Speaker 1: M h. Welcome to Strictly Business, Varieties weekly podcast featuring
Speaker 1: conversations with industry leaders about the business of media and entertainment.
Speaker 1: I'm Cynthia Littleton, co editor in chief of Variety. Today's
Speaker 1: Strictly Business Interview comes from the south By Southwest Conference
Speaker 1: in Austin, Texas on March fifteenth. I interviewed two major
Speaker 1: players for a keynote session about the state of the
Speaker 1: content business. Handle Media co CEO Kevin Mayer is a
Speaker 1: former Disney executive who has been making waves in Hollywood
Speaker 1: as he has been out shopping with a big checkbook
Speaker 1: for content assets. Media Link CEO Michael Casson is a
Speaker 1: well known deal maker in the advertising business and a
Speaker 1: marketing consultant to many Marquis names. His company was just
Speaker 1: acquired by a United talent agency for a hundred and
Speaker 1: twenty five million dollars. The three of us had a
Speaker 1: lively conversation in front of a packed house at the
Speaker 1: Austin Convention Center. We went deep on marketplace conditions, roth evaluations,
Speaker 1: how TikTok will be monetized, when ads will come to Netflix,
Speaker 1: and where the new normal is headed in pay TV.
Speaker 1: That's all coming up after the break. This is a
Speaker 1: really great opportunity with our two guests here, we have
Speaker 1: people that just reflect all of the cross currents of
Speaker 1: media right now. Kevin Mayer has had quite a tour
Speaker 1: in the last twelve, twelve, sixteen months of media and
Speaker 1: all of its inflection points. Michael has made a career
Speaker 1: out of being at the intersection of media, advertising, marketing, commerce,
Speaker 1: and that is that those are all of the things
Speaker 1: that are driving the business forward right now. So it's
Speaker 1: a great opportunity for us to talk about some you know,
Speaker 1: to talk about some specifics and also some big picture things.
Speaker 1: So we'll talk well thought we would start by talking
Speaker 1: Kevin Mayer is in the midst with your partner Tom Stags,
Speaker 1: who like you as a fellow Disney along longtime Disney executive.
Speaker 1: You have joined forces into a company called Candle Media,
Speaker 1: and you have been the buzz of Hollywood because you've
Speaker 1: been in town with a big checkbook talking to people
Speaker 1: about buying content assets. You've been very deliberative and you
Speaker 1: and Tom have talked a little bit about the big
Speaker 1: picture of what you're going after today, I'd like to
Speaker 1: start by talking about sort of you've been at it
Speaker 1: now for probably going on about a year. Where does
Speaker 1: Candle Media stand in terms of your building a physical
Speaker 1: infrastructure around that business. Well, I think we're in pretty
Speaker 1: good shape. We actually started in earnest this summer, late
Speaker 1: summer when we bought Hello Sunshine. That was our first
Speaker 1: purchase research. You might have heard something about that, Yeah,
Speaker 1: and UM and we partner with Blackstone and that that
Speaker 1: was an ongoing UM search that I was the time
Speaker 1: and I were on to see who's the right private
Speaker 1: equity partner Blackstone being as one of the largest private
Speaker 1: equity players and one of the companies that wants very
Speaker 1: much to put some money in media right now, Well,
Speaker 1: black Stone is It varies from time to time. I
Speaker 1: think they're the biggest private equity firm in the world.
Speaker 1: At this point, I have the biggest fund. We're part
Speaker 1: of a twenty six billion dollar fund, which is great.
Speaker 1: They are a black Stone specifically was was a great
Speaker 1: choice because they are very they're in thematic investors and
Speaker 1: one of the one of the themes they have a
Speaker 1: lot of conviction on is content growth in content spands.
Speaker 1: So they're investing in private equity with Tom and myself
Speaker 1: and Candle Media they're investing in the real estates either
Speaker 1: they're buying studios UM they have private public equity operations
Speaker 1: and they're buying you know, they're making their choices among
Speaker 1: public stocks in that space too. So they're high conviction
Speaker 1: and they've been a great partner. And we got we
Speaker 1: got put into orbit really with the with the hell
Speaker 1: of Sunshine by and then not not long thereafter, we
Speaker 1: purchased a company called Moonbug. And if you have anyone
Speaker 1: out there has small kids, you'll either like me or
Speaker 1: hate mate for having for Moonbug. They have cocoa melon
Speaker 1: is their primary m asset and intellectual property, and they
Speaker 1: a blippy and they have a whole the whole bunch
Speaker 1: of kids I p that was born on YouTube and
Speaker 1: then taken from YouTube and multi platforms into Netflix, into Amazon,
Speaker 1: you know, the streaming services and also licensing and merchandizing,
Speaker 1: and so we're pretty good shape. We do have a
Speaker 1: vision for a modern UM sort of creator economy business
Speaker 1: which has traditional film and television assets that are sold
Speaker 1: to streamers. UM. We have social media storytelling, as best
Speaker 1: evidenced by Moonbug, which again starts on YouTube and then
Speaker 1: the stories propagate to other platforms. And then commerce. I
Speaker 1: think there's a not my time at TikTok, I really
Speaker 1: saw the ability for content and influencers to create audience
Speaker 1: dynamics that are very, very conducive to making concluding commerce transactions.
Speaker 1: Has happened in China to a large degree, this social
Speaker 1: social media commerce, and we think we have the assets
Speaker 1: to bring to bear to the same thing here in
Speaker 1: the US and parts West. So commerce can generate the
Speaker 1: kind of numbers that people in the content business are
Speaker 1: accustomed to with, you know, big successful movies and big
Speaker 1: successful TV shows. You see that that market is that big. Yeah,
Speaker 1: it's very big. I mean, here's one example. Hella Sunshine
Speaker 1: has a has a show called The Home Edit. The
Speaker 1: Home Edit for those of you haven't seen it, UM
Speaker 1: is based on a company called the Home Edit. We
Speaker 1: just bought. That's where I'm going. That UM that goes
Speaker 1: to people's homes and started office celebrities, but it goes
Speaker 1: to you know, anyone who hires them. They go in
Speaker 1: and they reorganize and edit your home, and they come
Speaker 1: in with products too, so you can rearrange your garage
Speaker 1: and your closets and everything else. And they do a
Speaker 1: great job, and they make the shows out of it,
Speaker 1: an unscripted show. We bought the underlying company and that
Speaker 1: is a big commerce place. So that's the and there's
Speaker 1: a big social media component around the Home Edit to
Speaker 1: the founders of the Home Edit are very active in
Speaker 1: social media. There's a huge amount of residents there. So
Speaker 1: that's a great example of taking content and moving into
Speaker 1: commerce and then social media storytelling. So and Mike, let
Speaker 1: me ask you, Michael, you've known Kevin a long time.
Speaker 1: You know he's embarking on this big adventure with again
Speaker 1: a nice bankroll. What what did you what? What was
Speaker 1: your advice as he as he started out on this
Speaker 1: journey in terms of what to look for and where
Speaker 1: the where the opportunities? Well? What what? What? I think
Speaker 1: Kevin said at the beginning identifying Blackstone as his partner
Speaker 1: because they had a focus, and Kevin had a focus.
Speaker 1: We've been in conversation about the strategy well before they
Speaker 1: implemented the first deal in the summer, and it was
Speaker 1: about that and he was clear and Tom equally clear
Speaker 1: on that focus. And I think you know hard to
Speaker 1: give Kevin advice on many things that he doesn't give
Speaker 1: me advice on, but I will tell the audience why
Speaker 1: we played that song if you don't mind. As we
Speaker 1: were sitting in the green room, I looked at Kevin
Speaker 1: and I said, you know, you've got the brains, I've
Speaker 1: got the looks. Let's go make lots of money. And
Speaker 1: I asked them to thank you for agreeing with me
Speaker 1: on you know, I agree with them that there you go.
