1 00:00:08,000 --> 00:00:12,680 Speaker 1: Welcome to Strictly Business Varieties, weekly podcast featuring conversations with 2 00:00:12,760 --> 00:00:17,200 Speaker 1: industry leaders about the business of media and entertainment. I'm 3 00:00:17,280 --> 00:00:21,239 Speaker 1: Cynthia Littleton, co editor in chief of Variety Today. My 4 00:00:21,320 --> 00:00:25,159 Speaker 1: guest is Jeff Scotland. Jeff is executive vice president of 5 00:00:25,200 --> 00:00:29,280 Speaker 1: Global Studios for Hudson Pacific. Hudson Pacific is a real 6 00:00:29,400 --> 00:00:33,279 Speaker 1: estate investment trust that is very focused on the content business. 7 00:00:33,840 --> 00:00:37,640 Speaker 1: Hudson Pacific owns three very busy studio lots in Hollywood, 8 00:00:37,920 --> 00:00:42,320 Speaker 1: Sunset Gower, Sunset Las Palmas, and Sunset Bronson. They're building 9 00:00:42,360 --> 00:00:45,520 Speaker 1: another studio north of Burbank, and they also just bought 10 00:00:45,600 --> 00:00:50,519 Speaker 1: Quixote Studios, another provider of sound stages and services. The 11 00:00:50,600 --> 00:00:54,120 Speaker 1: company has a partnership with private equity giant Blackstone and 12 00:00:54,200 --> 00:00:57,560 Speaker 1: has more building plans all around the world, including in 13 00:00:57,600 --> 00:01:01,560 Speaker 1: the UK. Jeff is a former Disney strategy executive who 14 00:01:01,560 --> 00:01:06,120 Speaker 1: worked in the Parks, Experiences and Products division, helping manage 15 00:01:06,160 --> 00:01:10,199 Speaker 1: the studio's real estate, among other properties. He joined Hudson 16 00:01:10,240 --> 00:01:13,600 Speaker 1: Pacific last year. Here, Jeff talks me through all the 17 00:01:13,680 --> 00:01:16,600 Speaker 1: questions I have about the business of renting sound stages 18 00:01:16,800 --> 00:01:20,200 Speaker 1: and production space. I found it enlightening and interesting, and 19 00:01:20,240 --> 00:01:23,479 Speaker 1: I hope you will too. That's all coming up after 20 00:01:23,520 --> 00:01:37,959 Speaker 1: the break and we're back with Hudson pacifics Jeff Stockland. Jeff, 21 00:01:37,959 --> 00:01:41,360 Speaker 1: thank you so much for inviting me here to the 22 00:01:41,400 --> 00:01:46,120 Speaker 1: beautiful sunset Lost Palmis lot in the heart of Hollywood. 23 00:01:46,400 --> 00:01:49,720 Speaker 1: My pleasure. Thank you for it, thank you for having well. 24 00:01:49,800 --> 00:01:51,880 Speaker 1: The impetus for me reaching out to you to talk 25 00:01:51,920 --> 00:01:56,320 Speaker 1: to you about the business of managing studio space, creative space, 26 00:01:56,400 --> 00:02:01,600 Speaker 1: sound stage space is The impetus was that Hudson Pacific 27 00:02:01,680 --> 00:02:04,960 Speaker 1: has bought Ka Hotel Studios, which is a big, big 28 00:02:05,000 --> 00:02:10,520 Speaker 1: studio sound stage operator in Los Angeles. And having this, 29 00:02:10,800 --> 00:02:13,519 Speaker 1: having started that conversation, I've learned so much more about 30 00:02:13,720 --> 00:02:17,679 Speaker 1: Hudson Pacific and how you have very strategically acquired a 31 00:02:18,120 --> 00:02:23,240 Speaker 1: lot of of sound stage space, creative production office space, 32 00:02:23,480 --> 00:02:26,720 Speaker 1: so much so that pretty much anybody shooting a major 33 00:02:26,760 --> 00:02:30,400 Speaker 1: project in town is doing business with Hudson Pacific. So, Jeff, 34 00:02:30,400 --> 00:02:32,480 Speaker 1: why don't you start by kind of setting setting the 35 00:02:32,720 --> 00:02:35,839 Speaker 1: table for us in terms of Hudson Pacific, And it's 36 00:02:35,880 --> 00:02:40,440 Speaker 1: specifically it's studio and stund sound stage business, which I 37 00:02:40,480 --> 00:02:43,959 Speaker 1: know is also not just in Los Angeles. Yeah. UM, 38 00:02:44,160 --> 00:02:49,080 Speaker 1: so we have in l A we have UM Sunset Studios, 39 00:02:49,120 --> 00:02:52,000 Speaker 1: which is three different studios right now. There's Sunset Gower 40 00:02:52,200 --> 00:02:57,280 Speaker 1: since at Las Palmas and Sunset Bronson UM. The Netflix Headquarters, 41 00:02:57,919 --> 00:03:00,480 Speaker 1: which is a building that we built, is also Sunset 42 00:03:00,480 --> 00:03:04,040 Speaker 1: Bronson right in that nexus of these great exactly right right, 43 00:03:04,080 --> 00:03:06,680 Speaker 1: and they're all very close to each other. UM. There's 44 00:03:06,680 --> 00:03:11,720 Speaker 1: about thirty five stages, about a million square feet of office. UM. 45 00:03:11,760 --> 00:03:15,440 Speaker 1: It's unique in the sense that on Sunset Bronson, UM 46 00:03:15,440 --> 00:03:18,840 Speaker 1: and Gower there are corporate offices there. So you'll see 47 00:03:18,960 --> 00:03:21,919 Speaker 1: in addition to sound stages in the traditional studio lot, 48 00:03:22,160 --> 00:03:26,680 Speaker 1: there's also know big sort of commercial class A office spaces, 49 00:03:26,880 --> 00:03:30,079 Speaker 1: which is pretty unique. You don't see that on all lots. 50 00:03:30,120 --> 00:03:34,800 Speaker 1: So UM we own We've owned those assets for roughly 51 00:03:34,880 --> 00:03:37,480 Speaker 1: ten years, acquired them you know along the way, so 52 00:03:37,880 --> 00:03:39,640 Speaker 1: not all ten years ago, but sort of over the 53 00:03:39,680 --> 00:03:43,920 Speaker 1: last ten years. And then I joined about eighteen months ago. 54 00:03:44,480 --> 00:03:48,040 Speaker 1: And then in that last eighteen months we've added UM 55 00:03:48,080 --> 00:03:52,560 Speaker 1: some other companies including Kyote and UH they have another 56 00:03:52,680 --> 00:03:56,119 Speaker 1: twenty six stages. UH. And then in addition to that, 57 00:03:56,160 --> 00:03:59,720 Speaker 1: we're building a studio called Sunset Glen Oaks, which is 58 00:04:00,120 --> 00:04:04,000 Speaker 1: in sun Ballets, about fifteen minutes north of Burbank. So 59 00:04:04,320 --> 00:04:07,200 Speaker 1: that will take the Sunset portfolio to forty two stages 60 00:04:08,240 --> 00:04:14,040 Speaker 1: with