggest asset in all of television. But if you're

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Speaker 1: if you're Shrry Redstone right now, what are you thinking?

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Speaker 2: Honestly, I don't know.

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Speaker 3: I mean, the biggest question on how to decipher what

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Speaker 3: ends up happening is trying to figure out what Cherry

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Speaker 3: RedZone wants, and I don't know what that is. It's

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Speaker 3: I mean, it's an interesting time to try to sell

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Speaker 3: a business if that's what really she intends to do.

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Speaker 3: You have, you know, you have an election coming up

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Speaker 3: in at the end of the year, you might have

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Speaker 3: a change of administration, which means you might have a

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Speaker 3: change of regulatory you know, a change in the regulatory environment.

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Speaker 2: If you do it now, you're.

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Speaker 3: Kind of putting yourself in front of regulators before a

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Speaker 3: potential change in administration. So why not wait until later

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Speaker 3: until you have greater clarity over who might you be

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Speaker 3: talking to? So it's an interesting time to be doing this.

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Speaker 3: My guess is there's a number the media companies who

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Speaker 3: might be potentially interested in buying are working through the

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Speaker 3: cleaning up their balance sheets right now, right And so

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Speaker 3: if i'm them, why would you want to do a

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Speaker 3: deal now? Why don't you wait until later when your

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Speaker 3: balance sheets are in much better position to be able

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Speaker 3: to finance a transaction.

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Speaker 1: And as we step back for that broader picture, how

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Speaker 1: are the capital markets looking right now?

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Speaker 3: You know what they're actually good for the first time

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Speaker 3: in a couple of years, is that it's I think

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Speaker 3: people have a line of sight on potential declines and

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Speaker 3: interest rates. I think a lot of companies, frankly, you know,

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Speaker 3: need the race capital and and and they've kind of

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Speaker 3: held off because they didn't know interest rates were going

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Speaker 3: to go even if interestates don't go down, and look,

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Speaker 3: the broader market expections interestrates to go down. At least

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Speaker 3: knowing that rates aren't going to go any higher makes

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Speaker 3: investors and companies interested are interested in going out and issuing,

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Speaker 3: you know, debt to finance upcoming maturities. And so that

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Speaker 3: certainty has made the markets much more much, much more open,

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Speaker 3: and so we've seen a lot of deals both at

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Speaker 3: the higher level, right, so bonds as well as leverage

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Speaker 3: loans have actually picked up significantly this year.

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Speaker 1: So with that said, and you still mentioned, of course,

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Speaker 1: this regulatory overhang, do you expect prior to November in

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Speaker 1: the media sector or perhaps adjacent tech or telecom, that

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Speaker 1: we will see other deals? Do you think, I don't know,

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Speaker 1: other players in this space, like Disney, Comcast, Lionsgate, could

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Speaker 1: we see things.

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Speaker 2: I'm skeptical about that.

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Speaker 1: Uh huh.

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Speaker 3: I actually don't think that we're going to get resolution

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Speaker 3: on a potential paramount self for a while, you know,

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Speaker 3: for a number of reasons. And yes, that might open

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Speaker 3: up the spigott for additional M and A deals, but

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Speaker 3: I think there's a lot of issues with any one

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Speaker 3: of these deals that we contemplate that it would take

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Speaker 3: longer for those to happen. So I'm a bit skeptical

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Speaker 3: about you know, the spigot opening up and a lot

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Speaker 3: of deals happening this year.

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Speaker 1: And yet let's say, as you know, we're obviously it

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Speaker 1: looks like Trump versus Biden in twenty twenty four, a

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Speaker 1: Trump presidency comes to pass, that brings certain unpredictabilities.

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Speaker 3: I would imagine.

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Speaker 1: I think back to what happened with the last time

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Speaker 1: he was around. Are people necessary CEO is gonna want

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Speaker 1: to take their chances with the Trump presidency again?

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Speaker 3: It's a great question, and you're thinking of eighteen teams

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Speaker 3: time owner. Yeah, I asked that as an uncertainty that

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Speaker 3: we'd have to deal with.