Speaker 1: And we did do a quick calculation on the copyright
Speaker 1: in the I p ip benefits and how much. But
Speaker 1: but but truthfully, the advice I gave Kevin was advice
Speaker 1: he was actually giving himself, which was be focused on
Speaker 1: where they're going, what what What's interesting to me is
Speaker 1: being on a stage with you. In One of the
Speaker 1: earliest panel conversations I ever did was twenty two years
Speaker 1: ago with Variety with Peter Bart, a name that is
Speaker 1: you know, well known by many in our industry. Great
Speaker 1: and this was in two thousand and The topic sentence
Speaker 1: of the of the panel was content meets commerce. So
Speaker 1: we're not in a conversation Asian now that hasn't been
Speaker 1: around for a long time. What I think we've found
Speaker 1: is that inflection point where content is influencing everything, but
Speaker 1: particularly commerce. As we're looking at it, and there's a
Speaker 1: whole lot behind that. But just it's funny for me
Speaker 1: to be on a stage twenty two years later really
Speaker 1: talking about the seas, content, commerce, et cetera. UM, I mean,
Speaker 1: we've moved a level beyond Watch Friends, like Rachel's Sweater
Speaker 1: and click now now Rachel's sweater is the show. I
Speaker 1: actually asked her if she ever had a blue sweater.
Speaker 1: Answer was no, But everybody said, what how are you
Speaker 1: going to buy that blue sweater? Let me ask you
Speaker 1: a little more specifically, Kevin, So, is the idea that
Speaker 1: the Candle Media is a will be a traditional kind
Speaker 1: of roll up where you will Candle Media will provide
Speaker 1: some back end services, administration, you know, distribution, marketing. Is
Speaker 1: that the idea? Or are you just building a holding
Speaker 1: company and you intend to house these imprints and have
Speaker 1: them run completely autonomously. It's actually neither. Um we're building.
Speaker 1: We're trying to replicate the sort of framework that we
Speaker 1: had at Disney, where Disney is an integrated company. There's
Speaker 1: you know, there's no question about that. We bought UM
Speaker 1: brands and franchises that plugged into that that company, and
Speaker 1: they were the creative UM the creative folks and the
Speaker 1: creative teams were allowed to run very autonomously. We bought Marvel.
Speaker 1: You know, Kevin Fay, he runs the Marvel studios. He
Speaker 1: decides about to make and he decides where the cinematic
Speaker 1: universe is going. He does all that stuff. You would
Speaker 1: never want to get in the way of that. But
Speaker 1: in terms of distributing the films, monetizing them, deciding you know,
Speaker 1: to put them into streaming service, the windowing of all
Speaker 1: that um which which the characters are going to be
Speaker 1: exploited for licensing, merchandizing opportunities. So all the monetization is
Speaker 1: done at the Walt Disney company level, and we're that's
Speaker 1: the approach that we're taking here. Candle Media isn't fully
Speaker 1: integrated operating company. It's not a holding company, nor is
Speaker 1: it a company that just provides back in services to
Speaker 1: its component parts. Were fully operational working company UM, and
Speaker 1: we're building that through acquisition, and then once we do
Speaker 1: these acquisitions, there's gonna be a huge amount of organic
Speaker 1: build that's going to come from that. So yeah, you know,
Speaker 1: we're not pretending to be Disney or anything like that
Speaker 1: that we don't have that much humors. But we like
Speaker 1: that organizational philosophy that works so well at Disney, keeping
Speaker 1: the creative engines going and autonomous. Everything else is truly integrated.
Speaker 1: And will you at at the Candle Media level or
Speaker 1: at the Hello Sunshine level, will you be in the
Speaker 1: business of financing your own content or do you intend
Speaker 1: to still partner with the major studios and platforms. Yeah,
Speaker 1: that's a good question. The one of the thesis that
Speaker 1: with the thesis that we had one of them, the content,
Speaker 1: commerce and community one, that big one we just talked about.
Speaker 1: That's that's the main strategy behind the company. But if
Speaker 1: you look just at film and television, that component of it,
Speaker 1: there is a real value for two. Independence at this
Speaker 1: point and the other the only thing that the independent
Speaker 1: producers haven't had they haven't had enough scale, and they
Speaker 1: haven't had access to capital. They've been capital starved and
Speaker 1: they've been you know, um, just not big enough to
Speaker 1: leverage the right deals with streamers. Now. On the on
Speaker 1: the other side, streamers have no option to go to
Speaker 1: the large studios anymore, by and large because those large
Speaker 1: studios have their own streaming services at their feeding. I
Speaker 1: helped our silo walls are getting builder. And that's what
Speaker 1: Bob iron I did my last five years of Disney
Speaker 1: is that's we architected that that every single and it's
Speaker 1: the right strategy. I think every single piece of creative
Speaker 1: output that comes from any part of Disney, whether it
Speaker 1: be you know, something that's branded Disney, something Pixar, Marvel,
Speaker 1: Star Wars, that all goes in Disney. Plus if it's
Speaker 1: come something out of the ABC Television studios, twenty one
Speaker 1: Century TV, those are basically targeted for Hulu. But everything
Speaker 1: we may ultimately comes to one of our streaming services
Speaker 1: permanently and exclusively. That means if you're Netflix, you can
Speaker 1: no longer license Disney project. If you're Amazon, you can't
Speaker 1: license Disney product. And I was running content sales in
Speaker 1: order to eliminate them and get rid of content sales.
Speaker 1: So independent independent producers are the last fashion of content
Speaker 1: that these that these streamers can go to outside of
Speaker 1: the stuff that they make themselves. So being independent is
Speaker 1: a very substantial benefit. Independent in the face of double
Speaker 1: digit growth in demand for the kind of content that
Speaker 1: we make, and if you have capital and scale that
Speaker 1: when we're piecing these companies together, so you can go
Speaker 1: to market in a much more leveraged way, and we
Speaker 1: have capital. Some projects will take all the way from
Speaker 1: development through a finished product and go license that and
Speaker 1: own it and to create a library like studios do.
Speaker 1: Some will do you know, EP type stuff, or where's
Speaker 1: the producer and we get paid to credit. Some will
Speaker 1: be in between. But if you have scale and you
Speaker 1: have capital, then you can start making those choices affirmatively
Speaker 1: rather than just being at the whim of the buyer.
Speaker 1: And do you think that if you have Riese Witherspoon
Speaker 1: or all of the all of the heft that you
Speaker 1: can bring to I P you can walk into Netflix
Speaker 1: or Amazon or even Disney Plus and say no, I
Speaker 1: don't want to cost plus deal, which means they give
Speaker 1: you the budget and they give you twenty on the
Speaker 1: high end as the producer's fee, as opposed to the
Speaker 1: old game, which was a little more like the casino
Speaker 1: and the studio came in, had money in the game,
Speaker 1: and in success, everybody made a lot of money. Now,
Speaker 1: in success, for the most part, producers know that your
Speaker 1: upside is capside is capped at and that's a very
Speaker 1: predictable game. But it's a different game. Do you think
Speaker 1: that Michael, I'm gonna let you stop, but I want
Speaker 1: to see what Kevin, as you're playing the middle of
Speaker 1: building this right to give you an example, but that
Speaker 1: seems to be the real. I mean, streamers want to
Speaker 1: own other product and pay you and buy you out
Speaker 1: and and just pay you a premium. We as a
Speaker 1: studio want to own the product and not more and
Speaker 1: more of the product and not sell it out, and
Speaker 1: so you continue to own the i P. One example
Speaker 1: of this Moonbug, not a hell of sometime, but a
Speaker 1: Moonbug example. We all the ipaid Moonbug, and Moonbug was
Speaker 1: a two point seven billion valuation, something that I think
Speaker 1: really which was a high valuation, but I think also
Speaker 1: really opened people's eyes to the market for this kind
Speaker 1: of really like preschoosed on the value of the i P.
Speaker 1: It wasn't a high price. I wasn't not a high price.