associated like office space and production support mills and um, 61 00:04:14,080 --> 00:04:16,280 Speaker 1: you know, all the sorts of associated space we need 62 00:04:16,320 --> 00:04:19,000 Speaker 1: on a studio lot. Uh. And then and then we 63 00:04:19,080 --> 00:04:22,080 Speaker 1: also own you know, formerly the Star Wagons business, which 64 00:04:22,120 --> 00:04:23,920 Speaker 1: is all the trailers that you'd see on lots of 65 00:04:24,040 --> 00:04:27,800 Speaker 1: the cast trailers and makeup and wardrobe company called Zio 66 00:04:28,000 --> 00:04:31,600 Speaker 1: which also is a similar type of a business, UM, 67 00:04:31,640 --> 00:04:34,599 Speaker 1: and that's called Zio Studio Services. And then recently we 68 00:04:34,680 --> 00:04:38,480 Speaker 1: just bought Kyote, which has a collection of different business 69 00:04:38,600 --> 00:04:40,600 Speaker 1: is really one of which is stages and a lot 70 00:04:40,640 --> 00:04:43,360 Speaker 1: of services and have a lot of services as well. Yeah, 71 00:04:43,360 --> 00:04:46,400 Speaker 1: so that's sort of the um what we have in 72 00:04:46,560 --> 00:04:50,359 Speaker 1: l A on the production services side. We also have 73 00:04:51,040 --> 00:04:55,799 Speaker 1: a business in Albuquerque, uh, in New Orleans, in New York, 74 00:04:56,000 --> 00:04:58,719 Speaker 1: and in Atlanta, so and sort of the some other 75 00:04:58,760 --> 00:05:03,040 Speaker 1: markets and nods in all real production hubs. Yeah, I 76 00:05:03,040 --> 00:05:06,839 Speaker 1: mean they're really yeah, and we're really focused on major 77 00:05:06,880 --> 00:05:10,640 Speaker 1: production hubs, which I would say from a Tier one perspective, 78 00:05:11,320 --> 00:05:13,719 Speaker 1: you know, l A certainly is the home and that 79 00:05:14,200 --> 00:05:17,000 Speaker 1: that I think we have really strong conviction of not 80 00:05:17,080 --> 00:05:20,200 Speaker 1: only being strong today but strong for you know, the 81 00:05:20,240 --> 00:05:24,600 Speaker 1: next hundred years. With the infrastructure, talent both on screen 82 00:05:24,680 --> 00:05:27,840 Speaker 1: and you know, behind the camera. It's really just hard 83 00:05:27,880 --> 00:05:30,719 Speaker 1: to build that in any market. But you know, l A. 84 00:05:30,880 --> 00:05:33,760 Speaker 1: London's and market where we're building a giant studio. We 85 00:05:33,800 --> 00:05:35,680 Speaker 1: can come back to that, I guess, but building a 86 00:05:35,680 --> 00:05:41,679 Speaker 1: giant studio there, Um New York, uh, you know, Um, 87 00:05:41,839 --> 00:05:44,960 Speaker 1: Vancouver is another big market. Atlanta is another big market. 88 00:05:45,000 --> 00:05:48,120 Speaker 1: We really stick to those, and then places like Albuquerque, 89 00:05:48,279 --> 00:05:52,560 Speaker 1: New Orleans, you know, Toronto. Those are really interesting markets 90 00:05:52,560 --> 00:05:55,040 Speaker 1: for us that you know, we can talk about our 91 00:05:55,080 --> 00:05:59,160 Speaker 1: strategy for thinking about those markets, but really for purpose 92 00:05:59,240 --> 00:06:02,160 Speaker 1: built studio lots, we really are focusing on those kind 93 00:06:02,200 --> 00:06:05,400 Speaker 1: of those tier one markets of l A, London, you know, 94 00:06:05,560 --> 00:06:10,440 Speaker 1: New York, Vancouver, Toronto. I'm guessing that with so much 95 00:06:10,480 --> 00:06:13,840 Speaker 1: demand and everybody always searching for a stage, you've got 96 00:06:14,240 --> 00:06:16,800 Speaker 1: a waiting list a mile long for how are you 97 00:06:16,839 --> 00:06:20,920 Speaker 1: how do you manage the demand. Well, so it's interesting 98 00:06:20,960 --> 00:06:24,919 Speaker 1: that there's there's two basic types of models and we 99 00:06:25,000 --> 00:06:28,120 Speaker 1: have both on our existing lots. One is these long 100 00:06:28,240 --> 00:06:31,360 Speaker 1: term leases. So what what you saw, what we've seen 101 00:06:31,560 --> 00:06:33,800 Speaker 1: like and this is really a recent development over the 102 00:06:33,880 --> 00:06:37,200 Speaker 1: last eight four years where the studio is like a 103 00:06:37,279 --> 00:06:40,840 Speaker 1: Netflix for example, for instance, UM, they would come in 104 00:06:40,960 --> 00:06:43,279 Speaker 1: and do long term leases where they would take multiple 105 00:06:43,360 --> 00:06:46,119 Speaker 1: stages over a long term period of time, five years, 106 00:06:46,160 --> 00:06:48,560 Speaker 1: ten years, you know, whatever it is. But it and 107 00:06:48,600 --> 00:06:50,880 Speaker 1: the other models really show by show and that's the 108 00:06:50,960 --> 00:06:53,720 Speaker 1: traditional model, which is you and I want to go 109 00:06:54,040 --> 00:06:57,400 Speaker 1: produce a show, UM, and we need stages, and it 110 00:06:57,400 --> 00:07:00,240 Speaker 1: gets greenlit, and so you go do all this stuff. 111 00:07:00,240 --> 00:07:02,240 Speaker 1: You get, you get the stages, you get the services, 112 00:07:02,240 --> 00:07:04,279 Speaker 1: and that's a that show by show and if our 113 00:07:04,320 --> 00:07:07,240 Speaker 1: show gets picked up, we renew that lease hopefully if 114 00:07:07,240 --> 00:07:09,720 Speaker 1: those stages are available, and you kind of go from there. 