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Speaker 1: Yeah, maybe maybe they should be doing deals now all

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Speaker 1: Biden's in office, or you know, even with what we

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Speaker 1: have seen with you know, Biden's got a real sort

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Speaker 1: of regulatory hawk in place right now. We've seen what

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Speaker 1: happened in terms of how she was looking at Amazon,

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Speaker 1: especially what's gone on with a lot of the tech

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Speaker 1: players right now. And as you look at that sector

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Speaker 1: and what's gone on there, can we see more activity there?

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Speaker 1: I mean, there's a if the media business looked rough.

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Speaker 1: My god, what's going on there?

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Speaker 3: Yeah, between Amazon and Apple and Alphabet and Meta No,

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Speaker 3: I think it's I think there's a bullseye on their backs,

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Speaker 3: and so I think it would be very difficult for

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Speaker 3: them to get any kind of transaction through. I will say, look,

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Speaker 3: our read on the regulatory environment in DC today is

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Speaker 3: clearly it's it's a much higher hurdle to get a

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Speaker 3: deal through regulators. Regulators are willing to go to courts

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Speaker 3: and litigate, even if they don't think they're going to win.

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Speaker 3: They can make it very painful for the you know,

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Speaker 3: the buyer and the seller, where it takes a number

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Speaker 3: of years to go through a litigation process where by

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Speaker 3: the end maybe they walk away from a transaction. It

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Speaker 3: took Microsoft Activision a number of years to do that,

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Speaker 3: and Microsoft was very patient. Microsoft, you know, has a

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Speaker 3: balance sheet and cash flow. But if you're talking about

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Speaker 3: a number of the media companies, you know, one they

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Speaker 3: may not have the patients to put up with that,

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Speaker 3: and two the asset that they're buying might degrade significantly

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Speaker 3: that by the time they get approvals, the business isn't

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Speaker 3: going to be what they originally anticipated.

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Speaker 1: Got it. Well, let's move off of M and A

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Speaker 1: and talk more about what else matters in the media sector. Obviously,

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Speaker 1: the streaming Wars haven't talked much about Netflix yet. They

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Speaker 1: obviously put on quite a show of power coming out

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Speaker 1: of twenty twenty three, and we saw in Q four

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Speaker 1: it does not look like this year is going to

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Speaker 1: be They are not going to look any weaker in

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Speaker 1: twenty four. How do you see the streaming wars shaping

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Speaker 1: up as Netflix does not look like they are losing

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Speaker 1: any momentum. No streaming wars kind of ver Yeah, I

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Speaker 1: mean we should retire the phrase at this point.

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Speaker 3: Yeah, yeah, I mean Netflix has done an amazing job

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Speaker 3: of building out a business and you know, and getting

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Speaker 3: to the scale and the profitability that they have where

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Speaker 3: everyone else is chasing that and will continue to chase that.

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Speaker 3: Having said that, look, they did benefit for a number

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Speaker 3: of years not having petition, and that got them to

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Speaker 3: the two hundred and sixties two hundred and seventy million

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Speaker 3: subscribers they have, But the markets also gave them a

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Speaker 3: pass being unprofitable, no cash full for the longest amount

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Speaker 3: of time, and so in a way, the media companies,

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Speaker 3: the legacy media companies are a bit disadvantage because all

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Speaker 3: of a sudden we've decided to pivot. We but just

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Speaker 3: generally the market has decided to pivot away from subscribers

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Speaker 3: to now, you need to be profitable, and so they

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Speaker 3: didn't get the luxury of time that Netflix got to

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Speaker 3: build their business, you know, without the pressures of profitability.

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Speaker 3: Having said that, that's not thinking away anything from Netflix.

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Speaker 2: They are.

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Speaker 3: When I talk to people and I ask, you know,

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Speaker 3: what is the streaming service you want to have you

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Speaker 3: need to have, it's always Netflix. They've become the anchor.

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Speaker 3: They're becoming the xerox of copying.

