WEBVTT - How Gunpowder & Sky Makes Movies for Millennials 0:00:06.400 --> 0:00:08.959 This is Brent Line of Variety Magazine, and I'm joined 0:00:09.000 --> 0:00:12.480 today in our Los Angeles studio with the co founders 0:00:12.480 --> 0:00:16.279 of Gunpowder and Sky, Van Tuffler and Flora's Bauer. In 0:00:16.320 --> 0:00:18.439 a very short period of time, gun Powder and Sky 0:00:18.480 --> 0:00:21.440 has established itself as a major force in the indie space, 0:00:21.800 --> 0:00:25.160 releasing such films as Lords of Chaos, Hearts, Beat Loud, 0:00:25.280 --> 0:00:31.440 and Her Smell. It's my great pleasure to have Van 0:00:31.520 --> 0:00:33.800 in Flora's here and we're gonna talk a little bit 0:00:33.840 --> 0:00:39.840 about some major industry trends and familiarize people with Gunpowder 0:00:39.840 --> 0:00:43.400 and Sky. I think, sort of to start, I'm really 0:00:43.440 --> 0:00:48.400 interested in your take on the theatrical space right now 0:00:48.440 --> 0:00:51.760 because there's been a lot written about sort of this 0:00:52.200 --> 0:00:57.120 box office apocalypse. You know, things don't seem to be working, uh, 0:00:57.200 --> 0:01:00.360 theatrically in the way they once did, and that's been 0:01:00.400 --> 0:01:04.839 sort of focused primarily on the major studio films. What's 0:01:04.880 --> 0:01:08.039 been sort of this scene in the indie space? Are 0:01:08.080 --> 0:01:13.639 are things um connecting theatrically? Is is there some spill 0:01:13.680 --> 0:01:17.160 over from sort of the problems and the larger theatrical space. 0:01:17.400 --> 0:01:21.479 How's that impacting of the indie space right now? I mean, 0:01:21.840 --> 0:01:25.880 from my perspective, the key is flexibility. Uh, and that's 0:01:26.240 --> 0:01:30.280 what we all talk about amongst ourselves and to filmmakers. 0:01:30.400 --> 0:01:34.399 So unlike the major studios, there's a lot of baggage 0:01:34.440 --> 0:01:39.280 around the relationships with the theater owners and distribution UM. 0:01:39.560 --> 0:01:45.280 And I think being open to how long movies stay 0:01:45.319 --> 0:01:49.920 in theaters, how they released, how they're marketed, UM, and 0:01:50.360 --> 0:01:53.800 when they go to t VOD or SAT or other windows. 0:01:54.320 --> 0:01:57.640 We whenever we go into a film, whether we're making 0:01:57.680 --> 0:02:00.160 it or acquiring it, we talked to the filmmaker is 0:02:00.240 --> 0:02:04.840 to say, let's optimize the release. Sometimes that means bypassing 0:02:04.880 --> 0:02:09.760 theatrical altogether. Sometimes that means a hastened window for theatrical, 0:02:10.480 --> 0:02:14.560 but uh, not being precious that it needs a certain 0:02:14.800 --> 0:02:19.840 level of promotion and time in theaters. UM. Now theater 0:02:19.960 --> 0:02:25.000 owners less flexible, but UM, particularly for young people, you 0:02:25.040 --> 0:02:27.320 have to give them a real reason to spend money 0:02:27.320 --> 0:02:32.440 and go to theaters because the experience isn't as wonderful 0:02:32.680 --> 0:02:34.679 as it was for us as kids. It was, first 0:02:34.680 --> 0:02:36.680 of all, is the only time you could see movies. 0:02:37.320 --> 0:02:41.640 But UM, technology is enabled kids to watch stuff on 0:02:41.720 --> 0:02:45.240 demand how they want, when they want. At their freedom. UM, 0:02:45.400 --> 0:02:47.760 So you really have to give them a compelling reason 0:02:47.800 --> 0:02:49.880 of making an event to go to theaters. And that's 0:02:50.080 --> 0:02:54.720 that's a pretty high bar. Um So I think that uh, 0:02:55.120 --> 0:03:00.120 having flexibility, being a smaller independent studio, it enables you 0:03:00.160 --> 0:03:03.840 to do that. Um And the fact of the matter 0:03:04.040 --> 0:03:06.640 is the trending is just not great for movie with you. 0:03:06.760 --> 0:03:09.680 Someone told me, um, and I grew up in New York, 0:03:09.800 --> 0:03:15.400 so that there are twenty plus percent less seats in 0:03:15.520 --> 0:03:18.720 particularly Midtown to downtown then there were a few years ago. 0:03:19.520 --> 0:03:25.079 That doesn't bode well for theatrical revenues. Um. So when 0:03:25.080 --> 0:03:28.520 you're when you're talking about having flexibility, what do you 0:03:28.520 --> 0:03:31.120 mean by that? What sort of Gunpowder and Sky's approach? 