115 00:07:09,960 --> 00:07:12,720 Speaker 1: It's a more transient model. That's the way the industry 116 00:07:12,880 --> 00:07:16,000 Speaker 1: generally works. The recent phenomenal of the last like kind 117 00:07:16,000 --> 00:07:18,960 Speaker 1: of I don't know, four or five years, maybe studios 118 00:07:19,120 --> 00:07:22,160 Speaker 1: starting to get worried about, um, you know, with the 119 00:07:22,200 --> 00:07:24,560 Speaker 1: proliferation of content, that we're gonna get boxed out of 120 00:07:24,560 --> 00:07:28,280 Speaker 1: getting access to stages. So you know, with a pile 121 00:07:28,320 --> 00:07:32,120 Speaker 1: of cash, they said, listen, let's let's lock that up 122 00:07:32,240 --> 00:07:34,680 Speaker 1: of the supply of stages, so we're not you know, 123 00:07:34,720 --> 00:07:38,120 Speaker 1: without that key ingredient to go make the content. And 124 00:07:38,160 --> 00:07:40,960 Speaker 1: so that's what you saw. So on our lots, um 125 00:07:41,040 --> 00:07:44,360 Speaker 1: we have a mix of long term leases and then 126 00:07:44,400 --> 00:07:47,760 Speaker 1: also show by show. So if you're in a long 127 00:07:47,880 --> 00:07:51,160 Speaker 1: term lease model, managing demand isn't you know when you 128 00:07:51,200 --> 00:07:53,040 Speaker 1: go back that it isn't really an issue because you 129 00:07:53,040 --> 00:07:56,240 Speaker 1: already have that that that client locked up for a 130 00:07:56,280 --> 00:07:58,960 Speaker 1: period of time. But for most of the industry that's 131 00:07:59,000 --> 00:08:01,720 Speaker 1: not the case. For more studio lots, it's show by show, 132 00:08:02,320 --> 00:08:05,520 Speaker 1: and so for that you are managing demand. And that's 133 00:08:05,520 --> 00:08:09,040 Speaker 1: a pretty interesting one because in the ideal world, if 134 00:08:09,080 --> 00:08:12,160 Speaker 1: you had perfect visibility and to how all that demand 135 00:08:12,240 --> 00:08:15,680 Speaker 1: was going to materialize, you'd be able to say, oh, well, 136 00:08:15,760 --> 00:08:18,240 Speaker 1: show A comes to me and says, hey, we really 137 00:08:18,280 --> 00:08:22,640 Speaker 1: need stages, and you know, you know here the least 138 00:08:22,760 --> 00:08:25,080 Speaker 1: rates for those stages, and hear the services that you 139 00:08:25,120 --> 00:08:27,760 Speaker 1: know that that they'll need as well, you say, well, 140 00:08:27,800 --> 00:08:31,080 Speaker 1: that's that's one option, and then there's a whole another 141 00:08:31,160 --> 00:08:35,240 Speaker 1: series of people that need the same stages maybe, and 142 00:08:35,360 --> 00:08:37,440 Speaker 1: let's compare and contrast and let's sort of go with 143 00:08:37,520 --> 00:08:40,400 Speaker 1: the best or highest bidder, but like in reality, it 144 00:08:40,400 --> 00:08:43,319 Speaker 1: never really look works out like that. And in reality 145 00:08:43,800 --> 00:08:47,520 Speaker 1: somebody comes to you know, um least your your stages. 146 00:08:47,559 --> 00:08:50,160 Speaker 1: There's first of all, you want to help them and 147 00:08:50,480 --> 00:08:52,400 Speaker 1: you want to maintain a long term relationships. And you 148 00:08:52,440 --> 00:08:54,760 Speaker 1: never really want to say no to anybody, right, which 149 00:08:54,840 --> 00:08:59,080 Speaker 1: means the burden the hand is always better generally what 150 00:08:59,240 --> 00:09:04,079 Speaker 1: is what kind of happened? So theoretically you can manage demand, 151 00:09:04,320 --> 00:09:07,199 Speaker 1: but like in reality, you're you just don't want those 152 00:09:07,240 --> 00:09:09,680 Speaker 1: stages to go empty. And no matter who runs the 153 00:09:09,720 --> 00:09:13,760 Speaker 1: business of studios, you don't want stages to go empty. 154 00:09:13,800 --> 00:09:17,560 Speaker 1: So you're always inclined to take you know, whoever sort 155 00:09:17,559 --> 00:09:19,920 Speaker 1: of comes in first. And you also want to maintain 156 00:09:19,960 --> 00:09:22,280 Speaker 1: that good relationship with them because the next time when 157 00:09:22,280 --> 00:09:24,520 Speaker 1: they have to produce something, you want them to call. 158 00:09:24,920 --> 00:09:28,000 Speaker 1: And if you have this reputation saying no, then they're 159 00:09:28,040 --> 00:09:31,400 Speaker 1: just gonna stop calling. So yeah, do you ever going 160 00:09:31,480 --> 00:09:34,280 Speaker 1: to do a situation because I know now especially it 161 00:09:34,400 --> 00:09:36,800 Speaker 1: is so it is so competitive and so hard to 162 00:09:36,960 --> 00:09:39,200 Speaker 1: It's just it's a it's a literal land rush that 163 00:09:39,200 --> 00:09:42,040 Speaker 1: that people even before they have a hundred percent a 164 00:09:42,080 --> 00:09:45,000 Speaker 1: hundred and fifty percent of their green light they're looking 165 00:09:45,040 --> 00:09:47,360 Speaker 1: for stages. Does that become an issue to people try 166 00:09:47,400 --> 00:09:51,559 Speaker 1: to reserve things that they don't then can't can't actually 167 00:09:52,000 --> 00:09:54,880 Speaker 1: are going to actually need. Yeah, I mean it's a really, 168 00:09:54,920 --> 00:09:57,400 Speaker 1: it's a really, it's a really good question. Um, there 169 00:09:57,520 --> 00:10:02,640 Speaker 1: is that that concept of reserve in stages. Um, Different 170 00:10:02,720 --> 00:10:07,080 Speaker 1: studio lots have different policies. Some students, some studio lots 171 00:10:07,080 --> 00:10:13,920 Speaker 1: will hold for a deposit and others won't. Most don't. 172 00:10:15,400 --> 00:10:17,920 Speaker 1: But it happens all the time where people are calling 173 00:10:17,960 --> 00:10:21,679 Speaker 1: around and you, as an owner and operator of studios, 174 00:10:21,760 --> 00:10:26,000 Speaker 1: are also assessing the likelihood that that person is actually 175 00:10:26,000 --> 00:10:28,520 Speaker 1: gonna book right, and you, you know, do you want 176 00:10:28,559 --> 00:10:31,760 Speaker 1: to that hold? What depends on your relationship. So these 177 00:10:31,800 --> 00:10:35,640 Speaker 1: aren't like commoditized types of transaction where it's like you know, 178 00:10:35,800 --> 00:10:37,959 Speaker 1: going in and buying milk a grocery store, where it's 179 00:10:38,000 --> 00:10:41,360 Speaker 1: the same thing every time. Stage a stage B, stage 180 00:10:41,400 --> 00:10:44,360 Speaker 1: site right. Even the the you know we were talking 181 00:10:44,360 --> 00:10:47,240 Speaker 1: about this earlier, even through the physical layout of stages 182 00:10:47,240 --> 00:10:50,520 Speaker 1: are all different. What people's needs are different, their ability 183 00:10:50,559 --> 00:10:52,600 Speaker 1: to make a decision, and the timing is a little 184 00:10:52,600 --> 00:10:56,920 Speaker 1: bit different. So I think that you kind