WEBVTT - 'Content Influences Everything': Kevin Mayer and Michael Kassan on Media's New Roadmap 0:00:00.080 --> 0:00:11.640 M h. Welcome to Strictly Business, Varieties weekly podcast featuring 0:00:11.720 --> 0:00:15.720 conversations with industry leaders about the business of media and entertainment. 0:00:16.360 --> 0:00:20.280 I'm Cynthia Littleton, co editor in chief of Variety. Today's 0:00:20.280 --> 0:00:23.400 Strictly Business Interview comes from the south By Southwest Conference 0:00:23.440 --> 0:00:27.040 in Austin, Texas on March fifteenth. I interviewed two major 0:00:27.080 --> 0:00:29.240 players for a keynote session about the state of the 0:00:29.280 --> 0:00:33.360 content business. Handle Media co CEO Kevin Mayer is a 0:00:33.400 --> 0:00:36.680 former Disney executive who has been making waves in Hollywood 0:00:36.720 --> 0:00:39.279 as he has been out shopping with a big checkbook 0:00:39.320 --> 0:00:43.680 for content assets. Media Link CEO Michael Casson is a 0:00:43.720 --> 0:00:46.560 well known deal maker in the advertising business and a 0:00:46.640 --> 0:00:50.760 marketing consultant to many Marquis names. His company was just 0:00:50.840 --> 0:00:53.600 acquired by a United talent agency for a hundred and 0:00:53.640 --> 0:00:56.680 twenty five million dollars. The three of us had a 0:00:56.760 --> 0:00:59.600 lively conversation in front of a packed house at the 0:00:59.640 --> 0:01:05.720 Austin Convention Center. We went deep on marketplace conditions, roth evaluations, 0:01:05.720 --> 0:01:09.760 how TikTok will be monetized, when ads will come to Netflix, 0:01:10.120 --> 0:01:12.560 and where the new normal is headed in pay TV. 0:01:13.280 --> 0:01:22.840 That's all coming up after the break. This is a 0:01:22.959 --> 0:01:27.199 really great opportunity with our two guests here, we have 0:01:28.200 --> 0:01:31.000 people that just reflect all of the cross currents of 0:01:31.040 --> 0:01:33.880 media right now. Kevin Mayer has had quite a tour 0:01:34.400 --> 0:01:38.600 in the last twelve, twelve, sixteen months of media and 0:01:38.680 --> 0:01:41.680 all of its inflection points. Michael has made a career 0:01:41.840 --> 0:01:46.600 out of being at the intersection of media, advertising, marketing, commerce, 0:01:46.920 --> 0:01:49.320 and that is that those are all of the things 0:01:49.320 --> 0:01:52.880 that are driving the business forward right now. So it's 0:01:52.880 --> 0:01:55.920 a great opportunity for us to talk about some you know, 0:01:56.000 --> 0:01:58.840 to talk about some specifics and also some big picture things. 0:01:58.880 --> 0:02:01.560 So we'll talk well thought we would start by talking 0:02:01.880 --> 0:02:04.800 Kevin Mayer is in the midst with your partner Tom Stags, 0:02:05.240 --> 0:02:08.880 who like you as a fellow Disney along longtime Disney executive. 0:02:08.960 --> 0:02:12.040 You have joined forces into a company called Candle Media, 0:02:12.360 --> 0:02:14.960 and you have been the buzz of Hollywood because you've 0:02:15.000 --> 0:02:18.320 been in town with a big checkbook talking to people 0:02:18.520 --> 0:02:22.960 about buying content assets. You've been very deliberative and you 0:02:23.000 --> 0:02:25.600 and Tom have talked a little bit about the big 0:02:25.639 --> 0:02:28.440 picture of what you're going after today, I'd like to 0:02:28.440 --> 0:02:30.840 start by talking about sort of you've been at it 0:02:30.880 --> 0:02:34.639 now for probably going on about a year. Where does 0:02:34.720 --> 0:02:38.960 Candle Media stand in terms of your building a physical 0:02:39.000 --> 0:02:42.080 infrastructure around that business. Well, I think we're in pretty 0:02:42.080 --> 0:02:45.799 good shape. We actually started in earnest this summer, late 0:02:45.800 --> 0:02:48.119 summer when we bought Hello Sunshine. That was our first 0:02:48.120 --> 0:02:51.440 purchase research. You might have heard something about that, Yeah, 0:02:51.520 --> 0:02:54.680 and UM and we partner with Blackstone and that that 0:02:54.760 --> 0:02:57.320 was an ongoing UM search that I was the time 0:02:57.360 --> 0:02:58.919 and I were on to see who's the right private 0:02:58.919 --> 0:03:01.760 equity partner Blackstone being as one of the largest private 0:03:01.800 --> 0:03:04.440 equity players and one of the companies that wants very 0:03:04.520 --> 0:03:06.800 much to put some money in media right now, Well, 0:03:06.840 --> 0:03:10.320 black Stone is It varies from time to time. I 0:03:10.320 --> 0:03:12.280 think they're the biggest private equity firm in the world. 0:03:12.280 --> 0:03:14.000 At this point, I have the biggest fund. We're part 0:03:14.000 --> 0:03:16.000 of a twenty six billion dollar fund, which is great. 0:03:16.440 --> 0:03:19.040 They are a black Stone specifically was was a great 0:03:19.120 --> 0:03:22.040 choice because they are very they're in thematic investors and 0:03:22.160 --> 0:03:23.520 one of the one of the themes they have a 0:03:23.520 --> 0:03:27.160 lot of conviction on is content growth in content spands. 0:03:27.160 --> 0:03:30.280 So they're investing in private equity with Tom and myself 0:03:30.360 --> 0:03:32.840 and Candle Media they're investing in the real estates either 0:03:32.840 --> 0:03:38.279 they're buying studios UM they have private public equity operations 0:03:38.280 --> 0:03:40.280 and they're buying you know, they're making their choices among 0:03:40.320 --> 0:03:43.280 public stocks in that space too. So they're high conviction 0:03:43.280 --> 0:03:45.840 and they've been a great partner. And we got we 0:03:45.960 --> 0:03:48.080 got put into orbit really with the with the hell 0:03:48.120 --> 0:03:51.360 of Sunshine by and then not not long thereafter, we 0:03:51.480 --> 0:03:53.960 purchased a company called Moonbug. And if you have anyone 0:03:53.960 --> 0:03:57.000 out there has small kids, you'll either like me or 0:03:57.000 --> 0:03:59.400 hate mate for having for Moonbug. They have cocoa melon 0:03:59.520 --> 0:04:04.680 is their primary m asset and intellectual property, and they 0:04:04.720 --> 0:04:06.880 a blippy and they have a whole the whole bunch 0:04:07.000 --> 0:04:10.280 of kids I p that was born on YouTube and 0:04:10.320 --> 0:04:14.160 then taken from YouTube and multi platforms into Netflix, into Amazon, 0:04:14.320 --> 0:04:17.240 you know, the streaming services and also licensing and merchandizing, 0:04:17.680 --> 0:04:20.039 and so we're pretty good shape. We do have a 0:04:20.120 --> 0:04:25.120 vision for a modern UM sort of creator economy business 0:04:25.480 --> 0:04:29.400 which has traditional film and television assets that are sold 0:04:29.520 --> 0:04:33.200 to streamers. UM. We have social media storytelling, as best 0:04:33.240 --> 0:04:36.560 evidenced by Moonbug, which again starts on YouTube and then 0:04:36.800 --> 0:04:40.560 the stories propagate to other platforms. And then commerce. I 0:04:40.600 --> 0:04:43.080 think there's a not my time at TikTok, I really 0:04:43.080 --> 0:04:47.880 saw the ability for content and influencers to create audience 0:04:48.120 --> 0:04:53.720 dynamics that are very, very conducive to making concluding commerce transactions. 0:04:53.880 --> 0:04:57.200 Has happened in China to a large degree, this social 0:04:57.480 --> 0:05:01.760 social media commerce, and we think we have the assets 0:05:01.760 --> 0:05:04.440 to bring to bear to the same thing here in 0:05:04.480 --> 0:05:08.200 the US and parts West. So commerce can generate the 0:05:08.279 --> 0:05:10.640 kind of numbers that people in the content business are 0:05:10.720 --> 0:05:13.760 accustomed to with, you know, big successful movies and big 0:05:13.800 --> 0:05:17.920 successful TV shows. You see that that market is that big. Yeah, 0:05:17.920 --> 0:05:20.560 it's very big. I mean, here's one example. Hella Sunshine 0:05:20.600 --> 0:05:22.880 has a has a show called The Home Edit. The 0:05:22.920 --> 0:05:24.919 Home Edit for those of you haven't seen it, UM 0:05:25.120 --> 0:05:29.760 is based on a company called the Home Edit. We 0:05:29.800 --> 0:05:32.560 just bought. That's where I'm going. That UM that goes 0:05:32.640 --> 0:05:34.640 to people's homes and started office celebrities, but it goes 0:05:34.640 --> 0:05:36.120 to you know, anyone who hires them. They go in 0:05:36.160 --> 0:05:38.840 and they reorganize and edit your home, and they come 0:05:38.839 --> 0:05:41.680 in with products too, so you can rearrange your garage 0:05:41.720 --> 0:05:43.520 and your closets and everything else. And they do a 0:05:43.520 --> 0:05:46.200 great job, and they make the shows out of it, 0:05:46.240 --> 0:05:49.760 an unscripted show. We bought the underlying company and that 0:05:49.880 --> 0:05:52.320 is a big commerce place. So that's the and there's 0:05:52.360 --> 0:05:54.720 a big social media component around the Home Edit to 0:05:54.920 --> 0:05:56.719 the founders of the Home Edit are very active in 0:05:56.760 --> 0:05:59.440 social media. There's a huge amount of residents there. So 0:05:59.680 --> 0:06:02.719 that's a great example of taking content and moving into 0:06:02.800 --> 0:06:06.120 commerce and then social media storytelling. So and Mike, let 0:06:06.120 --> 0:06:08.440 me ask you, Michael, you've known Kevin a long time. 0:06:08.640 --> 0:06:11.680 You know he's embarking on this big adventure with again 0:06:11.680 --> 0:06:14.680 a nice bankroll. What what did you what? What was 0:06:14.720 --> 0:06:17.080 your advice as he as he started out on this 0:06:17.160 --> 0:06:19.440 journey in terms of what to look for and where 0:06:19.480 --> 0:06:22.560 the where the opportunities? Well? What what? What? I think 0:06:22.640 --> 0:06:26.480 Kevin said at the beginning identifying Blackstone as his partner 0:06:26.520 --> 0:06:30.799 because they had a focus, and Kevin had a focus. 0:06:30.960 --> 0:06:36.680 We've been in conversation about the strategy well before they 0:06:36.760 --> 0:06:40.599 implemented the first deal in the summer, and it was 0:06:40.640 --> 0:06:45.039 about that and he was clear and Tom equally clear 0:06:45.200 --> 0:06:47.880 on that focus. And I think you know hard to 0:06:47.880 --> 0:06:50.120 give Kevin advice on many things that he doesn't give 0:06:50.120 --> 0:06:53.760 me advice on, but I will tell the audience why 0:06:54.520 --> 0:06:57.640 we played that song if you don't mind. As we 0:06:57.640 --> 0:07:01.119 were sitting in the green room, I looked at Kevin 0:07:01.160 --> 0:07:03.680 and I said, you know, you've got the brains, I've 0:07:03.680 --> 0:07:05.960 got the looks. Let's go make lots of money. And 0:07:06.040 --> 0:07:09.840 I asked them to thank you for agreeing with me 0:07:09.960 --> 0:07:12.840 on you know, I agree with them that there you go. 0:07:13.000 --> 0:07:15.920 And we did do a quick calculation on the copyright 0:07:15.920 --> 0:07:21.400 in the I p ip benefits and how much. But 0:07:21.400 --> 0:07:24.440 but but truthfully, the advice I gave Kevin was advice 0:07:24.480 --> 0:07:27.360 he was actually giving himself, which was be focused on 0:07:27.360 --> 0:07:30.200 where they're going, what what What's interesting to me is 0:07:31.000 --> 0:07:35.720 being on a stage with you. In One of the 0:07:35.800 --> 0:07:40.040 earliest panel conversations I ever did was twenty two years 0:07:40.040 --> 0:07:44.680 ago with Variety with Peter Bart, a name that is 0:07:45.000 --> 0:07:47.600 you know, well known by many in our industry. Great 0:07:48.880 --> 0:07:54.960 and this was in two thousand and The topic sentence 0:07:55.120 --> 0:07:58.840 of the of the panel was content meets commerce. So 0:07:58.920 --> 0:08:02.040 we're not in a conversation Asian now that hasn't been 0:08:02.040 --> 0:08:05.160 around for a long time. What I think we've found 0:08:05.320 --> 0:08:09.560 is that inflection point where content is influencing everything, but 0:08:09.680 --> 0:08:13.040 particularly commerce. As we're looking at it, and there's a 0:08:13.040 --> 0:08:15.480 whole lot behind that. But just it's funny for me 0:08:15.560 --> 0:08:18.200 to be on a stage twenty two years later really 0:08:18.240 --> 0:08:23.920 talking about the seas, content, commerce, et cetera. UM, I mean, 0:08:24.400 --> 0:08:28.840 we've moved a level beyond Watch Friends, like Rachel's Sweater 0:08:29.000 --> 0:08:33.760 and click now now Rachel's sweater is the show. I 0:08:33.840 --> 0:08:36.280 actually asked her if she ever had a blue sweater. 