Speaker 1: It was just it wasn't thank you for saying, but
Speaker 1: it was a good price based on the value of
Speaker 1: the i P. People thought we were paid from Marball
Speaker 1: and all that stuff. We want, Tom and I know
Speaker 1: the value I paid. We're pretty good, We're pretty experienced
Speaker 1: of that. So I think we did pay a very
Speaker 1: fair price. Frankly, um, But I guess time will time
Speaker 1: will prove that. But here's a here's an example of
Speaker 1: when you have the goods that streamers need or anyone needs,
Speaker 1: you have some leverage. So Cocoa Melon, that's the biggest
Speaker 1: I P that that Moon Bike has. It's the largest
Speaker 1: YouTube channel in the world, and they when they bought it,
Speaker 1: it was a sixty million subscribers, and that was almost
Speaker 1: hundred forty million subscribers. It's massive. And last year it
Speaker 1: was the second most streamed television show on Netflix. Of
Speaker 1: all shows, the only bigger one was Criminal Minds. It
Speaker 1: was this much bigger. Coco Milon was almost the number
Speaker 1: one show. And that Cocoa Melon show was YouTube episodes
Speaker 1: strung together into episode into TV length episodes package in
Speaker 1: ten episo. So sold to Netflix for a license fee,
Speaker 1: non exclusively. We own it. Netflix does not own anything.
Speaker 1: They paid us a fee and they are benefiting tremendously
Speaker 1: from it. It's a huge one for them, it's a
Speaker 1: huge one for us. And it's still on YouTube with
Speaker 1: that huge audience, and we're getting a lot of advertising
Speaker 1: revenue from YouTube. So if you have the goods and
Speaker 1: you have an finished product, you can get the deal
Speaker 1: that you want. We've already done it. Interesting, we're gonna say, Well,
Speaker 1: what I was gonna say is two things. It's not
Speaker 1: the old days of the studio knocking on your door.
Speaker 1: The producers don't have to go to the streamers. Now
Speaker 1: the streamers are coming to the producers. Because of Kevin's point,
Speaker 1: the studios are all going to have exclusive rights to
Speaker 1: their product. So you do need the independence. So this
Speaker 1: is a time when the independence have leverage that they
Speaker 1: wouldn't have had traditionally. Number one, number two. You you
Speaker 1: have to understand that. And I know we're going to
Speaker 1: get into this, but this commerce part of this. I
Speaker 1: look at the commerce part not only as the buying
Speaker 1: of the goods and services, but the advertising side of it,
Speaker 1: the monetization through advertising. We're watching that change right now.
Speaker 1: I mean, as as Kevin developed Disney Plus, it was
Speaker 1: clear at the beginning that there wasn't going to be
Speaker 1: an a vote alternative at the beginning, but it was
Speaker 1: clear if you looked at it, that there was going
Speaker 1: to be one ultimately. I mean, I'm throwing that question
Speaker 1: to him because where in the cycle was that decision
Speaker 1: made to ultimately do it, and you know the the
Speaker 1: other guy, uh starts with an end. I think when
Speaker 1: that avenue revenue per user number started to go in
Speaker 1: the right direction, and I saw that the AD product
Speaker 1: was even more, even more incretive potential in your decision
Speaker 1: process at the beginning, you must have known that that
Speaker 1: was on the on the completely. I think Disney is
Speaker 1: doing the right thing with that. It is if you
Speaker 1: look at Hulu as an example. Hulu has an AD
Speaker 1: free and an AD supported product, and that was part
Speaker 1: of our Disney family of Directics Humor services, So I
Speaker 1: know this pretty well. Um, the AD free was nine
Speaker 1: a month and the AD supported was seven nine a month.
Speaker 1: I think that was the numbers. There's a five dollar
Speaker 1: difference and um, so maybe it's six, but that five
Speaker 1: dollars that you got for um AD free was actually
Speaker 1: worse than the r P you got for AD supported
Speaker 1: because there's an eight dollars of AD support for and
Speaker 1: maybe now it's nine. It's actually growing. You would know
Speaker 1: this too, So you're three or four dollars better off
Speaker 1: if that subscriber takes ads and if they take no ads.
Speaker 1: And I think that there's a massive demand for in
Speaker 1: you know, in stream over the top high quality advertising.
Speaker 1: That is just because there's a flight the linear television
Speaker 1: is the exodus advertising from linear television is extreme, and
Speaker 1: they're going they'd still like high quality UM video as context,
Speaker 1: so they go over the top services like Pluto, like
Speaker 1: Hulu and now like Disney Plus. Michael, are your clients
Speaker 1: freaking out that so much activity is going to subscriptions,
Speaker 1: so much activity is happening, so all the buzzy shows
Speaker 1: are happening, And you know absolutely, and you know the
Speaker 1: the the challenge is, traditionally and historically we looked at
Speaker 1: that inextricable link between the creation of and delivery of
Speaker 1: content supported by marketing messages of some sort. That was
Speaker 1: the That was the value exchange that happened. You know.
Speaker 1: I always like to go back to where it started
Speaker 1: and people say, well, it used to be free for television,
Speaker 1: and I say, it never was free. The exchange you
Speaker 1: made was I'm going to give you my time and
Speaker 1: my attention and look at those commercials and you're going
Speaker 1: to give me content. That break occurred and if you're
Speaker 1: you know, back to your question, Cynthia, are the clients
Speaker 1: the brands freaking out? Of course they are because they're
Speaker 1: trying to figure out how do we play, how do
Speaker 1: we get our message across? Is it going to be
Speaker 1: back to just you know, the Coca cola can on
Speaker 1: the table. I don't think so. I mean, sure there'll
Speaker 1: be more of that, but they are at that point
Speaker 1: where they need to figure out They the brands need
Speaker 1: to figure it out. And now with Disney making this announcement,
Speaker 1: which I presumed was on the you know, on the
Speaker 1: roadmap from the beginning. I heard and Spencer used to
Speaker 1: work for Kevin back in the day at Disney. Spencer Newman,
Speaker 1: who's the CFO Netflix, the other day said well, we're
Speaker 1: not religious. There was a softening at Netflix, the CFO.
Speaker 1: Netflix actually softened to the the Their response for ten
Speaker 1: years has been absolutely the thought of advertising on Netflix.
Speaker 1: Five second pre roll in front of every Netflix video.
Speaker 1: How many billions of dollars is there? It's it's it's there.
Speaker 1: They don't have a choice. At some point, you're in
Speaker 1: fact of a very smart variety. Senior media analysts. Gavin
Speaker 1: Bridge on this very stage said that Netflix, it'll be
Speaker 1: It could be five years, it could be ten years,
Speaker 1: but Netflix will have years. Alright. I want to tell you,
Speaker 1: and I can't read into this more than I asked
Speaker 1: him to do it and he's going to do it.
Speaker 1: But ted Sarandos is going to sit with me on
Speaker 1: the stage at the can Lions this year and in
Speaker 1: the lions Den know it and into the lions Den
Speaker 1: and someone said to me, how the hell did you
Speaker 1: get him, the guy who won't accept advertising, to sit
Speaker 1: on a stage at a conference that celebrates advertising. I said, well,
Speaker 1: he's got two hats because Netflix is a pretty big
Speaker 1: advertiser in terms of what they spend on promoting their programming,
Speaker 1: so that is advertising. The incoming is the other. I'm
Speaker 1: not suggesting that him doing that is anything other than
Speaker 1: him doing something that I asked him to do. But truthfully,
Speaker 1: it gives you an indication that that's softening and not
Speaker 1: being religious. Will will will occur. That doesn't make it
Speaker 1: easy for the advertisers because they still have to figure
Speaker 1: it out. And that's part of what keeps us busy,
Speaker 1: you know, candidly is helping advertisers identify those opportunities. And
Speaker 1: you know, one of the reasons that we reimagined media
Speaker 1: Link at the end of last year at u t
Speaker 1: A at United talent agency was the realization that being
Speaker 1: closer to the creator economy for media Link was a
Speaker 1: smart play because our brands and our clients are saying, wtf,
Speaker 1: you know, how do we get there? And we have
Speaker 1: to start creating more of our own content, which, by
Speaker 1: the way, is a part of where Candle Media has opportunity.
Speaker 1: And Kevin and I have certainly talked about this. Um well,
Speaker 1: I've talked and Kevin's listened. He hasn't agreed yet. But
Speaker 1: but truthfully, we've been doing this routine for twenty years,
Speaker 1: so it's act going a little bit, a little bit.