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Speaker 1: Yeah, I mean clearly, Now, if you're Bob Eiger, what

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Speaker 1: do you do with that? I mean, clearly they've got

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Speaker 1: a bundling strategy coming together with Hulu. He's got plenty

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Speaker 1: of other headaches to worry about within Disney as well.

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Speaker 1: If you're Bob Iger right now, how do you deal

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Speaker 1: with that reality?

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Speaker 3: So, look, Disney's further along than all those other peers,

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Speaker 3: and as they like to remind me all the time,

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Speaker 3: Disney Plus is not even a four year old service

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Speaker 3: right launched in twenty nineteen in November, and so it's

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Speaker 3: a relatively immature business. So they say, patients, Yeah, I

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Speaker 3: get that, but they do have the scale, they do

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Speaker 3: have the assets, whether it's Disney Plus or Hulu or

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Speaker 3: you know, whenever they launch their flagship DTC ESPN service.

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Speaker 1: To be.

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Speaker 3: A player, a keeper, you know, a company of significant

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Speaker 3: scale and importance in the streaming world. And so of

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Speaker 3: all of the media companies that we're probably going to

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Speaker 3: talk about, they're the ones I'm least worry about because

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Speaker 3: they're home, They're further along than everybody else. They hopefully

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Speaker 3: will get the break even cash will break even this year,

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Speaker 3: and then given their scale and if they stay disciplined

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Speaker 3: on the cost side, profitability should should you know, start

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Speaker 3: to ramp up with this company?

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Speaker 1: I mean, profitability I think is sort of the name

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Speaker 1: of the game right now in this space. Do you

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Speaker 1: how do you see the financial health of the companies

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Speaker 1: that are in this space now that we're moving into

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Speaker 1: year two and of sort of the race to profitability?

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Speaker 1: And this matters a lot in terms of what you

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Speaker 1: look at in terms of credit ratings and such.

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Speaker 3: Yeah, yeah, it's actually it's interesting. We thought we would

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Speaker 3: come into this. We recognize that we were going to

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Speaker 3: come into this kind of a cycle back in twenty

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Speaker 3: eighteen that there were going to be investments in streaming

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Speaker 3: that we're going to result in losses and at some

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Speaker 3: point you were going to get to an inflection point

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Speaker 3: and then start to see losses decline and then eventually

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Speaker 3: get the profitability.

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Speaker 2: And we're kind of we're along.

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Speaker 3: We're along that path pretty far for some companies, you know,

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Speaker 3: for companies like either a Peacock or a Comcast or Paramount,

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Speaker 3: we're further behind and they're kind of hitting that inflection

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Speaker 3: point kind of this year. So you know, cashlow is

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Speaker 3: really important for us, So we're spending a lot of

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Speaker 3: time thinking about the cash flow impact.

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Speaker 2: On this business.

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Speaker 3: As the losses of the client and the companies have

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Speaker 3: cut back on things like SGNA and clearly on content spending,

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Speaker 3: that should help the profitability and the cash flow out

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Speaker 3: of that business. What they essentially need to do, though,

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Speaker 3: is to grow the business faster than linear TV is declining,

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Speaker 3: and that maybe that might be the biggest surprise over

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Speaker 3: the last four years, which is linear TV we thought

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Speaker 3: had more legs. The impact and the decline has been

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Speaker 3: far faster and more significant than we thought. But that's

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Speaker 3: kind of the race these companies are all playing, is

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Speaker 3: can they get streaming profitable, you know, ahead of the

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Speaker 3: pace of the declines of linear television.

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Speaker 1: And yeah, I mean, obviously cord cutting continues a pace.

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Speaker 1: The thing that I'm wondering about is we've seen some

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Speaker 1: data points in recent months about PEAKTV, and clearly the

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Speaker 1: peak TV era is over. Clearly the strikes of twenty

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Speaker 1: twenty three have allowed these companies to reset how much

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Speaker 1: they are spending on content after a number of years

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Speaker 1: of spending like drunk sailors. I just wonder, how you

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Speaker 1: know whether what twenty twenty four is going to look

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Speaker 1: like in terms of that spending, whether they're going to

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Speaker 1: be spending an appropriate amount going forward, or whether it

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Speaker 1: might actually be too little after you know, how they

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Speaker 1: conditioned the audiences to expect a certain amount a surplus

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Speaker 1: and now it's going to be too little.

