Speaker 1: Welcome to Strictly Business Varieties, weekly podcast featuring conversations with
Speaker 1: industry leaders about the business of media and entertainment. I'm
Speaker 1: Cynthia Lyttleton, co editor in chief of Variety Today. My
Speaker 1: guest is Takashi Nakano, Senior director of Content for Samsung
Speaker 1: TV Plus. Samsung TV Plus is the biggest streaming platform
Speaker 1: that you probably have never heard of, but it is
Speaker 1: becoming a force and entertainment. The South Korean electronics giant
Speaker 1: has embraced the fast channel market, building in hundreds of
Speaker 1: free streaming channels into the operating systems of its connected TVs.
Speaker 1: Samsung has sold more than six hundred million such TVs
Speaker 1: in twenty four countries in recent years. That means Samsung
Speaker 1: is creating a very different kind of network, one that's
Speaker 1: not bound by geography or someone searching for a specific outlet.
Speaker 1: Samsung's menu of free channels is available the minute consumers
Speaker 1: turn on their TV sets. Samsung isn't the only TV
Speaker 1: manufacturer in this game, but they are far ahead of
Speaker 1: their competition. Nikano is based in Los Angeles. He's a
Speaker 1: cable veteran who joined Samsung in twenty sixteen to help
Speaker 1: it grow beyond the hardware side of television. Before that,
Speaker 1: he worked in distribution and affiliate sales for Discovery, Scripts,
Speaker 1: Pop TV, and GSN As Nikano explains, fast channels are
Speaker 1: evolving into a new form of basic cable and a
Speaker 1: new form of syndication for creatives and profit participants. He
Speaker 1: walks us through the ins and outs of how Samsung
Speaker 1: has grown the business over the past five years. He's
Speaker 1: also really candid about how the company flocked with its
Speaker 1: first effort focused on paid VOD offerings and what they
Speaker 1: learned from all those mistakes. It's all coming up right
Speaker 1: after this break. Takashi Nakano, Senior director of Content for
Speaker 1: Samsung TV Plus, thank you so much for joining me today.
Speaker 2: Sure, no, thanks for having.
Speaker 1: Me well as you As you probably know, I've been
Speaker 1: knocking on the door of Samsung TV Plus for a
Speaker 1: while now because I've seen you've been doing a lot
Speaker 1: of interesting stuff. You have been, you know, aggregating and
Speaker 1: bringing together fast channels. You've you've been doing a lot
Speaker 1: of interesting stuff just with the Samsung platform and the
Speaker 1: operating system that you have, and in making the decision
Speaker 1: to really go for it with fast channels with free
Speaker 1: streaming ad supported content. You've created a different kind of
Speaker 1: network that's based on Samsung TV devices, which at last
Speaker 1: count is somewhere over five hundred and seventy one million
Speaker 1: around the world. It's an intriguing kind of network that
Speaker 1: you've built. I'd love kind of the thirty thousand foot
Speaker 1: view of Samsung TV Plus. What encouraged Samsung, which is
Speaker 1: a very established name in consumer electronics, what encouraged them
Speaker 1: to go deeper into the content side.
Speaker 2: So it's interesting we started this endeavor. I joined Samsung
Speaker 2: in twenty sixteen and I was originally brought over to
Speaker 2: launch a virtual MVPD. That's when Sling was launching, Direct
Speaker 2: tv Now was launching. So the idea was to integrate
Speaker 2: a video ecosystem into the TV and everything at that
Speaker 2: point was pay. We had modeled it a number of
Speaker 2: different ways, We had talked to partners, and it was
Speaker 2: just a business that was never going to really be profitable,
Speaker 2: and we pivoted from that point. We you know, simultaneously,
Speaker 2: we had launched a transactional vod store in twenty sixteen
Speaker 2: as well. It was it was called TV Plus, and
Speaker 2: interestingly enough, it was a gigantic failure, but we learned
Speaker 2: a lot.
Speaker 1: Sometimes that's the benefits, can you know outweigh the fail.
Speaker 2: Right, you know, we we had a lot of We
Speaker 2: didn't sell many assets, and part of it was execution,
Speaker 2: part of it was market dynamics. Transactions weren't really we
Speaker 2: weren't doing it well. But what we learned was a
Speaker 2: lot of people came in to look, to browse and look.