Speaker 1: We've got we've got a get going. But but but truthfully,
Speaker 1: the opportunity to get brands more active in the financing
Speaker 1: of that content is another mechanism and then it becomes
Speaker 1: brought to you by and just as just a um
Speaker 1: Michael's company. Media Link was sold in December to the
Speaker 1: United Talent Agency, one of the Hollywood's largest talent agencies,
Speaker 1: for a million dollars. And that is another deal that's
Speaker 1: a signpost of how all these things are converging in
Speaker 1: ways that they did not. You know, new new alignments
Speaker 1: are being formed. Kevin was talking about the new sort
Speaker 1: of new world order Disney of all of the content
Speaker 1: going to different streamers, and we've seen that at not
Speaker 1: only Disney, we've seen it in a bas NBC Universal.
Speaker 1: It's been inside of three years. The literally the profit centers,
Speaker 1: all of the business models have literally just been re engineered.
Speaker 1: It is such a shift from literally decades of what
Speaker 1: I think we're looking in hindsight and recognizing, you know,
Speaker 1: incredible profit margins, incredible momentum. But do you do you
Speaker 1: feel like that the pay TV moment that built ESPN,
Speaker 1: that is that business? Is that going to be a
Speaker 1: moment or are we going to see it more? Because
Speaker 1: I think we've seen a lot of these digital m
Speaker 1: v p d s and that that business seems to have.
Speaker 1: The digital m v p d s to who lose
Speaker 1: the YouTube lives, they seem to have the same problems
Speaker 1: as the traditional because there's the same product, there's delivered
Speaker 1: a different way. There's there they're called over the top,
Speaker 1: they're just pay TV services. I mean, we when we
Speaker 1: decided to launch a Hulu, we wanted to. We thought
Speaker 1: there was an opportunity to do maybe do a little better,
Speaker 1: a little different on new devices, on connected TV, so
Speaker 1: the interface would be a more pleasant experience, which I
Speaker 1: think it has been. Um, you could dynamically insert ads,
Speaker 1: which would be great, But I will say it is
Speaker 1: linear television, that the seven streaming channel is linear television
Speaker 1: with how it was delivered on a satellite box, on
Speaker 1: a cable box, or on over the top on the Internet.
Speaker 1: It is the same product, so it is experiencing the
Speaker 1: same problems. We thought that it hopefully offset some of
Speaker 1: the downward trajectory of subscribers. It really has not. I
Speaker 1: think that paid that the pay TV subscriber universe is
Speaker 1: in free fall. Actually do you think like it doesn't settle.
Speaker 1: Here's what's kind of happen. My prediction is this soon
Speaker 1: the the only people well served by by pay TV
Speaker 1: bundle or sports fans because that's where you find sports.
Speaker 1: Putting on your hat as chairman of the Zone, a
Speaker 1: streaming service that is mostly focused in Europe and Asia,
Speaker 1: but a player in the sports game, a big I think,
Speaker 1: a pretty big player in the sports game. If you're
Speaker 1: in Europe, you would know it well. And we have
Speaker 1: boxing in the US and around the world. But this
Speaker 1: is putting on my ESPN hat. You know, I've launched
Speaker 1: the ESPN Plus and as a Disney and so I
Speaker 1: know kind of the thinking behind that, And my fear
Speaker 1: is that the it will continue to decline and decline
Speaker 1: and decline until basically you have sports fans, because it's
Speaker 1: only only thing that really has to be delivered on
Speaker 1: a time basis is sports and news, and that's the
Speaker 1: only thing. Other than that, all entertainment programming can be
Speaker 1: delivered on a you know, on demand basis through streaming services.
Speaker 1: There's no fundamental reason to have a linear channel experience
Speaker 1: for for entertainment. In fact, people don't prefer it. There's
Speaker 1: some spectacle lidents, you know, yeah, it's okay, you put
Speaker 1: the IS in there too, so you have the oscars
Speaker 1: and you have some other live events. So the live
Speaker 1: programming is the only universe that has to be served
Speaker 1: live almost by definition. So what happens then is can
Speaker 1: continue to decline until there's just basically mostly sports fans.
Speaker 1: And still let are a lot of sports fans in
Speaker 1: the US and around the world, but that's the value proposition.
Speaker 1: In the US and pay television, you think something maybe
Speaker 1: fifty even, but then you have to look if you're ESPN,
Speaker 1: if you're the other providers of sports. Are you better
Speaker 1: off wholesaling into this audience that is purely sports fans,
Speaker 1: or are you better off retailing to that audience the
Speaker 1: same same calculus who went through a Disney to launch
Speaker 1: Disney Plus all be better off wholesaling our content Netflix
Speaker 1: and the other streamers or being a streamer. So ESPN
Speaker 1: and other providers will have to go through that same calculus. Okay,
Speaker 1: pay TV is small enough now that wow, why should
Speaker 1: be be a wholesaler? Shouldn't it be a retailer can
Speaker 1: make more money? And that's when you'll see ESPN and
Speaker 1: others pull themselves out of the bundle, go direct to
Speaker 1: consumers and then there is no more bundle there pay
Speaker 1: TVs O And that's that's the trajectory that is. You
Speaker 1: need quite a stomach to be able to do that,
Speaker 1: because you have to make that decision to cut that
Speaker 1: income stream off to make the bet. So those are
Speaker 1: you know, those are rooms you want to kind of
Speaker 1: understand the dynamic of the decision to say we're not
Speaker 1: going to take these billions of dollars over here because
Speaker 1: we're making the bet over here, and generally speaking, in
Speaker 1: corporate America at least. Those decisions are tough because the
Speaker 1: short term versus the long term decision is really tough
Speaker 1: to make. There's a certain tone of voice in this
Speaker 1: and they always in the earnings calls, they always make
Speaker 1: the CFO deliver the news appropriately. But there's a certain
Speaker 1: tone of voice that the CFO gets when they're starting,
Speaker 1: when they're going to announce, okay, and in this quarter,
Speaker 1: we're going to take this level of a hit. I mean,
Speaker 1: the things have been so upside down that for a
Speaker 1: while there last year the companies were announcing how much
Speaker 1: they were going to lose and the stock, the stock
Speaker 1: wouldn't go out. It's been do you get a sense
Speaker 1: from you both in the market that there's been a
Speaker 1: leveling off? Certainly we saw that in the Q four
Speaker 1: earning cycle, there was a leveling off of Wall streets enthusiasm.
Speaker 1: Don't go anywhere. We'll be right back with more insights
Speaker 1: from Kevin Mayer and Michael Casson after this break. Thanks
Speaker 1: for helping us pay the bills. Now we're back with
Speaker 1: more from the South By Southwest conference. What I was
Speaker 1: going to say about the calendar, you know, we certainly
Speaker 1: all understand was a tough year for of the people
Speaker 1: in the world, companies and and and civilians alike. One
Speaker 1: was a banner year for everybody that you can find economically.
Speaker 1: And I think the prognosis that is going to continue
Speaker 1: that momentum is absolutely correct the question for most and
Speaker 1: I look at it through the lens of marketing and advertising,
Speaker 1: but the but the you know, that point of twenty
Speaker 1: three is going to be okay, Now we're in a
Speaker 1: real world. We've had this momentum, the build up from
Speaker 1: twenty all the left, all the pent up savings, all
Speaker 1: of that rising tide. You know, everybody's floating above the surface.
Speaker 1: Now what happens in twenty three, I think is going
Speaker 1: to really be the question from a macroeconomic perspective as
Speaker 1: to will that momentum continue save geopolitical you know conversations
Speaker 1: which hard to save right now because we're right in
Speaker 1: the midst of it. But as we become it is
Speaker 1: truly as we become more globally, as the business becomes
Speaker 1: more globally connected, it's like they say, you know, a
Speaker 1: butterfly flaps its wings in one country and creates as
Speaker 1: that's that's only going to increase in the world of
Speaker 1: global and you know, if you look at it through
Speaker 1: the lens of talent um. You know, I used to
Speaker 1: get around and say, if you had a show in
Speaker 1: on linear television that hit a hundred episodes, you guys
Speaker 1: know this, well, that was the magic number for syndication
Speaker 1: in the old days. And the joke used to be,
Speaker 1: if you had a hundred episodes, geographically in Los Angeles,
Speaker 1: you could afford a house north of Sunset and and
Speaker 1: that would be you know, a hundred episodes entitled you
Speaker 1: to a house in a good neighborhood. You know that
Speaker 1: doesn't exist anymore. Maybe a hundred episodes will exist, but
Speaker 1: the ancillary rights in the ancillary economics, So this is
Speaker 1: turning a different model upside down, which is talent. Just
Speaker 1: from that perspective and now being inside the halls at
Speaker 1: U t A, I see, you know, even the impact
Speaker 1: on talent that's happening because to your point, there's a
Speaker 1: there's a ceiling now and where you know, we're Kevin
Speaker 1: and you all are investing. I mean, I know there
Speaker 1: were some snickers about Hello Sunshine being valued at nine
Speaker 1: on the on the surface within the industry that felt
Speaker 1: like wow, what is there? Because they don't have a
Speaker 1: big library. They don't have they have incredible promise and
Speaker 1: they're clearly very industrious, incredibly impressed by CEO Sarah Harden.
