Speaker 1: We're from BHARD. We're Innovation, Money and Power Collie in
Speaker 1: Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde
Speaker 1: and Ed Ludlow.
Speaker 2: Welcome to a special edition of Bloomberg Technology Live from
Speaker 2: Bloomberg screen Time in Los Angeles. Coming up this hour,
Speaker 2: we'll bring you conversations from some of the biggest names
Speaker 2: in the entertainment industry.
Speaker 3: So today we're going to be speaking with top celebrities, entrepreneurs,
Speaker 3: moguls across what is a changing media landscape. And we're
Speaker 3: starting with Bloomberg's Lucas Shaw, the managing editor who leads
Speaker 3: screen Time, our own celebrity exactly. And screen time is
Speaker 3: the coverage of popular culture. It is a huge global
Speaker 3: industry and it kicked off last night with Live Nation.
Speaker 3: Mike Rippino and I came to realize something sitting in
Speaker 3: the audience that Live Nation is peerless. If you think
Speaker 3: about its business concerts is one fastest of it around
Speaker 3: the world. It was such an engaging conversation. Honestly, it
Speaker 3: was a CEO of a company that was refreshingly honest.
Speaker 3: You did the interview, you talk about it. Where do
Speaker 3: you want to go with that?
Speaker 4: Well, look to your point, he has no peers, and
Speaker 4: I think he also serves sort of like a founder.
Speaker 4: Like I find that founders are more candidate interviews because
Speaker 4: they kind of don't care. They don't have as many
Speaker 4: people that answer to. And he's been running that business
Speaker 4: now for almost twenty years.
Speaker 1: Right.
Speaker 4: They are the biggest concert promoter in the world by
Speaker 4: a wide mile. They're the biggest ticket seller because a
Speaker 4: ticketmaster by a lot. He knows that, he's confident. He
Speaker 4: has relationships with every artist. When they want to know
Speaker 4: what should I do with my tour? They call him,
Speaker 4: and so he can be a little you know, he
Speaker 4: can poke fun at the government which is suing him
Speaker 4: right now. He can do things like that in a
Speaker 4: way that I don't think other CEOs can.
Speaker 5: But he can poke the bear.
Speaker 2: But the bear wants to spin up this size and
Speaker 2: scale that he's managed to build up.
Speaker 5: And so what was his reaction to all of this?
Speaker 1: Well, I thought it was interesting.
Speaker 4: I asked him, as a way of get into the
Speaker 4: DOJ question, if he would sell Ticketmaster, which is something
Speaker 4: that the DJ would like him to do.
Speaker 1: Right.
Speaker 4: They want to break up Live Nation and Ticketmaster, which
Speaker 4: is sort of where this all started with a merger
Speaker 4: many years ago. He's like, some days, yes, because Ticketmaster
Speaker 4: is the biggest pain for him. That's when fans get
Speaker 4: mad when tickets still get sold. But if you talk
Speaker 4: to anyone at the company, they're pretty confident that they're
Speaker 4: going to win this DOJ suit because they don't think
Speaker 4: that the DOJ really understands the music business. And I think,
Speaker 4: if they were being honest, they're also maybe kind of
Speaker 4: hoping that the people in charge of the DOJ will
Speaker 4: be different by the time this is done.
Speaker 3: So what you did well, and if you're just joining us, right,
Speaker 3: what we're talking about is media and entertainment. But a
Speaker 3: company that's been in the headlines because of Taylor Swift
Speaker 3: and then Oasis, But they kind of have two parts
Speaker 3: of their business and you helped us learn about that.
Speaker 3: There's ticketing and then I think promotion. Yeah, just explain it.
Speaker 1: So Live Nation is a concert promoter.
Speaker 4: That means that they're the people who are in charge
Speaker 4: of putting on a show.
Speaker 1: Right.
Speaker 4: When you're a promoter, you make very little money because
Speaker 4: the artist keeps.
Speaker 1: Almost all of the tickets sit, which seems fair totally.
Speaker 4: The promoter can make money from merchandise, can make money
Speaker 4: from food and beverage, that sort of thing.
Speaker 1: They also own a ticket seller.
Speaker 4: Ticket sellers similarly, don't make very much money from the
Speaker 4: actual tickets being sold.
Speaker 1: They make their money from the fees.
Speaker 4: But when we're talking about profit margins, content promotion is
Speaker 4: a very low margin business. Ticket selling is a better
Speaker 4: business Live Nation. You add in advertising, which they do.
Speaker 4: They sell sponsorships and ticketing, and advertising is actually where
Speaker 4: they make most of their money. But the promotion is
Speaker 4: sort of the meat of the business, and so the
Speaker 4: whole package works really well. But it's also something that
Speaker 4: some people feel is unfair.
Speaker 2: We're going to be listening to part of that interview
Speaker 2: that you conducted last night in a moment, but push
Speaker 2: us forward to today. We are currently sat in LA
Speaker 2: It's about to get fiercely hot. It's going to get
Speaker 2: crowded in here, and with excitement. You've got others in
Speaker 2: the music industry, Ron for example.
Speaker 4: Yeah, I really hope it's not too hot today, but
Speaker 4: it is a concern. Look, Scooter doesn't do very many interviews.
Speaker 4: He's had a pretty tumultuous couple of years. There was
Speaker 4: sort of this period where he basically stopped managing a
Speaker 4: lot of his biggest clients, justin Bieber Ariana Grande. It
Speaker 4: was reported as they fired him. I think it was
Speaker 4: sort of a conscious uncoupling in the term of Gwynne
Speaker 4: Paltrow and Chris Martin. But I'm very excited to talk
Speaker 4: to him about that and about sort of discovering talent
Speaker 4: and how that works, because there's a lot of concern
Speaker 4: that it's hard for artists to break out. Right now, We've.
Speaker 2: Got so many great conversations coming up, Sean Evans, you
Speaker 2: gonna be listening to Matt Stone. Cannot wait for that
Speaker 2: conversation all about South Park. Look as sure, what a
Speaker 2: legend who's currently running this event for us.
Speaker 5: We thank him.
Speaker 2: Meanwhile, those panels actually did kick off yesterday as we're saying,
Speaker 2: let's just listen to a little bit of that conversation
Speaker 2: the CEO of Live Nation, Michael Rappino, who says they
Speaker 2: actually want resale prices to be capped.