0:08:36.800 --> 0:08:39.520 Answer was no, But everybody said, what how are you 0:08:39.559 --> 0:08:43.320 going to buy that blue sweater? Let me ask you 0:08:43.320 --> 0:08:46.640 a little more specifically, Kevin, So, is the idea that 0:08:46.760 --> 0:08:51.040 the Candle Media is a will be a traditional kind 0:08:51.080 --> 0:08:53.880 of roll up where you will Candle Media will provide 0:08:53.920 --> 0:08:59.040 some back end services, administration, you know, distribution, marketing. Is 0:08:59.080 --> 0:09:02.920 that the idea? Or are you just building a holding 0:09:02.960 --> 0:09:06.280 company and you intend to house these imprints and have 0:09:06.400 --> 0:09:10.319 them run completely autonomously. It's actually neither. Um we're building. 0:09:10.720 --> 0:09:13.040 We're trying to replicate the sort of framework that we 0:09:13.080 --> 0:09:15.920 had at Disney, where Disney is an integrated company. There's 0:09:16.240 --> 0:09:19.439 you know, there's no question about that. We bought UM 0:09:19.800 --> 0:09:23.360 brands and franchises that plugged into that that company, and 0:09:23.400 --> 0:09:26.800 they were the creative UM the creative folks and the 0:09:26.800 --> 0:09:29.920 creative teams were allowed to run very autonomously. We bought Marvel. 0:09:30.200 --> 0:09:32.320 You know, Kevin Fay, he runs the Marvel studios. He 0:09:32.360 --> 0:09:34.959 decides about to make and he decides where the cinematic 0:09:35.040 --> 0:09:37.120 universe is going. He does all that stuff. You would 0:09:37.200 --> 0:09:38.720 never want to get in the way of that. But 0:09:38.760 --> 0:09:43.520 in terms of distributing the films, monetizing them, deciding you know, 0:09:43.520 --> 0:09:45.640 to put them into streaming service, the windowing of all 0:09:45.679 --> 0:09:49.520 that um which which the characters are going to be 0:09:49.960 --> 0:09:53.760 exploited for licensing, merchandizing opportunities. So all the monetization is 0:09:53.800 --> 0:09:56.160 done at the Walt Disney company level, and we're that's 0:09:56.160 --> 0:09:58.959 the approach that we're taking here. Candle Media isn't fully 0:09:59.000 --> 0:10:01.760 integrated operating company. It's not a holding company, nor is 0:10:01.800 --> 0:10:04.319 it a company that just provides back in services to 0:10:04.400 --> 0:10:09.120 its component parts. Were fully operational working company UM, and 0:10:09.120 --> 0:10:11.840 we're building that through acquisition, and then once we do 0:10:11.920 --> 0:10:14.280 these acquisitions, there's gonna be a huge amount of organic 0:10:14.280 --> 0:10:17.240 build that's going to come from that. So yeah, you know, 0:10:17.320 --> 0:10:19.280 we're not pretending to be Disney or anything like that 0:10:19.280 --> 0:10:21.280 that we don't have that much humors. But we like 0:10:21.400 --> 0:10:24.640 that organizational philosophy that works so well at Disney, keeping 0:10:24.679 --> 0:10:28.439 the creative engines going and autonomous. Everything else is truly integrated. 0:10:29.200 --> 0:10:31.920 And will you at at the Candle Media level or 0:10:31.960 --> 0:10:33.840 at the Hello Sunshine level, will you be in the 0:10:33.880 --> 0:10:36.679 business of financing your own content or do you intend 0:10:36.720 --> 0:10:40.480 to still partner with the major studios and platforms. Yeah, 0:10:41.280 --> 0:10:44.360 that's a good question. The one of the thesis that 0:10:44.400 --> 0:10:47.000 with the thesis that we had one of them, the content, 0:10:47.040 --> 0:10:49.400 commerce and community one, that big one we just talked about. 0:10:49.640 --> 0:10:53.080 That's that's the main strategy behind the company. But if 0:10:53.080 --> 0:10:55.840 you look just at film and television, that component of it, 0:10:56.559 --> 0:11:00.200 there is a real value for two. Independence at this 0:11:00.240 --> 0:11:03.079 point and the other the only thing that the independent 0:11:03.120 --> 0:11:05.880 producers haven't had they haven't had enough scale, and they 0:11:05.880 --> 0:11:08.240 haven't had access to capital. They've been capital starved and 0:11:08.280 --> 0:11:11.320 they've been you know, um, just not big enough to 0:11:11.440 --> 0:11:14.040 leverage the right deals with streamers. Now. On the on 0:11:14.080 --> 0:11:17.560 the other side, streamers have no option to go to 0:11:17.600 --> 0:11:20.040 the large studios anymore, by and large because those large 0:11:20.040 --> 0:11:22.440 studios have their own streaming services at their feeding. I 0:11:22.480 --> 0:11:25.960 helped our silo walls are getting builder. And that's what 0:11:26.000 --> 0:11:28.680 Bob iron I did my last five years of Disney 0:11:28.760 --> 0:11:31.360 is that's we architected that that every single and it's 0:11:31.360 --> 0:11:33.720 the right strategy. I think every single piece of creative 0:11:33.760 --> 0:11:35.839 output that comes from any part of Disney, whether it 0:11:35.920 --> 0:11:39.199 be you know, something that's branded Disney, something Pixar, Marvel, 0:11:39.240 --> 0:11:41.360 Star Wars, that all goes in Disney. Plus if it's 0:11:41.360 --> 0:11:43.960 come something out of the ABC Television studios, twenty one 0:11:44.040 --> 0:11:47.200 Century TV, those are basically targeted for Hulu. But everything 0:11:47.240 --> 0:11:50.480 we may ultimately comes to one of our streaming services 0:11:50.480 --> 0:11:53.400 permanently and exclusively. That means if you're Netflix, you can 0:11:53.440 --> 0:11:55.960 no longer license Disney project. If you're Amazon, you can't 0:11:56.000 --> 0:11:59.080 license Disney product. And I was running content sales in 0:11:59.160 --> 0:12:01.840 order to eliminate them and get rid of content sales. 0:12:02.120 --> 0:12:06.080 So independent independent producers are the last fashion of content 0:12:06.160 --> 0:12:08.720 that these that these streamers can go to outside of 0:12:08.720 --> 0:12:12.280 the stuff that they make themselves. So being independent is 0:12:12.320 --> 0:12:16.199 a very substantial benefit. Independent in the face of double 0:12:16.240 --> 0:12:18.199 digit growth in demand for the kind of content that 0:12:18.240 --> 0:12:20.760 we make, and if you have capital and scale that 0:12:20.760 --> 0:12:22.839 when we're piecing these companies together, so you can go 0:12:22.920 --> 0:12:25.080 to market in a much more leveraged way, and we 0:12:25.120 --> 0:12:27.400 have capital. Some projects will take all the way from 0:12:27.440 --> 0:12:29.800 development through a finished product and go license that and 0:12:29.800 --> 0:12:32.520 own it and to create a library like studios do. 0:12:32.920 --> 0:12:35.600 Some will do you know, EP type stuff, or where's 0:12:35.600 --> 0:12:37.160 the producer and we get paid to credit. Some will 0:12:37.200 --> 0:12:38.880 be in between. But if you have scale and you 0:12:38.960 --> 0:12:41.840 have capital, then you can start making those choices affirmatively 0:12:42.000 --> 0:12:44.000 rather than just being at the whim of the buyer. 0:12:44.400 --> 0:12:46.679 And do you think that if you have Riese Witherspoon 0:12:46.840 --> 0:12:49.080 or all of the all of the heft that you 0:12:49.120 --> 0:12:51.920 can bring to I P you can walk into Netflix 0:12:52.040 --> 0:12:55.400 or Amazon or even Disney Plus and say no, I 0:12:55.400 --> 0:12:58.040 don't want to cost plus deal, which means they give 0:12:58.080 --> 0:13:00.880 you the budget and they give you twenty on the 0:13:00.920 --> 0:13:03.960 high end as the producer's fee, as opposed to the 0:13:04.040 --> 0:13:06.320 old game, which was a little more like the casino 0:13:06.720 --> 0:13:08.959 and the studio came in, had money in the game, 0:13:09.080 --> 0:13:12.120 and in success, everybody made a lot of money. Now, 0:13:12.200 --> 0:13:15.760 in success, for the most part, producers know that your 0:13:15.840 --> 0:13:20.600 upside is capside is capped at and that's a very 0:13:20.640 --> 0:13:23.480 predictable game. But it's a different game. Do you think 0:13:23.520 --> 0:13:26.319 that Michael, I'm gonna let you stop, but I want 0:13:26.320 --> 0:13:29.920 to see what Kevin, as you're playing the middle of 0:13:29.920 --> 0:13:32.120 building this right to give you an example, but that 0:13:32.160 --> 0:13:36.120 seems to be the real. I mean, streamers want to 0:13:36.120 --> 0:13:38.120 own other product and pay you and buy you out 0:13:38.160 --> 0:13:40.400 and and just pay you a premium. We as a 0:13:40.400 --> 0:13:43.120 studio want to own the product and not more and 0:13:43.120 --> 0:13:45.360 more of the product and not sell it out, and 0:13:45.480 --> 0:13:47.840 so you continue to own the i P. One example 0:13:47.880 --> 0:13:50.000 of this Moonbug, not a hell of sometime, but a 0:13:50.000 --> 0:13:52.920 Moonbug example. We all the ipaid Moonbug, and Moonbug was 0:13:52.960 --> 0:13:55.800 a two point seven billion valuation, something that I think 0:13:55.960 --> 0:13:58.160 really which was a high valuation, but I think also 0:13:58.240 --> 0:14:01.480 really opened people's eyes to the market for this kind 0:14:01.520 --> 0:14:04.400 of really like preschoosed on the value of the i P. 0:14:04.559 --> 0:14:07.120 It wasn't a high price. I wasn't not a high price. 