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Speaker 2: Yeah, it's a great question.

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Speaker 3: I don't even think we're going to get that answer

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Speaker 3: in twenty four because the you know, the after effects

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Speaker 3: of the strike are still rolling through the ecosystem, and

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Speaker 3: so I wouldn't call it this year a normalized level

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Speaker 3: of spending.

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Speaker 2: It's probably next year Yeah, we'll.

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Speaker 3: See our consumers react to getting less content from their

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Speaker 3: streaming services. You know, I think certainly this year we're

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Speaker 3: going to see a box office that's going to be

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Speaker 3: down from last year because there's there's no movies and so,

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Speaker 3: you know, I think you're going to see a lot

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Speaker 3: of experimentation from the media companies trying to figure out

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Speaker 3: what's the right amount of spending and what's the right

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Speaker 3: pace of growth of spending, and that I don't think

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Speaker 3: we're really going to see that next year.

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Speaker 1: We're going to take a quick break when we come

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Speaker 1: back more with Navene Sarma, Managing director of S and

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Speaker 1: P Global Ratings. And we are back with Navene Sarma,

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Speaker 1: Managing director of S and P Global Race, a veteran

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Speaker 1: analyst who has been watching the media business for a

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Speaker 1: long time. Lots to ask him about. We were just

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Speaker 1: talking about the strikes. I was curious if you were

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Speaker 1: nervous about the potential for yet another strike this year.

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Speaker 1: There is the possibility of IATZI the you know, could

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Speaker 1: we see yet another disruption that could be a setback

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Speaker 1: that is pretty significant, and I mean, can could this

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Speaker 1: industry afford another disruption like we saw last year.

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Speaker 3: Yeah, one of the things I wanted to learn coming

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Speaker 3: out to LA was to take the temperature of that

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Speaker 3: and get an answer. And what I'm hearing is the

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Speaker 3: industry took a big hit from the strikes in twenty three,

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Speaker 3: and there's no appetite to go through a similar actions

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Speaker 3: in twenty four. So I'm optimistic that there's a settlement

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Speaker 3: on both sides. Both sides got hurt from the from

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Speaker 3: the strike, whether it's content creators or the studios, and

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Speaker 3: so I think that there's there's no appetite to go

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Speaker 3: through that exercise again. So I'm optimistic that there's a

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Speaker 3: resolution before there's a strike.

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Speaker 1: Although just because there's an intent for resolution doesn't mean

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Speaker 1: that there will actually be a resolution. That's something I've

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Speaker 1: certainly learned in my own years out here watching these things.

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Speaker 1: Sometimes they can't be averted, but we'll see, And I

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Speaker 1: think that's something that's going to be obviously coming together

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Speaker 1: in the number in a number of months. Something else,

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Speaker 1: as we were talking about the streaming wars, that I

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Speaker 1: think is going to be apparent this year is advertising

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Speaker 1: tears and what that's going to mean with consumers. Do

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Speaker 1: you think I think this is going to be something

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Speaker 1: that is going to be material to the companies that

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Speaker 1: are putting them out there, something that's going to be

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Speaker 1: well received by consumers. And yeah, what do you what's

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Speaker 1: your take?

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Speaker 3: Yeah, I think, well, we'll see how consumers react. I mean,

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Speaker 3: part of the play of putting an AD tier out

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Speaker 3: is lower price. And you know, one of our concerns

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Speaker 3: for the economy this year is consumers have been spending

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Speaker 3: like drunk and sales for the last couple of years.

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Speaker 3: That money will eventually start to dry up. We think

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Speaker 3: that will happen sometime this year. So putting out an

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Speaker 3: AD tier, you know, gives an option to consumers if

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Speaker 3: they're if they're stressed financially and they need to, you know,

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Speaker 3: reevaluate their budgets. Having said that, the AD tier is

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Speaker 3: a very good idea. Look, advertisers have been the slowest

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Speaker 3: to move off of television. Audience has left a long

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Speaker 3: time ago, other than for the NFL or for other sports.