of manage 185 00:10:56,960 --> 00:11:00,960 Speaker 1: demand based on um, you know, a asking the likelihood 186 00:11:00,960 --> 00:11:03,080 Speaker 1: that somebody actually needs a stage now and they're willing 187 00:11:03,080 --> 00:11:05,480 Speaker 1: to do it, and if they can't, then you probably 188 00:11:05,480 --> 00:11:07,680 Speaker 1: go to the next person who needs it. And in 189 00:11:07,679 --> 00:11:12,800 Speaker 1: this market usually there are other people, but um, that 190 00:11:12,840 --> 00:11:15,400 Speaker 1: won't always be the case. So you always have this 191 00:11:15,440 --> 00:11:18,200 Speaker 1: incentive to really try to help somebody out because you 192 00:11:18,200 --> 00:11:21,160 Speaker 1: want them to come back. And talking about your business models, 193 00:11:21,200 --> 00:11:23,320 Speaker 1: I can see from a business perspective, you probably like 194 00:11:23,440 --> 00:11:26,560 Speaker 1: having a few long term people, but you like, like 195 00:11:26,600 --> 00:11:29,520 Speaker 1: a restaurateur, you can turn the tables and so you 196 00:11:29,520 --> 00:11:31,760 Speaker 1: can turn your tables over and bring in new people. 197 00:11:31,840 --> 00:11:35,760 Speaker 1: And you know you would you say, not asking you 198 00:11:35,840 --> 00:11:38,440 Speaker 1: dollars and cents, but would you say that your rates 199 00:11:39,520 --> 00:11:41,800 Speaker 1: do they vary depending on the client needs or is 200 00:11:41,840 --> 00:11:43,920 Speaker 1: it kind of a do you have like a here's 201 00:11:43,920 --> 00:11:46,120 Speaker 1: a tier one, here's a tier two, and do they 202 00:11:46,160 --> 00:11:48,240 Speaker 1: stay steady or do do they go up and down 203 00:11:48,320 --> 00:11:51,480 Speaker 1: depending on the demand cer. We don't change rates by 204 00:11:51,600 --> 00:11:55,440 Speaker 1: client like we there there are and by the way, 205 00:11:55,640 --> 00:11:58,960 Speaker 1: having the market, it's market rates are tough to come 206 00:11:58,960 --> 00:12:02,160 Speaker 1: by because it's such a opaque industry, like the industry 207 00:12:02,280 --> 00:12:06,000 Speaker 1: is not The information is not transparent, it's not readily available, 208 00:12:06,280 --> 00:12:08,800 Speaker 1: so and things are bundled, so it's hard to even 209 00:12:08,800 --> 00:12:12,280 Speaker 1: know what other studios are charging because it's it's bundled 210 00:12:12,320 --> 00:12:17,400 Speaker 1: between stages and services. So market is a elusive concept. 211 00:12:17,600 --> 00:12:20,920 Speaker 1: Market rates for stages. That said, we don't really charge 212 00:12:21,000 --> 00:12:25,920 Speaker 1: different rates depending on the client um, and you do 213 00:12:26,000 --> 00:12:28,440 Speaker 1: kind of want both. Like having long term is great 214 00:12:28,559 --> 00:12:31,840 Speaker 1: because if if the demand dissipates right and you're heading 215 00:12:31,840 --> 00:12:34,640 Speaker 1: into a market where there's not as many people, having 216 00:12:34,679 --> 00:12:38,760 Speaker 1: that certainty of somebody paying you to cover fixed costs 217 00:12:38,840 --> 00:12:42,040 Speaker 1: is super helpful. In a market where it's up into 218 00:12:42,080 --> 00:12:44,959 Speaker 1: the right, where there's a lot of demand and it 219 00:12:45,440 --> 00:12:48,760 Speaker 1: exceeds supply, you don't want to be locked into long 220 00:12:48,880 --> 00:12:51,960 Speaker 1: term releases because you want to quote unquote mark to market, 221 00:12:52,000 --> 00:12:54,959 Speaker 1: which means, if you know, six months from now, if 222 00:12:55,080 --> 00:12:58,839 Speaker 1: rates are rising because demand farout strips supply, you want 223 00:12:58,840 --> 00:13:00,160 Speaker 1: to be able to charge that. But if you have 224 00:13:00,160 --> 00:13:02,000 Speaker 1: a long term at least, you can't do that. You 225 00:13:02,040 --> 00:13:05,160 Speaker 1: can't quote unquote mark to market. So you'll just have 226 00:13:05,240 --> 00:13:09,160 Speaker 1: different scenarios and different investors, Different owners of lots depending 227 00:13:09,160 --> 00:13:11,640 Speaker 1: on who they are, have a different perspective on that 228 00:13:11,679 --> 00:13:16,559 Speaker 1: exact dynamic. If you're generally a real estate owner, they 229 00:13:16,679 --> 00:13:19,080 Speaker 1: like to lock in long term rates and they're they're 230 00:13:19,440 --> 00:13:23,280 Speaker 1: maybe maybe more willing to sacrifice upside and the interest 231 00:13:23,360 --> 00:13:27,520 Speaker 1: of the risking um. But there's a lot of upside 232 00:13:27,520 --> 00:13:30,800 Speaker 1: economically in the market that's frothy to go market the 233 00:13:30,840 --> 00:13:32,720 Speaker 1: markets as you're giving up a lot, and it's really 234 00:13:32,760 --> 00:13:35,679 Speaker 1: just managing risk at that point. And you know, I 235 00:13:36,080 --> 00:13:38,800 Speaker 1: like to us have both and and the and the 236 00:13:38,840 --> 00:13:41,880 Speaker 1: reality is the way the industry works is most of 237 00:13:41,920 --> 00:13:44,560 Speaker 1: the businesses show by show. So even if you and 238 00:13:44,600 --> 00:13:46,880 Speaker 1: I said here said hey, we want to completely long 239 00:13:47,000 --> 00:13:49,760 Speaker 1: term business, right, the only way you'd really do it 240 00:13:49,800 --> 00:13:52,160 Speaker 1: is to discount it so heavily to get that person 241 00:13:52,200 --> 00:13:55,360 Speaker 1: in there that it just wouldn't be economically viable. So 242 00:13:55,679 --> 00:13:58,640 Speaker 1: the reality is, as you scale this business, the more stages, 243 00:13:58,679 --> 00:14:02,079 Speaker 1: more studios in different markets, most of the business will 244 00:14:02,120 --> 00:14:04,800 Speaker 1: be showed by show. Some of the long term but 245 00:14:05,920 --> 00:14:07,959 Speaker 1: no long term leases are tough because you're asking a 246 00:14:08,000 --> 00:14:11,280 Speaker 1: studio to make a long term financial commitment and they 247 00:14:11,280 --> 00:14:13,560 Speaker 1: don't necessarily want to lock into these because they're not 248 00:14:13,640 --> 00:14:15,200 Speaker 1: sure what their needs are going to be, right, and 249 00:14:15,240 --> 00:14:17,240 Speaker 1: they don't know what the what what who's going to 250 00:14:17,320 --> 00:14:20,120 Speaker 1: be on or off their own lots? And I remember 251 00:14:20,520 --> 00:14:23,440 Speaker 1: early on thinking, well, every you know, every Warner Brothers 252 00:14:23,440 --> 00:14:25,560 Speaker 1: show would have to be shot at Warner Brothers. It's 253 00:14:25,600 --> 00:14:28,120 Speaker 1: one of those It's one of those funny things. Let 254 00:14:28,120 --> 00:14:31,120 Speaker 1: me ask you, totally won key question, but do you 255 00:14:32,360 --> 00:14:34,440 Speaker 1: when you're when you are doing a deal with with 256 00:14:34,480 --> 00:14:36,600 Speaker 1: somebody who's going to take a stage? Is it our 257 00:14:36,680 --> 00:14:39,160 Speaker 1: deal terms? Is it done by square foot? Is it 258 00:14:39,240 --> 00:14:41,560 Speaker 1: done by the amount of time that they will be 259 00:14:41,600 --> 00:14:44,840 Speaker 1: on the stage? And totally just great question. Um, it's 260 00:14:44,880 --> 00:14:48,480 Speaker 1: not done by square foot. It's done by the total 261 00:14:48,560 --> 00:14:53,360 Speaker 1: price to occupy that stage. So, um, you might have 262 00:14:54,080 --> 00:14:57,960 Speaker 1: let's say two stages twenty thousand square feet each forty 263 00:14:58,320 --> 00:15:02,160 Speaker 1: square feed, plus you know, another ten fifteen thousand square 264 00:15:02,200 --> 00:15:05,320 Speaker 1: feet of production support office. You might have some other 265 00:15:05,360 --> 00:15:08,640 Speaker 1: type of office. You might have a mills space. The 266 00:15:08,760 --> 00:15:12,440 Speaker 1: whole thing will be a baker. You'll pay X amount 267 00:15:12,480 --> 00:15:15,800 Speaker 1: of dollars a month for that whole service. So it's 268 00:15:15,840 --> 00:15:20,240 Speaker 1: not really tease apartment. It's it's sort of bundled into 269 00:15:20,280 --> 00:15:24,840 Speaker 1: this one thing services. That's a whole different situation. There 270 00:15:24,840 --> 00:15:27,640 Speaker 1: are different business models as to whether those are bundled 271 00:15:27,720 --> 00:15:32,080 Speaker 1: or they're sort of charged as separate unbundled services moralic 272 00:15:32,200 --> 00:15:37,320 Speaker 1: card that model really does bettery. But the investor or 273 00:15:37,400 --> 00:15:41,000 Speaker 1: the real estate from an evaluation perspective after the fact 274 00:15:41,440 --> 00:15:44,720 Speaker 1: does look at sort of dollars per square feet. But 275 00:15:44,880 --> 00:15:47,840 Speaker 1: the clients themselves when you structure these leasing rooms, they 276 00:15:47,840 --> 00:15:49,800 Speaker 1: don't look at it like that. It's just one number. 277 00:15:50,240 --> 00:15:53,320 Speaker 1: And then you, as somebody who's used to like leasing 278 00:15:53,360 --> 00:15:57,400 Speaker 1: stages and producing stuff, you'll just know, oh, this is 279 00:15:57,440 --> 00:15:59,800 Speaker 1: more than I typically used to paying more less. But 280 00:16:00,800 --> 00:16:04,320 Speaker 1: the total numbers what you'll be aware of, what you'll know, 281 00:16:04,440 --> 00:16:06,880 Speaker 1: and that's your basis of comparison. And that's how we 282 00:16:06,920 --> 00:16:10,200 Speaker 1: do it as investors. We also look at it as 283 00:16:10,240 --> 00:16:12,480 Speaker 1: a yield per square foot. It's just more of like 284 00:16:12,520 --> 00:16:15,600 Speaker 1: a key performance indicator. So kind of both happened for 285 00:16:15,600 --> 00:16:18,440 Speaker 1: different purposes. Is that I'm guessing there must be people 286 00:16:18,760 --> 00:16:22,240 Speaker 1: counterparts at studios and the sizeable production companies that have 287 00:16:22,840 --> 00:16:26,720 Speaker 1: expertise in doing that, probably in the physical production in 288 00:16:26,840 --> 00:16:31,200 Speaker 1: terms of in terms of taking stages and yeah, yeah 289 00:16:31,400 --> 00:16:35,880 Speaker 1: that's in Yeah. So um, there's there's really a couple 290 00:16:35,880 --> 00:16:38,840 Speaker 1: of different types of people. You have physical production executives 291 00:16:38,920 --> 00:16:42,040 Speaker 1: at every studio and they're in charge with you know, 292 00:16:42,800 --> 00:16:46,800 Speaker 1: really the you know, once the slate is sort of 293 00:16:46,840 --> 00:16:49,080 Speaker 1: set at a studio to figure out what they're going 294 00:16:49,160 --> 00:16:54,440 Speaker 1: to produce, that whole organization, that function goes out and 295 00:16:54,520 --> 00:16:59,520 Speaker 1: figures out all the logistics around you know, um, purchasing 296 00:16:59,560 --> 00:17:02,120 Speaker 1: all the access to the services that they're going to 297 00:17:02,240 --> 00:17:04,880 Speaker 1: need to produce that slate, and so that that really 298 00:17:04,920 --> 00:17:08,480 Speaker 1: is a production planning function at the various studios, it's 299 00:17:08,600 --> 00:17:11,199 Speaker 1: called physical production or whatever. Now, if you're doing a 300 00:17:11,200 --> 00:17:15,240 Speaker 1: long term lease, those are typically corporate real estate executives, 301 00:17:15,680 --> 00:17:19,400 Speaker 1: so they would work in partnership in each studio because 302 00:17:19,400 --> 00:17:23,640 Speaker 1: of their various organizational structures. It might change, but generally 303 00:17:23,800 --> 00:17:27,200 Speaker 1: it probably has changed. Every studio has changed every job 304 00:17:27,240 --> 00:17:30,000 Speaker 1: and everybody's title in the last twenty four months. Well, 305 00:17:30,040 --> 00:17:32,760 Speaker 1: it's a great point, and so that's another challenge with 306 00:17:32,840 --> 00:17:35,840 Speaker 1: getting long term leases done. It's a much more complex 307 00:17:36,240 --> 00:17:40,600 Speaker 1: sale where you're navigating eight different you know, functions, are 308 00:17:40,920 --> 00:17:43,240 Speaker 1: you know, a lot of different people to get something 309 00:17:43,240 --> 00:17:45,239 Speaker 1: like that done, Whereas when you're doing a show by 310 00:17:45,320 --> 00:17:47,720 Speaker 1: show you're not really dealing with like a bunch of 311 00:17:47,800 --> 00:17:51,360 Speaker 1: different factions. It's generally a physical production person who's going 312 00:17:51,440 --> 00:17:54,520 Speaker 1: to sort of do that. Um so it's a completely 313 00:17:54,520 --> 00:17:59,080 Speaker 1: different challenge from a sales perspective to do long term leases. 