Speaker 6: Listening Unfortunately, those ten times a year when you have
Speaker 6: ten million people trying to buy a million Oasis tickets,
Speaker 6: you know, nice way to tell nine million passionate fans,
Speaker 6: sorry the store is closed. So you know that that
Speaker 6: creates lots of tens and they go online and they
Speaker 6: see paid, they see you ten pages of secondary tickets
Speaker 6: and they get pissed off.
Speaker 4: If you had a magic wand or you were you
Speaker 4: were a third of named Emperor for the day, and
Speaker 4: you could change just change ticketing however you wanted, what
Speaker 4: would you do?
Speaker 6: It's it's a great question. The problem is professional bots
Speaker 6: all around the world. You know, we got hit by
Speaker 6: multi billions of bots on the Oasis on sale, you know,
Speaker 6: so there are professional twelve billion dollar business trying to
Speaker 6: capture all those seats, right, so it's an arms race
Speaker 6: with us trying to stop them. Not let them in
Speaker 6: the door, let them, not let them hold the tickets.
Speaker 6: You shouldn't have a middleman that has nothing invested in
Speaker 6: the business make any money from it. So we would
Speaker 6: love it regulated in some sense, cap it at twenty percent.
Speaker 1: Some people can make a little money. That would be the.
Speaker 6: Biggest part that we get. The most engine on the
Speaker 6: an cell.
Speaker 1: Is that right now? Right?
Speaker 3: That was Live Nation CEO Michael Rapino, and it was
Speaker 3: refreshingly honest in that conversation with Lucas Shaw. Many more
Speaker 3: conversations like that coming up throughout the day. Okay, on
Speaker 3: this program Bloomberg Technology, We're going to talk video generation
Speaker 3: in the context of AI and much more with Runway
Speaker 3: CEO Chris the baal of Anezuela.
Speaker 7: That's coming up next.
Speaker 3: This is Bloomberg Technology on the Road screen Time, Los Angeles, Hollywood.
Speaker 3: All right, if you're just joining us, this is Bloomberg
Speaker 3: Technology on the road in Hollywood at screen Time. Runway
Speaker 3: is using AI to revolutionize the entertainment industry. The company's
Speaker 3: teamed up with Lionsgate Studios to build AI models and
Speaker 3: now has backing to produce dozens of films, movies literally
Speaker 3: about it.
Speaker 7: Runway CEO Chris bell Anezuela joins.
Speaker 3: Us and that deal. How real is it? The process
Speaker 3: the production of making a film in partnership using your technology.
Speaker 1: Yeah, so it's a first off.
Speaker 8: It's kind kind of the ill and the idea behind
Speaker 8: it really is to take the Lionsgate team further with
Speaker 8: the technology. We're at the crossing point where AI is
Speaker 8: becoming really useful for filmmaking, and so what we really
Speaker 8: want to make sure is that we help creative filmmakers, artists,
Speaker 8: studios really understand how to use it in the best
Speaker 8: way possible, and so what we did with Lionsgate it's
Speaker 8: I think something we've been trying to do for a
Speaker 8: long time, basically to reach the gap between AI and
Speaker 8: Hollywood and bring this technology in much more accessible ways
Speaker 8: too many fast.
Speaker 7: As you know, I love the detail of things.
Speaker 3: Are we talking about filmmakers at Lionsgate sitting as a
Speaker 3: computer using your your your software as part of their process?
Speaker 1: Yeah, that's kind of the point.
Speaker 8: There's many tasks in the development of a movie where
Speaker 8: you and in bad AI.
Speaker 7: Or our models and make that cheaper and faster.
Speaker 8: So if you're iterating through storyboarding or previousizations or visual effects,
Speaker 8: you can use our models, and filmmakers are now understanding
Speaker 8: how to use these models in ways that are very
Speaker 8: useful for them, right. But I think that's the key
Speaker 8: aspect of it, which is for a long time it
Speaker 8: has been seen as this kind of a system that
Speaker 8: creates movies on its own, right, And it's really not
Speaker 8: like that.
Speaker 7: It's really a tool for.
Speaker 8: Directors on filmmakers, And with the lens Geed deal, what
Speaker 8: we really want to make sure they understand is that
Speaker 8: they can take that further for the movies and becomes
Speaker 8: a really cost effective tool to you. So again, if
Speaker 8: you're spending hundreds of self dollars in making a shot,
Speaker 8: making a visual effects a scene, you can now use
Speaker 8: Runway to kind of reduce that cost and move faster
Speaker 8: and to better results.
Speaker 2: You've been improving your models, Yes, how costly does that become?
Speaker 8: Remain there's definitely research that has to be done to
Speaker 8: train the models on the first end, but then running
Speaker 8: the models and using them has become much more cost
Speaker 8: effective over time. And I don't know, I think we're yet
Speaker 8: at the point where you will see an optimization, like
Speaker 8: we're going to optimize the models even more so the
Speaker 8: cost of running them will be even cheaper and faster.
Speaker 2: Let's just talk a little bit about therefore, is you're
Speaker 2: building your offering, you're winning over new clients like Lionsgate.
Speaker 2: We think about where we were this time last year.
Speaker 2: We think about Hollywood in strike mode because in large
Speaker 2: part because ourtivision intelligence. What sort of conversations you had
Speaker 2: to have to get people comfortable with this technology.
Speaker 8: Well, the first thing that I think it's important to
Speaker 8: remember is that Hollywood is the history of technology. Like
Speaker 8: we are here because of technological breakthrough, right, and so
Speaker 8: we sometimes forget that ourd and technology kind of like
Speaker 8: come together always, and for us it's like this may
Speaker 8: defind a little bit of technology. Again, if you understand
Speaker 8: AI as a tool for humans, then it changes the
Speaker 8: narrative and it's less about fearing it and more about
Speaker 8: embracing it and you realize how.
Speaker 1: You can actually use it. And I think what we
Speaker 1: need to.
Speaker 8: Do right now is kind of like educate more and
Speaker 8: show the potential. There's also challenges of the technology. It's
Speaker 8: not a kind of technology. It's not a perfect tool.
Speaker 8: There are things that are not exactly working as they should,
Speaker 8: but that's kind of the point, as you need to
Speaker 8: improve them and make it even better. And I think
Speaker 8: part of it is just like showing more people, more producers,
Speaker 8: more Hollywood studios, really the potential of film.