0:14:07.200 --> 0:14:09.600 It was just it wasn't thank you for saying, but 0:14:09.640 --> 0:14:11.640 it was a good price based on the value of 0:14:11.640 --> 0:14:13.679 the i P. People thought we were paid from Marball 0:14:13.760 --> 0:14:16.120 and all that stuff. We want, Tom and I know 0:14:16.160 --> 0:14:18.120 the value I paid. We're pretty good, We're pretty experienced 0:14:18.120 --> 0:14:20.160 of that. So I think we did pay a very 0:14:20.200 --> 0:14:22.960 fair price. Frankly, um, But I guess time will time 0:14:23.000 --> 0:14:24.920 will prove that. But here's a here's an example of 0:14:25.040 --> 0:14:27.520 when you have the goods that streamers need or anyone needs, 0:14:27.640 --> 0:14:30.960 you have some leverage. So Cocoa Melon, that's the biggest 0:14:30.960 --> 0:14:33.760 I P that that Moon Bike has. It's the largest 0:14:33.760 --> 0:14:35.960 YouTube channel in the world, and they when they bought it, 0:14:35.960 --> 0:14:37.840 it was a sixty million subscribers, and that was almost 0:14:37.960 --> 0:14:42.200 hundred forty million subscribers. It's massive. And last year it 0:14:42.280 --> 0:14:45.960 was the second most streamed television show on Netflix. Of 0:14:46.000 --> 0:14:48.280 all shows, the only bigger one was Criminal Minds. It 0:14:48.320 --> 0:14:50.560 was this much bigger. Coco Milon was almost the number 0:14:50.600 --> 0:14:54.800 one show. And that Cocoa Melon show was YouTube episodes 0:14:54.920 --> 0:14:59.560 strung together into episode into TV length episodes package in 0:14:59.560 --> 0:15:02.240 ten episo. So sold to Netflix for a license fee, 0:15:02.560 --> 0:15:06.520 non exclusively. We own it. Netflix does not own anything. 0:15:06.560 --> 0:15:09.479 They paid us a fee and they are benefiting tremendously 0:15:09.480 --> 0:15:11.040 from it. It's a huge one for them, it's a 0:15:11.080 --> 0:15:14.040 huge one for us. And it's still on YouTube with 0:15:14.080 --> 0:15:16.960 that huge audience, and we're getting a lot of advertising 0:15:17.200 --> 0:15:20.280 revenue from YouTube. So if you have the goods and 0:15:20.360 --> 0:15:22.480 you have an finished product, you can get the deal 0:15:22.520 --> 0:15:25.880 that you want. We've already done it. Interesting, we're gonna say, Well, 0:15:25.920 --> 0:15:28.080 what I was gonna say is two things. It's not 0:15:28.480 --> 0:15:30.960 the old days of the studio knocking on your door. 0:15:33.280 --> 0:15:35.360 The producers don't have to go to the streamers. Now 0:15:35.400 --> 0:15:38.120 the streamers are coming to the producers. Because of Kevin's point, 0:15:38.480 --> 0:15:41.440 the studios are all going to have exclusive rights to 0:15:41.480 --> 0:15:44.320 their product. So you do need the independence. So this 0:15:44.400 --> 0:15:47.560 is a time when the independence have leverage that they 0:15:47.600 --> 0:15:53.320 wouldn't have had traditionally. Number one, number two. You you 0:15:53.360 --> 0:15:55.440 have to understand that. And I know we're going to 0:15:55.520 --> 0:16:01.040 get into this, but this commerce part of this. I 0:16:01.080 --> 0:16:03.280 look at the commerce part not only as the buying 0:16:03.320 --> 0:16:06.560 of the goods and services, but the advertising side of it, 0:16:07.400 --> 0:16:12.640 the monetization through advertising. We're watching that change right now. 0:16:12.680 --> 0:16:16.280 I mean, as as Kevin developed Disney Plus, it was 0:16:16.360 --> 0:16:18.800 clear at the beginning that there wasn't going to be 0:16:18.840 --> 0:16:21.960 an a vote alternative at the beginning, but it was 0:16:22.040 --> 0:16:23.960 clear if you looked at it, that there was going 0:16:24.000 --> 0:16:27.480 to be one ultimately. I mean, I'm throwing that question 0:16:27.520 --> 0:16:30.960 to him because where in the cycle was that decision 0:16:31.040 --> 0:16:35.560 made to ultimately do it, and you know the the 0:16:35.600 --> 0:16:38.600 other guy, uh starts with an end. I think when 0:16:38.640 --> 0:16:41.200 that avenue revenue per user number started to go in 0:16:41.240 --> 0:16:43.640 the right direction, and I saw that the AD product 0:16:43.720 --> 0:16:47.680 was even more, even more incretive potential in your decision 0:16:47.680 --> 0:16:50.200 process at the beginning, you must have known that that 0:16:50.280 --> 0:16:53.440 was on the on the completely. I think Disney is 0:16:53.440 --> 0:16:56.200 doing the right thing with that. It is if you 0:16:56.240 --> 0:17:01.040 look at Hulu as an example. Hulu has an AD 0:17:01.040 --> 0:17:03.440 free and an AD supported product, and that was part 0:17:03.480 --> 0:17:06.159 of our Disney family of Directics Humor services, So I 0:17:06.200 --> 0:17:10.439 know this pretty well. Um, the AD free was nine 0:17:10.480 --> 0:17:13.360 a month and the AD supported was seven nine a month. 0:17:13.480 --> 0:17:15.560 I think that was the numbers. There's a five dollar 0:17:15.640 --> 0:17:19.240 difference and um, so maybe it's six, but that five 0:17:19.240 --> 0:17:22.440 dollars that you got for um AD free was actually 0:17:22.440 --> 0:17:24.520 worse than the r P you got for AD supported 0:17:24.560 --> 0:17:26.960 because there's an eight dollars of AD support for and 0:17:27.000 --> 0:17:29.080 maybe now it's nine. It's actually growing. You would know 0:17:29.160 --> 0:17:31.800 this too, So you're three or four dollars better off 0:17:32.280 --> 0:17:35.080 if that subscriber takes ads and if they take no ads. 0:17:35.400 --> 0:17:39.040 And I think that there's a massive demand for in 0:17:39.520 --> 0:17:43.280 you know, in stream over the top high quality advertising. 0:17:43.600 --> 0:17:46.400 That is just because there's a flight the linear television 0:17:46.520 --> 0:17:50.080 is the exodus advertising from linear television is extreme, and 0:17:50.119 --> 0:17:55.200 they're going they'd still like high quality UM video as context, 0:17:55.480 --> 0:17:57.879 so they go over the top services like Pluto, like 0:17:58.280 --> 0:18:01.240 Hulu and now like Disney Plus. Michael, are your clients 0:18:01.240 --> 0:18:04.800 freaking out that so much activity is going to subscriptions, 0:18:04.880 --> 0:18:07.359 so much activity is happening, so all the buzzy shows 0:18:07.359 --> 0:18:11.520 are happening, And you know absolutely, and you know the 0:18:11.520 --> 0:18:17.879 the the challenge is, traditionally and historically we looked at 0:18:17.880 --> 0:18:21.879 that inextricable link between the creation of and delivery of 0:18:21.960 --> 0:18:25.879 content supported by marketing messages of some sort. That was 0:18:25.920 --> 0:18:28.199 the That was the value exchange that happened. You know. 0:18:28.240 --> 0:18:30.280 I always like to go back to where it started 0:18:30.280 --> 0:18:33.200 and people say, well, it used to be free for television, 0:18:33.200 --> 0:18:36.240 and I say, it never was free. The exchange you 0:18:36.359 --> 0:18:38.760 made was I'm going to give you my time and 0:18:38.800 --> 0:18:41.199 my attention and look at those commercials and you're going 0:18:41.280 --> 0:18:45.840 to give me content. That break occurred and if you're 0:18:45.880 --> 0:18:48.640 you know, back to your question, Cynthia, are the clients 0:18:48.680 --> 0:18:51.200 the brands freaking out? Of course they are because they're 0:18:51.200 --> 0:18:54.040 trying to figure out how do we play, how do 0:18:54.119 --> 0:18:56.600 we get our message across? Is it going to be 0:18:56.800 --> 0:18:59.560 back to just you know, the Coca cola can on 0:18:59.560 --> 0:19:02.359 the table. I don't think so. I mean, sure there'll 0:19:02.400 --> 0:19:05.000 be more of that, but they are at that point 0:19:05.000 --> 0:19:07.719 where they need to figure out They the brands need 0:19:07.840 --> 0:19:10.879 to figure it out. And now with Disney making this announcement, 0:19:10.960 --> 0:19:13.600 which I presumed was on the you know, on the 0:19:13.680 --> 0:19:18.760 roadmap from the beginning. I heard and Spencer used to 0:19:18.760 --> 0:19:21.399 work for Kevin back in the day at Disney. Spencer Newman, 0:19:21.440 --> 0:19:25.240 who's the CFO Netflix, the other day said well, we're 0:19:25.240 --> 0:19:31.640 not religious. There was a softening at Netflix, the CFO. 0:19:31.800 --> 0:19:35.480 Netflix actually softened to the the Their response for ten 0:19:35.560 --> 0:19:39.160 years has been absolutely the thought of advertising on Netflix. 0:19:40.520 --> 0:19:42.840 Five second pre roll in front of every Netflix video. 0:19:42.840 --> 0:19:45.560 How many billions of dollars is there? It's it's it's there. 0:19:45.760 --> 0:19:48.840 They don't have a choice. At some point, you're in 0:19:48.880 --> 0:19:52.600 fact of a very smart variety. Senior media analysts. Gavin 0:19:52.640 --> 0:19:55.440 Bridge on this very stage said that Netflix, it'll be 0:19:55.480 --> 0:19:57.160 It could be five years, it could be ten years, 0:19:57.160 --> 0:20:01.199 but Netflix will have years. Alright. I want to tell you, 0:20:01.200 --> 0:20:02.960 and I can't read into this more than I asked 0:20:03.040 --> 0:20:04.439 him to do it and he's going to do it. 0:20:04.480 --> 0:20:07.399 But ted Sarandos is going to sit with me on 0:20:07.440 --> 0:20:10.119 the stage at the can Lions this year and in 0:20:10.200 --> 0:20:13.520 the lions Den know it and into the lions Den 0:20:13.560 --> 0:20:15.639 and someone said to me, how the hell did you 0:20:15.720 --> 0:20:19.120 get him, the guy who won't accept advertising, to sit 0:20:19.160 --> 0:20:22.359 on a stage at a conference that celebrates advertising. I said, well, 0:20:22.440 --> 0:20:25.160 he's got two hats because Netflix is a pretty big 0:20:25.200 --> 0:20:29.480 advertiser in terms of what they spend on promoting their programming, 0:20:29.520 --> 0:20:33.400 so that is advertising. The incoming is the other. I'm 0:20:33.440 --> 0:20:36.240 not suggesting that him doing that is anything other than 0:20:36.320 --> 0:20:39.560 him doing something that I asked him to do. But truthfully, 0:20:41.040 --> 0:20:43.560 it gives you an indication that that's softening and not 0:20:43.640 --> 0:20:47.760 being religious. Will will will occur. That doesn't make it 0:20:47.760 --> 0:20:50.439 easy for the advertisers because they still have to figure 0:20:50.480 --> 0:20:54.120 it out. And that's part of what keeps us busy, 0:20:54.280 --> 0:21:00.480 you know, candidly is helping advertisers identify those opportunities. And 0:21:01.160 --> 0:21:05.679 you know, one of the reasons that we reimagined media 0:21:05.720 --> 0:21:08.440 Link at the end of last year at u t 0:21:08.640 --> 0:21:14.880 A at United talent agency was the realization that being 0:21:14.960 --> 0:21:18.920 closer to the creator economy for media Link was a 0:21:19.040 --> 0:21:24.080 smart play because our brands and our clients are saying, wtf, 0:21:24.760 --> 0:21:27.000 you know, how do we get there? And we have 0:21:27.119 --> 0:21:29.960 to start creating more of our own content, which, by 0:21:30.000 --> 0:21:33.160 the way, is a part of where Candle Media has opportunity. 0:21:33.160 --> 0:21:36.440 And Kevin and I have certainly talked about this. Um well, 0:21:36.480 --> 0:21:40.320 I've talked and Kevin's listened. He hasn't agreed yet. But 0:21:40.320 --> 0:21:44.000 but truthfully, we've been doing this routine for twenty years, 0:21:44.000 --> 0:21:46.760 so it's act going a little bit, a little bit. 0:21:46.960 --> 0:21:49.919 We've got we've got a get going. But but but truthfully, 0:21:50.600 --> 0:21:54.600 the opportunity to get brands more active in the financing 0:21:54.640 --> 0:21:58.520 of that content is another mechanism and then it becomes 0:21:58.600 --> 0:22:01.680 brought to you by and just as just a um 0:22:01.840 --> 0:22:05.119 Michael's company. Media Link was sold in December to the 0:22:05.280 --> 0:22:08.280 United Talent Agency, one of the Hollywood's largest talent agencies, 0:22:08.280 --> 0:22:12.000 for a million dollars. And that is another deal that's 0:22:12.000 --> 0:22:15.439 a signpost of how all these things are converging in 0:22:15.480 --> 0:22:18.720 ways that they did not. You know, new new alignments 0:22:18.720 --> 0:22:22.360 are being formed. Kevin was talking about the new sort 0:22:22.400 --> 0:22:24.600 of new world order Disney of all of the content 0:22:24.680 --> 0:22:27.399 going to different streamers, and we've seen that at not 0:22:27.640 --> 0:22:30.440 only Disney, we've seen it in a bas NBC Universal. 