Speaker 2: And simultaneously, Korea was building this idea of you know,
Speaker 2: Caro selling movie trailers and used in leveraging an impulse pread,
Speaker 2: an impulse pay per view experience to buy and red movies,
Speaker 2: and so they were car selling trailers into a into
Speaker 2: an EPG. And we liked that idea and what we
Speaker 2: ended up doing is bringing that to the US, not
Speaker 2: the transit what we we had a separate transactional element.
Speaker 2: But what we really liked was the fact that you
Speaker 2: can integrate channels essentially content into an electronic programming guide
Speaker 2: without the need of any additional hardware. You just go
Speaker 2: to Best Buy or Amazon would deliver your TV, bring
Speaker 2: it into the house, hang it from the wall, and
Speaker 2: connect to your Wi Fi and you would just get content.
Speaker 2: And that was very interesting and without the need of
Speaker 2: a cable box. We believe integrating content into your electronic
Speaker 2: programming guide was very much akin to what people are
Speaker 2: used to doing. Anyways. Yeah, it used to be called
Speaker 2: cable Yeah, even before that, it was called broadcast TV, right,
Speaker 2: So I think that's what really kind of set us
Speaker 2: down this journey. We didn't have content obviously, we were
Speaker 2: a hardware manufacturer. We were knocking on a lot of
Speaker 2: doors looking for content. Most of it was available, you know,
Speaker 2: most of it was on YouTube, and it was short
Speaker 2: form and it wasn't really situated well for TV. We
Speaker 2: we at that, you know, at that point we had
Speaker 2: a small strategic investment a company called Pluto TV. Heard
Speaker 2: of them, so we had a small minority stake in
Speaker 2: them early days, and we launched ten channels and we
Speaker 2: were off to the races. So it's been an interesting journey,
Speaker 2: and for us, it's obviously evolved from the ten channels
Speaker 2: that we originally launched. We had learned a lot from
Speaker 2: that from those ten channels that have expanded to you know,
Speaker 2: over four hundred channels now here in the US. We're
Speaker 2: available in twenty four countries, thousands of channels around the world.
Speaker 2: It's an interesting it's interesting to see the scale that
Speaker 2: it's grown to and just you know, the all five
Speaker 2: short years.
Speaker 1: Is there are there things that you can do because
Speaker 1: you are a device based network. Are there things that
Speaker 1: you can do for advertisers or content providers that others can't?
Speaker 1: And I know you have such a depth of experience
Speaker 1: in the multi channel world. I'm curious if there are
Speaker 1: like benefits to the kind of uniqueness of the Samsung network.
Speaker 2: Yeah. The ecosystem that we have today is you know,
Speaker 2: it's very much from the outside looking in. From the
Speaker 2: user's perspective, looking at the service, looks like television, right,
Speaker 2: but on the backside it there there and on the
Speaker 2: backside it looks very different. It's very digital, right. And
Speaker 2: when you have a digital ecosystem, you're essentially able to
Speaker 2: send one feed to one device in a unicast model
Speaker 2: around the world. That model has given the ability to
Speaker 2: sell dynamic insert dynamic ads. We're able to have real,
Speaker 2: real life measurement and understand who's watching what in real time. Everything.
Speaker 2: The beauty of digital is all transferred, you know, with
Speaker 2: the simplicity of using television. So I think that has
Speaker 2: really if you take that and see what we can
Speaker 2: continue to do with it. The you know, the world
Speaker 2: is our oyster, and we think that if you have
Speaker 2: access to the hardware you have, you understand what the
Speaker 2: users are doing, and then you understand what the future
Speaker 2: of this content world is going into and you can
Speaker 2: combine all that to think all those things together. Really,
Speaker 2: the opportunity of media and the future is unlimited, and
Speaker 2: that's what's exciting to us right where we're not you know,
Speaker 2: I came from traditional cable. We had we were fighting
Speaker 2: for qualm space essentially. Right we were fighting for a channel,
Speaker 2: trying to get launched with direct TV or Dish or Comcast,
Speaker 2: and that was a billion dollar investment to do one channel.
Speaker 2: Today you can launch a channel for thousands of dollars
Speaker 2: and the dynamics are very different and what you can
Speaker 2: do with that type of economic structure and now the
Speaker 2: scale of being able to deliver content around the world
Speaker 2: because you're not terrestrial based, but you really you live
Speaker 2: in the Internet. That's awesome and we don't. We're exploring
Speaker 2: all the elements of what that looks like in the future.