Speaker 3: And you said because about Caroline and I use text
Speaker 3: to text, texted image, text and video tools every day.
Speaker 3: I love technology, but I also just love film. Yeah,
Speaker 3: and there comes a point where I just want to
Speaker 3: ask if AI really can give the same feeling create
Speaker 3: film and movie and content that is as authentic as
Speaker 3: the great filmmakers can make it with their hands and
Speaker 3: their eyes and camera.
Speaker 7: What do you think about that?
Speaker 8: Well, the interesting thing is filmmaking and stories and art
Speaker 8: are never really about the denali are about conveying feeling
Speaker 8: and emotion. Are about connecting with the viewer and telling
Speaker 8: and make you feel something. Right, You never watch a
Speaker 8: movie because how it was made right, or the cameras
Speaker 8: that were used to make the movies.
Speaker 7: Right, You watch your real nerves.
Speaker 8: Yeah, yes, but maybe even though like after the fact
Speaker 8: that you like the movie, right, you can go deeper
Speaker 8: into how it was made. But ninety nine percent of
Speaker 8: the world which is movie because they feel something because
Speaker 8: they connect with it, And so ai you think about
Speaker 8: it as a tool, can help you kind of connect
Speaker 8: with your audience, can help you deliver that message, can
Speaker 8: help you tell us stories. And so right now, I
Speaker 8: think we're fascinating by the technoli itself because it is fascinating,
Speaker 8: it's revolutionary, it's changing the game. It's incredibly new and exciting.
Speaker 8: But at the same time, if you want to focus
Speaker 8: on art and filmmaking, it's important that we switch the
Speaker 8: narrative to storytelling to people and how they use it
Speaker 8: and how they convey stories with technology and less about
Speaker 8: how which AI or which technology was used behind the scenes.
Speaker 2: You've been telling stories to raise money, and you've got some.
Speaker 5: Really interesting investors because.
Speaker 2: Not many of them are going to be in the
Speaker 2: world of art and creation. In fact, you've got Nvidio salesforce.
Speaker 2: What do they want to see out of you? Why
Speaker 2: do you have these sort of strategic investors coming on
Speaker 2: like an Nvidia and what do they earn it?
Speaker 9: Well?
Speaker 8: I think they are telling stories and their users are
Speaker 8: also telling stories. Again, you can think about storytelling as Hollywood,
Speaker 8: as media, as films, but okay, you think about companies.
Speaker 8: Companies are also telling stories when they're advertising, when they're
Speaker 8: doing marketing, when they're communicating with they're users, and so
Speaker 8: if you can help them also deliver better messages, then
Speaker 8: that's also a form of storytelling. Perhaps it's not as
Speaker 8: the art kind of like form, but it's still like
Speaker 8: a former video. You want to make sure we can
Speaker 8: work with companies like that that are great and have
Speaker 8: been great partners for us for all long.
Speaker 3: For at least a year, I've been hearing about Runway
Speaker 3: and your name comes up a lot. Open AI has
Speaker 3: Sora on the show. In the last week we talked
Speaker 3: about Meta's new tool. Yeah, but you have a very
Speaker 3: singular focus. Where do you think you stand in your
Speaker 3: competence and as a business relative to that competition of
Speaker 3: open AI and Meta.
Speaker 1: Yeah.
Speaker 8: Look, when we started this seven years ago, it was
Speaker 8: a very new field, and I think we prevent over
Speaker 8: time that it's a really exciting and worthwhile time field
Speaker 8: to spend time. And it's an industry that's going and
Speaker 8: it's changing. And I think when you create a market
Speaker 8: and you create a good opportunity, you will have competition.
Speaker 8: I think it's it's unreal to think that no one
Speaker 8: else will try to build what we're building. But at
Speaker 8: the same time, we're very much in the long term
Speaker 8: horizon strategy, like everything we're building is not really about
Speaker 8: video to the eights around everything else that we can
Speaker 8: build to create better tools for storytellers over the world,
Speaker 8: And so video is only a first kind of like
Speaker 8: stepping stone, but working towards audio, towards images, towards three D.
Speaker 8: Just a collective system and collective set of tools and
Speaker 8: AI system that can help you in all forms of
Speaker 8: storytellings that you want to tell.
Speaker 10: Will you raise more money for that long we will
Speaker 10: have to do whatever we have to do to deliver
Speaker 10: that meeting, you will have to We've been kind of
Speaker 10: like raising almost every year from now since we started
Speaker 10: seven years ago, and IPS.
Speaker 8: We're just focused on building right now.
Speaker 11: We always want to know that about things run by
Speaker 11: CEO Christ about Valenzuela, want a joy to have him.
Speaker 2: We've given you the founder take from La, but let's
Speaker 2: get the analysts take now on the future of entertainment,
Speaker 2: the intertwining of generative AI and the competition we're seeing
Speaker 2: when it comes to streaming in the light we needn't
Speaker 2: see your entertainment analyst, Laura Martin, We're.
Speaker 5: So excited to meet you here in the flat.
Speaker 12: Finally after all this time. Lovely to be here.
Speaker 2: And you were just here listening to what Crista Bell
Speaker 2: was talking about in terms of the Runway deal working
Speaker 2: with Lionsgate and for you. How much is generative AI
Speaker 2: changing up the game of the companies you cover?
Speaker 12: You know, I think it's changing it a lot.
Speaker 13: I see it most in my tech first companies because
Speaker 13: they have to adopt generalor AI. These content storytelling companies,
Speaker 13: I think are going to be a little slower because
Speaker 13: you watch consumers watch movies because it's storytelling. But I
Speaker 13: think Generator VII opens up poor creative windows.
Speaker 3: Let me just jump in and say, for oblionbo Telogy,
Speaker 3: and you cover public equities, but it's tech companies, but
Speaker 3: also some the media and entertainment names.
Speaker 7: Yes, and let's give that context and go from their.
Speaker 12: Current So I think it's really important.
Speaker 13: I think we don't know how much is going to
Speaker 13: affect Hollywood because under the strikes they prohibited the use
Speaker 13: of Generative AI for three years of their deals, so
Speaker 13: it won't affect Hollywood quite as quickly, at least the
Speaker 13: big studios. But I think Runway is going to be
Speaker 13: really important to the future of entertainment, to.
Speaker 5: The future of hiring.