0:03:31.200 --> 0:03:33.480 When when you pick up a film, are you doing 0:03:33.639 --> 0:03:37.000 a traditional theatrical window? Are you doing some kind of hybrid? 0:03:37.000 --> 0:03:41.119 Are you going straight to um s bod's avods? How 0:03:41.160 --> 0:03:45.000 do you approach a release of a film? I'll let 0:03:45.000 --> 0:03:48.760 you speak in a second, but all of the above. So, Uh, 0:03:48.920 --> 0:03:55.000 for example, we haven't sort of concluded this definitively, but 0:03:55.160 --> 0:03:58.480 we just acquired a documentary on on this wonderful young 0:03:58.560 --> 0:04:01.920 rapper Little People on fortun Only Die he's a sort 0:04:01.920 --> 0:04:06.320 of emblematic of these young rappers who go from obscurity 0:04:06.440 --> 0:04:12.480 to infamy of via SoundCloud. Um. And unfortunately he overdosed, 0:04:13.000 --> 0:04:18.359 but he has these rabid rabbit fans, rabbid young fans, 0:04:18.960 --> 0:04:22.039 and we are thinking about doing a one night only 0:04:22.080 --> 0:04:25.440 release that may have exclusive music in theaters and then 0:04:25.680 --> 0:04:30.160 it will go to tivon spot, So literally twenty four hours. Um, 0:04:30.160 --> 0:04:31.880 we did this, you know, when I was at MTV 0:04:32.040 --> 0:04:34.440 with Madonna's Truth or Dare to the second movie, we 0:04:34.520 --> 0:04:38.440 had one week in theaters, and so sometimes we do 0:04:38.560 --> 0:04:41.320 ninety days, uh, and then we go to tivon spots. 0:04:41.400 --> 0:04:44.360 Sometimes we'll sell movies right to spots. So the first 0:04:44.400 --> 0:04:49.000 four movies we did, we're with Jason Blum, and we 0:04:49.040 --> 0:04:51.760 sold two of those to Netflix, and two of those 0:04:51.800 --> 0:04:57.200 two HBO and CAM. One in particular on Netflix was 0:04:57.279 --> 0:05:01.479 released over the Thanksgiving holidays and probably more people saw 0:05:01.520 --> 0:05:03.880 that within a week than have seen a lot of 0:05:04.000 --> 0:05:08.560 Jason's films and theaters, which he admitted, Um, So I 0:05:08.600 --> 0:05:10.640 think you just have to figure out what's right for 0:05:10.720 --> 0:05:14.800 each project. And are you finding that that's you know, 0:05:14.839 --> 0:05:18.080 a more profitable model for you? Does it help you 0:05:18.440 --> 0:05:23.600 in terms of your marketing spend, your distribution costs. Are 0:05:23.640 --> 0:05:27.840 you getting more of the revenue from a film release 0:05:28.000 --> 0:05:31.680 by not going, you know, a traditional sort of theatrical 0:05:32.440 --> 0:05:38.640 run for some of these films. Definitely, I think, UM, 0:05:38.680 --> 0:05:42.120 because we don't pre set the distribution strategy and we 0:05:42.240 --> 0:05:44.400 really look at it in a holistic way. How can 0:05:44.480 --> 0:05:51.159 we create maximum awareness UM with efficient spending. UM. We 0:05:51.240 --> 0:05:54.480 look at all the windows, including theatrical very specifically. So 0:05:54.560 --> 0:05:57.479 for us, there's no point over spending theatrical if we 0:05:57.560 --> 0:06:00.240 don't think that is where most of our audiences to 0:06:00.320 --> 0:06:06.040 watch the film. UM. And we always set the distribution 0:06:06.080 --> 0:06:10.000 strategy after testing it and thinking about it a lot internally. 0:06:10.080 --> 0:06:14.719 So probably our biggest windows from a revenue point of view, 0:06:15.040 --> 0:06:17.240 or at least a net revenue point of view, off 0:06:17.240 --> 0:06:23.279 the marketing s bend are our second window, so so HBO, Netflix, TVA. 0:06:24.520 --> 0:06:28.360 And when you're having conversations with with filmmakers, I mean, 0:06:28.400 --> 0:06:30.719 how open are they to this? Because I feel like 0:06:30.760 --> 0:06:34.320 you still read in trade press, you know when there's 0:06:34.320 --> 0:06:36.440 a big bidding war or something like that, that you 0:06:36.480 --> 0:06:39.520 know that that these filmmakers still want that that traditional 0:06:39.680 --> 0:06:43.560 theatrical release. Is that becoming you know, a little bit 0:06:43.560 --> 0:06:47.880 of an anachronism. Or are people more open to two 0:06:48.000 --> 0:06:51.280 novel distribution strategies or do you still have to kind 0:06:51.279 --> 0:06:53.800 of have a kind of a tough conversation with people. 