Speaker 1: She is really an impressive person. Um. But clearly you
Speaker 1: are betting on what we talked about, the social commerce
Speaker 1: and the ability of Reese and the footprint of her
Speaker 1: and like minded creators to bring audiences to them in
Speaker 1: that direct to consumer way. Is it really? This? Is
Speaker 1: it so? Should that drives all of that social is
Speaker 1: a big is a kind of at the center of everything,
Speaker 1: I think, um, And yes, I think we are counting
Speaker 1: on the fact that we can, you know, drive a
Speaker 1: lot of traffic and fandom around her social media presence.
Speaker 1: She has a book club, she has a lot of
Speaker 1: a lot of the intellectual property that she made that
Speaker 1: Reese makes into you know, filmed entertainment, whether the series
Speaker 1: or movies, comes from that, you know, access to incredible
Speaker 1: thinking from these her book authors, in her in her universe,
Speaker 1: so that there's some advantage to access to ideas from
Speaker 1: that perspective. And I just do think that we are
Speaker 1: going to build a library. We didn't buy a library,
Speaker 1: but we're building one, um, because we're going to achieve
Speaker 1: ownership and shows that we really care about achieving ownership.
Speaker 1: And so we're gonna have a very a very full
Speaker 1: spectrum model, if you will, from producer fees, which is great.
Speaker 1: You know, make a lot of money doing that to
Speaker 1: full ownership and it's gonna end library and then between
Speaker 1: him partial ownership, a lot of co co productions and
Speaker 1: stuff like that. We've already done some hellas Sunshine. So
Speaker 1: that's another model. I don't own the whole thing, but
Speaker 1: now we have a capital that allows us to make
Speaker 1: take those bets, and we're gonna make those bets and
Speaker 1: adds risk to the equation, but it also adds upside.
Speaker 1: And as for a high price, I think, um, when
Speaker 1: we talked about Moonbug being I think a pretty low price,
Speaker 1: people snicker. I mean, honestly, if you go back to
Speaker 1: our days when we bought Pixar and the bays about Marvel,
Speaker 1: we were roundly criticized for overpaying dramatically Marvel especially. I
Speaker 1: remember people thinking what that's worth? You name it sixty
Speaker 1: dollars and it was a good bet. Now, not every
Speaker 1: bet turns out great. I'm not saying that every bet
Speaker 1: I make is always great, but I will say if
Speaker 1: you we were very um disciplined and careful, and we
Speaker 1: have a roadmap that gets us to a value well
Speaker 1: in advance of above what we paid. So we'll see.
Speaker 1: I mean, the proof is in the pudding, but I
Speaker 1: think we'll come out looking pretty good on that one.
Speaker 1: It is I mean, if you step back and look
Speaker 1: at the business as it is now, I mean, it
Speaker 1: is kind of fascinating the talent of the scale of reefs.
Speaker 1: And you know something that they have this lever, these
Speaker 1: levers that they can push that they never did. I imagine, Michael,
Speaker 1: now with your deeper connection with U t A. As
Speaker 1: we talked about, opportunity is the theme of this this discussion.
Speaker 1: The opportunity for people to move literally move people to
Speaker 1: the markets that they want to establish is pretty incredible.
Speaker 1: With social well, the commerce piece of this is the
Speaker 1: thing that gets really sexy because talent today understands that
Speaker 1: their association with brands is more than just being a spokesperson. Yeah,
Speaker 1: it's it's not that and and and not everybody can
Speaker 1: influence it, but we certainly have enough examples of people
Speaker 1: like Ryan Reynolds, or people like Kim Kardashian, or people
Speaker 1: you know down the line Paris Hilton, who we were
Speaker 1: just at a conference with and she stood up and
Speaker 1: she was introduced as one of the you know, o
Speaker 1: g of of that world, and she really is. You
Speaker 1: know when you look at that and you say, the
Speaker 1: association of brands, of celebrity and brands is no different
Speaker 1: than product placement on steroids. Right. The idea of product
Speaker 1: placement was to borrow celebrity. If you're holding an Apple
Speaker 1: computer or working on an Apple computer in a movie,
Speaker 1: you want to be cool because you've got an Apple computer.
Speaker 1: So you're using the celebrity of the brand along with
Speaker 1: the celebrity of the of the talent, if you will.
Speaker 1: We're seeing that commerce and celebrity come together in a
Speaker 1: very meaningful way, and it's working. I mean, we've got
Speaker 1: a couple of you know, newly hatched billionaires, and Rihanna
Speaker 1: and Kim Kardashian and and and you know down the
Speaker 1: list of people who are cashing in, but not in
Speaker 1: a negative way. There's never anything negative about cashing in legitimately,
Speaker 1: but we're seeing that that cash register ring loud and clear.
Speaker 1: So talent is really getting moving up the food change.
Speaker 1: And I would imagine that there's also, like, you know,
Speaker 1: just as just as talent, well, you don't want to
Speaker 1: be in you know, you don't want to be in
Speaker 1: too many movies in one year. There's a certain that
Speaker 1: you've got to have some boundaries, Like you know, you
Speaker 1: don't want to put your name on everything. You want
Speaker 1: to make sure Like I would imagine that there's a
Speaker 1: whole new discipline for talent management in how do you
Speaker 1: determine opportunities and how do you know what's what's right
Speaker 1: with you? I would imagine that those conversations, we actually
Speaker 1: do it scientifically. And one of the great things that
Speaker 1: I inherited with Media Link at U T A was
Speaker 1: something called U T i i Q, and U T
Speaker 1: A i Q really develops the basis for those kinds
Speaker 1: of decisions. So it's not just random. When somebody sits
Speaker 1: down and negotiates Kevin Hart's next movie, you can actually
Speaker 1: show up with data that indicates why Kevin Hart should
Speaker 1: earn X amount of dollars for this movie. And by
Speaker 1: the way, you can apply that same thing to brands
Speaker 1: in a traditional sense. And it comes back to what
Speaker 1: at least at the intersection that Media Link lives out
Speaker 1: which I've said and you said a bit ago, marketing, media, advertising,
Speaker 1: entertainment and technology. At that intersection, data is driving all
Speaker 1: the right to say, visioning. So data should be driving
Speaker 1: the same kind of decision NG that you make around content,
Speaker 1: around the endorsement opportunities, the product opportunities. You use the
Speaker 1: same data that brands have used forever. Well, Tommy talking
Speaker 1: about talking about vehicles right now there is nothing. Let's
Speaker 1: talk a little bit about your TikTok and sort of
Speaker 1: where it stands right now. UM. I saw you quoted,
Speaker 1: i think last year saying that that TikTok you had
Speaker 1: a brief association with them as CEO in UM. I
Speaker 1: know it was it was a combination of geopolitical situation
Speaker 1: that was happening at that time with the Trump administration,
Speaker 1: but it was a short tenure for you about three months. Um.