Speaker 2: I mean, how much do you start to see this
Speaker 2: becoming a profit generators to a certain extent because they're
Speaker 2: able to strip out costs.
Speaker 13: So since we're sitting in Hollywood, I'll be respectful of
Speaker 13: the guilds and say that I think of what it
Speaker 13: first does first is open up new areas of creativity.
Speaker 13: Just like animation unleashes has created to give you and
Speaker 13: draw anything. I think that's what Generative AI does over time.
Speaker 13: What I am hearing from companies that are in the
Speaker 13: tech world that are adopting generator. By is they think
Speaker 13: they can cut costs where it applies in segments where
Speaker 13: it applies by twenty to thirty percent.
Speaker 7: The players are different.
Speaker 3: I think it's been so interesting to be here with
Speaker 3: Caroline for twenty four hours. Is go to the studios,
Speaker 3: to drive past Warner Brothers, beyond the Disney lot and
Speaker 3: actually learn a bit about the history, and then consider
Speaker 3: the money that they're deploying to try and either catch
Speaker 3: up with Netflix, frankly, or try and do something a
Speaker 3: bit different. Caroline had fantastic conversation on stage with Amazon
Speaker 3: last night. In the context of Prime you covered those names,
Speaker 3: which do you think is ahead?
Speaker 12: Well, if we're talking about winners clinically.
Speaker 3: And I'm talking about video, you know, entertainment in the
Speaker 3: context of film and television.
Speaker 12: YouTube one, we're done.
Speaker 13: Wow, Amazon's next, Amazon's on the prowl, it's coming up.
Speaker 7: But on YouTube YouTube one. That's a definitive statement from you.
Speaker 13: It is my point of view, ten percent of total
Speaker 13: streaming viewing in Netflix's next at seven point five, so
Speaker 13: YouTube is viewed both on the big screen. Because of
Speaker 13: the NFL deal, they've now done and because user generated
Speaker 13: contact on both mobile phones and on.
Speaker 3: The connected I like data as much as the next person, Laura,
Speaker 3: but you can be a bit more romantic than that
Speaker 3: about you know. So I'm a massive rings of power.
Speaker 3: I'm a massive rings of power nerd. And I was
Speaker 3: trying to get Caroline into that.
Speaker 7: I don't know, what do you think?
Speaker 3: I find YouTube interesting, but I don't go there to
Speaker 3: watch the content I'm super passionate about.
Speaker 2: And so is that the element that we'll start to
Speaker 2: see them bringing originals bringing I mean, at the moment
Speaker 2: it's user generator content. We've got Amazon doing originals, movie making,
Speaker 2: They're also doing live sports. What will YouTube end up
Speaker 2: offering us?
Speaker 13: Well, I remember when Survivor first launch, which was the
Speaker 13: original reality program. I mean, everybody said, this is junk,
Speaker 13: this is trash, This is never going to catch on.
Speaker 13: You know, people who watch YouTube user generator.
Speaker 12: Content think it's premium program.
Speaker 13: I mean, you may not, but it turns out it
Speaker 13: reaches global audiences on YouTube.
Speaker 7: And I really believe in YouTube.
Speaker 3: But I'm just talking about in the evening, when you
Speaker 3: go home after work and you want to watch a
Speaker 3: piece of television.
Speaker 7: I'm not going to YouTube, But carry on, please, I.
Speaker 13: Think anecdotal not statistical to suggest that sort of everybody.
Speaker 13: I think something like eighty five percent of consumers that
Speaker 13: watch video globally or on YouTube weekly, so their data
Speaker 13: is really compelling.
Speaker 5: Now on YouTube, I think, what's interesting you mentioned Survivor.
Speaker 5: I'm actually having a.
Speaker 2: Conversation later with unscripted executives for Peacock, and that's all
Speaker 2: about Love Island and traitors and the new Age and Survivor.
Speaker 5: What then of the Peacocks? What then of the paramounts,
Speaker 5: what then.
Speaker 2: Of be not Key Disney, Netflix, Amazon YouTube?
Speaker 13: So I just think we need to think about the
Speaker 13: job to be done, and the job to be done is.
Speaker 12: To entertain consumers.
Speaker 13: Now, consumers globally and certainly some consumers will sit through
Speaker 13: two hour movies or one hour dramas or thirty minute sitcoms,
Speaker 13: but they'll also sit through fifteen second TikTok videos or
Speaker 13: thirty second three minute YouTube videos. I think all this
Speaker 13: content is better for consumers, gives consumers more choice.
Speaker 3: This is Bloomberg technology. Let's bring this back to business. Sure,
Speaker 3: if you're an investor, how do you judge Netflix, Disney
Speaker 3: and rank them? Is it the subscriber number and how
Speaker 3: closely are we paying attention to those big, big figure
Speaker 3: dollar figures right and spending on content right?
Speaker 12: So I think what we need to look at.
Speaker 13: What the market cares about today is return on invested capital,
Speaker 13: including your content capital. So right now Netflix is the
Speaker 13: only streamer making money. Wall Street cares about that. Disney
Speaker 13: is recently Disney streaming has recently moved into profitability, and
Speaker 13: especially on those apps, they're switching on the ads and
Speaker 13: they are lowering their content costs. So I do think
Speaker 13: that what we're seeing the problem is it's not Disney
Speaker 13: isn't pure playing. What's happening in their parks margins is
Speaker 13: just as important as what's happening in the streaming business.
Speaker 13: And they have linear TV, so ESPN's super important too.
Speaker 13: When you look at MBA rights doubling on the fees.
Speaker 7: Can we talk a bit about advertising, Sure.
Speaker 3: I find the job of your job really interesting because
Speaker 3: there's something that you can't model for, which is the
Speaker 3: psychology of a consumer. When I was a child, I
Speaker 3: watched ads on TV and it was normal, And there
Speaker 3: was a period of time during the pandemic where there
Speaker 3: were no ads, and then suddenly everyone started doing it
Speaker 3: and there.
Speaker 7: Was a revolt. That actually seems like it's working.
Speaker 1: Yep.
Speaker 13: I think the consumer has to take he has to
Speaker 13: judge his time as a valuable asset. So it's either
Speaker 13: free with ads, which means you just took your time,
Speaker 13: and because the streamers have much lower ad loads four minutes,
Speaker 13: five minutes. Remember at cable tv it was like fourteen
Speaker 13: minute ad loads. Yes, so much lower ad loads, so
Speaker 13: a lower price in a way for an hour of content.