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Speaker 3: But yet advertisers continues to stay on television for a

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Speaker 3: number of reasons. One because they understood the way that

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Speaker 3: television ratings impacted their business and so that you know,

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Speaker 3: the devil they know, they they know versus the devil.

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Speaker 2: They don't know.

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Speaker 3: But more importantly, they weren't getting impressions from streaming that

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Speaker 3: justified the spending, so they spent it on television they

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Speaker 3: got make goods. But now they're starting to And this

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Speaker 3: is why I think advertising has been software television. It's

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Speaker 3: not we're in an ad recession, but advertisers have moved

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Speaker 3: dollars off of television linear television onto other platforms and

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Speaker 3: now other options here, and streaming is clearly one of them,

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Speaker 3: especially as these companies have all launched these ad services,

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Speaker 3: these add tiers services, and they're getting scale, and that

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Speaker 3: has been a problem thus far that they haven't had

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Speaker 3: enough scale. And so when you go and you know,

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Speaker 3: you go to a streaming service and you say, I

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Speaker 3: want to watch the show. How many times have you

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Speaker 3: seen multiple the same ad multiple times? There's not enough impression.

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Speaker 3: Oh god, there's not an impressions and there's certainly not

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Speaker 3: enough unique impressions. That should change now that you have

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Speaker 3: a number of companies launching services, you know, ad tier services.

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Speaker 3: Although let's be honest, Disney doesn't have that many subscribers.

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Speaker 3: Netflix really doesn't have that many subscribers. On the ad tier,

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Speaker 3: so they need to really grow that quickly. One of

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Speaker 3: the things that Disney can do now that they have

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Speaker 3: an agreement with Charter is if they replicate that with

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Speaker 3: other other cable companies, they can now put Disney plus

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Speaker 3: you know, the AD tier in front of a lot

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Speaker 3: of people who have linear television. Amazon what Amazon did

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Speaker 3: last week by basically saying, you know, everybody who's got

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Speaker 3: an Amazon Prime subscription is now on the AD tier.

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Speaker 3: They went from having nobody or you know, very few

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Speaker 3: subscribers seeing advertising to the potential for their entire base

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Speaker 3: in the United States other than those who you know,

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Speaker 3: not pay the extra money to not get it, to

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Speaker 3: now get advertising. And so suddenly advertisers have the opportunity

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Speaker 3: to actually get large impressions through streaming. And you know,

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Speaker 3: it's a good thing for the overall ecosystem, for the overall.

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Speaker 3: For each individual media company, they're gonna lose money because

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Speaker 3: some of that money is gonna get drained onto an

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Speaker 3: Amazon platform. And so, you know, it's a good thing

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Speaker 3: for the ecosystem, but some of the the media companies.

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Speaker 2: Clear that you're not gonna all benefit from that.

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Speaker 1: Clearly. I'm also wondering what other trends you think are

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Speaker 1: gonna be significant to the streaming space this year, I,

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Speaker 1: for one, went into this year wondering whether we would

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Speaker 1: see the same number of competitors. Even in the streaming space.

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Speaker 1: It feels like we've been waiting for a shakeout for

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Speaker 1: quite some time. And maybe this is part of the

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Speaker 1: M and A conversation we were having before. But do

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Speaker 1: you think we're gonna see by the end of twenty

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Speaker 1: four the same number of players?

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Speaker 2: I would hope not, And and I do, and I

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Speaker 2: mean this without M and A.

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Speaker 3: I think there needs to be consolidation. I mean, if

401
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Speaker 3: you think about just the price what consumers are paying

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Speaker 3: the AD. If you add up the price for all

403
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Speaker 3: of the AD tiered services, it's about sixty five dollars.

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Speaker 3: If you go AD free, it's over one hundred and

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Speaker 3: twenty five dollars. Today, that's a big bill. It's as

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Speaker 3: expensive as a linear television. I think consumers are perpetually

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Speaker 3: confused by where they can find content. I think they

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Speaker 3: would love to watch, They would love to have somebody

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Speaker 3: aggregated laugh of you you.