0:06:54.680 --> 0:06:57.120 It depends they're much more open than they used to be. 0:06:57.760 --> 0:07:01.280 You know, if I were to do uh Jack Assid 0:07:01.360 --> 0:07:05.279 Napoleon Dynamite, they may have bypassed theaters altogether. Right, But 0:07:05.440 --> 0:07:09.200 on one in particular, I acquired this movie foot fist 0:07:09.240 --> 0:07:13.920 Way with Will Smith and Adam McKay and Jody Hill, 0:07:14.280 --> 0:07:17.560 who did He's Bounded Down, Who's just a great, wonderful 0:07:17.720 --> 0:07:21.800 young director. Uh. We we felt because I think it 0:07:21.840 --> 0:07:25.840 may have been the second or first worst testing movie 0:07:25.840 --> 0:07:29.800 in Paramounts history, right, And we tried to convince Jody 0:07:29.920 --> 0:07:34.240 to release it on Funnier Die and MTV dot com 0:07:34.280 --> 0:07:36.880 at the time, and he wanted a traditional theatrical window. 0:07:37.000 --> 0:07:39.480 Was his first movie, so we couldn't argue with that. 0:07:39.520 --> 0:07:42.880 But I bet if we had that conversation today, uh, 0:07:42.920 --> 0:07:47.680 he might feel differently because we would market it socially 0:07:47.720 --> 0:07:51.000 and viral e and potentially get more eyeballs than would 0:07:51.040 --> 0:07:53.320 go see that movie and pay ten knowledge to see 0:07:53.320 --> 0:07:55.920 in the movie theaters. And just to add, I think 0:07:55.960 --> 0:07:58.920 a lot of the people and filmmakers were talking to 0:07:59.120 --> 0:08:02.520 ultimately also want a successful release, So it's not only 0:08:02.560 --> 0:08:06.720 about the amount of theaters. They want the release to 0:08:06.760 --> 0:08:09.800 be seen as successful and they want to get into 0:08:09.800 --> 0:08:13.000 the theaters where they think the audience which will most 0:08:13.080 --> 0:08:15.560 likely want to see it is going to see it. 0:08:16.080 --> 0:08:19.560 So it's more quality over quantity, the same as in 0:08:19.680 --> 0:08:22.400 terms of the length of the release. Sometimes I wonder 0:08:22.400 --> 0:08:25.680 when when people talk about, you know, the theatrical experience, 0:08:25.760 --> 0:08:29.040 and they have this sort of reverence for it. Um. 0:08:29.080 --> 0:08:31.200 I mean, do you think consumers feel the same way, 0:08:31.240 --> 0:08:35.560 because I know that that quite frankly, I don't always 0:08:35.559 --> 0:08:37.480 have a wonderful experience when I go to a movie theater. 0:08:37.520 --> 0:08:39.920 Maybe it's dirty, maybe people are talking. I mean, maybe 0:08:39.960 --> 0:08:42.640 I would prefer to just watch something in the home. 0:08:43.120 --> 0:08:47.400 I mean, is that something that that people aren't really 0:08:47.440 --> 0:08:49.640 listening to what consumers are telling them when they sort 0:08:49.679 --> 0:08:52.880 of talk about it in that and that sort of, um, 0:08:52.920 --> 0:08:57.480 almost religious quasi religious way. It's hard. I mean, you 0:08:57.520 --> 0:09:02.160 think about the evolutionary lack of evolution of the in 0:09:02.440 --> 0:09:06.800 theater experience. It hasn't changed that much, right. I mean, 0:09:06.880 --> 0:09:10.080 you've got some Imax theaters, you've got theaters, your reserve 0:09:10.160 --> 0:09:14.680 seats um that are are wonderful, but they're they're more 0:09:14.760 --> 0:09:19.320 of the anomaly. Uh. And so I think you've got 0:09:19.360 --> 0:09:23.360 to make either the movie or the experience exceptional. Having 0:09:23.360 --> 0:09:25.440 a bar and a lot of the movie theaters is good. 0:09:25.480 --> 0:09:29.599 So Alamo is having success with younger movie going audiences 0:09:29.679 --> 0:09:32.560 because it's a better experience, it's a night out. But 0:09:32.880 --> 0:09:35.520 I think that people are not listening enough to the 0:09:35.559 --> 0:09:38.840 consumers saying, you