Speaker 13: And I really like some of the innovations where they'll
Speaker 13: show you a video and then you get the next
Speaker 13: program for free.
Speaker 12: I love that because you get good.
Speaker 13: Attention to the ad and you get half an hour
Speaker 13: an hour of free content.
Speaker 12: I think that's a great business model.
Speaker 2: You know, we were just talking last week about M
Speaker 2: and A out of necessity coming in.
Speaker 5: Cable TV land.
Speaker 2: Yes, where is the M and A going to start
Speaker 2: switching on for these content providers because we've been.
Speaker 5: Talking about it for years.
Speaker 13: Unfortunately, you need a different president, you need a different
Speaker 13: White House because the FCCFTC, and DOJ are all appointed
Speaker 13: by the person by the party essentially in the White House,
Speaker 13: and right now under Democrats, M and A is really
Speaker 13: really hard because they believe big is bad, and so
Speaker 13: even these companies that really do need to merge and
Speaker 13: cut costs, they cannot do so as long as there's
Speaker 13: a Democrat administration.
Speaker 5: In the White House.
Speaker 3: Medium Senior Entertainment analyst, Laura Martin, it's really fantastic to
Speaker 3: do this in person. You've been on Bloomberg Technology so
Speaker 3: many times.
Speaker 5: Keep coming, please, and if.
Speaker 3: You're just joining us, this is Bloomberg Technology on the
Speaker 3: road in Hollywood.
Speaker 2: Welcome back to a very special edition of BlueBag Technology.
Speaker 2: We are live from Bloomberg screen Time right here in
Speaker 2: the hearts Hollywood, Yeah, and Hollywood friends, and we're talking
Speaker 2: there for content creation streaming. We were speaking in particular
Speaker 2: about Amazon adding Apple TV Plus to its channel store
Speaker 2: in the US, offering kits of course like ted Lasso
Speaker 2: one that you love slow horses in the video supermarket.
Speaker 2: For the first time, I got to chat with Mike
Speaker 2: Hopkins last night. He's head of Amazon Prime Video and
Speaker 2: Amazon MGM Studios.
Speaker 5: Just take a listen about the deal. We've tried to.
Speaker 14: Become over the last four or five years as a
Speaker 14: first stop entertainment hub for consumers around the world. And
Speaker 14: what I mean by that is, not only do we
Speaker 14: have the prime content that we talked about at the top,
Speaker 14: including Thursday night Football, we have our fourth game this
Speaker 14: season tomorrow night, the NBA coming next year, NASCAR, but
Speaker 14: around the world we also have Champions League throughout Europe
Speaker 14: and a variety of sports as well. So we've got
Speaker 14: our prime programming, but we also offer the world's largest
Speaker 14: tea bod store written by movies and TV shows in
Speaker 14: the world. And then on top of that, we have
Speaker 14: over one hundred partner streaming services that you can subscribe
Speaker 14: to right inside of our application. And what we found
Speaker 14: is consumers. You know, if you think about the number
Speaker 14: of apps and subscriptions you have, it's kind of hard
Speaker 14: to keep track of it all. You're not sure exactly
Speaker 14: where that show or a movie might be. And so
Speaker 14: what we've noticed is people realize they can subscribe to
Speaker 14: Max or Paramount Plus or Lead Pass or Crunchy Role,
Speaker 14: et cetera inside of Prime Video. We see we see
Speaker 14: a lot more engagement.
Speaker 1: We are able to.
Speaker 14: Get subscribers for those those those businesses at a real
Speaker 14: attractive rate, and it's an exciting part of our business.
Speaker 14: In fact, we're gonna announce tonight that we are adding
Speaker 14: Apple TV Plus to our prime video channels propositions and sure, and.
Speaker 5: Why why Apple TV Plus?
Speaker 14: Well, they have great programming and you know, we've had
Speaker 14: a good partnership with Apple on a number of fronts.
Speaker 14: But you know, our companies do a lot of business together.
Speaker 14: And I want to thank ADIEQ, who I know isn't
Speaker 14: here tonight, but he hit his team have done a
Speaker 14: great job with this deal and we're excited to get
Speaker 14: it going.
Speaker 3: That was Mike Hopkins, head of Amazon Prime Video and
Speaker 3: Amazon MGM Studios and Amazon putting Apple TV Plus in there.
Speaker 7: That is news.
Speaker 5: Shout out to Eddie Q, and a shout.
Speaker 7: Out to Eddie Q in our world. That is news.
Speaker 3: Another player in the battle over streaming is pulling in
Speaker 3: tens of millions of viewers without charging them a thing.
Speaker 3: In the US, more than eighty one million people stream
Speaker 3: content every month on twov the free ad supported platform which.
Speaker 7: Is owned by Fox.
Speaker 3: It's now expanding overseas, with the service launching across the
Speaker 3: UK this summer. Our original home joining US now is
Speaker 3: tvco Anderlei sud It's great to see you. The UK
Speaker 3: is an interesting market. Just explain the basics why and
Speaker 3: what's going to happen.
Speaker 15: So we've been getting incredible traction in the US.
Speaker 7: We just gave them name.
Speaker 15: Yeah, we're the most watched free TV service in the
Speaker 15: US now. And what we're finding is that audiences, particularly
Speaker 15: chord cutters and nevers, they want to watch content for free.
Speaker 15: They don't mind watching ads in return, and they want
Speaker 15: a large collection of the term Sorry, card cutter and
Speaker 15: cord nevers, I've not heard that.
Speaker 5: Oh, I think it's it's almost like you going out
Speaker 5: for gen Z.
Speaker 15: Yeah, of audiences that just it's not that they originally
Speaker 15: were subscribing to cable and stopped, is that they're just
Speaker 15: they never did to begin with it.
Speaker 7: Sorry.
Speaker 15: And what we're finding is that t B has this
Speaker 15: incredible formula. We're free for consumers. We have the world's
Speaker 15: largest collection of movies and TV shows and it's resonating
Speaker 15: with audiences, and we believe we can bring that same
Speaker 15: value proposition to UK audiences. We've done the same in Canada,
Speaker 15: we're doing the same in Latin America. Really it's a
Speaker 15: global opportunity and that's what we're looking to first.