Speaker 1: But in the big picture about about TikTok, you've said
Speaker 1: that that that their algorithm, that their recommendation, their ability
Speaker 1: to put content in front of people, that they actually
Speaker 1: do want to see the success of the algorithm. Have
Speaker 1: you now, now that you're on the entrepreneurial side, do
Speaker 1: you see a way to turn that into a growth
Speaker 1: driver a profit generator for candle media related businesses. Well,
Speaker 1: I think you know, TikTok is one of several social
Speaker 1: media platforms, and I think that's really social entertainment if
Speaker 1: you think look at TikTok specifically, that really is about
Speaker 1: capturing people's time and attention that otherwise would probably be
Speaker 1: spent watching a Netflix or something, because it's truly immersive
Speaker 1: video and it's not a lot of communication that happens
Speaker 1: on TikTok. It is mostly you know, people create and
Speaker 1: then you get your feed and you're passively watching a
Speaker 1: whole bunch of stuff that is super interesting to you.
Speaker 1: Because the AI technology that that byte Dance has is
Speaker 1: second to none. It's incredible. Um and and so being
Speaker 1: in the social media space generally speaking with TikTok, with Instagram,
Speaker 1: with YouTube, I think that's where opportunities are are going
Speaker 1: to lie. And I do think that you can attack
Speaker 1: it from a bunch of different angles. Again, you know,
Speaker 1: getting back to Moonbug that was ip born on YouTube.
Speaker 1: Mom and pop creates, it creates something that's fun, it
Speaker 1: explodes virally, we buy it, I mean animal platform and
Speaker 1: make a lot more to monetize a lot better than
Speaker 1: they ever could. So it's a win win. They get
Speaker 1: they get bought out, We own it, and then we
Speaker 1: can monetize it. And I think there's it goes both
Speaker 1: ways though, a lot of stuff that we make can
Speaker 1: actually end up storytelling on on social media, and I
Speaker 1: think we're going to be pursuing some social media storytelling
Speaker 1: assets that hopefully will being out soon that are gonna
Speaker 1: be fun um. But I do think you monetize that
Speaker 1: and just purely through advertising on social Yeah, well, I
Speaker 1: think when we're on social we're gonna monetize it a
Speaker 1: few ways. You can do third party advertising, for sure.
Speaker 1: You can. You can be a U, a marketer for
Speaker 1: the right brand, have grandchildren. Thank god, there's some opportunity
Speaker 1: you can do that. You can create your own brands
Speaker 1: if you're if you're a celebrity with enough resonance with
Speaker 1: with your followers, and you can authentically. The thing about
Speaker 1: social media, the connection has to be utterly authentic. If
Speaker 1: you try, If you sell yourself and you and you
Speaker 1: um create messages that clearly don't fit what your followers
Speaker 1: expect to you know, to to present to them, you
Speaker 1: have a real problem. You can't just force marketing. You
Speaker 1: can't fake your life to actually use it. Paris Holton
Speaker 1: uses certain products so you can authentically talk about it
Speaker 1: and boom. Then then it works the other thing again,
Speaker 1: if you're big enough, you can create your own brands,
Speaker 1: and that's what Rihanna has done, and that's what the
Speaker 1: Kardashians have done. Um Paris Hulton has done that. That's
Speaker 1: at the top of the very top of the food chain.
Speaker 1: But it is a way for celebrities since they're capped
Speaker 1: a little bit and what they can make now on
Speaker 1: film and television, it's a way for them to very
Speaker 1: much capitalize on their on the degree of which people
Speaker 1: hang on their every word on social media, some of
Speaker 1: these people have hundred plus million followers. It's right report
Speaker 1: last week that the Kardashian family collectively has more social
Speaker 1: media followers than Netflix has global subscribers and fix up
Speaker 1: to about the last time. It's quite extraordinary. And at
Speaker 1: the core of it, Kevin just said it, but I'll
Speaker 1: put a word on it is authenticity, because if you're
Speaker 1: not authentic in this environment, you're dead. It's not actually
Speaker 1: your kitchen. Things that drive marketing today in an interesting way,
Speaker 1: One is purpose and it's not just tick the box purpose.
Speaker 1: You have to demonstrate it and authenticity because if the
Speaker 1: brand doesn't, whether that's a celebrity or a consumer package
Speaker 1: goods product, if if if it's not authentic, the bullshit
Speaker 1: detectors out there are too high right now. People just
Speaker 1: know can't work. So individual celebrities obviously you can gather.
Speaker 1: But what do you see other sort of sectors that
Speaker 1: are right for kind of DTC type disruption, like sports leagues.
Speaker 1: I've been hearing a lot of chatter that regional sports networks,
Speaker 1: cable channels that are devoted to showing regional games of
Speaker 1: local teams, that those are you know that that those
Speaker 1: are very much likely to go to go into a
Speaker 1: DTC for this of the reasons, and that the hardcore
Speaker 1: fans that want to pay that four dollars a month,
Speaker 1: here's their opportunity. I think very much. Look anything that
Speaker 1: you can be talking about time and entertainment here and
Speaker 1: you know we can all sorts of package goods are
Speaker 1: directed consumer and others. Thousands of new director consumer brands,
Speaker 1: I will say that are out there. But with respect
Speaker 1: to what to our ecosystem, if it can be on
Speaker 1: a TV screen, it can be delivered over the top.
Speaker 1: There's nothing, There is no and I can have a
Speaker 1: direct consumer business model. There's nothing that prevents that. Everything
Speaker 1: is digital, of course, and has been for quite some time,
Speaker 1: and it's just a matter of which protocol you use
Speaker 1: to get it from the you know. The origination point
Speaker 1: to the viewing point is that i P is an
Speaker 1: Internet protocol? Is it some you know the technology that
Speaker 1: you know q am that that that that satellite and
Speaker 1: cable companies use. It doesn't matter, but it does matter
Speaker 1: is the business model. And I think that people are
Speaker 1: getting used to paying for what they want and not
Speaker 1: paying for what they don't want more and more and more,
Speaker 1: and I think that is driving the unbundling of of
Speaker 1: the cable net of the cable system. It is driving
Speaker 1: people to buy more. Precisely, regional sports networks have been
Speaker 1: a rip off for a long time because they're very
Speaker 1: high priced and there then they get package with their
Speaker 1: local cable companies. And if you buy a big local
Speaker 1: cable package and then separately on top of that by
Speaker 1: a local sports it's just not fair. It's not fair
Speaker 1: to those their cross subsidizing a lot of people that
Speaker 1: aren't really sports fans and I can't go on forever,
Speaker 1: especially at those prices. And if you think about the
Speaker 1: impact on marketing for direct to consumer. We we coined
Speaker 1: a phrase at media Link a couple of years ago,
Speaker 1: and what we looked at was the traditional brand marketing
Speaker 1: thinking and what we would always call performance marketing or
Speaker 1: what you might have known originally as direct marketing, but
Speaker 1: performance marketing. And the artificial distinction between brand marketing and
Speaker 1: performance marketing was the performance marketing go back to data,
Speaker 1: required more data, and there was a return loop because
Speaker 1: you could see what was happening, and it was a
Speaker 1: call to action. And I really coined it coming out
Speaker 1: of work with American Express, where the chief marketing officer
Speaker 1: at American Express, Elizabeth Ruttledge, challenged us to bring together
Speaker 1: her brand marketers don't leave home without it and her
Speaker 1: performance marketers, which is to make sure not only should
Speaker 1: you have the card in your pocket, but you should
Speaker 1: be using it because if you don't use it, they
Speaker 1: don't make any money. And so that idea came together
Speaker 1: and the light bulb went off for me and I said,
Speaker 1: so what you're really talking about is brand foremance marketing.
Speaker 1: You want to have the same data infused into your
Speaker 1: traditional brand marketing that you do in your performance marketing.
Speaker 1: That's where I came up with the word, but where
Speaker 1: I really saw it play out was with Disney Plus
Speaker 1: and others, the other streamers. We were tasked with helping
Speaker 1: the marketing mentality at Disney Plus. And this is something
Speaker 1: Kevin and I worked on together because traditionally the Walt
Speaker 1: Disney Company would market to put AUSS and seats on Friday, Saturday,
Speaker 1: and Sunday when they opened movies, and all of a sudden,
Speaker 1: they had to be thinking and subscriber acquisition mode with
Speaker 1: Disney Plus, and you want to avoid churn and all
Speaker 1: the things you needed to do. And it took an
Speaker 1: entirely different marketing muscle, and we had to not only
Speaker 1: retrain the internal team, but we had to find the
Speaker 1: right agency partners that could that could understand that. And
Speaker 1: I still and I still, I think it's pretty clear
Speaker 1: that like I don't think any other company, only Disney
Speaker 1: with that goodwill and built in you know, Warner Brothers,
Speaker 1: as established as it is, people don't have that feeling
Speaker 1: for that brand that they do that that the we
Speaker 1: were tracking that the awareness of Disney Plus was shockingly.