know what, it's not worth me paying 0:09:38.880 --> 0:09:41.760 all this money for that experience. I'd rather stay home 0:09:41.880 --> 0:09:44.079 or wait for the movie to get into a window 0:09:44.160 --> 0:09:47.360 that I can enjoy at home. Yeah, and it's I 0:09:47.360 --> 0:09:49.160 think it's it's it's the cost of the ticket. But 0:09:49.200 --> 0:09:52.559 always deals so driving there and the parking and the X, 0:09:52.720 --> 0:09:55.200 Y and Z, and we were talking a little bit 0:09:55.240 --> 0:09:59.080 about the sort of the filmmakers and and they're growing 0:09:59.240 --> 0:10:03.080 flexibility with some of these distributions strategies. But there's office 0:10:03.240 --> 0:10:07.199 obviously another party involved in that, and that's the theater 0:10:07.240 --> 0:10:12.760 owners themselves. So what are you sort of hearing from 0:10:12.960 --> 0:10:17.960 that end of things? I mean, are they being flexible 0:10:18.000 --> 0:10:20.800 to about letting your movies in. I mean, how how 0:10:20.960 --> 0:10:25.600 is that kind of conversation too? You know, I think 0:10:25.640 --> 0:10:28.360 they've been pretty great to tell you the truth, as 0:10:28.440 --> 0:10:31.040 long as you work with them in terms of release 0:10:31.200 --> 0:10:33.959 dates and and when you have the theaters, they want 0:10:34.200 --> 0:10:39.160 more programming, they want alternative program and clearly Disney students 0:10:39.200 --> 0:10:42.800 still doing really well with four quadrant event movies, but 0:10:42.920 --> 0:10:45.920 they like to have the options. Now that may mean 0:10:46.000 --> 0:10:48.520 you're not in three thousand theaters. You can start in 0:10:48.600 --> 0:10:51.720 fifty and go to a few hundred. But I think 0:10:51.880 --> 0:10:56.600 that the theater owners like alternatives, and I also believe 0:10:56.679 --> 0:10:59.320 they'll maybe movie past and get it right. They're open 0:10:59.360 --> 0:11:03.560 to altern of pricing, particularly at low traffic times a day. 0:11:04.559 --> 0:11:08.480 You mean sort of subscription service kinds of things ees 0:11:08.720 --> 0:11:16.080 or flexible pricing. Um, let's let's go back to kind 0:11:16.080 --> 0:11:19.560 of the formation of Gunpowder and Sky. Um Fan, I 0:11:19.600 --> 0:11:23.000 know that you had a lot of experience. You were 0:11:23.000 --> 0:11:28.079 at Vatcom, you were at MTV films, UM and uh Floriss, 0:11:28.640 --> 0:11:30.839 you were at end them all. How did you guys 0:11:30.880 --> 0:11:35.320 get together and why did you see this as a 0:11:35.440 --> 0:11:41.160 space you you wanted to go into? Well, you know, 0:11:41.240 --> 0:11:45.720 I think separately Floris and I had a similar notion 0:11:45.800 --> 0:11:50.520 of kind of a premium content studio that was sort 0:11:50.520 --> 0:11:54.520 of youth oriented, forward looking, that would create content for 0:11:54.600 --> 0:11:58.880 newer platforms. It just felt like there was a content renaissance. 0:11:58.920 --> 0:12:03.840 There were platforms emerging UM every day, and a lot 0:12:03.880 --> 0:12:09.000 of the content, particularly for young people, was was amateur 0:12:09.160 --> 0:12:12.160 was based on you know, kids were posting videos, so 0:12:12.200 --> 0:12:16.200 there was an opportunity to create more premium content that 0:12:16.320 --> 0:12:20.960 targeted young people. And UM also there was gonna be 0:12:21.440 --> 0:12:24.319 uh sort of a day of reckoning with linear TV 0:12:24.480 --> 0:12:26.760 channels where they were going to have to find alternative 0:12:26.760 --> 0:12:31.440 sources of programming because the audiences were getting smaller. So 0:12:31.600 --> 0:12:35.800 all those things lad each of us separately to uh 0:12:36.200 --> 0:12:40.400 come up with this notion of creating UM a content studio, 0:12:40.480 --> 0:12:44.720 creating brands that could live on O T T platforms 0:12:45.240 --> 0:12:49.680 targeting young people. And we got together primarily through Peter 0:12:49.800 --> 0:12:54.640 Turning and Honor and uh this was when when did 0:12:54.640 --> 0:12:59.240 you guys form the company story? And we were prepared 0:12:59.280 --> 0:13:01.640 for it hobby or something. So the market looks very 0:13:01.679 --> 0:13:04.880 different at that time and what right, well, when we 0:13:05.000 --> 0:13:07.240 when we came up with the notion of the studio. 