Speaker 2: That does the content therefore evolved because do you therefore
Speaker 2: have originals made by the UK in the UK for
Speaker 2: the UK audience or are they very much global demandstrayt.
Speaker 15: So TB has been able to successfully do a couple
Speaker 15: of different things. One we license in are content from
Speaker 15: really everyone, so we have this very vast selection of
Speaker 15: opportunities and shows. We also have invested in originals. We
Speaker 15: have hundreds of originals. Nearly one in four to be
Speaker 15: viewers in the US watches an original, and so we
Speaker 15: will absolutely look to have, well, which is one of
Speaker 15: your original A to be original? A to be original?
Speaker 15: And what's really interesting about to be originals is they
Speaker 15: don't tend to be these big budget originals.
Speaker 5: That you might see on other streamers.
Speaker 15: What we often do is we will listen to what
Speaker 15: is resonating on our platform, what our fans love, and
Speaker 15: then we'll go and look to acquire or produce content
Speaker 15: that really reflects something that they can't find anywhere else.
Speaker 3: We should probably talk about the Fox element of this.
Speaker 3: A lot of people are surprised by that. I think
Speaker 3: we were partly how does that work? And I'm assuming
Speaker 3: that undepending all of that is that if it's free
Speaker 3: for the consumer. It's advertising that you've got to make
Speaker 3: some money, right.
Speaker 15: Yeah, So we only make money through advertising, which do
Speaker 15: you think really aligns incentives because we only make money
Speaker 15: if our viewers are engaged, if they're actually watching content.
Speaker 15: TV is owned by Fox. It was acquired several years ago.
Speaker 15: It's actually started in Silicon Valley over ten years ago.
Speaker 12: Really interesting to be.
Speaker 15: Started as an ad tech startup and then pivoted over
Speaker 15: time to be a consumer streaming service. And what that
Speaker 15: means is our DNA is very, very rich in using
Speaker 15: technology and data to personalize and offer a delightful experience.
Speaker 15: It's something I've been really impressed by and I think
Speaker 15: it's a big differentiator right now because audiences also, they
Speaker 15: don't want barriers, they don't want friction.
Speaker 5: They want TV to feel fun again.
Speaker 3: So you raise a really good point on the technology
Speaker 3: in our household. At least, I have a Roku TV
Speaker 3: and I have a Samsung Smart TV. On the Roku TV,
Speaker 3: it's an AT based system. On the Smart TV, I
Speaker 3: can search for a specific show that I want to
Speaker 3: watch and it might tell me that the only place
Speaker 3: I can find it is to be that My goodness
Speaker 3: of options and and I'll be honest. You know, my
Speaker 3: wife said to me the other day, you know, I
Speaker 3: didn't know we had TV, and I said, maybe did I?
Speaker 7: And that might You must kind of recognize that a
Speaker 7: little bit.
Speaker 5: Absolutely. I think there's a paradox of choice, and.
Speaker 15: I think we in the streaming ecosystem haven't yet really
Speaker 15: made it as easy for viewers as we need to.
Speaker 15: Two B's approaches to be ubiquitous. So we are present
Speaker 15: and available and accessible to consumers across over thirty devices,
Speaker 15: every surface and screen that we can be on. And
Speaker 15: to your point, having that really large library means that
Speaker 15: we're often discoverable because we're the place you can watch
Speaker 15: that content you're looking for for free.
Speaker 5: And I think you're just going to see us continue.
Speaker 15: To do more and more to just remove barriers and
Speaker 15: make that experience easier and better.
Speaker 5: So your market share keeps on going up.
Speaker 2: I mean, you might not have been aware or using it,
Speaker 2: but one point eight percent of the market is yours.
Speaker 2: You're only just behind people, Kanhunu. When are you going
Speaker 2: to eclipse them?
Speaker 15: Honestly, you know, we're we are very focused on playing
Speaker 15: one game and one game only, and that is being
Speaker 15: free frictionless entertainment for consumers. But what I will say
Speaker 15: is we are doubling down on the strategy. We believe
Speaker 15: it's working. We think the tailwinds in our favor, and
Speaker 15: it's on us to continue to deliver.
Speaker 7: Where does live sports fit into your strategy?
Speaker 15: We are not investing in premium live sports rights. That
Speaker 15: is that's very expensive, and our belief is that's not
Speaker 15: going to really work on a free, ad supported model
Speaker 15: the way it does in other models. But what you
Speaker 15: will see us do is partner with Fox Sports in
Speaker 15: particular to really tell stories in and around the culture
Speaker 15: of sports. An example is this week we announced a
Speaker 15: talk show with Dean Sanders coach Prime. You'll also see
Speaker 15: us do a purple carpet sort of pregame show before
Speaker 15: the Super Bowl this year that kind of talks about
Speaker 15: fashion and celebrity culture around the game, and we'll continue
Speaker 15: to experiment there. But what we see, particularly among younger
Speaker 15: viewers gen Z, is that they're very interested in stories
Speaker 15: and culture around sports, almost as much as the live
Speaker 15: game itself.
Speaker 2: Yeah, very briefly, do you want an oscar? Do you
Speaker 2: want to like have an original make a big bang?
Speaker 5: I want to produce content.
Speaker 15: That delights our viewers, and I would say we care
Speaker 15: a lot more about that engagement as our currency, probably
Speaker 15: above awards or anything.
Speaker 2: Else, don'tkay to Angelie, so so nice to have some
Speaker 2: time with you.
Speaker 5: We thank him. Meanwhile, coming up, we dive.
Speaker 2: Into your favorite the gaming industry, folks, Mike Morheims with us,
Speaker 2: the co founder of Blizzard Entertainment. Boy, if we got
Speaker 2: some chats. He's now needing his own game developer startup
Speaker 2: and some new content coming.
Speaker 3: Yeah, it was a big part of my childhood some
Speaker 3: of his work. I'm super excited. Last night, Snoop Dog
Speaker 3: also sat down with Blimbers Lucashaw to discuss this new album.
Speaker 7: But also my childhood, my child your childhood.
Speaker 3: But also you probably saw it his experience at the
Speaker 3: Olympics over the summer.
Speaker 7: Just check this out.
Speaker 15: The NBC was and the Olympics was willing to allow
Speaker 15: us to bring our flavor to the table.
Speaker 7: And I try to keep us in the box and
Speaker 7: let us, you know, season and meat.