Speaker 1: It spread so fast that the hardcore consumer was was
Speaker 1: aware that Disney Plus was coming. One thing we did
Speaker 1: in an incredible way, We set out a target. Let
Speaker 1: me did this together of coverage of people in a
Speaker 1: monthly basis getting at least three exposures to Disney Plus
Speaker 1: advertising at the top three. That means the average getting
Speaker 1: something like fifty. That's just the way the math works.
Speaker 1: We carpet bombed this country with UM Disney Plus advertising
Speaker 1: and it worked really really well, and we got ten
Speaker 1: million stubs in the first day. Now we have built
Speaker 1: in a brand equity, as you said, because it was
Speaker 1: Disney that helps for sure. I'm not Hoizon, you know.
Speaker 1: Hans Vestberg and I did a really good deal UM
Speaker 1: with Verizon, which broy the way, worked out really really
Speaker 1: well better than people think. It was a four month
Speaker 1: deal both for both of us, and a lot of
Speaker 1: those people that were getting Disney Plus for free for
Speaker 1: a year actually did convert over to be Disney Plus debscriber.
Speaker 1: So I was a big, big win. You're right. But
Speaker 1: then we took that learning that we created, We created
Speaker 1: what I called to my troops a consumer frenzy. There
Speaker 1: was a frenzy around Disney Plus, and we took that
Speaker 1: same exact philosophy and did the same thing in Europe
Speaker 1: before I left Europe and India. We took that same
Speaker 1: consumer frenzy and our team executed it really well during
Speaker 1: a pandemic. But it's all about extreme reach and frequency
Speaker 1: of our advertising message beyond which Disney normally do. It
Speaker 1: was good Disney Plus launched November, I mean, three months
Speaker 1: before a pandemic or plus or minus, you know, three
Speaker 1: or four months, and and the story has been obviously extraordinary.
Speaker 1: But you think of the timing of it and I
Speaker 1: think back, it's kind of special to be on this
Speaker 1: stage because I was supposed to be on this stage
Speaker 1: in on you know, I think literally two years ago
Speaker 1: today and here we are, which, by the way, I
Speaker 1: just want to give a shout out to the south
Speaker 1: By Southwest teams because there is that special moment of
Speaker 1: being back together and being in person, and I r
Speaker 1: L has has attraction has been so nice and Austin
Speaker 1: couldn't be a more welcoming, just fun place to be.
Speaker 1: It's really it's been nice. Yeah, thank you. I appreciate
Speaker 1: you mentioning the south By Southwest people. They have worked
Speaker 1: hard and put on a very good event in in
Speaker 1: tough circumstances working up. We're gonna open it up to
Speaker 1: questions in our last few minutes here, but I wanted
Speaker 1: to ask Michael um part of media links business is
Speaker 1: not as not as well known as the as the
Speaker 1: as the marketing and the consultancy is that you do
Speaker 1: some head hunting. That you do do executive search, high
Speaker 1: level executive search for media firms. What I know, I
Speaker 1: know you can't talk dish specifics, but can you talk
Speaker 1: about some of the like what what are the what
Speaker 1: are the jobs of the future, what are what are
Speaker 1: the skills that people are looking for? And what kind
Speaker 1: of placements are people looking for? The Yeah, obviously I
Speaker 1: can't be specific, but I can be generic. The Great
Speaker 1: Resignation is real. The Great Resignation has really created a
Speaker 1: circumstance where talent is impossible to find right now across industries.
Speaker 1: But what we're really understanding is, and I'll take this
Speaker 1: from a TV show, there was a period in the marketing, advertising,
Speaker 1: media business that m mad men were the people you
Speaker 1: were looking for, and today it's math men, but math people. Today,
Speaker 1: you're looking for people who can actually understand the data, data, analysis,
Speaker 1: and analysis, not just it's not just about the creative,
Speaker 1: it's about understanding the type of creative. And look, our industries,
Speaker 1: respectively pivot on five words right now. And it's funny
Speaker 1: that I just kind of landed on this and realized
Speaker 1: all the words started with the letter T. And those
Speaker 1: words are trust, transparency, technology, transformation, and finally, to your question, talent.
Speaker 1: And coincidentally, they all start with the letter T. And
Speaker 1: in every aspect of our industries where we come together
Speaker 1: again at that intersection of marketing, media, advertising, entertainment, and technology.
Speaker 1: If you find me a conversation that doesn't pivot on
Speaker 1: one of those five words, I would be surprised, because
Speaker 1: that's really to your question, talent is at the core,
Speaker 1: and it's really hard to find right now. The talent
Speaker 1: representation business is undergoing so much change as expected. You know,
Speaker 1: bear in mind now the media links at U T A.
Speaker 1: I have to use talent with a small T and
Speaker 1: talent with a large T. U T A is in
Speaker 1: the business of representing talent. We're in the business of
Speaker 1: identifying talent through right head hunting, you know, practice, it's
Speaker 1: a little different. So we do have to use a
Speaker 1: capital to this multi occasion um hogging the questions again? Okay,
Speaker 1: how about this is a good one. The lines between
Speaker 1: brand funded content and advertising continue to blur. What potential
Speaker 1: does candle mediacy in this space? I would, I would venture,
Speaker 1: I guess a whole lot would I would agree that
Speaker 1: is it's a question that answers itself almost I think, um,
Speaker 1: and that's right. And by the way, lines are blurring
Speaker 1: all over the place between content and advertising, between performance
Speaker 1: advertising and brand advertising, I would almost say there is
Speaker 1: no difference here brandformance thing or every all advertisers performance
Speaker 1: and one subset of performing this brand. Another subset might
Speaker 1: be product placement. Another subset might be true performance digital
Speaker 1: digital call to action advertising. So I think, um, we're
Speaker 1: very focused on that. We think that having having an
Speaker 1: audience and having a connected audience where you can actually
Speaker 1: speak and have a two way conversation with your audience
Speaker 1: opens up these types of opportunities for modernization that just
Speaker 1: weren't there ten years ago. Do you think that we're
Speaker 1: obviously the time in media entertainment, there's a lot of
Speaker 1: consolidation to your point of the need for a strong
Speaker 1: independent idea factory more than ever. But do you think
Speaker 1: that that that consolidation, that is there a danger of
Speaker 1: the industry literally getting into you know, three or four
Speaker 1: gigantic conglomerates that control everything. I think a lot will
Speaker 1: be determined by what the Justice Department does with Amazon
Speaker 1: and MGM right now. That's going to have a lot
Speaker 1: to do with where this plays out. If the Justice
Speaker 1: Department stops that deal, which I don't think they will,
Speaker 1: I think that deal will go through. I think it's
Speaker 1: a lot of noise, but the deal should go through.
Speaker 1: There's no base is for it not to go through.
Speaker 1: I'll put on my lawyer's heat. I don't wear it
Speaker 1: very often, but I have it. Um. I think that
Speaker 1: deal goes through, and if it does, I think that
Speaker 1: bodes I don't know if you'd say this is bodes well,
Speaker 1: Maybe it doesn't, but it bodes well for others in
Speaker 1: the tech space to be making acquisition in the pure
Speaker 1: content space. Do I think you end up with three
Speaker 1: big players? No? Do I think you end up with consolidation. Yes,
Speaker 1: you've made it clear that you're looking for you know,
Speaker 1: very creator grouping companies. But is there you know, is
Speaker 1: there a world where you would look at a more
Speaker 1: traditional You know, there's some companies out there with a
Speaker 1: few cable networks the studio. Is there any would you
Speaker 1: play in those waters at all? I don't think so.