0:13:07.480 --> 0:13:12.800 We were seeing that audience isn't obviously specifically younger people 0:13:12.840 --> 0:13:17.040 were moving where very quickly from traditional and linear TV 0:13:17.280 --> 0:13:21.079 channels to these new platforms, and on these new platforms 0:13:21.120 --> 0:13:24.040 you had, like what Ben was saying, from cat videos, 0:13:24.320 --> 0:13:27.040 make the totals, etcetera, which are very meaningful in themselves, 0:13:27.080 --> 0:13:31.720 but it's not, as we call it, kind of premium content. 0:13:33.280 --> 0:13:36.199 With the shift, we assumed that at some point when 0:13:36.240 --> 0:13:38.920 the audience moves, as a rule of media, at some 0:13:39.000 --> 0:13:45.920 point um uh, advertising, subscription, etcetera, revenues will follow, and 0:13:45.960 --> 0:13:50.440 because of that, you're able to spend more money on 0:13:50.720 --> 0:13:53.720 the content. And with more money coming into the space, 0:13:54.080 --> 0:14:00.320 more quality, newer creators, newer formats, um etcetera. That what 0:14:00.520 --> 0:14:03.360 we were betting on when we came into the market 0:14:03.400 --> 0:14:06.600 and set up this new studio purely focused on premium 0:14:06.640 --> 0:14:11.040 content for the space. That market was not there right 0:14:11.160 --> 0:14:13.680 it was. Everybody was talking about the digital pennies and 0:14:13.760 --> 0:14:16.719 the m c ns at that stage. UM, So we 0:14:16.720 --> 0:14:19.320 were taking a bet that what we thought what was 0:14:19.320 --> 0:14:23.440 gonna happen was gonna happen. You had some smaller digital 0:14:23.480 --> 0:14:27.440 players who were uh starting to spend some money like 0:14:27.480 --> 0:14:33.720 the the go nineties watchables, et cetera. Um, since then, 0:14:34.360 --> 0:14:38.160 we we we the market has actually shifted way quicker 0:14:38.200 --> 0:14:40.960 than we could have hoped for. With now all these 0:14:41.080 --> 0:14:45.200 new O T T platforms which are looking for differentiated 0:14:45.240 --> 0:14:48.040 content as well as you focused content. So we're having 0:14:48.600 --> 0:14:54.240 the Warners, the Apples, the Netflix, Quimby, come const launching 0:14:54.240 --> 0:14:59.560 news services, the monetization on YouTube becoming better. Um, So 0:15:00.160 --> 0:15:05.120 there is more and more outlets and demands uh for 0:15:05.240 --> 0:15:10.200 premium content, differentiated premium content from both films, series as 0:15:10.200 --> 0:15:13.240 well as brands and channels. So where do you fit 0:15:13.360 --> 0:15:15.760 into all of this? Because you're absolutely right, I feel 0:15:15.760 --> 0:15:18.040 like in the last year and a half, I mean, 0:15:18.760 --> 0:15:22.040 you have such major players coming into this space. Um. 0:15:22.080 --> 0:15:27.080 You know, as you mentioned, Warner just announcing yesterday just 0:15:27.360 --> 0:15:32.560 just you know this week, Uh, their their HBO Max service. 0:15:32.640 --> 0:15:36.080 You have Disney Plus coming in, you have this a 0:15:36.240 --> 0:15:42.240 VOD service that Comcast is launching. Apple. Where do you 0:15:42.320 --> 0:15:44.800 fit into this? Are you going to be a provider 0:15:44.800 --> 0:15:47.320 of content for them? Are you a competitor? How does 0:15:47.360 --> 0:15:49.840 this work? And then you have something like Quimby, which 0:15:49.840 --> 0:15:51.440 is which is a little different with its sort of 0:15:51.480 --> 0:15:56.560 short form content. Well, we're providing content to all those services. 0:15:56.640 --> 0:15:59.680 To tell you the truth, we haven't announced the series, 0:15:59.720 --> 0:16:02.320 but to Warner streaming service with Quimby, we're doing that 0:16:02.480 --> 0:16:05.840 first series, fifty States of Terror. We're doing movies for 0:16:05.920 --> 0:16:09.760 these services. Um, so it's it's a great time to 0:16:09.880 --> 0:16:14.000 make premium content for these different platforms, you know. In 0:16:14.040 --> 0:16:19.800 addition to that, though, we're not sort of randomly um uh, 0:16:20.040 --> 0:16:23.800 kind of picking the categories that we play in. We 0:16:23.880 --> 0:16:32.360 have specific genres that we're doubling down in, so sci fi, horror, music, unscripted, um, comedy. 