Speaker 1: It's really when you think about the potential, it can
Speaker 1: kind of blow your mind when you think about it.
Speaker 1: Are you able to see what people are watching, and
Speaker 1: do you have visibility because it's going through the operating system,
Speaker 1: do you have visibility into what people are watching, how
Speaker 1: much they watch, how they how they surf channels.
Speaker 2: Yes and no. Yes, in the sense that we do.
Speaker 2: You know, on a macro level, we understand that. But
Speaker 2: in a micro level, it's not usable in much of
Speaker 2: the In much of the experience, there's just too many
Speaker 2: people consuming too much content to make anything that a lot.
Speaker 1: Of data points to consider.
Speaker 2: It's not actionable in that sense. But you can identify trends,
Speaker 2: you can identify you know, how people are consuming, what
Speaker 2: they're consuming, and why they're consuming, and where they go
Speaker 2: to next, and how these kind of patterns, these macro
Speaker 2: shifts are changing. So it's exciting to see that, you know,
Speaker 2: and I think we're we're learning right every day. It's
Speaker 2: it's it's a learning experience around how content is changing
Speaker 2: and how people are navigating, you know, whether it's sports,
Speaker 2: whether it's news, whether it's general entertainment, why people turn
Speaker 2: on the TV and watch what they do, and it's
Speaker 2: you know, how different parts of the country watch different things,
Speaker 2: how different parts of the world watch different things. It's
Speaker 2: interesting to see that, and it's and it's difficult to
Speaker 2: navigate all of those different points and understand how do
Speaker 2: you take all this data and distill it into you know, actionable,
Speaker 2: forward thinking content decisions. But that's what makes this job
Speaker 2: so exciting.
Speaker 1: That's absolutely the challenge. I mean, again, having come from
Speaker 1: the traditional cable ecosystem, do you think is it is
Speaker 1: it fair to say that fast is the new ad
Speaker 1: supported basic cable.
Speaker 2: I think that was our premise when we started, and
Speaker 2: you know, five years we fast forward now, you know,
Speaker 2: five years later, and there's no question, right, there's there's
Speaker 2: no question that what's happening in the pay TV world
Speaker 2: and I came from that place. I understand that world.
Speaker 2: It's changing, you know, significantly, and it's going to continue
Speaker 2: to change, and how it evolves is going to continue
Speaker 2: to is going to continue to change. But it's the
Speaker 2: way people are going to watch TV. The value proposition
Speaker 2: is just too strong, and we're seeing the growth and
Speaker 2: engagement daily and now when you can mirror that with
Speaker 2: great content together, we see a hockey stick effect.
Speaker 1: How the economics of all of this for the creative
Speaker 1: community have been you know, of this sort of the
Speaker 1: digital transition have been challenging for sure. Can you kind
Speaker 1: of talk through how it works, how your approach to
Speaker 1: the to content owners. Do you do things like largely
Speaker 1: on a rev share basis? Is it different depending on
Speaker 1: the deal.
Speaker 2: Yeah, Our deals vary across the board. You know, it's
Speaker 2: to take all content creators and put them into a
Speaker 2: bucket of where they are, you know, structurally and economically,
Speaker 2: it's tough to do. You got everyone from the biggest
Speaker 2: and the best studios like Warner Brothers and NBC Universal
Speaker 2: in Fox Disney, and then you got YouTube creators and
Speaker 2: then everyone in between. They all have a different need
Speaker 2: and structural requirements for them to continue to succeed. You know,
Speaker 2: I look at fast as the opportunity to bring content
Speaker 2: to millions and millions of people that many that you
Speaker 2: weren't able to do before right outside of YouTube. You know,
Speaker 2: now you can take it just wasn't feasible.
Speaker 1: It was the economic model just wasn't there to even
Speaker 1: put it on Just the cost of putting it on
Speaker 1: TV would have been prohibitive.
Speaker 2: Yeah, and you had, you know, cable networks, broadcasters that
Speaker 2: made decisions on what kind of content would be up
Speaker 2: on the screen at eight PM on a Tuesday, right,
Speaker 2: and that was that was finite. It was one second.