314 00:17:59,119 --> 00:18:02,639 Speaker 1: Not so much in terms of appetite, but navigating that 315 00:18:02,920 --> 00:18:06,560 Speaker 1: is it's a skill. Do you ever deal directly with showrunners? 316 00:18:06,640 --> 00:18:09,280 Speaker 1: Do you ever show runners coming in and I'm sure 317 00:18:09,320 --> 00:18:12,040 Speaker 1: they've got to scope out, you know, what what they 318 00:18:12,080 --> 00:18:16,760 Speaker 1: need and what. Yeah, showrunners, uh, you know, showrunners line producers, 319 00:18:16,800 --> 00:18:20,040 Speaker 1: but show runners in general have really particular preferences a 320 00:18:20,040 --> 00:18:22,520 Speaker 1: lot of time with wherever they want to produce. They've 321 00:18:22,520 --> 00:18:24,840 Speaker 1: had and you know, some of it is because of 322 00:18:24,880 --> 00:18:27,560 Speaker 1: the logistics and the ease of which they shoot. And 323 00:18:27,720 --> 00:18:29,800 Speaker 1: you know, we love to think of ourselves as you know, 324 00:18:29,880 --> 00:18:32,439 Speaker 1: our Sunset brand is important because it's a little like 325 00:18:32,480 --> 00:18:36,000 Speaker 1: the hospitality industry where it ultimately stands for something and 326 00:18:36,040 --> 00:18:38,879 Speaker 1: what does it stand for? Hopefully ease of service. You 327 00:18:38,960 --> 00:18:41,040 Speaker 1: come here, all your needs are met, you know, it's 328 00:18:41,119 --> 00:18:43,119 Speaker 1: it's just you know, it doesn't take you forever to 329 00:18:43,119 --> 00:18:46,760 Speaker 1: get on the lot into park. Like like any hospitality business, 330 00:18:47,280 --> 00:18:49,640 Speaker 1: there's a hundred little things that we try to think 331 00:18:49,640 --> 00:18:52,160 Speaker 1: about to make it easier. So some of those showrunners 332 00:18:52,400 --> 00:18:55,439 Speaker 1: have a preference based on that, But some of some 333 00:18:55,520 --> 00:18:58,720 Speaker 1: of those showrunners in addition to that, or aside from that, 334 00:18:59,320 --> 00:19:03,280 Speaker 1: there's just a certain like luck factor, like, oh, the 335 00:19:03,359 --> 00:19:06,520 Speaker 1: last show I made, you have, last Palmise, did really 336 00:19:06,520 --> 00:19:09,479 Speaker 1: really well, so like, I'm definitely going back to last promise. 337 00:19:09,560 --> 00:19:12,440 Speaker 1: And I think you find that a lot of businesses 338 00:19:12,480 --> 00:19:16,120 Speaker 1: where it's like, hey, I occupied this office at you know, 339 00:19:16,560 --> 00:19:19,480 Speaker 1: this address on San Vicente, and like I'm definitely starting 340 00:19:19,520 --> 00:19:21,800 Speaker 1: my next business there because I just have good Carmen there. 341 00:19:21,800 --> 00:19:24,880 Speaker 1: So I think there's both what you know, whatever it takes. 342 00:19:24,920 --> 00:19:27,760 Speaker 1: It's interesting. Do you ever get into um Do you 343 00:19:27,840 --> 00:19:31,520 Speaker 1: ever have like landlord issue where show X has promised 344 00:19:31,520 --> 00:19:33,680 Speaker 1: they're going to be out of their stage because Show 345 00:19:33,720 --> 00:19:36,199 Speaker 1: Why is coming in in a week. Do you ever 346 00:19:36,280 --> 00:19:39,720 Speaker 1: have to kick anybody to the current Let's try not to. 347 00:19:39,880 --> 00:19:44,320 Speaker 1: It really doesn't. It really doesn't happen like that. You 348 00:19:44,440 --> 00:19:47,880 Speaker 1: generally no, So the answer is generally not um. And 349 00:19:48,520 --> 00:19:52,000 Speaker 1: the tenants that we're dealing with, we we call them clients, 350 00:19:52,000 --> 00:19:54,720 Speaker 1: and on purpose, they're not tenants to us, they're really clients. 351 00:19:54,760 --> 00:19:56,720 Speaker 1: And there are people that for all the reasons that 352 00:19:57,520 --> 00:20:02,679 Speaker 1: we just talked about. UM, they generally are you know, 353 00:20:03,119 --> 00:20:04,720 Speaker 1: they do this for a living. They don't want to 354 00:20:04,760 --> 00:20:07,440 Speaker 1: be paying their crews and you know, for longer than 355 00:20:07,480 --> 00:20:10,600 Speaker 1: they have to. UM. And aside from the factor, it's 356 00:20:10,640 --> 00:20:13,359 Speaker 1: generally not an issue with them getting out. UM. They 357 00:20:13,720 --> 00:20:16,199 Speaker 1: have every incentive to be super efficient with how they 358 00:20:16,240 --> 00:20:19,280 Speaker 1: produce because it costs some money to you know every day. 359 00:20:19,359 --> 00:20:24,080 Speaker 1: UM and uh yeah, so so. And a side sort 360 00:20:24,080 --> 00:20:28,119 Speaker 1: of related that they're all generally really good credit, Like 361 00:20:28,200 --> 00:20:30,320 Speaker 1: you don't have like if you're if you're leasing out 362 00:20:30,359 --> 00:20:33,320 Speaker 1: office space or you know, apartment building. You know, you 363 00:20:33,320 --> 00:20:35,520 Speaker 1: can run credit checks, but generally you never really know. 364 00:20:35,600 --> 00:20:37,879 Speaker 1: And there's a there's a meaningful loss factor that you 365 00:20:37,880 --> 00:20:41,399 Speaker 1: have to account for in the studio space knock on wood. 366 00:20:43,080 --> 00:20:46,000 Speaker 1: You just don't really see that. You generally don't see that. 367 00:20:46,119 --> 00:20:50,520 Speaker 1: I mean you're dealing with a Netflix or Disney or 368 00:20:50,600 --> 00:20:53,239 Speaker 1: warrener