Speaker 3: Blizzard co founder industry veteran Mike Morheims working to replicate
Speaker 3: the video game studio's success, but without making some of
Speaker 3: the mistakes that have impacted the company's reputation in recent years,
Speaker 3: in particular and in particular the culture. Mike's new company
Speaker 3: is dream Haven. It is announcing a new title literally today.
Speaker 3: It has not said very much at all since kind
Speaker 3: of starting in twenty twenty, and I'm delighted to say
Speaker 3: that Mike's here with us in person.
Speaker 7: We can go into the.
Speaker 3: Backstory of Blizzard, and we can go into how for
Speaker 3: many people watching this show around the world, some of
Speaker 3: the original Blizzard titles and I'm a child with the
Speaker 3: nineties is a big part of their video games history.
Speaker 3: But let's start with what's new today. Okay, you have
Speaker 3: a title out, sunder Folk. It is the kind of
Speaker 3: big moment for your studio, which you founded in twenty twenty.
Speaker 3: The basics of the game and why it's important, why
Speaker 3: it will stand out in this field.
Speaker 9: So so yeah, this is a big moment for us
Speaker 9: because we've been heads down working on two games internally
Speaker 9: at dream Haven through our Secret Door studio and Moonshot.
Speaker 9: So Secret Door just announced their first game. It's called
Speaker 9: sunder Folk. It is a touch co op tactical RPG
Speaker 9: adventure that you can play with your friends. Really inspired
Speaker 9: by the magic of tabletop.
Speaker 7: Gaming, and this is a twenty twenty five thing.
Speaker 9: Just this is a twenty twenty five thing. So we
Speaker 9: just revealed what we've been working on all of this time,
Speaker 9: and we're super excited about it. Some of the unique
Speaker 9: things about this game it uses two screens, a personal
Speaker 9: screen which is basically your phone in your pocket, and
Speaker 9: shared screen. And we're really trying to replicate the magic
Speaker 9: of tabletop and RPG adventure gaming without some of the
Speaker 9: barriers that really make it inaccessible to a lot of people.
Speaker 9: You know, the thick manuals, the setup time. If you
Speaker 9: look at some of these games, sometimes you're taking you
Speaker 9: have to spend an hour learning the rules, to teach
Speaker 9: your friends how to play the game.
Speaker 7: I mean that is MMO RPG classic. That's the point
Speaker 7: of it.
Speaker 9: That is not the point of it, Okay, it is
Speaker 9: to get in and.
Speaker 7: He need to disagree, keep going, yeah, and have.
Speaker 5: Fun with your friends.
Speaker 9: And so we really kind of streamlined that whole experience
Speaker 9: to try to make game Night accessible to more people
Speaker 9: and so and to also give tools to the people
Speaker 9: really passionate about this genre to be able to bring
Speaker 9: in their friends who may not have experienced the magic.
Speaker 2: Of table talk people building that and Sokile and what
Speaker 2: so interesting is this is a full year project. She've
Speaker 2: been some in stealth. What is the heavy lift that
Speaker 2: goes into bringing us under Folk to bringing us the
Speaker 2: other game that you got lined up?
Speaker 9: I think that, I mean one of the big challenges.
Speaker 9: Whenever you're doing something innovative that hasn't been done before,
Speaker 9: there's a lot of trial and error and iteration. Often
Speaker 9: you come up with the design, you think it's going
Speaker 9: to be great, and then when you actually start playing it,
Speaker 9: you find that there are a lot of things that
Speaker 9: maybe aren't working as well as you thought, or aren't
Speaker 9: as fun as you thought. And so it's just very
Speaker 9: iterative to go and try things, play them, and then evolve,
Speaker 9: and sometimes you have to make big course corrections or
Speaker 9: pivots along the way.
Speaker 5: Who are you trying to build games for. Here's your demographic.
Speaker 9: We're trying to go for a really broad audience. So
Speaker 9: we try to make games that have depth, for a
Speaker 9: lot of replayability and for people who really want to
Speaker 9: who are really familiar with these genres, with accessibility. Even
Speaker 9: if you're not familiar, it's really yeah, I would love
Speaker 9: for you to play our games.
Speaker 3: It would be an interesting experiment to do that, right,
Speaker 3: to play together.
Speaker 7: I mean, if you're just tuning in.
Speaker 3: This has been big technology in Hollywood for screen time,
Speaker 3: and Mike Morheim and his colleagues are the people behind
Speaker 3: Diablo and Warcraft and those games in the nineties two
Speaker 3: thousand and four Warcraft rethink subscription model. I mean you
Speaker 3: were behind it and then skeptical about how that would grow.
Speaker 3: Let's put that to one side, because it isn't the
Speaker 3: nineties or two thousands anymore. It seems to me really
Speaker 3: hard to run an independent games studio and publishing shop
Speaker 3: right now.
Speaker 9: How hard well, Game development has always been very difficult
Speaker 9: in our experience. I don't think there's ever been a
Speaker 9: project that has been sort of like, we know what
Speaker 9: we're making, we go and make it and it's just great.
Speaker 9: It's just always has these zigs and zags along the way.
Speaker 9: And I think where we've been successful is really being
Speaker 9: reactive to what the games have told us that they
Speaker 9: need in order to achieve their potential. And we always
Speaker 9: have gone through a process where we continue to bring
Speaker 9: in fresh people with fresh perspectives yes to experience the
Speaker 9: game and observe how they interact with it, where are
Speaker 9: they getting stuck, what doesn't make sense, and try to
Speaker 9: really streamline that.
Speaker 7: Onboarding, Mike, let's talk about this industry.
Speaker 3: The backstory is that Lizard merged with Activision. I just
Speaker 3: want to ask that, at the conclusion of Activision being
Speaker 3: acquired by Microsoft, how you feel that left the industry,
Speaker 3: What the significance of it was for video games.
Speaker 9: I think we don't know the answer to that yet.
Speaker 9: I think it's still early because you're going to have
Speaker 9: to see how.
Speaker 5: How Blizzard is able.
Speaker 9: To operate within that new environment and whether it's an
Speaker 9: environment that will still allow it to continue innovating.
Speaker 5: We referenced at the start you built.
Speaker 2: A legendary business in gaming that many people grew up with.
Speaker 5: It's hard running businesses.
Speaker 2: What are the lessons you learned from Blizzard that you're
Speaker 2: either bringing over or not doing in the new agreat.