0:22:31.119 --> 0:22:34.440 It's been inside of three years. The literally the profit centers, 0:22:34.480 --> 0:22:38.679 all of the business models have literally just been re engineered. 0:22:38.720 --> 0:22:41.760 It is such a shift from literally decades of what 0:22:41.960 --> 0:22:44.760 I think we're looking in hindsight and recognizing, you know, 0:22:45.040 --> 0:22:50.000 incredible profit margins, incredible momentum. But do you do you 0:22:50.000 --> 0:22:53.680 feel like that the pay TV moment that built ESPN, 0:22:53.800 --> 0:22:57.000 that is that business? Is that going to be a 0:22:57.040 --> 0:23:00.000 moment or are we going to see it more? Because 0:23:00.119 --> 0:23:01.760 I think we've seen a lot of these digital m 0:23:01.840 --> 0:23:04.239 v p d s and that that business seems to have. 0:23:04.480 --> 0:23:06.880 The digital m v p d s to who lose 0:23:06.960 --> 0:23:08.959 the YouTube lives, they seem to have the same problems 0:23:09.000 --> 0:23:11.919 as the traditional because there's the same product, there's delivered 0:23:11.920 --> 0:23:14.160 a different way. There's there they're called over the top, 0:23:14.200 --> 0:23:16.240 they're just pay TV services. I mean, we when we 0:23:16.320 --> 0:23:18.960 decided to launch a Hulu, we wanted to. We thought 0:23:19.000 --> 0:23:20.920 there was an opportunity to do maybe do a little better, 0:23:20.960 --> 0:23:23.240 a little different on new devices, on connected TV, so 0:23:23.400 --> 0:23:26.280 the interface would be a more pleasant experience, which I 0:23:26.320 --> 0:23:29.200 think it has been. Um, you could dynamically insert ads, 0:23:29.200 --> 0:23:31.679 which would be great, But I will say it is 0:23:32.240 --> 0:23:37.240 linear television, that the seven streaming channel is linear television 0:23:37.240 --> 0:23:39.639 with how it was delivered on a satellite box, on 0:23:39.680 --> 0:23:42.840 a cable box, or on over the top on the Internet. 0:23:42.880 --> 0:23:44.919 It is the same product, so it is experiencing the 0:23:44.960 --> 0:23:48.280 same problems. We thought that it hopefully offset some of 0:23:48.320 --> 0:23:51.359 the downward trajectory of subscribers. It really has not. I 0:23:51.400 --> 0:23:55.280 think that paid that the pay TV subscriber universe is 0:23:55.320 --> 0:23:59.800 in free fall. Actually do you think like it doesn't settle. 0:24:00.000 --> 0:24:03.680 Here's what's kind of happen. My prediction is this soon 0:24:04.600 --> 0:24:07.760 the the only people well served by by pay TV 0:24:07.800 --> 0:24:10.000 bundle or sports fans because that's where you find sports. 0:24:10.080 --> 0:24:13.080 Putting on your hat as chairman of the Zone, a 0:24:13.160 --> 0:24:16.280 streaming service that is mostly focused in Europe and Asia, 0:24:16.359 --> 0:24:19.520 but a player in the sports game, a big I think, 0:24:19.560 --> 0:24:21.120 a pretty big player in the sports game. If you're 0:24:21.119 --> 0:24:22.560 in Europe, you would know it well. And we have 0:24:22.600 --> 0:24:24.760 boxing in the US and around the world. But this 0:24:24.800 --> 0:24:26.760 is putting on my ESPN hat. You know, I've launched 0:24:26.760 --> 0:24:29.080 the ESPN Plus and as a Disney and so I 0:24:29.119 --> 0:24:32.359 know kind of the thinking behind that, And my fear 0:24:32.840 --> 0:24:36.080 is that the it will continue to decline and decline 0:24:36.080 --> 0:24:38.639 and decline until basically you have sports fans, because it's 0:24:38.680 --> 0:24:40.240 only only thing that really has to be delivered on 0:24:40.240 --> 0:24:43.760 a time basis is sports and news, and that's the 0:24:43.800 --> 0:24:46.520 only thing. Other than that, all entertainment programming can be 0:24:46.520 --> 0:24:49.960 delivered on a you know, on demand basis through streaming services. 0:24:49.960 --> 0:24:52.800 There's no fundamental reason to have a linear channel experience 0:24:52.800 --> 0:24:55.800 for for entertainment. In fact, people don't prefer it. There's 0:24:55.840 --> 0:24:59.840 some spectacle lidents, you know, yeah, it's okay, you put 0:24:59.840 --> 0:25:01.400 the IS in there too, so you have the oscars 0:25:01.400 --> 0:25:03.359 and you have some other live events. So the live 0:25:03.400 --> 0:25:05.959 programming is the only universe that has to be served 0:25:06.040 --> 0:25:10.399 live almost by definition. So what happens then is can 0:25:10.480 --> 0:25:14.359 continue to decline until there's just basically mostly sports fans. 0:25:14.560 --> 0:25:16.000 And still let are a lot of sports fans in 0:25:16.040 --> 0:25:18.760 the US and around the world, but that's the value proposition. 0:25:18.800 --> 0:25:23.840 In the US and pay television, you think something maybe 0:25:23.840 --> 0:25:26.359 fifty even, but then you have to look if you're ESPN, 0:25:26.359 --> 0:25:28.800 if you're the other providers of sports. Are you better 0:25:28.840 --> 0:25:32.639 off wholesaling into this audience that is purely sports fans, 0:25:33.200 --> 0:25:35.439 or are you better off retailing to that audience the 0:25:35.480 --> 0:25:37.520 same same calculus who went through a Disney to launch 0:25:37.600 --> 0:25:40.400 Disney Plus all be better off wholesaling our content Netflix 0:25:40.400 --> 0:25:43.879 and the other streamers or being a streamer. So ESPN 0:25:43.920 --> 0:25:47.920 and other providers will have to go through that same calculus. Okay, 0:25:48.080 --> 0:25:50.639 pay TV is small enough now that wow, why should 0:25:50.680 --> 0:25:52.880 be be a wholesaler? Shouldn't it be a retailer can 0:25:52.880 --> 0:25:55.000 make more money? And that's when you'll see ESPN and 0:25:55.040 --> 0:25:57.320 others pull themselves out of the bundle, go direct to 0:25:57.359 --> 0:25:59.479 consumers and then there is no more bundle there pay 0:25:59.560 --> 0:26:02.080 TVs O And that's that's the trajectory that is. You 0:26:02.119 --> 0:26:03.959 need quite a stomach to be able to do that, 0:26:04.040 --> 0:26:06.600 because you have to make that decision to cut that 0:26:06.960 --> 0:26:12.639 income stream off to make the bet. So those are 0:26:12.720 --> 0:26:14.639 you know, those are rooms you want to kind of 0:26:14.720 --> 0:26:17.720 understand the dynamic of the decision to say we're not 0:26:17.760 --> 0:26:20.480 going to take these billions of dollars over here because 0:26:20.520 --> 0:26:23.760 we're making the bet over here, and generally speaking, in 0:26:23.840 --> 0:26:27.320 corporate America at least. Those decisions are tough because the 0:26:27.359 --> 0:26:30.280 short term versus the long term decision is really tough 0:26:30.320 --> 0:26:32.240 to make. There's a certain tone of voice in this 0:26:32.400 --> 0:26:34.359 and they always in the earnings calls, they always make 0:26:34.359 --> 0:26:37.480 the CFO deliver the news appropriately. But there's a certain 0:26:37.520 --> 0:26:39.760 tone of voice that the CFO gets when they're starting, 0:26:39.760 --> 0:26:41.800 when they're going to announce, okay, and in this quarter, 0:26:41.840 --> 0:26:44.680 we're going to take this level of a hit. I mean, 0:26:44.960 --> 0:26:48.440 the things have been so upside down that for a 0:26:48.480 --> 0:26:51.239 while there last year the companies were announcing how much 0:26:51.280 --> 0:26:53.400 they were going to lose and the stock, the stock 0:26:53.440 --> 0:26:56.960 wouldn't go out. It's been do you get a sense 0:26:56.960 --> 0:26:58.879 from you both in the market that there's been a 0:26:58.960 --> 0:27:01.480 leveling off? Certainly we saw that in the Q four 0:27:01.520 --> 0:27:05.280 earning cycle, there was a leveling off of Wall streets enthusiasm. 0:27:05.440 --> 0:27:08.480 Don't go anywhere. We'll be right back with more insights 0:27:08.520 --> 0:27:13.040 from Kevin Mayer and Michael Casson after this break. Thanks 0:27:13.040 --> 0:27:15.560 for helping us pay the bills. Now we're back with 0:27:15.640 --> 0:27:18.320 more from the South By Southwest conference. What I was 0:27:18.320 --> 0:27:21.360 going to say about the calendar, you know, we certainly 0:27:21.440 --> 0:27:26.320 all understand was a tough year for of the people 0:27:26.320 --> 0:27:31.280 in the world, companies and and and civilians alike. One 0:27:31.560 --> 0:27:35.840 was a banner year for everybody that you can find economically. 0:27:36.160 --> 0:27:40.040 And I think the prognosis that is going to continue 0:27:40.080 --> 0:27:44.000 that momentum is absolutely correct the question for most and 0:27:44.040 --> 0:27:46.440 I look at it through the lens of marketing and advertising, 0:27:46.720 --> 0:27:50.040 but the but the you know, that point of twenty 0:27:50.119 --> 0:27:52.040 three is going to be okay, Now we're in a 0:27:52.080 --> 0:27:55.080 real world. We've had this momentum, the build up from 0:27:55.119 --> 0:27:59.160 twenty all the left, all the pent up savings, all 0:27:59.240 --> 0:28:03.600 of that rising tide. You know, everybody's floating above the surface. 0:28:03.640 --> 0:28:06.560 Now what happens in twenty three, I think is going 0:28:06.600 --> 0:28:10.120 to really be the question from a macroeconomic perspective as 0:28:10.160 --> 0:28:15.440 to will that momentum continue save geopolitical you know conversations 0:28:15.480 --> 0:28:17.639 which hard to save right now because we're right in 0:28:17.640 --> 0:28:19.919 the midst of it. But as we become it is 0:28:19.960 --> 0:28:22.800 truly as we become more globally, as the business becomes 0:28:22.800 --> 0:28:25.200 more globally connected, it's like they say, you know, a 0:28:25.240 --> 0:28:28.760 butterfly flaps its wings in one country and creates as 0:28:29.640 --> 0:28:31.359 that's that's only going to increase in the world of 0:28:31.400 --> 0:28:33.520 global and you know, if you look at it through 0:28:33.520 --> 0:28:36.840 the lens of talent um. You know, I used to 0:28:36.920 --> 0:28:39.880 get around and say, if you had a show in 0:28:40.320 --> 0:28:43.560 on linear television that hit a hundred episodes, you guys 0:28:43.600 --> 0:28:46.480 know this, well, that was the magic number for syndication 0:28:46.520 --> 0:28:48.440 in the old days. And the joke used to be, 0:28:48.480 --> 0:28:51.960 if you had a hundred episodes, geographically in Los Angeles, 0:28:52.240 --> 0:28:54.880 you could afford a house north of Sunset and and 0:28:54.960 --> 0:28:57.200 that would be you know, a hundred episodes entitled you 0:28:57.320 --> 0:29:00.360 to a house in a good neighborhood. You know that 0:29:00.400 --> 0:29:03.880 doesn't exist anymore. Maybe a hundred episodes will exist, but 0:29:04.000 --> 0:29:08.280 the ancillary rights in the ancillary economics, So this is 0:29:08.320 --> 0:29:11.200 turning a different model upside down, which is talent. Just 0:29:11.280 --> 0:29:14.239 from that perspective and now being inside the halls at 0:29:14.360 --> 0:29:16.960 U t A, I see, you know, even the impact 0:29:17.000 --> 0:29:20.480 on talent that's happening because to your point, there's a 0:29:20.600 --> 0:29:22.800 there's a ceiling now and where you know, we're Kevin 0:29:22.840 --> 0:29:24.920 and you all are investing. I mean, I know there 0:29:24.920 --> 0:29:28.320 were some snickers about Hello Sunshine being valued at nine 0:29:29.120 --> 0:29:31.680 on the on the surface within the industry that felt 0:29:31.720 --> 0:29:34.160 like wow, what is there? Because they don't have a 0:29:34.160 --> 0:29:37.200 big library. They don't have they have incredible promise and 0:29:37.240 --> 0:29:42.000 they're clearly very industrious, incredibly impressed by CEO Sarah Harden. 