Speaker 1: I don't think. I definitely don't want to play in
Speaker 1: the cable network waters. I just don't think that's a
Speaker 1: viable model for UM, and we're not. We don't. I
Speaker 1: don't like distribution brands as I like content brands, brands
Speaker 1: that actually mean something about the content. We think Hell
Speaker 1: of Sunshine is a great content brand. Moon Bug is
Speaker 1: becoming a great content brand you want to get behind.
Speaker 1: And we have a have a significant piece of Westbrook,
Speaker 1: which Will Will Smith Company that to content brand. Will
Speaker 1: and Jada have. Actually one of the most distinctive shows
Speaker 1: to come out of Facebook is Jada's Written People, which
Speaker 1: is to all your point about authenticity, Yeah, I mean,
Speaker 1: and it's great show. So look, we're I think the
Speaker 1: answer to that would probably be no. We We are
Speaker 1: focused on a couple of things. Creator driven companies where
Speaker 1: the creator is front and center, a brand that arises
Speaker 1: from that, because we want to transcend the individual creator
Speaker 1: and get a brand that live beyond that that creator. Obviously,
Speaker 1: but also that really speaks to a defined audience. Something
Speaker 1: else to be Lord at Disney, know your audience and
Speaker 1: speak to that audience and as a full way and
Speaker 1: as a sort of a diverse way as you possibly can.
Speaker 1: So we have you know, Hellos and China. It's it's
Speaker 1: it's content um created and delivered by women for women audience.
Speaker 1: Of course it's an inclusive audience appeals to a lot
Speaker 1: of different people, but it's really by women for women.
Speaker 1: Moonbug is kids um. I think, well you'll you'll can
Speaker 1: he need to see us look at the very very
Speaker 1: most premium content brands we can get or developed that
Speaker 1: speech to certain audiences and then fill out the audience
Speaker 1: map and then we'll then we think we'll be shaped
Speaker 1: is Blackstone in for more? Do you have any of
Speaker 1: the two billion left? I would imagine you probably that's
Speaker 1: two billion thing I remember all came from the when
Speaker 1: when Kevin and Tom started and started their company and
Speaker 1: started going out there. I honestly I don't know variety
Speaker 1: was the guilty of it. But the number two billion
Speaker 1: that you guys had a billion dollar bankroll, well, let's
Speaker 1: we've already deployed were setting the record straight here well,
Speaker 1: there's been four billion dollars of assets that we pulled together.
Speaker 1: But you know, I don't know. There's all sorts of
Speaker 1: different you know, Blackstone from the fund, their own limited
Speaker 1: partners in the fund can do sidecar investments. We've had
Speaker 1: that you have some debt people. When we buy companies,
Speaker 1: one of the things we insist on is they take
Speaker 1: a lot of equity in the new company as part
Speaker 1: of their consideration for the purchase, because we want everyone
Speaker 1: to have skin in the game for the entire company.
Speaker 1: The best way to do that equity that crossed lateralizes
Speaker 1: everything in the company. Everyone has commitments for them to
Speaker 1: stay for a certain amount of time. Yeah, and then
Speaker 1: when when you go public or get bought, probably I
Speaker 1: think where our path is likely an I p O.
Speaker 1: Then that equity becomes you know, has some real, real
Speaker 1: monetize able value to it. But it's everyone rose in
Speaker 1: the same direction. That's why equity so important. Thank you.
Speaker 1: I would have felt bad if I hadn't asked you
Speaker 1: about the the future I p O. Do you have
Speaker 1: any kind of a timeline Do you think that that
Speaker 1: for that happening and do you think is there all
Speaker 1: their alternatives to going to an IPO route. Yeah, look,
Speaker 1: we have We've built a company now that has the
Speaker 1: scale and the financial um contours to actually go public
Speaker 1: whenever we want to go public. At this point, I
Speaker 1: would say the moon Bugs alternative to being bought by
Speaker 1: us itself could have been a public company. And so
Speaker 1: it's a very very the financial they're very robust. So
Speaker 1: it's a matter of the markets being ready and we
Speaker 1: us being ready as an organization to really want to
Speaker 1: be public. Has you need some infrastructure, public company accounting
Speaker 1: systems and you know, star box compliance and all that stuff,
Speaker 1: and we have to get get into that mode. And
Speaker 1: I would imagine also a couple of good hits and
Speaker 1: not hurt. So you know, I think I don't want
Speaker 1: to no specific timeframe, but it won't be many years
Speaker 1: from now. It'll be sooner than that. I don't my
Speaker 1: advices take a breather. Having gone from being public for
Speaker 1: the last four years to being private again as of December,
Speaker 1: it's kind of nice to be private. We have investors. Well,
Speaker 1: you have to have some liquidity event of some sort,
Speaker 1: and that's one way we can get being purchased another
Speaker 1: possible outcome. It's not what we're angling towards. You don't
Speaker 1: want to build a company to be to package it
Speaker 1: to be sold. If you want to build it. We
Speaker 1: want to build a company that can stand and live
Speaker 1: and thrive in its own right. And you need the
Speaker 1: fire in your belly to build. Yes, exactly there. Let
Speaker 1: me press you again on in terms of Candle Media,
Speaker 1: will you you you were born in a pandemic? Will
Speaker 1: you add some you have physical office space at some point?
Speaker 1: Will you have any kind of common infrastructure? Yeah? We will. Um.
Speaker 1: We have you know, the Candle Media uh corporate and
Speaker 1: we have I don't know six employees right now. We
Speaker 1: have a little office on Sunset Boulevard is nice, which
Speaker 1: sits geographic geographically in between the Moonbug offices in in
Speaker 1: Hollywood and the Westwood offices of Hello Sunshine. So we
Speaker 1: commute between the two. But look, we have big offices
Speaker 1: in London for Moonbug. There's about the several hundred people
Speaker 1: there we have you know, Hello Sunshine has a hundred
Speaker 1: plus people. They're mostly in Westwood but in other parts too. Um.
Speaker 1: So we have we have physical offices and we at
Speaker 1: corporate if you will, um, we're pulling everything together. We
Speaker 1: I think We have an interesting philosophy Tom Stags and I.
Speaker 1: One is that if you buy a company that can
Speaker 1: that has a capability that can be used across outside
Speaker 1: of its company and to all the other brands that
Speaker 1: we have, we're gonna use that. So here's an example.
Speaker 1: Um Moonbike has this guy, Simon Phillips. He's the head
Speaker 1: of licensing and merchandizing. He is probably the best executive
Speaker 1: in the world. He was at Disney, he was at
Speaker 1: Marvel when we be about Marvel. He was at Disney
Speaker 1: and rand Emia for Disney when we when he was there.
Speaker 1: When I first visited Moonbug, I saw Simon pill Ups,
Speaker 1: I couldn't believe I didn't know who was there. So
Speaker 1: he is the licensing merchandizing expert without parallel. And so
Speaker 1: to the extent that we have licensing and merchandizing needs
Speaker 1: in Hello Sunshine, and we also want the studio that
Speaker 1: that that produces Fauda, that Netflix show, that bar Way
Speaker 1: Road Pictures. That was a smaller person but a great one.
Speaker 1: Those guys are awesome and they you know, to the
Speaker 1: extent that they are less likely to have kind of
Speaker 1: licensable characters because it's pretty gritty stuff. That they do.
Speaker 1: But you know, but will Smith, I agree, it's incredible,
Speaker 1: so so some insans will will be We'll be managing
Speaker 1: all licensing and merchandising out of Moon bug Um. We
Speaker 1: have a great distribution team at Hello Sunshine, so maybe
Speaker 1: that will be the center of excellence for distribution for
Speaker 1: everyone over. So it doesn't have to sit a corporate
Speaker 1: for it to be a shared resource. I guess it
Speaker 1: is my point. So corporate will never be massive, but
Speaker 1: we all but we're going to tightly integrate all the
Speaker 1: operations across businesses. Thank you everyone for sticking with us.
Speaker 1: Thank you for all your insights, your candor. We really
Speaker 1: appreciate it. Thank you Austin south By Southwest. This has
Speaker 1: been a blast. Thanks for listening. Be sure to leave
Speaker 1: us a review at Apple Podcast, and please go to
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Speaker 1: And as always, be sure to tune in next week
Speaker 1: for another episode of Strictly Business. Ye