Speaker 2: It's one hour of time during the day, during the week,
Speaker 2: during the month, during the year, and when that's gone,
Speaker 2: it's gone. Now, all of a sudden, you can take
Speaker 2: content that users created, whether it's high production from a
Speaker 2: big studio or it's a high quality you know, someone
Speaker 2: created great content in their garage and now you can
Speaker 2: put that anywhere. Right, you could target that content to
Speaker 2: the right user on your sixty five inch tea and
Speaker 2: sixty five inch TV. It emulates that same breath that users,
Speaker 2: you know, associate with this television and quality television. We've
Speaker 2: we've launched brands that were you know, we just launched
Speaker 2: a channel called Haggardy Media. Right, it's a it's a
Speaker 2: car enthusiast channel. Right, They're an insurance company and now
Speaker 2: they've got they had tons of content for their fans
Speaker 2: and now we've turned that into a twenty four to
Speaker 2: seven linear channel. It's exciting to see this happen, and
Speaker 2: we've it's countless We've seen lots of small creators build
Speaker 2: channels that have really done a great job and facilitating
Speaker 2: and bringing new content forward, and that's what I'm excited about.
Speaker 2: That's exciting for me to see new stuff that that's
Speaker 2: often lost in you know, billions of videos on the
Speaker 2: on the internet to something that's premium on television.
Speaker 1: Is your phone just ringing off the hook from people that, boy,
Speaker 1: do I have a channel for you?
Speaker 2: My team, my team's phones are ringing off the hook,
Speaker 2: they are, and everyone's building channels, and you know, I
Speaker 2: think that yes it is. You know, the channel environment
Speaker 2: is something that's important. But you look at video on
Speaker 2: demand as something that is really a way to look
Speaker 2: at content. That is, you know, where you don't need
Speaker 2: volumes and volumes of hours of content. As you know,
Speaker 2: being in from this business, a twenty four to seven
Speaker 2: channel is hard to program. It's they're voracious, right. You
Speaker 2: have to continue to acquire a new content feed that monster,
Speaker 2: and it's hard to do. You know, we can now
Speaker 2: bring a video on demand experience, you know, forward, curate
Speaker 2: that to the user and all of a sudden, now
Speaker 2: use linear expose video video on demand content and then
Speaker 2: drive that back. So we create this flywheel effect and.
Speaker 1: The user decides when that twenty four hour or whatever
Speaker 1: whatever amount of time they want to spend that the
Speaker 1: user decides when they're two hours with whatever channel starts.
Speaker 2: We're so focused on the user, and I think what's
Speaker 2: really important is whatever we're whatever we're doing, it's how
Speaker 2: do we super serve the user? How do how do
Speaker 2: we provide the best content that they may not have
Speaker 2: seen to, you know, to that audience. In the business,
Speaker 2: we talk about this a lot, and we've been saying this,
Speaker 2: you know since the early days. When I was at Discovery.
Speaker 2: We got one point zero rating on a Sunday night
Speaker 2: and we were extatic it was amazing. And that's one
Speaker 2: percent of the US households watch that content. And today
Speaker 2: we can now take that same piece of content and
Speaker 2: expose it to the ninety nine percent of people that
Speaker 2: have never seen it. And now, all of a sudden,
Speaker 2: the content economics change. Right before, it was the volume
Speaker 2: game where you had to continue to produce content reaching
Speaker 2: that one percent. Now, how do we take content that's
Speaker 2: been created that has amazing, that take amazing IP and
Speaker 2: deliver it to those other ninety nine percent that have
Speaker 2: not yet seen it. That I think is what makes
Speaker 2: this business really interesting.
Speaker 1: Don't change the channel. We'll be right back after this break,
Speaker 1: and we're back with more from Samsung TV Plus's Takashi Nakano.
Speaker 1: Are you surprised at the number I mean, I've seen,
Speaker 1: you know, major brands on your channel lineup? Are you
Speaker 1: surprised that the number of major leagues showbiz brands that
Speaker 1: have come to you and said, oh boy, do we
Speaker 1: want to you know, do we want to work with
Speaker 1: you and package some of our content because they, you know,
Speaker 1: the biggest, have so much that sits on the show.
Speaker 2: You know, I look back five years ago and to
Speaker 2: see the you know, the ground that our team has
Speaker 2: made up between then and now, it's shocking. It's it's
Speaker 2: it's amazing that and I wouldn't have thought that we
Speaker 2: would be at this point this fast.
Speaker 1: Was it a hard sell at first? Did you have
Speaker 1: to like talk people through the concept?
Speaker 2: Yeah? It was. It was you know, I think the
Speaker 2: MVPD world hadn't imploded yet, right, it was starting to.