0:29:42.160 --> 0:29:45.760 She is really an impressive person. Um. But clearly you 0:29:45.800 --> 0:29:48.360 are betting on what we talked about, the social commerce 0:29:48.440 --> 0:29:51.480 and the ability of Reese and the footprint of her 0:29:51.560 --> 0:29:56.560 and like minded creators to bring audiences to them in 0:29:56.600 --> 0:29:59.600 that direct to consumer way. Is it really? This? Is 0:29:59.640 --> 0:30:01.960 it so? Should that drives all of that social is 0:30:02.000 --> 0:30:04.320 a big is a kind of at the center of everything, 0:30:04.360 --> 0:30:07.400 I think, um, And yes, I think we are counting 0:30:07.400 --> 0:30:10.040 on the fact that we can, you know, drive a 0:30:10.080 --> 0:30:13.200 lot of traffic and fandom around her social media presence. 0:30:13.360 --> 0:30:14.800 She has a book club, she has a lot of 0:30:15.000 --> 0:30:17.360 a lot of the intellectual property that she made that 0:30:17.560 --> 0:30:20.840 Reese makes into you know, filmed entertainment, whether the series 0:30:20.920 --> 0:30:24.640 or movies, comes from that, you know, access to incredible 0:30:24.840 --> 0:30:27.840 thinking from these her book authors, in her in her universe, 0:30:27.840 --> 0:30:30.520 so that there's some advantage to access to ideas from 0:30:30.560 --> 0:30:33.120 that perspective. And I just do think that we are 0:30:33.120 --> 0:30:35.080 going to build a library. We didn't buy a library, 0:30:35.120 --> 0:30:38.120 but we're building one, um, because we're going to achieve 0:30:38.160 --> 0:30:41.080 ownership and shows that we really care about achieving ownership. 0:30:41.120 --> 0:30:44.280 And so we're gonna have a very a very full 0:30:44.320 --> 0:30:48.120 spectrum model, if you will, from producer fees, which is great. 0:30:48.160 --> 0:30:49.680 You know, make a lot of money doing that to 0:30:49.960 --> 0:30:52.960 full ownership and it's gonna end library and then between 0:30:53.040 --> 0:30:55.240 him partial ownership, a lot of co co productions and 0:30:55.280 --> 0:30:58.400 stuff like that. We've already done some hellas Sunshine. So 0:30:58.440 --> 0:31:00.280 that's another model. I don't own the whole thing, but 0:31:00.320 --> 0:31:02.440 now we have a capital that allows us to make 0:31:02.600 --> 0:31:04.360 take those bets, and we're gonna make those bets and 0:31:04.480 --> 0:31:07.640 adds risk to the equation, but it also adds upside. 0:31:07.760 --> 0:31:10.240 And as for a high price, I think, um, when 0:31:10.200 --> 0:31:12.920 we talked about Moonbug being I think a pretty low price, 0:31:13.920 --> 0:31:16.520 people snicker. I mean, honestly, if you go back to 0:31:16.560 --> 0:31:19.520 our days when we bought Pixar and the bays about Marvel, 0:31:19.720 --> 0:31:24.600 we were roundly criticized for overpaying dramatically Marvel especially. I 0:31:24.680 --> 0:31:30.600 remember people thinking what that's worth? You name it sixty 0:31:31.200 --> 0:31:33.680 dollars and it was a good bet. Now, not every 0:31:33.720 --> 0:31:35.760 bet turns out great. I'm not saying that every bet 0:31:35.800 --> 0:31:38.480 I make is always great, but I will say if 0:31:38.520 --> 0:31:42.000 you we were very um disciplined and careful, and we 0:31:42.000 --> 0:31:44.120 have a roadmap that gets us to a value well 0:31:44.120 --> 0:31:47.120 in advance of above what we paid. So we'll see. 0:31:47.120 --> 0:31:48.560 I mean, the proof is in the pudding, but I 0:31:48.560 --> 0:31:50.200 think we'll come out looking pretty good on that one. 0:31:50.600 --> 0:31:52.000 It is I mean, if you step back and look 0:31:52.000 --> 0:31:53.560 at the business as it is now, I mean, it 0:31:53.680 --> 0:31:56.520 is kind of fascinating the talent of the scale of reefs. 0:31:56.640 --> 0:31:59.640 And you know something that they have this lever, these 0:31:59.720 --> 0:32:02.840 levers that they can push that they never did. I imagine, Michael, 0:32:02.880 --> 0:32:06.560 now with your deeper connection with U t A. As 0:32:06.600 --> 0:32:09.719 we talked about, opportunity is the theme of this this discussion. 0:32:10.160 --> 0:32:13.760 The opportunity for people to move literally move people to 0:32:13.880 --> 0:32:17.400 the markets that they want to establish is pretty incredible. 0:32:17.440 --> 0:32:19.880 With social well, the commerce piece of this is the 0:32:19.880 --> 0:32:23.880 thing that gets really sexy because talent today understands that 0:32:23.960 --> 0:32:29.040 their association with brands is more than just being a spokesperson. Yeah, 0:32:29.120 --> 0:32:32.440 it's it's not that and and and not everybody can 0:32:32.560 --> 0:32:36.080 influence it, but we certainly have enough examples of people 0:32:36.200 --> 0:32:39.360 like Ryan Reynolds, or people like Kim Kardashian, or people 0:32:39.840 --> 0:32:42.360 you know down the line Paris Hilton, who we were 0:32:42.360 --> 0:32:44.800 just at a conference with and she stood up and 0:32:45.040 --> 0:32:47.360 she was introduced as one of the you know, o 0:32:47.600 --> 0:32:52.360 g of of that world, and she really is. You 0:32:52.360 --> 0:32:54.280 know when you look at that and you say, the 0:32:54.320 --> 0:32:59.800 association of brands, of celebrity and brands is no different 0:32:59.800 --> 0:33:03.560 than product placement on steroids. Right. The idea of product 0:33:03.560 --> 0:33:07.120 placement was to borrow celebrity. If you're holding an Apple 0:33:07.160 --> 0:33:09.920 computer or working on an Apple computer in a movie, 0:33:10.280 --> 0:33:12.600 you want to be cool because you've got an Apple computer. 0:33:12.760 --> 0:33:15.600 So you're using the celebrity of the brand along with 0:33:15.640 --> 0:33:18.680 the celebrity of the of the talent, if you will. 0:33:19.040 --> 0:33:22.520 We're seeing that commerce and celebrity come together in a 0:33:22.640 --> 0:33:25.880 very meaningful way, and it's working. I mean, we've got 0:33:25.920 --> 0:33:29.840 a couple of you know, newly hatched billionaires, and Rihanna 0:33:29.960 --> 0:33:33.320 and Kim Kardashian and and and you know down the 0:33:33.400 --> 0:33:38.360 list of people who are cashing in, but not in 0:33:38.400 --> 0:33:42.880 a negative way. There's never anything negative about cashing in legitimately, 0:33:42.960 --> 0:33:47.400 but we're seeing that that cash register ring loud and clear. 0:33:47.520 --> 0:33:51.520 So talent is really getting moving up the food change. 0:33:51.520 --> 0:33:53.600 And I would imagine that there's also, like, you know, 0:33:53.760 --> 0:33:55.640 just as just as talent, well, you don't want to 0:33:55.640 --> 0:33:56.800 be in you know, you don't want to be in 0:33:56.840 --> 0:33:59.400 too many movies in one year. There's a certain that 0:33:59.480 --> 0:34:01.720 you've got to have some boundaries, Like you know, you 0:34:01.720 --> 0:34:03.360 don't want to put your name on everything. You want 0:34:03.360 --> 0:34:05.240 to make sure Like I would imagine that there's a 0:34:05.240 --> 0:34:08.520 whole new discipline for talent management in how do you 0:34:08.719 --> 0:34:11.799 determine opportunities and how do you know what's what's right 0:34:11.880 --> 0:34:14.760 with you? I would imagine that those conversations, we actually 0:34:14.800 --> 0:34:17.520 do it scientifically. And one of the great things that 0:34:17.600 --> 0:34:21.200 I inherited with Media Link at U T A was 0:34:21.320 --> 0:34:23.960 something called U T i i Q, and U T 0:34:24.120 --> 0:34:28.600 A i Q really develops the basis for those kinds 0:34:28.600 --> 0:34:32.080 of decisions. So it's not just random. When somebody sits 0:34:32.120 --> 0:34:35.920 down and negotiates Kevin Hart's next movie, you can actually 0:34:35.960 --> 0:34:39.120 show up with data that indicates why Kevin Hart should 0:34:39.120 --> 0:34:41.799 earn X amount of dollars for this movie. And by 0:34:41.800 --> 0:34:44.200 the way, you can apply that same thing to brands 0:34:44.200 --> 0:34:47.080 in a traditional sense. And it comes back to what 0:34:47.600 --> 0:34:50.520 at least at the intersection that Media Link lives out 0:34:50.760 --> 0:34:54.920 which I've said and you said a bit ago, marketing, media, advertising, 0:34:55.080 --> 0:34:59.399 entertainment and technology. At that intersection, data is driving all 0:34:59.440 --> 0:35:01.920 the right to say, visioning. So data should be driving 0:35:01.920 --> 0:35:05.000 the same kind of decision NG that you make around content, 0:35:05.400 --> 0:35:11.000 around the endorsement opportunities, the product opportunities. You use the 0:35:11.040 --> 0:35:15.600 same data that brands have used forever. Well, Tommy talking 0:35:15.600 --> 0:35:18.160 about talking about vehicles right now there is nothing. Let's 0:35:18.200 --> 0:35:22.319 talk a little bit about your TikTok and sort of 0:35:22.320 --> 0:35:25.520 where it stands right now. UM. I saw you quoted, 0:35:25.719 --> 0:35:28.000 i think last year saying that that TikTok you had 0:35:28.040 --> 0:35:33.719 a brief association with them as CEO in UM. I 0:35:33.719 --> 0:35:37.239 know it was it was a combination of geopolitical situation 0:35:37.440 --> 0:35:39.520 that was happening at that time with the Trump administration, 0:35:39.560 --> 0:35:43.120 but it was a short tenure for you about three months. Um. 0:35:43.160 --> 0:35:46.759 But in the big picture about about TikTok, you've said 0:35:46.760 --> 0:35:50.200 that that that their algorithm, that their recommendation, their ability 0:35:50.239 --> 0:35:53.120 to put content in front of people, that they actually 0:35:53.120 --> 0:35:56.200 do want to see the success of the algorithm. Have 0:35:56.400 --> 0:35:59.400 you now, now that you're on the entrepreneurial side, do 0:35:59.520 --> 0:36:02.160 you see a way to turn that into a growth 0:36:02.239 --> 0:36:06.680 driver a profit generator for candle media related businesses. Well, 0:36:06.719 --> 0:36:09.160 I think you know, TikTok is one of several social 0:36:09.160 --> 0:36:11.799 media platforms, and I think that's really social entertainment if 0:36:11.800 --> 0:36:14.560 you think look at TikTok specifically, that really is about 0:36:14.800 --> 0:36:17.239 capturing people's time and attention that otherwise would probably be 0:36:17.280 --> 0:36:20.400 spent watching a Netflix or something, because it's truly immersive 0:36:20.480 --> 0:36:23.000 video and it's not a lot of communication that happens 0:36:23.000 --> 0:36:26.080 on TikTok. It is mostly you know, people create and 0:36:26.080 --> 0:36:28.560 then you get your feed and you're passively watching a 0:36:28.560 --> 0:36:30.640 whole bunch of stuff that is super interesting to you. 0:36:30.680 --> 0:36:34.120 Because the AI technology that that byte Dance has is 0:36:34.480 --> 0:36:38.719 second to none. It's incredible. Um and and so being 0:36:38.840 --> 0:36:43.320 in the social media space generally speaking with TikTok, with Instagram, 0:36:43.360 --> 0:36:46.520 with YouTube, I think that's where opportunities are are going 0:36:46.560 --> 0:36:49.200 to lie. And I do think that you can attack 0:36:49.200 --> 0:36:51.239 it from a bunch of different angles. Again, you know, 0:36:51.400 --> 0:36:54.560 getting back to Moonbug that was ip born on YouTube. 