Brothers or an Apple or Amazon. They're generally really 369 00:20:53,320 --> 00:20:57,000 Speaker 1: good credit. It's an appealing aspect of this industry, Like 370 00:20:57,040 --> 00:21:00,679 Speaker 1: not only are they sort of aligned in their motivation 371 00:21:00,680 --> 00:21:04,359 Speaker 1: to be efficient getting get out, but they pay, which 372 00:21:04,400 --> 00:21:08,000 Speaker 1: is good from you know, business perspective. Yeah, and the 373 00:21:08,080 --> 00:21:15,080 Speaker 1: checks the checks player for sure, don't go anywhere. We'll 374 00:21:15,119 --> 00:21:25,800 Speaker 1: be right back after this pause for monetization, and we're 375 00:21:25,840 --> 00:21:28,679 Speaker 1: back with more on the sound stage business from Hudson 376 00:21:28,720 --> 00:21:32,479 Speaker 1: Pacific's Jeff Stockland. Let me ask you in the big picture, 377 00:21:32,600 --> 00:21:36,399 Speaker 1: how has scale benefited? How has the scale of adding 378 00:21:36,440 --> 00:21:39,439 Speaker 1: more properties? And now you know the potential Keyhote and 379 00:21:39,480 --> 00:21:41,600 Speaker 1: forgive me that deal is done, that is a done deal. 380 00:21:41,800 --> 00:21:46,119 Speaker 1: So adding Keyhote, how has scale helped you skill? I 381 00:21:46,160 --> 00:21:49,560 Speaker 1: would say is that the core of our strategy and 382 00:21:49,640 --> 00:21:55,159 Speaker 1: the reason is because ultimately, you know, we believe that 383 00:21:55,720 --> 00:21:59,280 Speaker 1: having the assets in the right markets, in the right 384 00:21:59,400 --> 00:22:02,680 Speaker 1: services is really important to the studios. As those students 385 00:22:02,680 --> 00:22:06,159 Speaker 1: get bigger and their their business has become more complex 386 00:22:06,520 --> 00:22:12,000 Speaker 1: and they're shooting in multiple geographies, um, multiple types of 387 00:22:13,600 --> 00:22:17,440 Speaker 1: multiple language, local language is the thing, all of it. Yeah, exactly, 388 00:22:17,520 --> 00:22:19,920 Speaker 1: And so that you can imagine is that, I mean, 389 00:22:19,960 --> 00:22:23,040 Speaker 1: it's incredibly complicated, right, And so the co financing stuff, 390 00:22:23,040 --> 00:22:25,479 Speaker 1: they have different partners, but what they really want is 391 00:22:25,680 --> 00:22:30,320 Speaker 1: almost an easy button for some aspect of their business. 392 00:22:30,520 --> 00:22:33,359 Speaker 1: And so the way you know, we look at this, 393 00:22:33,480 --> 00:22:34,960 Speaker 1: the way I really look at this is we're in 394 00:22:34,960 --> 00:22:37,440 Speaker 1: the picks and shovels business. We're in the business of 395 00:22:37,760 --> 00:22:41,000 Speaker 1: providing picks and shovels for the studio folks to go 396 00:22:41,080 --> 00:22:43,359 Speaker 1: produce their content and mind for goal to come up 397 00:22:43,400 --> 00:22:46,560 Speaker 1: with that next amazing piece of content. And so how 398 00:22:46,600 --> 00:22:48,320 Speaker 1: can we make it easier for them to do that, 399 00:22:48,440 --> 00:22:52,040 Speaker 1: whether you're filming in you know, geographically wherever around the world, 400 00:22:52,359 --> 00:22:55,000 Speaker 1: whatever services you need, how do we make it as 401 00:22:55,000 --> 00:22:57,679 Speaker 1: easy as possible so that you know, you don't need 402 00:22:57,760 --> 00:22:59,600 Speaker 1: to make twenty phone calls, you don't need to go 403 00:22:59,720 --> 00:23:02,480 Speaker 1: fake y're out how to go, you know, put together 404 00:23:02,800 --> 00:23:05,000 Speaker 1: all the pics and shovels to go produce this content. 405 00:23:05,160 --> 00:23:08,359 Speaker 1: So scale is a way to do that, right. You 406 00:23:08,480 --> 00:23:11,600 Speaker 1: can't you can't make it easier unless you have those 407 00:23:11,640 --> 00:23:14,320 Speaker 1: assets and you have that scale, right. And so that's 408 00:23:14,359 --> 00:23:16,679 Speaker 1: really a big part of the strategy and really fundamentally 409 00:23:16,760 --> 00:23:20,879 Speaker 1: underscoring our acquisition of some of these companies being in 410 00:23:20,960 --> 00:23:23,879 Speaker 1: all those markets. And you know, you that that really 411 00:23:23,960 --> 00:23:27,120 Speaker 1: is it and and listen, it's not you know, me 412 00:23:27,200 --> 00:23:31,439 Speaker 1: talking about this is not revealing some secret sauce. I 413 00:23:31,480 --> 00:23:34,720 Speaker 1: think a lot of people would agree that collecting those 414 00:23:34,760 --> 00:23:38,920 Speaker 1: assets in those key markets. It's kind of obvious, right, 415 00:23:39,280 --> 00:23:42,200 Speaker 1: it's just super hard to pull it off. And that's 416 00:23:42,200 --> 00:23:44,479 Speaker 1: in the secret sauce of what we do is our 417 00:23:44,520 --> 00:23:50,320 Speaker 1: ability to invest in and operate real estate and operating companies. 418 00:23:50,440 --> 00:23:53,280 Speaker 1: And what you find is that in the world, there's 419 00:23:53,320 --> 00:23:57,119 Speaker 1: not a lot of people who have the ability to 420 00:23:57,200 --> 00:24:00,639 Speaker 1: sort of speak and and and execute real estate and 421 00:24:00,680 --> 00:24:04,520 Speaker 1: also speak and execute operating businesses. And that's really what 422 00:24:04,680 --> 00:24:07,359 Speaker 1: this industry is, and that's really where the opportunity is 423 00:24:07,440 --> 00:24:12,159 Speaker 1: to scale this hybrid business to ultimately simplify the lives 424 00:24:12,200 --> 00:24:15,480 Speaker 1: of all the people producing content. So this this fundamental 425 00:24:15,520 --> 00:24:17,600 Speaker 1: belief we have. And listen, there's gonna be dips and 426 00:24:17,840 --> 00:24:20,440 Speaker 1: ups with content production, and we can all debate about 427 00:24:20,440 --> 00:24:22,719 Speaker 1: how much is gonna get produced. Who knows. I couldn't 428 00:24:22,720 --> 00:24:24,800 Speaker 1: tell you what's gonna happen next week, let alone next year. 429 00:24:24,840 --> 00:24:27,200 Speaker 1: But I will say this, we do a very strong 430 00:24:27,240 --> 00:24:31,000 Speaker 1: conviction that the amount of volume is not really going 431 00:24:31,080 --> 00:24:35,200 Speaker 1: to go down ultimately over the next five years, ten years, 432 00:24:35,200 --> 00:24:38,399 Speaker 1: twenty years, three years. The world needs more content and 433 00:24:38,440 --> 00:24:42,159 Speaker 1: we have conviction around that. Hopefully we're right. But so 434 00:24:43,600 --> 00:24:47,119 Speaker 1: scaling and and having these assets is a fundamental belief, 435 00:24:47,119 --> 00:24:48,879 Speaker 1: and so if there is a dip one week or 436 00:24:48,920 --> 00:24:51,960 Speaker 1: one month, I'm okay with that because we're not day trading. 