Speaker 2: It was starting to quake, a little landslide. Starting was
Speaker 2: just just early days. And yeah, no people, we most
Speaker 2: of the answers were no, we're not interested, we don't
Speaker 2: believe in this, and that was fine, and it was
Speaker 2: my team was persistent. They believed in what we were doing,
Speaker 2: and everyone focused on you know, hey, this is a
Speaker 2: new way to watch television, especially with the shifting of
Speaker 2: the landscape, and at that point, s VOD was becoming
Speaker 2: really the place to you know, to be and it's
Speaker 2: still for the for the most part. We you know,
Speaker 2: we love our s FOG partners at Samsung. We you know,
Speaker 2: they're all of our partners as well, so you know,
Speaker 2: it's still a great place to watch premium content. But
Speaker 2: you can't avoid and can't ignore the value of a free,
Speaker 2: ad supported experience. It's it's it's one hundred year old
Speaker 2: experience that we've had in you know, broadcast TV in
Speaker 2: the US, and it's not going away, and we still
Speaker 2: believe in it.
Speaker 1: From Samsung's perspective, do you use Does Samsung see content
Speaker 1: as a you know, growth area, a profit driver in
Speaker 1: the future, I know you have. You know, Samsung has
Speaker 1: far flung businesses in many different, many different pockets, but
Speaker 1: content is still relatively new.
Speaker 2: Yeah, No, content is new, you know. I think that's
Speaker 2: that's the big question for us, like how deep do
Speaker 2: we get into this content game? Are there opportunities? You know,
Speaker 2: if you spoke to our team most of us believe
Speaker 2: that there is right, there is absolutely if we have
Speaker 2: information on what users are interested in watching, if we
Speaker 2: have the ability to tailor and craft, and if it
Speaker 2: makes economic sense to actually make and control and own
Speaker 2: that for the life of the asset and the life
Speaker 2: of our business. Yeah, it may, it may actually make
Speaker 2: sense to do that, you know. And our unique proposition
Speaker 2: is twenty four plus countries and a few more later
Speaker 2: on this year. Right, So now, when you can take
Speaker 2: a global footprint, which most of our competitors can't, and
Speaker 2: you know, and we also can take not just a
Speaker 2: global television footprint, but a global mobile footprint, and you
Speaker 2: combine all that together. We have access to a lot
Speaker 2: of households and a lot of people, and a lot
Speaker 2: of screens in pockets. How do you take that and
Speaker 2: how do you bring content to those experiences? I think
Speaker 2: that's what's exciting. So, yeah, I do see an opportunity
Speaker 2: for us to move into that space.
Speaker 1: Are you able to customize your channel selection by country
Speaker 1: or region at all? We do.
Speaker 2: Every country has you know, country managers that oversee the
Speaker 2: content requirements needs, you know, this decisions that it's managed
Speaker 2: at the country level. There's nuances and rights are very complicated,
Speaker 2: as you know, across territories.
Speaker 1: I'm sure that's a full time job for a small,
Speaker 1: small army of people watching all around the world.
Speaker 2: It's difficult. You know, there's languages, you know, there's languages,
Speaker 2: there's you know, dialects that we need to manage for
Speaker 2: close captions versus subtitles. So there's a lot of nuance
Speaker 2: around operating a global environment, especially both mobile and TV,
Speaker 2: and how do you expose the content in the right way.
Speaker 2: So yes, we you know, it is complicated and is challenging,
Speaker 2: but there is there's an opportunity in that that very
Speaker 2: few companies can you know, take advantage of and move
Speaker 2: business forward. So what's exciting is we could with simplify it,
Speaker 2: but with a push of a button, you can launch
Speaker 2: content around the world. Really that's on a television on
Speaker 2: a mobile phone simultaneously. We've been talking about this in
Speaker 2: cable television forever and it's never been possible until today.
Speaker 2: So it's exciting.
Speaker 1: It's it is the end of geographic borders of being
Speaker 1: the parameters of where a service could go initially and
Speaker 1: then the and then it was so much based on
Speaker 1: the export model of content and it and you know
Speaker 1: that when Netflix at Cees twenty sixteen was a pivotal
Speaker 1: year for the PayTV ecosystem because twenty Netflix at Cees
Speaker 1: twenty sixteen flipped the switch and went global and just
Speaker 1: blew our minds in terms of like, oh thinking and
Speaker 1: to see now you know, where you have like a
Speaker 1: real you know, with the biggest of the big things
Speaker 1: like Game of Thrones and Stranger Things. You now literally
Speaker 1: have a market where you compete globally, yes, which is
Speaker 1: which is fascinating and obviously you all are in there.