0:36:54.840 --> 0:36:57.239 Mom and pop creates, it creates something that's fun, it 0:36:57.320 --> 0:37:00.680 explodes virally, we buy it, I mean animal platform and 0:37:00.680 --> 0:37:02.560 make a lot more to monetize a lot better than 0:37:02.600 --> 0:37:04.440 they ever could. So it's a win win. They get 0:37:04.480 --> 0:37:06.799 they get bought out, We own it, and then we 0:37:06.840 --> 0:37:08.919 can monetize it. And I think there's it goes both 0:37:08.920 --> 0:37:11.080 ways though, a lot of stuff that we make can 0:37:11.080 --> 0:37:14.920 actually end up storytelling on on social media, and I 0:37:14.920 --> 0:37:19.160 think we're going to be pursuing some social media storytelling 0:37:19.200 --> 0:37:21.879 assets that hopefully will being out soon that are gonna 0:37:21.880 --> 0:37:24.920 be fun um. But I do think you monetize that 0:37:24.960 --> 0:37:27.759 and just purely through advertising on social Yeah, well, I 0:37:27.760 --> 0:37:30.000 think when we're on social we're gonna monetize it a 0:37:30.040 --> 0:37:32.959 few ways. You can do third party advertising, for sure. 0:37:33.000 --> 0:37:35.839 You can. You can be a U, a marketer for 0:37:35.960 --> 0:37:39.759 the right brand, have grandchildren. Thank god, there's some opportunity 0:37:39.840 --> 0:37:41.680 you can do that. You can create your own brands 0:37:41.680 --> 0:37:45.200 if you're if you're a celebrity with enough resonance with 0:37:45.200 --> 0:37:48.680 with your followers, and you can authentically. The thing about 0:37:48.719 --> 0:37:51.160 social media, the connection has to be utterly authentic. If 0:37:51.200 --> 0:37:53.840 you try, If you sell yourself and you and you 0:37:54.080 --> 0:37:59.080 um create messages that clearly don't fit what your followers 0:37:59.160 --> 0:38:02.600 expect to you know, to to present to them, you 0:38:02.600 --> 0:38:04.759 have a real problem. You can't just force marketing. You 0:38:04.800 --> 0:38:08.240 can't fake your life to actually use it. Paris Holton 0:38:08.320 --> 0:38:11.040 uses certain products so you can authentically talk about it 0:38:11.080 --> 0:38:14.160 and boom. Then then it works the other thing again, 0:38:14.160 --> 0:38:15.880 if you're big enough, you can create your own brands, 0:38:16.040 --> 0:38:17.960 and that's what Rihanna has done, and that's what the 0:38:18.040 --> 0:38:21.960 Kardashians have done. Um Paris Hulton has done that. That's 0:38:22.160 --> 0:38:23.839 at the top of the very top of the food chain. 0:38:23.880 --> 0:38:26.560 But it is a way for celebrities since they're capped 0:38:26.560 --> 0:38:28.319 a little bit and what they can make now on 0:38:28.360 --> 0:38:30.839 film and television, it's a way for them to very 0:38:30.920 --> 0:38:33.640 much capitalize on their on the degree of which people 0:38:34.600 --> 0:38:36.759 hang on their every word on social media, some of 0:38:36.760 --> 0:38:41.640 these people have hundred plus million followers. It's right report 0:38:42.200 --> 0:38:46.480 last week that the Kardashian family collectively has more social 0:38:46.520 --> 0:38:51.880 media followers than Netflix has global subscribers and fix up 0:38:51.920 --> 0:38:59.120 to about the last time. It's quite extraordinary. And at 0:38:59.160 --> 0:39:01.520 the core of it, Kevin just said it, but I'll 0:39:01.520 --> 0:39:04.239 put a word on it is authenticity, because if you're 0:39:04.239 --> 0:39:07.400 not authentic in this environment, you're dead. It's not actually 0:39:07.440 --> 0:39:12.200 your kitchen. Things that drive marketing today in an interesting way, 0:39:12.480 --> 0:39:16.880 One is purpose and it's not just tick the box purpose. 0:39:17.719 --> 0:39:20.799 You have to demonstrate it and authenticity because if the 0:39:20.840 --> 0:39:24.840 brand doesn't, whether that's a celebrity or a consumer package 0:39:24.880 --> 0:39:29.000 goods product, if if if it's not authentic, the bullshit 0:39:29.040 --> 0:39:31.480 detectors out there are too high right now. People just 0:39:31.560 --> 0:39:36.640 know can't work. So individual celebrities obviously you can gather. 0:39:36.760 --> 0:39:39.840 But what do you see other sort of sectors that 0:39:39.840 --> 0:39:43.439 are right for kind of DTC type disruption, like sports leagues. 0:39:43.480 --> 0:39:46.560 I've been hearing a lot of chatter that regional sports networks, 0:39:46.960 --> 0:39:51.520 cable channels that are devoted to showing regional games of 0:39:51.600 --> 0:39:55.600 local teams, that those are you know that that those 0:39:55.640 --> 0:39:58.600 are very much likely to go to go into a 0:39:58.680 --> 0:40:02.440 DTC for this of the reasons, and that the hardcore 0:40:02.440 --> 0:40:04.439 fans that want to pay that four dollars a month, 0:40:04.719 --> 0:40:08.360 here's their opportunity. I think very much. Look anything that 0:40:08.400 --> 0:40:10.480 you can be talking about time and entertainment here and 0:40:10.560 --> 0:40:12.799 you know we can all sorts of package goods are 0:40:12.880 --> 0:40:16.120 directed consumer and others. Thousands of new director consumer brands, 0:40:16.200 --> 0:40:18.200 I will say that are out there. But with respect 0:40:18.200 --> 0:40:20.759 to what to our ecosystem, if it can be on 0:40:20.800 --> 0:40:23.359 a TV screen, it can be delivered over the top. 0:40:23.480 --> 0:40:26.560 There's nothing, There is no and I can have a 0:40:26.600 --> 0:40:29.280 direct consumer business model. There's nothing that prevents that. Everything 0:40:29.320 --> 0:40:31.439 is digital, of course, and has been for quite some time, 0:40:31.880 --> 0:40:33.680 and it's just a matter of which protocol you use 0:40:33.760 --> 0:40:36.120 to get it from the you know. The origination point 0:40:36.160 --> 0:40:38.239 to the viewing point is that i P is an 0:40:38.239 --> 0:40:41.160 Internet protocol? Is it some you know the technology that 0:40:41.239 --> 0:40:45.040 you know q am that that that that satellite and 0:40:46.000 --> 0:40:48.959 cable companies use. It doesn't matter, but it does matter 0:40:49.040 --> 0:40:51.600 is the business model. And I think that people are 0:40:51.640 --> 0:40:53.880 getting used to paying for what they want and not 0:40:53.920 --> 0:40:56.359 paying for what they don't want more and more and more, 0:40:56.520 --> 0:41:00.279 and I think that is driving the unbundling of of 0:41:00.320 --> 0:41:02.880 the cable net of the cable system. It is driving 0:41:02.920 --> 0:41:05.160 people to buy more. Precisely, regional sports networks have been 0:41:05.160 --> 0:41:07.200 a rip off for a long time because they're very 0:41:07.280 --> 0:41:10.759 high priced and there then they get package with their 0:41:10.760 --> 0:41:13.400 local cable companies. And if you buy a big local 0:41:13.400 --> 0:41:16.680 cable package and then separately on top of that by 0:41:16.800 --> 0:41:21.319 a local sports it's just not fair. It's not fair 0:41:21.320 --> 0:41:23.799 to those their cross subsidizing a lot of people that 0:41:23.840 --> 0:41:26.640 aren't really sports fans and I can't go on forever, 0:41:26.920 --> 0:41:29.200 especially at those prices. And if you think about the 0:41:29.239 --> 0:41:33.120 impact on marketing for direct to consumer. We we coined 0:41:33.120 --> 0:41:35.239 a phrase at media Link a couple of years ago, 0:41:35.760 --> 0:41:39.200 and what we looked at was the traditional brand marketing 0:41:39.400 --> 0:41:43.560 thinking and what we would always call performance marketing or 0:41:43.560 --> 0:41:46.200 what you might have known originally as direct marketing, but 0:41:46.360 --> 0:41:51.960 performance marketing. And the artificial distinction between brand marketing and 0:41:51.960 --> 0:41:55.640 performance marketing was the performance marketing go back to data, 0:41:56.080 --> 0:41:59.600 required more data, and there was a return loop because 0:41:59.600 --> 0:42:02.520 you could see what was happening, and it was a 0:42:02.600 --> 0:42:05.920 call to action. And I really coined it coming out 0:42:05.920 --> 0:42:09.080 of work with American Express, where the chief marketing officer 0:42:09.320 --> 0:42:14.320 at American Express, Elizabeth Ruttledge, challenged us to bring together 0:42:14.400 --> 0:42:18.040 her brand marketers don't leave home without it and her 0:42:18.040 --> 0:42:20.560 performance marketers, which is to make sure not only should 0:42:20.600 --> 0:42:22.240 you have the card in your pocket, but you should 0:42:22.239 --> 0:42:24.160 be using it because if you don't use it, they 0:42:24.160 --> 0:42:27.920 don't make any money. And so that idea came together 0:42:27.960 --> 0:42:29.879 and the light bulb went off for me and I said, 0:42:29.920 --> 0:42:33.240 so what you're really talking about is brand foremance marketing. 0:42:33.560 --> 0:42:36.560 You want to have the same data infused into your 0:42:36.800 --> 0:42:39.720 traditional brand marketing that you do in your performance marketing. 0:42:40.160 --> 0:42:42.080 That's where I came up with the word, but where 0:42:42.080 --> 0:42:45.760 I really saw it play out was with Disney Plus 0:42:46.080 --> 0:42:49.680 and others, the other streamers. We were tasked with helping 0:42:50.080 --> 0:42:53.320 the marketing mentality at Disney Plus. And this is something 0:42:53.640 --> 0:42:57.759 Kevin and I worked on together because traditionally the Walt 0:42:57.760 --> 0:43:01.280 Disney Company would market to put AUSS and seats on Friday, Saturday, 0:43:01.280 --> 0:43:04.360 and Sunday when they opened movies, and all of a sudden, 0:43:04.360 --> 0:43:07.239 they had to be thinking and subscriber acquisition mode with 0:43:07.320 --> 0:43:09.719 Disney Plus, and you want to avoid churn and all 0:43:09.719 --> 0:43:11.759 the things you needed to do. And it took an 0:43:11.920 --> 0:43:14.839 entirely different marketing muscle, and we had to not only 0:43:14.920 --> 0:43:17.600 retrain the internal team, but we had to find the 0:43:17.680 --> 0:43:21.840 right agency partners that could that could understand that. And 0:43:21.880 --> 0:43:24.120 I still and I still, I think it's pretty clear 0:43:24.160 --> 0:43:26.880 that like I don't think any other company, only Disney 0:43:26.960 --> 0:43:30.600 with that goodwill and built in you know, Warner Brothers, 0:43:30.640 --> 0:43:33.360 as established as it is, people don't have that feeling 0:43:33.440 --> 0:43:36.279 for that brand that they do that that the we 0:43:36.280 --> 0:43:40.040 were tracking that the awareness of Disney Plus was shockingly. 