0:16:32.720 --> 0:16:36.360 And as part of that, we're also creating these sort 0:16:36.360 --> 0:16:42.440 of branded ecosystems that have primarily lived in the AVOD world. So, um, 0:16:42.480 --> 0:16:46.200 we have a channel called Dust, which is a sci 0:16:46.280 --> 0:16:49.840 fi channel, and if you think about it, the next 0:16:49.920 --> 0:16:53.360 Ridley Scott will come out of the digital ecosystem. And 0:16:53.400 --> 0:16:57.200 in fact, we've got over five hundred short films right 0:16:57.320 --> 0:17:02.720 with with name actors. We were acquired George Lucas's first film, 0:17:02.880 --> 0:17:06.920 Robert Semeckis and all these young filmmakers are making these 0:17:06.960 --> 0:17:10.800 sort of thirteen or less minute films that live in 0:17:10.800 --> 0:17:14.160 this world. They're consumed in this world. But then there's 0:17:14.200 --> 0:17:17.320 this i P that we can spin off and sell 0:17:17.400 --> 0:17:21.600 to other platforms, so they're also i P forms as well. 0:17:22.240 --> 0:17:25.320 Um and so these genres we pick, we double down 0:17:25.320 --> 0:17:27.600 on them, We create content if they belong on a 0:17:27.600 --> 0:17:31.600 different platform like quimby or in theaters. Uh, you know 0:17:31.640 --> 0:17:36.840 a movie prospect came out of dust um, and then 0:17:37.040 --> 0:17:40.000 that's where they will live. So it's this combination of 0:17:40.640 --> 0:17:44.480 branded ecosystems that aren't really competing with quib because they're 0:17:44.480 --> 0:17:47.920 living on Facebook and YouTube and roku and they live 0:17:47.960 --> 0:17:51.720 on Apple and Samsung and other platforms. Uh. And then 0:17:51.760 --> 0:17:54.000 we have i P that we kind of sell to 0:17:54.119 --> 0:17:59.520 different platforms and you're making money through advertising or through 0:17:59.560 --> 0:18:04.240 subscribe option or how does that work too? So so 0:18:04.480 --> 0:18:08.680 these these these brands, they do everything as Van mentioned, 0:18:08.760 --> 0:18:13.240 from short form two series, two films to bodcasts, and 0:18:13.280 --> 0:18:15.919 we have around direct to consumer channels which live on 0:18:15.920 --> 0:18:20.240 across a bunch of platforms. On the films and series, 0:18:20.320 --> 0:18:26.240 we make money through books Office, ti vo, UM sales 0:18:26.320 --> 0:18:31.600 to Netflix, HBO. Then the channels we generate revenues through 0:18:32.160 --> 0:18:38.280 programmatic advertising UM, and we will through affiliate fees and 0:18:38.320 --> 0:18:41.719 subscription in the coming period. So I think and and 0:18:41.880 --> 0:18:45.240 coming back to, we think the opportunity is there is 0:18:45.280 --> 0:18:48.840 a big opportunity for for indie studios to create and 0:18:49.000 --> 0:18:54.160 sell grade content, especially if you have differentiated content, targeted content, 0:18:54.880 --> 0:18:58.159 and then creating these larger brands where we want to 0:18:58.160 --> 0:19:03.520 be a trusted cuader and programmer within a specific genre. 0:19:04.240 --> 0:19:08.560 And these brands can live on the bigger platforms like 0:19:08.800 --> 0:19:13.680 Apple and Amazon and Samsung and Comcast, so where instead 0:19:13.720 --> 0:19:17.280 of only selling one off films and series were also 0:19:17.320 --> 0:19:21.679 packaging them in larger propositions. And I think as the 0:19:21.760 --> 0:19:28.439 next um ah he said iteration, I think you're going 0:19:28.480 --> 0:19:31.000 to see a lot of these larger platforms which need 0:19:31.080 --> 0:19:34.119 to become larger and larger and attract more and more people. 