Speaker 2: Well, if you look at the content experience that's around
Speaker 2: the world, that's really what's exciting. There's so much content
Speaker 2: that this country hasn't seen from around the world. There's
Speaker 2: brilliant creators that are doing this every day, day in
Speaker 2: and day out around the world. And to be exposed
Speaker 2: to some of those things, you know, the you know,
Speaker 2: the fandom of Korean content has exploded, and not because
Speaker 2: traditional television has brought to popularity. It's really the digital
Speaker 2: you know environment has really brought that and you know,
Speaker 2: we as a Korean company can appreciate what that is.
Speaker 2: But now to see it in mainstream is very exciting
Speaker 2: and what else is out there? And you know, our
Speaker 2: teams are focused on finding that the what else is
Speaker 2: out there because that's untapped and unminded.
Speaker 1: I would imagine that the growth of your fast business
Speaker 1: has also helped build up your VOD business. Are you
Speaker 1: still pursuing that at all?
Speaker 2: Absolutely? You know, we look at VOD as as core
Speaker 2: of our business. You know, the fast business is great,
Speaker 2: it's growing, It continues to grow week after week, month
Speaker 2: after month, year over year over year. The growth has
Speaker 2: been phenomenal, and that engagement does not it hasn't stopped.
Speaker 2: The VOD business is exciting to us because the content
Speaker 2: mix is very different. Right, People watch content in different ways,
Speaker 2: and there's certain types of content that's best situated for VOD.
Speaker 2: There's great content that's best situated for linear. When we
Speaker 2: only had I Rewind twenty five years ago, we only
Speaker 2: had a linear experience. We all waited for, you know, game,
Speaker 2: the Game of Thrones or the Entourage to come in
Speaker 2: at Sunday nights at eight pm. And today that's not
Speaker 2: the model. Right. Netflix has broken that I want it
Speaker 2: when I want it, yeah, and they drop all thirteen
Speaker 2: episodes at the same time. So these models are continuing
Speaker 2: to change, and so how do we then, you know,
Speaker 2: this world of primetime watching versus late night watching versus
Speaker 2: daytime that's all a lot of that's broken too, and
Speaker 2: VOD can fix that. It's what kind of content do
Speaker 2: you want to watch that you're going to invest your
Speaker 2: time into and consume and what is that content? And
Speaker 2: how does Samsung TV Plus deliver that experience to the
Speaker 2: user where they're at at that right appropriate time.
Speaker 1: A lot of fast channels are broadly distributed. Are you
Speaker 1: at all interested in I know you have some exclusive deals.
Speaker 1: As I recall some of them, you'll have like an
Speaker 1: exclusive for a year or two and then it'll go wider.
Speaker 1: Is there value in exclusivity? To you?
Speaker 2: There is value in exclusivity. It does create this idea
Speaker 2: that users can only find it in our environment. Is
Speaker 2: it is it critical and important for ultimately the user?
Speaker 2: Not yet, you know, I don't believe that that that
Speaker 2: that's there yet. Will it become something in the future?
Speaker 2: It may, right, and I think it depends on the content.
Speaker 2: But if there, if it's content that's being produced for
Speaker 2: hundreds of millions of dollars and making it exclusive on
Speaker 2: a single platform, for the life of it, for the
Speaker 2: entire life of that asset likely doesn't make sense. How
Speaker 2: do you create, you know, how does that work for
Speaker 2: the content itself? And how does that work for the user?
Speaker 2: It doesn't. So if we're focused on the content, focus
Speaker 2: on the user, how do we expose that? You know,
Speaker 2: we don't necessarily think about exclusivity or non exclusive, but
Speaker 2: really what's best for the user and what's best for
Speaker 2: the content.
Speaker 1: Let me ask you in terms of like marketing in
Speaker 1: a consumer speaking to consumers about the fact that there
Speaker 1: is this great value added you know package that when
Speaker 1: you turn on your TV. How do you market that
Speaker 1: in a traditional kind of you know, consumer marketing or
Speaker 1: do you do you rely on like you know, people
Speaker 1: at people that are selling television sets at the at
Speaker 1: the electronics store to really you know, promote, hey, you
Speaker 1: buy this channel, you buy this set, and you're going
Speaker 1: to have all this other you know, scot free content
Speaker 1: that flows in as soon as you plug it in.