Speaker 7: That you want to avoid the mistakes of the past on.
Speaker 5: Yeah, So I mean that's two parts.
Speaker 9: I think some of the things we are definitely we
Speaker 9: want to bring over is we think that, look, gaming
Speaker 9: is a very competitive business. There's something like fifteen thousand
Speaker 9: games that are releasing each year on Steam alone, and
Speaker 9: so in order to sort of stand out, you really
Speaker 9: have to do something different better, and so really having
Speaker 9: a focus on creating high quality experiences. We really believe
Speaker 9: in the power of gaming to bring people together and
Speaker 9: that's what motivates us. And so I think we are
Speaker 9: always thinking about how to make the games as good
Speaker 9: as they can be with a view on what the players,
Speaker 9: what we as players want to see from those games,
Speaker 9: and I think that that's kind of we just always
Speaker 9: want to keep that mindset. I think, you know, with
Speaker 9: dream Haven, one of the things we want to do,
Speaker 9: we want to create an environment that allows individuals to
Speaker 9: do their best work so and to feel like and
Speaker 9: to have these studios feel like they're in control of
Speaker 9: their destiny and to feel agency and responsible for that
Speaker 9: so that they can, you know, steer their ship in
Speaker 9: the right the right ways.
Speaker 5: Mike, it's been so good having you.
Speaker 2: Thank you very much, dream Haven CEO with a new title, Michaelheim,
Speaker 2: We thank him.
Speaker 3: Let's recap for video game fans. Blizzard Entertainment was a
Speaker 3: household name, The maker of Overwatch and World of Warcraft
Speaker 3: changed the video game landscape until corporate Pair and Activision
Speaker 3: started cracking down on Blizzard's autonomy. We've just been speaking
Speaker 3: with one of the executives at the heart of the story,
Speaker 3: and it was all chronicled in a new book, play Nice,
Speaker 3: the Rise, Full and Future of Blizzard Entertainment, which just
Speaker 3: came out this week.
Speaker 7: Author and Bloomberg.
Speaker 3: News reporter Jason Schreyer is here with us in Hollywood.
Speaker 16: I'm here, Hello, Ed, and it's great to be here.
Speaker 3: I was going over with Mike some of the history
Speaker 3: of Blizzard. I was a child of the nineties. The
Speaker 3: titles your book goes inside the company, what was happening
Speaker 3: in the ninety two thousands?
Speaker 7: Where would you like to start? And what's inside the pages?
Speaker 16: It's really two stories.
Speaker 1: It's a story.
Speaker 16: It's a culture story and a business story. Both they
Speaker 16: go in some wild directions.
Speaker 1: You see.
Speaker 16: The book traces the history of Lizard from nineteen ninety
Speaker 16: one when it was founded, all the way up until
Speaker 16: today when it was bought by Microsoft in a sixty
Speaker 16: nine billion dollar acquisition. Still kind of unfathomable, right, It's
Speaker 16: still unimaginable that that happened. And what I do is
Speaker 16: I trace the culture, the way that people treated the place,
Speaker 16: the way of the company, what it was like to
Speaker 16: work there.
Speaker 7: So really quick good culture of bad culture.
Speaker 16: I try not to be reductive because for a lot
Speaker 16: of people is really good.
Speaker 12: For a lot of people, it was really bad for
Speaker 12: a lot of peoples, both a lot of women.
Speaker 16: For example, there have been a lot of discussions about
Speaker 16: how Bizard treated women in the wake of this made
Speaker 16: lawsuit that hit the company.
Speaker 12: A lot of women felt like at times.
Speaker 16: It was the best place in the world, and at
Speaker 16: times it was just really awful, and they were treated,
Speaker 16: they were harass they were discriminated against. But sometimes I mean,
Speaker 16: one woman I talked to you told me that she
Speaker 16: messed some of her best friends in the world, people
Speaker 16: who were in her wedding party at Wizard, But at
Speaker 16: the same time she had to deal with like getting
Speaker 16: paid less than her male colleagues.
Speaker 2: What Mike Moheim has now built his venture with his
Speaker 2: wife Yep and his many ways trying to push against
Speaker 2: some of the tougher experiences he had built in a
Speaker 2: new way.
Speaker 5: One of the lessons being learnt by the industry right now.
Speaker 12: Yeah, it's funny.
Speaker 5: I actually went and visited their studio last night, and.
Speaker 12: I think it's really interesting.
Speaker 1: One thing that really struck me about.
Speaker 16: Dreamhaven, their new venture, is that they have about thirty
Speaker 16: seven percent of their employees identify as either women or
Speaker 16: non binary, as opposed to a company like Blizzard. When
Speaker 16: they were founded, it was zero percent. Essentially, maybe they're
Speaker 16: lucky to get one or two women over the course
Speaker 16: of the nineties. Of course, the entire video game industry
Speaker 16: was in a very different place back then, But now
Speaker 16: I think they're working hard to be more inclusive.
Speaker 1: I think a lot of game companies, I mean.
Speaker 16: It's like very slow, gradual steps towards not being sexist
Speaker 16: and not being like crummy towards your workers, but they
Speaker 16: are making progress.
Speaker 12: And you know what, I think a lot more people
Speaker 12: these days are.
Speaker 16: Willing to call out companies that don't treat them well,
Speaker 16: and I think that has led to some changes.
Speaker 7: Just one point.
Speaker 3: We hate talking about this because video games industry is
Speaker 3: a huge industry movies, and it's important to always remind
Speaker 3: ourselves of that.
Speaker 2: It's a key screen that we're all addicted to, the
Speaker 2: gaming screen. Jason's going to be here at screen time
Speaker 2: doing an interview.
Speaker 5: I'm sure, Yes, I'm talking to Mike Morehome.
Speaker 12: Actually I get them after you.
Speaker 2: Guys, there we have it. But this whole day, it's
Speaker 2: going to be amazing. There's gonna be so many people.
Speaker 2: You want to be listening from Scooter Blaun, it's going
Speaker 2: to be here, going to hear of course, the CEO
Speaker 2: of Comcast coming on. You don't want to miss what's
Speaker 2: going on.
Speaker 3: And tomorrow, Long Beach, we are talking defense, we're talking space.
Speaker 3: We are live from Rocket Lab. Do not miss that
Speaker 3: Bloomberg Technology see as soon