0:43:40.600 --> 0:43:44.120 It spread so fast that the hardcore consumer was was 0:43:44.280 --> 0:43:47.440 aware that Disney Plus was coming. One thing we did 0:43:47.760 --> 0:43:50.360 in an incredible way, We set out a target. Let 0:43:50.400 --> 0:43:54.560 me did this together of coverage of people in a 0:43:54.560 --> 0:43:58.520 monthly basis getting at least three exposures to Disney Plus 0:43:58.600 --> 0:44:03.239 advertising at the top three. That means the average getting 0:44:03.239 --> 0:44:05.160 something like fifty. That's just the way the math works. 0:44:05.719 --> 0:44:10.960 We carpet bombed this country with UM Disney Plus advertising 0:44:11.120 --> 0:44:13.319 and it worked really really well, and we got ten 0:44:13.320 --> 0:44:15.360 million stubs in the first day. Now we have built 0:44:15.360 --> 0:44:16.840 in a brand equity, as you said, because it was 0:44:16.840 --> 0:44:21.040 Disney that helps for sure. I'm not Hoizon, you know. 0:44:21.120 --> 0:44:24.000 Hans Vestberg and I did a really good deal UM 0:44:24.000 --> 0:44:26.680 with Verizon, which broy the way, worked out really really 0:44:26.680 --> 0:44:28.560 well better than people think. It was a four month 0:44:28.600 --> 0:44:32.239 deal both for both of us, and a lot of 0:44:32.239 --> 0:44:34.440 those people that were getting Disney Plus for free for 0:44:34.440 --> 0:44:36.680 a year actually did convert over to be Disney Plus debscriber. 0:44:36.719 --> 0:44:39.000 So I was a big, big win. You're right. But 0:44:39.040 --> 0:44:41.680 then we took that learning that we created, We created 0:44:41.680 --> 0:44:44.560 what I called to my troops a consumer frenzy. There 0:44:44.600 --> 0:44:46.680 was a frenzy around Disney Plus, and we took that 0:44:46.840 --> 0:44:50.960 same exact philosophy and did the same thing in Europe 0:44:51.080 --> 0:44:53.799 before I left Europe and India. We took that same 0:44:53.840 --> 0:44:56.160 consumer frenzy and our team executed it really well during 0:44:56.200 --> 0:44:59.640 a pandemic. But it's all about extreme reach and frequency 0:45:00.000 --> 0:45:03.839 of our advertising message beyond which Disney normally do. It 0:45:03.880 --> 0:45:09.320 was good Disney Plus launched November, I mean, three months 0:45:09.320 --> 0:45:11.759 before a pandemic or plus or minus, you know, three 0:45:11.840 --> 0:45:16.759 or four months, and and the story has been obviously extraordinary. 0:45:16.840 --> 0:45:19.799 But you think of the timing of it and I 0:45:19.840 --> 0:45:21.759 think back, it's kind of special to be on this 0:45:21.840 --> 0:45:24.000 stage because I was supposed to be on this stage 0:45:24.600 --> 0:45:29.080 in on you know, I think literally two years ago 0:45:29.160 --> 0:45:32.560 today and here we are, which, by the way, I 0:45:32.600 --> 0:45:34.520 just want to give a shout out to the south 0:45:34.560 --> 0:45:38.719 By Southwest teams because there is that special moment of 0:45:38.800 --> 0:45:41.719 being back together and being in person, and I r 0:45:41.880 --> 0:45:45.440 L has has attraction has been so nice and Austin 0:45:45.440 --> 0:45:48.279 couldn't be a more welcoming, just fun place to be. 0:45:48.440 --> 0:45:51.080 It's really it's been nice. Yeah, thank you. I appreciate 0:45:51.080 --> 0:45:53.360 you mentioning the south By Southwest people. They have worked 0:45:53.400 --> 0:45:56.120 hard and put on a very good event in in 0:45:56.239 --> 0:46:03.960 tough circumstances working up. We're gonna open it up to 0:46:04.080 --> 0:46:06.040 questions in our last few minutes here, but I wanted 0:46:06.080 --> 0:46:08.560 to ask Michael um part of media links business is 0:46:08.600 --> 0:46:10.360 not as not as well known as the as the 0:46:10.600 --> 0:46:13.799 as the marketing and the consultancy is that you do 0:46:13.880 --> 0:46:16.560 some head hunting. That you do do executive search, high 0:46:16.600 --> 0:46:19.480 level executive search for media firms. What I know, I 0:46:19.520 --> 0:46:22.399 know you can't talk dish specifics, but can you talk 0:46:22.440 --> 0:46:25.440 about some of the like what what are the what 0:46:25.520 --> 0:46:27.920 are the jobs of the future, what are what are 0:46:27.960 --> 0:46:30.480 the skills that people are looking for? And what kind 0:46:30.560 --> 0:46:34.600 of placements are people looking for? The Yeah, obviously I 0:46:34.640 --> 0:46:38.319 can't be specific, but I can be generic. The Great 0:46:38.360 --> 0:46:42.400 Resignation is real. The Great Resignation has really created a 0:46:42.440 --> 0:46:48.799 circumstance where talent is impossible to find right now across industries. 0:46:49.200 --> 0:46:52.279 But what we're really understanding is, and I'll take this 0:46:52.360 --> 0:46:56.600 from a TV show, there was a period in the marketing, advertising, 0:46:56.680 --> 0:47:01.920 media business that m mad men were the people you 0:47:01.960 --> 0:47:06.800 were looking for, and today it's math men, but math people. Today, 0:47:06.800 --> 0:47:10.600 you're looking for people who can actually understand the data, data, analysis, 0:47:10.600 --> 0:47:14.920 and analysis, not just it's not just about the creative, 0:47:15.120 --> 0:47:19.680 it's about understanding the type of creative. And look, our industries, 0:47:19.680 --> 0:47:24.760 respectively pivot on five words right now. And it's funny 0:47:24.800 --> 0:47:27.560 that I just kind of landed on this and realized 0:47:27.600 --> 0:47:30.759 all the words started with the letter T. And those 0:47:30.800 --> 0:47:37.960 words are trust, transparency, technology, transformation, and finally, to your question, talent. 0:47:38.520 --> 0:47:41.480 And coincidentally, they all start with the letter T. And 0:47:41.520 --> 0:47:45.440 in every aspect of our industries where we come together 0:47:45.520 --> 0:47:50.320 again at that intersection of marketing, media, advertising, entertainment, and technology. 0:47:50.360 --> 0:47:53.359 If you find me a conversation that doesn't pivot on 0:47:53.360 --> 0:47:57.600 one of those five words, I would be surprised, because 0:47:57.640 --> 0:48:01.040 that's really to your question, talent is at the core, 0:48:01.480 --> 0:48:04.800 and it's really hard to find right now. The talent 0:48:05.160 --> 0:48:09.920 representation business is undergoing so much change as expected. You know, 0:48:10.000 --> 0:48:12.200 bear in mind now the media links at U T A. 0:48:12.320 --> 0:48:14.360 I have to use talent with a small T and 0:48:14.400 --> 0:48:17.200 talent with a large T. U T A is in 0:48:17.239 --> 0:48:20.279 the business of representing talent. We're in the business of 0:48:20.320 --> 0:48:25.279 identifying talent through right head hunting, you know, practice, it's 0:48:25.320 --> 0:48:27.040 a little different. So we do have to use a 0:48:27.080 --> 0:48:31.560 capital to this multi occasion um hogging the questions again? Okay, 0:48:31.840 --> 0:48:34.320 how about this is a good one. The lines between 0:48:34.360 --> 0:48:38.480 brand funded content and advertising continue to blur. What potential 0:48:38.560 --> 0:48:41.120 does candle mediacy in this space? I would, I would venture, 0:48:41.120 --> 0:48:43.160 I guess a whole lot would I would agree that 0:48:43.280 --> 0:48:46.680 is it's a question that answers itself almost I think, um, 0:48:46.719 --> 0:48:48.600 and that's right. And by the way, lines are blurring 0:48:48.640 --> 0:48:52.040 all over the place between content and advertising, between performance 0:48:52.040 --> 0:48:54.520 advertising and brand advertising, I would almost say there is 0:48:54.560 --> 0:48:58.719 no difference here brandformance thing or every all advertisers performance 0:48:58.800 --> 0:49:01.359 and one subset of performing this brand. Another subset might 0:49:01.400 --> 0:49:04.800 be product placement. Another subset might be true performance digital 0:49:04.920 --> 0:49:09.160 digital call to action advertising. So I think, um, we're 0:49:09.239 --> 0:49:11.600 very focused on that. We think that having having an 0:49:11.640 --> 0:49:14.719 audience and having a connected audience where you can actually 0:49:14.760 --> 0:49:16.600 speak and have a two way conversation with your audience 0:49:16.800 --> 0:49:19.319 opens up these types of opportunities for modernization that just 0:49:19.360 --> 0:49:21.959 weren't there ten years ago. Do you think that we're 0:49:21.960 --> 0:49:24.040 obviously the time in media entertainment, there's a lot of 0:49:24.080 --> 0:49:26.880 consolidation to your point of the need for a strong 0:49:26.920 --> 0:49:31.560 independent idea factory more than ever. But do you think 0:49:31.560 --> 0:49:34.880 that that that consolidation, that is there a danger of 0:49:34.960 --> 0:49:38.279 the industry literally getting into you know, three or four 0:49:38.480 --> 0:49:42.920 gigantic conglomerates that control everything. I think a lot will 0:49:42.920 --> 0:49:45.840 be determined by what the Justice Department does with Amazon 0:49:45.880 --> 0:49:47.799 and MGM right now. That's going to have a lot 0:49:47.840 --> 0:49:51.920 to do with where this plays out. If the Justice 0:49:51.920 --> 0:49:54.959 Department stops that deal, which I don't think they will, 0:49:55.120 --> 0:49:56.680 I think that deal will go through. I think it's 0:49:56.719 --> 0:49:58.919 a lot of noise, but the deal should go through. 0:49:59.200 --> 0:50:01.200 There's no base is for it not to go through. 0:50:01.400 --> 0:50:04.000 I'll put on my lawyer's heat. I don't wear it 0:50:04.080 --> 0:50:07.680 very often, but I have it. Um. I think that 0:50:07.719 --> 0:50:10.359 deal goes through, and if it does, I think that 0:50:10.480 --> 0:50:13.799 bodes I don't know if you'd say this is bodes well, 0:50:13.880 --> 0:50:16.920 Maybe it doesn't, but it bodes well for others in 0:50:17.000 --> 0:50:19.879 the tech space to be making acquisition in the pure 0:50:19.920 --> 0:50:22.439 content space. Do I think you end up with three 0:50:22.440 --> 0:50:26.239 big players? No? Do I think you end up with consolidation. Yes, 0:50:26.480 --> 0:50:28.360 you've made it clear that you're looking for you know, 0:50:28.480 --> 0:50:32.160 very creator grouping companies. But is there you know, is 0:50:32.160 --> 0:50:33.799 there a world where you would look at a more 0:50:33.840 --> 0:50:36.840 traditional You know, there's some companies out there with a 0:50:36.880 --> 0:50:39.560 few cable networks the studio. Is there any would you 0:50:39.600 --> 0:50:42.040 play in those waters at all? I don't think so. 0:50:42.440 --> 0:50:43.960 I don't think. I definitely don't want to play in 0:50:43.960 --> 0:50:45.920 the cable network waters. I just don't think that's a 0:50:46.000 --> 0:50:49.920 viable model for UM, and we're not. We don't. I 0:50:49.920 --> 0:50:52.920 don't like distribution brands as I like content brands, brands 0:50:52.920 --> 0:50:55.160 that actually mean something about the content. We think Hell 0:50:55.160 --> 0:50:57.440 of Sunshine is a great content brand. Moon Bug is 0:50:57.480 --> 0:50:59.520 becoming a great content brand you want to get behind. 