Speaker 2: And part of the great the great thing of Samsung
Speaker 2: is that we know our core business is selling hardware,
Speaker 2: and to do that, they spend a lot of money
Speaker 2: in marketing, marketing the hardware, you know, consumer marketing, product
Speaker 2: and feature marketing ces. There's a lot of money spent
Speaker 2: on marketing hardware products, and we're the beneficiary of that.
Speaker 2: We draft off of a lot of that marketing that's
Speaker 2: being done at the hardware level, so we do rely
Speaker 2: on hardware and the value proposition. Our marketing team has
Speaker 2: done a phenomenal job selling TV Plus to the user
Speaker 2: our users, and we see that by the engagement, right,
Speaker 2: the consumers are watching and consuming a lot of the content,
Speaker 2: are exciting when new shows and new channels are launched,
Speaker 2: and our marketing teams does a phenomenal job and leveraging
Speaker 2: that and making that available and known to our user base.
Speaker 2: But we also need to be patient. Right, this is
Speaker 2: a service that's been around for five years, right, and
Speaker 2: we you know Amazon's been around for twenty five years.
Speaker 2: We forget that these things take a long time to
Speaker 2: incubate and grow to become part of the consumer zeitgeist.
Speaker 2: And how do we get there is a long term endeavor?
Speaker 2: We see a long term secular shift in television consumption
Speaker 2: that comes down to the great content coming on our platform,
Speaker 2: a better user experience, ubiquity across devices, you know, being
Speaker 2: able to watch the content you want, where you want
Speaker 2: to watch it, and how you want to watch it,
Speaker 2: and the consumer ultimately knowing that, hey, there's an amazing
Speaker 2: service out there that is free, and this is the
Speaker 2: way we end up. This is the way we're going
Speaker 2: to be consuming content as our central hub, whether it's
Speaker 2: on a mobile device or a television. That does take time.
Speaker 2: So when we look at our programming, we try to
Speaker 2: focus on users of all demographic of all ages, and
Speaker 2: how do we give them something that they can now
Speaker 2: anchor into. So this becomes habitual and it becomes instinctual
Speaker 2: as opposed to something that's conscious. Television for many people
Speaker 2: is unconscious.
Speaker 1: There you go wake up in the morning and turn.
Speaker 2: It on right and you open Netflix because that's what
Speaker 2: you do. And that took thirteen fourteen years for Netflix
Speaker 2: to become that. So we give ourselves time and we
Speaker 2: see the long term impacts and you know, the opportunity
Speaker 2: over multiple decades in this business. So that's what we're
Speaker 2: excited about.
Speaker 1: You're also doing some creative things. I understand you're bringing
Speaker 1: some a new package of like vintage Conan O'Brien episodes
Speaker 1: to one of your existing channels. That is slightly repackaged.
Speaker 2: Yeah. No, we're always looking to grow our linear channel
Speaker 2: channels that we're creating. We're always looking to add and
Speaker 2: augment and enhance the experience that we that we bring.
Speaker 2: Channels are like children. They're you know, you birth them,
Speaker 2: you take care of them, you grow them, and eventually
Speaker 2: one day they move off to have their own life
Speaker 2: to grow up. Right, But it doesn't happen overnight. We
Speaker 2: have to continue to feed them. We have to continue
Speaker 2: to nurture them. We have to grow their grow their
Speaker 2: ecosystem as well, and make sure that these channels are
Speaker 2: are changing. And you know, when I first started in
Speaker 2: the business years ago, we were launching we launched a
Speaker 2: channel called animal Planet and it was a gentle bend
Speaker 2: Lastly and Flipper, and that's what we were selling the
Speaker 2: cable operators. But the vision of what it could be
Speaker 2: in the future is what it is today and that's
Speaker 2: exciting to see. And it's no different, right, all of
Speaker 2: these channels, if you look at every single channel over
Speaker 2: the evolution of its multi decade, experience has changed, right,
Speaker 2: it's adapted to the to what's new, it's adapted to growth.
Speaker 2: Some didn't grow, some, you know, shrank, some went away,
Speaker 2: and that evolution is exciting to see and for us,
Speaker 2: we we own and operate and curate forty plus channels,
Speaker 2: we see what's going on in them. We try to
Speaker 2: take care of all of them as much as we can.