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Speaker 2: Know, laugh, gee, have I heard of that exactly? We're

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Speaker 2: going back to that.

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Speaker 3: But I think they would like to see aggregation of

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Speaker 3: all of this, and here's the challenge for that to happen.

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Speaker 3: I think we would all like to see that, but

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Speaker 3: I think the challenges here are multiple.

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Speaker 2: One is who owns the customer? Right?

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Speaker 3: I don't think any of the media companies, now that

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Speaker 3: they're actually seeing data from the customers, wants to either

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Speaker 3: share the data or necessarily, you know, share the customer

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Speaker 3: with Whoever is the aggregator there, Who does the billing,

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Speaker 3: who does the customer care? Does you know Netflix have

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Speaker 3: to share its data with the aggregator? Does Disney get

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Speaker 3: to see the Netflix data? I think all of these

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Speaker 3: things need to get resolved before you, before you, before

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Speaker 3: you can.

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Speaker 2: Go that route. Having said that, I mean, who are aggregators.

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Speaker 3: We've got Roku, we've got Amazon, We've got the cable companies.

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Speaker 3: So there's a number of players who would be interested

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Speaker 3: in aggregating it. So and clearly customers and consumers want

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Speaker 3: to see that as well, but we've got a lot

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Speaker 3: of impediments the way that have that happened.

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Speaker 1: That is true, and we've certainly seen some degree of bundling,

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Speaker 1: which I guess is sort of some sort of midpoint

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Speaker 1: between the aggregators and the individual players. Any momentum expected.

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Speaker 1: There lots of talk, not that much walk.

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Speaker 3: Yeah, I mean I have a Roku box and trying

437
00:24:53,880 --> 00:24:57,040
Speaker 3: to explain to you know, my kids and my wife

438
00:24:57,119 --> 00:24:59,840
Speaker 3: how to navigate that where you've got different tiles and

439
00:25:00,040 --> 00:25:02,679
Speaker 3: how do you go from here to hear. It's not

440
00:25:02,720 --> 00:25:06,040
Speaker 3: the optimum solution, and I think consumers don't particularly like that.

441
00:25:06,080 --> 00:25:08,719
Speaker 3: They would like, you know, well, they used to have,

442
00:25:08,760 --> 00:25:11,919
Speaker 3: which is linear television type bundles where you get a

443
00:25:11,960 --> 00:25:14,280
Speaker 3: guide and you can find everything by just a simple search.

444
00:25:16,359 --> 00:25:19,520
Speaker 1: Well, my god, there would be about fifty more questions

445
00:25:19,520 --> 00:25:21,920
Speaker 1: if you were to cat you know, get onto every

446
00:25:22,160 --> 00:25:31,240
Speaker 1: single trend of note here, any one last prediction trend

447
00:25:31,359 --> 00:25:34,439
Speaker 1: to watch that we have not touched on, that is

448
00:25:36,760 --> 00:25:40,560
Speaker 1: macro in this business that you feel like keep an

449
00:25:40,560 --> 00:25:45,359
Speaker 1: eye on this this year. Have you spent any time

450
00:25:45,440 --> 00:25:49,480
Speaker 1: yet with Apple's Vision Pro for instance, any thoughts there?

451
00:25:49,880 --> 00:25:50,880
Speaker 2: I haven't.

452
00:25:51,720 --> 00:25:52,919
Speaker 3: I don't know if I want to show what is it?

453
00:25:52,920 --> 00:25:56,119
Speaker 3: Thirty five hundred?

454
00:25:56,480 --> 00:25:57,600
Speaker 2: I no, I have not.

455
00:25:58,480 --> 00:26:05,919
Speaker 1: So Okay, have you spent any time with let's see

456
00:26:06,080 --> 00:26:09,520
Speaker 1: AI and what that could be meaning for the media

457
00:26:09,600 --> 00:26:10,640
Speaker 1: business at this time?