0:19:34.800 --> 0:19:39.160 Everybody's focused on originals, original content, which is extremely important, 0:19:39.160 --> 0:19:42.880 but in order for these platforms to ultimately become successful, 0:19:43.400 --> 0:19:47.320 they need more existing brands on their platform to attract 0:19:47.520 --> 0:19:54.280 larger amounts of audience and reduce programming and marketing calls 0:19:54.480 --> 0:19:57.240 and have sticky content on their platforms. So I think 0:19:57.240 --> 0:20:00.119 you're going to see a lot of brands existing and 0:20:00.240 --> 0:20:03.399 new brands come up. Is that because it's almost like 0:20:03.560 --> 0:20:07.040 a sign of quality or something for for a user. 0:20:07.119 --> 0:20:08.760 What why do you think? I think, yeah, I think 0:20:08.800 --> 0:20:11.000 you're seeing a lot of people who are now saying 0:20:12.600 --> 0:20:15.679 I think one which which is I think a mistake 0:20:15.720 --> 0:20:19.120 where people say young people only want v o D content, 0:20:19.160 --> 0:20:21.040 They want to watch it whatever they want, and they 0:20:21.040 --> 0:20:23.880 want to find it themselves. I think ultimately people care 0:20:23.920 --> 0:20:27.200 about brands right people where the same sneakers people want 0:20:27.200 --> 0:20:30.560 to listen to playlists Spotify. You want to be part 0:20:30.600 --> 0:20:32.480 of a brand. You want to know that if you 0:20:32.600 --> 0:20:36.119 go to a trusted brand, you're going to find something 0:20:36.160 --> 0:20:38.080 good and you can talk about it with your friends. 0:20:38.840 --> 0:20:45.119 Um and UM. I think that reduces the amount of 0:20:45.760 --> 0:20:49.760 spend on programming and your it reduces your spend on marketing. 0:20:50.480 --> 0:20:53.359 And I think a lot of people now we've seen 0:20:53.400 --> 0:20:56.480 the issues with for example, Netflix, that sometimes it takes 0:20:56.480 --> 0:20:59.359 you fifteen or thirty minutes to find something you want, 0:21:00.359 --> 0:21:03.679 and I think people are going to start focusing on 0:21:03.720 --> 0:21:07.879 that more and more. Um. It makes a lot of 0:21:07.880 --> 0:21:11.040 sense that that a smaller player, whose nimble could really 0:21:11.080 --> 0:21:14.080 profit from from all this change, because it feels like 0:21:14.119 --> 0:21:18.199 this change is just so accelerated. Things are so different 0:21:18.280 --> 0:21:22.600 and just a matter of months. But I've also recently 0:21:22.600 --> 0:21:26.159 been just sort of going around to traditional studios and 0:21:26.240 --> 0:21:31.080 I see this massive infrastructure, and I wonder what your 0:21:31.119 --> 0:21:33.919 thoughts are, as people who have also you know, worked 0:21:33.920 --> 0:21:38.480 in that space to how do these companies pivot? I mean, 0:21:38.560 --> 0:21:42.840 is it difficult when you have all of this infrastructure, 0:21:42.880 --> 0:21:45.840 these jobs, these all these people who are on your payroll, 0:21:46.000 --> 0:21:50.560 and you know, ways of releasing content to the world 0:21:50.680 --> 0:21:53.159 that are so sort of baked into your business model. 0:21:54.040 --> 0:21:57.200 How how hard is it for these companies to adjust 0:21:57.240 --> 0:22:06.560 to to this you know, new Frontier. It's, um, it's 0:22:06.600 --> 0:22:10.840 really hard. I think that um, you know what was 0:22:10.880 --> 0:22:14.639 his Steve Jobs expression that the people created the last 0:22:14.640 --> 0:22:16.520 invention are probably the last people are going to do 0:22:16.600 --> 0:22:18.119 the next one, because I have to get out of 0:22:18.119 --> 0:22:22.439 their own way. And there's all this sort of baggage 0:22:22.840 --> 0:22:25.040 that and and a lot of it is is good 0:22:25.119 --> 0:22:31.679 or bad baggage. But you know, I think that, UM, 0:22:31.720 --> 0:22:38.440 being at Viacom, uh, it was really important that UM. 0:22:38.560 --> 0:22:42.720 Anybody who stops listening to the consumer first, that's when 0:22:42.720 --> 0:22:45.800 you get into trouble. So MTV was a bit of 0:22:45.840 --> 0:22:48.439 a canary in a coal mine. All these young people 0:22:48.760 --> 0:22:53.560 were watching videos on YouTube. They were consuming content on YouTube, 0:22:54.440 --> 0:22:59.560 but because there were traditional distribution deals where direct TV 0:22:59.760 --> 0:23:03.280 or podcast would pay a billion dollars for the content 0:23:03.359 --> 0:23:07.000 on MTV, MTV couldn't put its content on the platform 0:23:07.000 --> 0:23:10.880 where most consumers were going. And so that was it 0:23:11.000 --> 0:23:13.520 was a nice baggage to have. You got a big 0:23:13.600 --> 0:23:17.440 check for your content, but then you couldn't be flexible 0:23:17.520 --> 0:23:21.120 and put it where people wanted to consume your content. 