Speaker 2: We try to make them look like channels and content
Speaker 2: experiences that users can come into and appreciate and enjoy.
Speaker 2: And then we add on to that, right bringing in
Speaker 2: new content. So yeah, you're going to see a whole
Speaker 2: host of new content coming into each of our channels,
Speaker 2: both you know, the linear channels and VOD over the
Speaker 2: next you know, twelve to twenty four months.
Speaker 1: So you must have quite I mean, with forty owned
Speaker 1: and operated channels alone, plus all the other stuff that
Speaker 1: you're like, you must have quite a team working on
Speaker 1: the just the operation of it's tiny. You're all working
Speaker 1: twenty four.
Speaker 2: Seven, they're working thirty six hours a day. I think
Speaker 2: it's really shocking to see the level of not just engagement,
Speaker 2: but what they're able to put together and what they
Speaker 2: what they bring to the table every day. It's it's
Speaker 2: mind boggling. Cable networks were built with a single cable
Speaker 2: network took a hundred and fifty people to operate. You know,
Speaker 2: a decade and a half ago. Today, my small team
Speaker 2: has launched forty channels. You know, the marketing team has
Speaker 2: done a great job in marketing these forty channels. Like
Speaker 2: it's not a large team. And now you know, we're
Speaker 2: talking about efficiency and scale earlier. We're able to leverage
Speaker 2: technology and become more efficient and scale and launch more stuff,
Speaker 2: and we're excited to leverage that to other parts of
Speaker 2: our business.
Speaker 1: And being part of Samsung, I'm sure does not hurt
Speaker 1: in that in that pursuit.
Speaker 2: For sure, no engineering technology focus there. You know, we
Speaker 2: think about the future of what this experience is there.
Speaker 2: You know, our research labs are developing and building. We
Speaker 2: hear and see new ideas all the time and we're
Speaker 2: blown away. And that's that's exciting.
Speaker 1: It's it is a big moment of invention and innovation
Speaker 1: for the business, that is for sure. Let's back up.
Speaker 1: I'm curious, Takashi. You worked for Discovery, you worked for Scripts,
Speaker 1: you worked for GSN, you worked for pop TV, which
Speaker 1: was a joint venture of lions Gate and CBS, so
Speaker 1: you've had quite a bit of exposure to all of this.
Speaker 1: How did what got you what first got you into
Speaker 1: the cable distribution business.
Speaker 2: So I didn't know I wanted to do cable distribution.
Speaker 2: I didn't know I wanted to negotiate deals with the
Speaker 2: cable operators. That's what I did for sixteen seventeen years.
Speaker 2: And it was a great learning experience, you know. We
Speaker 2: it was a great time of the business, and it
Speaker 2: was it was exciting to see and at that evolved
Speaker 2: when you know, I joined in. I joined Discovery in
Speaker 2: nineteen ninety eight, and I look, you know, from that
Speaker 2: day and I look forward to where we are today,
Speaker 2: and it's changed so much. Right, the highs and the lows,
Speaker 2: and the the challenges that our teams had and negotiating
Speaker 2: deals with big cable operators and as being at most
Speaker 2: of those were small networks, so we had to we
Speaker 2: were challenged.
Speaker 1: Do you have any good John Malone stories for us?
Speaker 2: Probably something, probably things I can't say on on on
Speaker 2: the record, but no, like the the John Malone I
Speaker 2: have so much respect for and what he's built and
Speaker 2: how he really came and saved you know, Discovery years
Speaker 2: and years ago in his relationship with John Hendrix, and
Speaker 2: just to see some of that. And I was on
Speaker 2: the tail end of it and then you know the
Speaker 2: the growth days. But we heard about the stories of
Speaker 2: the old days of cable, and I think about where
Speaker 2: we are today. It's no different, right. There's there's struggle,
Speaker 2: there's growth, there's opportunity, but there's vision. There's visionaries in
Speaker 2: this business that are that see so much more than
Speaker 2: what we currently have today. And I think that's what's
Speaker 2: really the exciting part of what fast in the future
Speaker 2: of television is it's we're convinced it's not going away.
Speaker 2: TV consumption doesn't doesn't go away, right, It's going to
Speaker 2: change here in the future, but it's not going to
Speaker 2: go away.
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