0:50:59.600 --> 0:51:02.640 And we have a have a significant piece of Westbrook, 0:51:02.680 --> 0:51:05.719 which Will Will Smith Company that to content brand. Will 0:51:05.760 --> 0:51:09.239 and Jada have. Actually one of the most distinctive shows 0:51:09.280 --> 0:51:11.879 to come out of Facebook is Jada's Written People, which 0:51:11.960 --> 0:51:17.839 is to all your point about authenticity, Yeah, I mean, 0:51:17.920 --> 0:51:21.160 and it's great show. So look, we're I think the 0:51:21.200 --> 0:51:23.359 answer to that would probably be no. We We are 0:51:23.520 --> 0:51:25.919 focused on a couple of things. Creator driven companies where 0:51:25.960 --> 0:51:28.840 the creator is front and center, a brand that arises 0:51:28.840 --> 0:51:31.000 from that, because we want to transcend the individual creator 0:51:31.000 --> 0:51:34.040 and get a brand that live beyond that that creator. Obviously, 0:51:34.200 --> 0:51:37.200 but also that really speaks to a defined audience. Something 0:51:37.239 --> 0:51:39.600 else to be Lord at Disney, know your audience and 0:51:39.640 --> 0:51:41.680 speak to that audience and as a full way and 0:51:41.719 --> 0:51:44.160 as a sort of a diverse way as you possibly can. 0:51:44.480 --> 0:51:47.360 So we have you know, Hellos and China. It's it's 0:51:47.400 --> 0:51:51.400 it's content um created and delivered by women for women audience. 0:51:51.680 --> 0:51:54.200 Of course it's an inclusive audience appeals to a lot 0:51:54.239 --> 0:51:56.520 of different people, but it's really by women for women. 0:51:56.760 --> 0:51:59.920 Moonbug is kids um. I think, well you'll you'll can 0:52:00.000 --> 0:52:02.560 he need to see us look at the very very 0:52:02.800 --> 0:52:05.400 most premium content brands we can get or developed that 0:52:05.480 --> 0:52:07.640 speech to certain audiences and then fill out the audience 0:52:07.680 --> 0:52:10.080 map and then we'll then we think we'll be shaped 0:52:10.520 --> 0:52:12.400 is Blackstone in for more? Do you have any of 0:52:12.400 --> 0:52:15.839 the two billion left? I would imagine you probably that's 0:52:15.840 --> 0:52:18.600 two billion thing I remember all came from the when 0:52:18.640 --> 0:52:21.799 when Kevin and Tom started and started their company and 0:52:21.800 --> 0:52:24.720 started going out there. I honestly I don't know variety 0:52:24.800 --> 0:52:26.880 was the guilty of it. But the number two billion 0:52:26.960 --> 0:52:29.879 that you guys had a billion dollar bankroll, well, let's 0:52:30.000 --> 0:52:32.359 we've already deployed were setting the record straight here well, 0:52:32.680 --> 0:52:35.640 there's been four billion dollars of assets that we pulled together. 0:52:37.160 --> 0:52:38.680 But you know, I don't know. There's all sorts of 0:52:38.680 --> 0:52:41.480 different you know, Blackstone from the fund, their own limited 0:52:41.480 --> 0:52:44.000 partners in the fund can do sidecar investments. We've had 0:52:44.040 --> 0:52:46.840 that you have some debt people. When we buy companies, 0:52:46.880 --> 0:52:49.120 one of the things we insist on is they take 0:52:49.160 --> 0:52:51.160 a lot of equity in the new company as part 0:52:51.200 --> 0:52:54.520 of their consideration for the purchase, because we want everyone 0:52:54.600 --> 0:52:56.640 to have skin in the game for the entire company. 0:52:56.760 --> 0:53:00.640 The best way to do that equity that crossed lateralizes 0:53:00.719 --> 0:53:03.279 everything in the company. Everyone has commitments for them to 0:53:03.320 --> 0:53:05.839 stay for a certain amount of time. Yeah, and then 0:53:05.920 --> 0:53:07.800 when when you go public or get bought, probably I 0:53:07.800 --> 0:53:09.440 think where our path is likely an I p O. 0:53:10.000 --> 0:53:13.160 Then that equity becomes you know, has some real, real 0:53:13.640 --> 0:53:16.880 monetize able value to it. But it's everyone rose in 0:53:16.920 --> 0:53:19.080 the same direction. That's why equity so important. Thank you. 0:53:19.360 --> 0:53:20.800 I would have felt bad if I hadn't asked you 0:53:20.840 --> 0:53:24.400 about the the future I p O. Do you have 0:53:24.480 --> 0:53:26.480 any kind of a timeline Do you think that that 0:53:27.080 --> 0:53:29.000 for that happening and do you think is there all 0:53:29.040 --> 0:53:32.399 their alternatives to going to an IPO route. Yeah, look, 0:53:32.400 --> 0:53:34.560 we have We've built a company now that has the 0:53:34.600 --> 0:53:38.720 scale and the financial um contours to actually go public 0:53:38.800 --> 0:53:40.759 whenever we want to go public. At this point, I 0:53:40.760 --> 0:53:43.000 would say the moon Bugs alternative to being bought by 0:53:43.080 --> 0:53:45.279 us itself could have been a public company. And so 0:53:45.360 --> 0:53:48.400 it's a very very the financial they're very robust. So 0:53:48.400 --> 0:53:50.640 it's a matter of the markets being ready and we 0:53:51.040 --> 0:53:53.040 us being ready as an organization to really want to 0:53:53.080 --> 0:53:56.840 be public. Has you need some infrastructure, public company accounting 0:53:56.880 --> 0:53:59.640 systems and you know, star box compliance and all that stuff, 0:53:59.640 --> 0:54:01.239 and we have to get get into that mode. And 0:54:01.239 --> 0:54:03.440 I would imagine also a couple of good hits and 0:54:04.320 --> 0:54:07.160 not hurt. So you know, I think I don't want 0:54:07.160 --> 0:54:10.120 to no specific timeframe, but it won't be many years 0:54:10.120 --> 0:54:12.319 from now. It'll be sooner than that. I don't my 0:54:12.360 --> 0:54:15.759 advices take a breather. Having gone from being public for 0:54:15.800 --> 0:54:18.360 the last four years to being private again as of December, 0:54:18.719 --> 0:54:23.640 it's kind of nice to be private. We have investors. Well, 0:54:23.680 --> 0:54:25.680 you have to have some liquidity event of some sort, 0:54:25.719 --> 0:54:28.920 and that's one way we can get being purchased another 0:54:29.080 --> 0:54:31.879 possible outcome. It's not what we're angling towards. You don't 0:54:31.880 --> 0:54:34.480 want to build a company to be to package it 0:54:34.520 --> 0:54:36.279 to be sold. If you want to build it. We 0:54:36.280 --> 0:54:38.279 want to build a company that can stand and live 0:54:38.320 --> 0:54:40.239 and thrive in its own right. And you need the 0:54:40.280 --> 0:54:44.480 fire in your belly to build. Yes, exactly there. Let 0:54:44.560 --> 0:54:46.840 me press you again on in terms of Candle Media, 0:54:46.880 --> 0:54:49.239 will you you you were born in a pandemic? Will 0:54:49.280 --> 0:54:52.000 you add some you have physical office space at some point? 0:54:52.000 --> 0:54:57.719 Will you have any kind of common infrastructure? Yeah? We will. Um. 0:54:57.840 --> 0:55:01.160 We have you know, the Candle Media uh corporate and 0:55:01.280 --> 0:55:03.239 we have I don't know six employees right now. We 0:55:03.280 --> 0:55:05.960 have a little office on Sunset Boulevard is nice, which 0:55:05.960 --> 0:55:10.440 sits geographic geographically in between the Moonbug offices in in 0:55:10.680 --> 0:55:13.560 Hollywood and the Westwood offices of Hello Sunshine. So we 0:55:13.880 --> 0:55:16.480 commute between the two. But look, we have big offices 0:55:16.480 --> 0:55:19.840 in London for Moonbug. There's about the several hundred people 0:55:19.840 --> 0:55:22.800 there we have you know, Hello Sunshine has a hundred 0:55:22.800 --> 0:55:26.279 plus people. They're mostly in Westwood but in other parts too. Um. 0:55:26.360 --> 0:55:28.879 So we have we have physical offices and we at 0:55:29.360 --> 0:55:32.600 corporate if you will, um, we're pulling everything together. We 0:55:32.760 --> 0:55:35.040 I think We have an interesting philosophy Tom Stags and I. 0:55:35.360 --> 0:55:37.440 One is that if you buy a company that can 0:55:37.560 --> 0:55:40.440 that has a capability that can be used across outside 0:55:40.440 --> 0:55:41.960 of its company and to all the other brands that 0:55:42.000 --> 0:55:44.160 we have, we're gonna use that. So here's an example. 0:55:44.719 --> 0:55:47.440 Um Moonbike has this guy, Simon Phillips. He's the head 0:55:47.440 --> 0:55:51.360 of licensing and merchandizing. He is probably the best executive 0:55:51.360 --> 0:55:52.640 in the world. He was at Disney, he was at 0:55:52.640 --> 0:55:54.640 Marvel when we be about Marvel. He was at Disney 0:55:54.640 --> 0:55:57.120 and rand Emia for Disney when we when he was there. 0:55:57.719 --> 0:56:00.279 When I first visited Moonbug, I saw Simon pill Ups, 0:56:00.280 --> 0:56:02.120 I couldn't believe I didn't know who was there. So 0:56:02.239 --> 0:56:06.920 he is the licensing merchandizing expert without parallel. And so 0:56:07.160 --> 0:56:09.640 to the extent that we have licensing and merchandizing needs 0:56:09.760 --> 0:56:12.960 in Hello Sunshine, and we also want the studio that 0:56:13.400 --> 0:56:17.719 that that produces Fauda, that Netflix show, that bar Way 0:56:17.800 --> 0:56:20.239 Road Pictures. That was a smaller person but a great one. 0:56:20.320 --> 0:56:22.600 Those guys are awesome and they you know, to the 0:56:22.640 --> 0:56:24.839 extent that they are less likely to have kind of 0:56:25.239 --> 0:56:28.560 licensable characters because it's pretty gritty stuff. That they do. 0:56:28.960 --> 0:56:34.400 But you know, but will Smith, I agree, it's incredible, 0:56:34.520 --> 0:56:37.360 so so some insans will will be We'll be managing 0:56:37.480 --> 0:56:41.400 all licensing and merchandising out of Moon bug Um. We 0:56:41.480 --> 0:56:43.920 have a great distribution team at Hello Sunshine, so maybe 0:56:43.960 --> 0:56:46.160 that will be the center of excellence for distribution for 0:56:46.200 --> 0:56:48.520 everyone over. So it doesn't have to sit a corporate 0:56:48.560 --> 0:56:50.160 for it to be a shared resource. I guess it 0:56:50.200 --> 0:56:53.000 is my point. So corporate will never be massive, but 0:56:53.080 --> 0:56:55.040 we all but we're going to tightly integrate all the 0:56:55.080 --> 0:56:59.400 operations across businesses. Thank you everyone for sticking with us. 0:56:59.440 --> 0:57:01.840 Thank you for all your insights, your candor. We really 0:57:01.880 --> 0:57:04.880 appreciate it. Thank you Austin south By Southwest. This has 0:57:04.920 --> 0:57:15.719 been a blast. Thanks for listening. Be sure to leave 0:57:15.800 --> 0:57:18.760 us a review at Apple Podcast, and please go to 0:57:18.880 --> 0:57:22.800 Variety dot com and sign up for varieties free Strictly 0:57:22.840 --> 0:57:27.880 Business newsletter covering media earnings, financial and investment news and more. 0:57:28.600 --> 0:57:31.520 And as always, be sure to tune in next week 0:57:31.760 --> 0:57:34.680 for another episode of Strictly Business. Ye