458
00:26:10,720 --> 00:26:12,119
Speaker 2: I've spent a lot of time. Yeah, actually that's a

459
00:26:12,119 --> 00:26:14,440
Speaker 2: good question, Okay, talking a lot about that, which is.

460
00:26:16,040 --> 00:26:19,720
Speaker 3: The I mean the strikes. You're interesting because of how

461
00:26:20,200 --> 00:26:23,160
Speaker 3: front and center AI was in both the writer's discussion

462
00:26:23,200 --> 00:26:27,600
Speaker 3: as well as the actors discussion. And I and I think,

463
00:26:28,359 --> 00:26:32,080
Speaker 3: I think how it was resolved it was good for

464
00:26:32,119 --> 00:26:35,879
Speaker 3: the industry. Right, the writers can use AI, but they

465
00:26:35,920 --> 00:26:40,880
Speaker 3: aren't forced to use it, and there's rules around how.

466
00:26:40,520 --> 00:26:44,000
Speaker 2: They get you know, pay and recognition and things like that.

467
00:26:44,359 --> 00:26:47,320
Speaker 3: I think really what's really important is that you have

468
00:26:47,400 --> 00:26:50,479
Speaker 3: a set of rules in the United States, copyright rules

469
00:26:50,520 --> 00:26:56,760
Speaker 3: and laws that basically protect content and and so I

470
00:26:56,760 --> 00:26:59,720
Speaker 3: think at the end of the day, you can you

471
00:26:59,720 --> 00:27:02,000
Speaker 3: can go and try a bunch of the things with AI.

472
00:27:02,240 --> 00:27:04,640
Speaker 3: And we've got companies who are now so I read

473
00:27:04,640 --> 00:27:08,760
Speaker 3: an article about some companies who were basically replicating movies

474
00:27:09,960 --> 00:27:13,760
Speaker 3: without the you know, without the studio's permission. At the

475
00:27:13,840 --> 00:27:15,520
Speaker 3: end of the day, the rule, the rule of law,

476
00:27:15,920 --> 00:27:18,679
Speaker 3: protection of copyright is the most important part in this country.

477
00:27:18,720 --> 00:27:21,080
Speaker 3: And so AI can be a tool that can improve

478
00:27:21,119 --> 00:27:24,960
Speaker 3: the process and improve content creation. But as long as

479
00:27:24,960 --> 00:27:28,359
Speaker 3: the rules are enforced through the laws, I think you

480
00:27:28,520 --> 00:27:31,000
Speaker 3: I think AI isn't a threat to content creation.

481
00:27:31,800 --> 00:27:36,520
Speaker 1: H Well, we'll see how that prediction holds up in

482
00:27:36,560 --> 00:27:40,879
Speaker 1: the future. It is very early days and I feel

483
00:27:40,880 --> 00:27:44,360
Speaker 1: like this conversation is just scratching the surface in terms

484
00:27:44,440 --> 00:27:50,720
Speaker 1: of so many different trends to watch in a year

485
00:27:50,800 --> 00:27:55,320
Speaker 1: that is going to be very, very interesting in the

486
00:27:55,359 --> 00:27:57,800
Speaker 1: media space, and so glad to have you here in

487
00:27:57,840 --> 00:28:03,680
Speaker 1: avin to get your insights. Thanks again for your fourth

488
00:28:03,800 --> 00:28:07,199
Speaker 1: appearance on this podcast since twenty nineteen.

489
00:28:07,440 --> 00:28:09,200
Speaker 2: Thank you very much for having me again.

490
00:28:15,560 --> 00:28:17,919
Speaker 1: Thanks for listening. Be sure to leave us a review

491
00:28:17,960 --> 00:28:21,400
Speaker 1: at Apple Podcasts and Amazon Music. We love to hear

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00:28:21,480 --> 00:28:24,520
Speaker 1: from listeners. Please go to Variety dot com to sign

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00:28:24,600 --> 00:28:28,760
Speaker 1: up for the free weekly Strictly Business newsletter, and don't

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Speaker 1: forget to tune in next week for another episode of

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Speaker 1: Strictly Business.