0:23:21.840 --> 0:23:24.199 When you don't have that baggage and you are small, 0:23:24.520 --> 0:23:27.560 you can follow the consumer. The consumer wants to watch 0:23:27.600 --> 0:23:30.640 a movie you make on Demanding Home and will pay 0:23:30.680 --> 0:23:34.160 the same price, well that's where you should be. Um. 0:23:34.400 --> 0:23:39.200 So I think that that the studios recognized the shift 0:23:39.920 --> 0:23:44.200 in consumer behavior. Look at the decline in linear TV ratings, 0:23:44.240 --> 0:23:47.439 the decline and young people going to movie theaters. It's there, 0:23:48.200 --> 0:23:50.439 but it's really hard when you've got a lot of 0:23:50.480 --> 0:23:53.720 partners involved to say the theater owners, oh, by the way, 0:23:53.760 --> 0:23:55.920 i'm gonna short in your window from ninety days to 0:23:56.040 --> 0:23:58.600 thirty days. You're good with that, right. You've seen the 0:23:58.640 --> 0:24:02.000 reactions that the theater owners have like, hey, come on now, 0:24:02.800 --> 0:24:06.720 so it's it's gonna take a beat. It really is. 0:24:07.280 --> 0:24:10.080 We don't have that baggage. We can just listen to 0:24:10.080 --> 0:24:14.719 the consumer and and the purity of purpose provides us 0:24:14.760 --> 0:24:19.200 a lot of freedom. Yeah, I think, and I think 0:24:19.240 --> 0:24:22.560 there's a lot of smart people at these larger places. 0:24:23.680 --> 0:24:26.600 But I think also the the having to focus on 0:24:26.760 --> 0:24:31.040 keeping your revenues and your profitability up whilst actually in 0:24:31.160 --> 0:24:34.080 order to pivot to the new world, you're gonna have 0:24:34.200 --> 0:24:38.119 to do things which in the short to medium term 0:24:38.200 --> 0:24:43.760 will actually you're focusing on lower profit initiatives and you're 0:24:43.760 --> 0:24:46.280 gonna have to let go of a couple of juicy, 0:24:47.320 --> 0:24:51.280 juicy deals. Um. And for that you need to also 0:24:51.359 --> 0:24:55.760 have shareholders which kind of appreciate you going into that direction. 0:24:55.880 --> 0:24:58.240 I think that that's that's the balance which a lot 0:24:58.240 --> 0:25:01.840 of people are having to con Well, it's interesting you 0:25:01.880 --> 0:25:04.520 say that because I talked sometimes to analysts and I'm 0:25:04.600 --> 0:25:07.479 kind of struck by the fact that they treat a 0:25:07.480 --> 0:25:10.080 lot of these streaming services. They almost see them as 0:25:10.200 --> 0:25:13.960 just additive, that it's just going to add revenues to, 0:25:14.320 --> 0:25:19.000 you know, their overall sort of pie. But they're taking 0:25:19.080 --> 0:25:22.240 content away, you know, they're they're wrapping up licensing deals 0:25:22.240 --> 0:25:25.560 which you're basically and at least in my estimation, pure 0:25:25.840 --> 0:25:30.919 profit for them putting you know, pulling that back, putting 0:25:30.920 --> 0:25:33.280 it on their service, which comes with all kinds of 0:25:33.320 --> 0:25:39.000 attendant costs. So I guess I'm just sort of what 0:25:39.119 --> 0:25:41.880 kind of if you're a publicly traded company, isn't that 0:25:42.280 --> 0:25:45.160 really problematic if you have to do things when you're 0:25:45.760 --> 0:25:47.280 what you If you just look at it from a 0:25:47.320 --> 0:25:49.879 pure number standpoint, you think this is this was a 0:25:49.960 --> 0:25:54.080 terrible quarter, right, I mean, how how do you do that? Explain? 0:25:54.280 --> 0:25:56.879 Like this is gone of costs pix for the next 0:25:56.880 --> 0:26:00.439 ten years. But the opportunity is why, and that's why 0:26:00.440 --> 0:26:02.639 are you going to do it? And for a Netflix 0:26:02.680 --> 0:26:06.760