437 00:24:52,320 --> 00:24:55,000 Speaker 1: We're building a long term vision and a business around 438 00:24:55,520 --> 00:24:58,639 Speaker 1: you know, making stuff easier. And to do that, you know, 439 00:24:58,720 --> 00:25:02,280 Speaker 1: it's just executing a fairly. It's a simple strategy, but 440 00:25:02,320 --> 00:25:05,000 Speaker 1: it's a difficult execution. If you want to come in 441 00:25:05,040 --> 00:25:08,359 Speaker 1: and shoot something short form for two days three days, 442 00:25:08,400 --> 00:25:10,879 Speaker 1: do you do you have any facility to allow that 443 00:25:10,920 --> 00:25:13,000 Speaker 1: would allow that? Is is that something that you're thinking 444 00:25:13,040 --> 00:25:17,880 Speaker 1: about given that we're seeing TikTok and influencers like really 445 00:25:18,440 --> 00:25:23,080 Speaker 1: create their own content and monetize it. Yeah. Um, I 446 00:25:23,080 --> 00:25:25,840 Speaker 1: wouldn't say it's a low budget model. I would say 447 00:25:25,840 --> 00:25:29,639 Speaker 1: it's a short form model where we do have um 448 00:25:29,800 --> 00:25:33,240 Speaker 1: product stages that could be leased out on a short 449 00:25:33,359 --> 00:25:35,840 Speaker 1: term like seven days or you know when you see 450 00:25:35,840 --> 00:25:37,879 Speaker 1: a lot of that with commercials what we call short 451 00:25:37,920 --> 00:25:40,359 Speaker 1: form content where they need it for two three days. 452 00:25:40,640 --> 00:25:43,080 Speaker 1: Very different operating model, by the way, much more intensive. 453 00:25:43,320 --> 00:25:45,320 Speaker 1: Their needs are much more extensive. So you see a 454 00:25:45,320 --> 00:25:47,960 Speaker 1: lot of studios shying away from it because frankly, it's 455 00:25:48,000 --> 00:25:50,240 Speaker 1: just hard to pull it off and it's really easy 456 00:25:50,280 --> 00:25:53,360 Speaker 1: to upset a customer because they come on that everything's 457 00:25:53,359 --> 00:25:55,440 Speaker 1: got to be aligned. They want to produce your commercial, 458 00:25:55,560 --> 00:25:56,800 Speaker 1: they want to get in, they want to get out. 459 00:25:56,920 --> 00:26:00,280 Speaker 1: They're not paying less, they're just doing more in a 460 00:26:00,400 --> 00:26:03,600 Speaker 1: much shorter period of time. So they gotta mobilize everything 461 00:26:04,160 --> 00:26:08,440 Speaker 1: everything to go right. And so again that's another sort 462 00:26:08,440 --> 00:26:10,840 Speaker 1: of angle of this business that I think partly was 463 00:26:10,880 --> 00:26:14,399 Speaker 1: the attractiveness of buying Kyote. A big part of their 464 00:26:14,440 --> 00:26:17,240 Speaker 1: business is in short form content, so they're really good 465 00:26:17,240 --> 00:26:19,880 Speaker 1: at that model, and that was really attractive to us 466 00:26:20,400 --> 00:26:22,760 Speaker 1: to get into that business. You could started from scratch, 467 00:26:23,480 --> 00:26:27,320 Speaker 1: or we could purchase Kyote, who really has built that 468 00:26:27,440 --> 00:26:30,439 Speaker 1: muscle of how to you know, how to how to 469 00:26:30,480 --> 00:26:33,399 Speaker 1: execute against short form content. But I don't look at 470 00:26:33,400 --> 00:26:36,120 Speaker 1: it like necessarily charging less. I look at it as like, 471 00:26:36,400 --> 00:26:41,560 Speaker 1: could we perfect the operating model around you know that 472 00:26:41,640 --> 00:26:44,840 Speaker 1: short form stuff which in you to three day um 473 00:26:44,920 --> 00:26:48,040 Speaker 1: to do that. I think the short form stuff like YouTube, 474 00:26:48,680 --> 00:26:53,439 Speaker 1: we haven't yet seen a tremendous demand for that. I 475 00:26:53,480 --> 00:26:57,199 Speaker 1: think we will, and and what is to be determined 476 00:26:57,280 --> 00:27:01,119 Speaker 1: is whether it's because the product doesn't exist because we 477 00:27:01,280 --> 00:27:03,760 Speaker 1: just don't have the picks and shovels set up exactly 478 00:27:03,760 --> 00:27:08,720 Speaker 1: for the economic base for the content isn't there yet, yeah, exactly, 479 00:27:09,040 --> 00:27:13,080 Speaker 1: But I do think over time that will be there. 480 00:27:13,240 --> 00:27:16,080 Speaker 1: I think that will be a tremendous opportunity for us, 481 00:27:16,880 --> 00:27:21,000 Speaker 1: And I do think our experience in this business vertically 482 00:27:21,040 --> 00:27:23,879 Speaker 1: integrating into something like that is super interesting, and I 483 00:27:23,920 --> 00:27:26,680 Speaker 1: think we'd be really well positioned to do that. So 484 00:27:26,840 --> 00:27:29,320 Speaker 1: I think that there is something there. It's probably a 485 00:27:29,359 --> 00:27:31,480 Speaker 1: little early for us to try to sort of figure 486 00:27:31,480 --> 00:27:35,440 Speaker 1: that out right now. There's other more low hanging, um 487 00:27:35,560 --> 00:27:38,480 Speaker 1: early stage development stuff that we're probably interested in. But 488 00:27:38,520 --> 00:27:41,480 Speaker 1: I do think that's a super interesting area, like long term, 489 00:27:42,280 --> 00:27:46,320 Speaker 1: very big opportunity. Jeff, you joined Hudson Pacific about eighteen 490 00:27:46,320 --> 00:27:50,080 Speaker 1: months ago from Disney. What was it about this opportunity 491 00:27:50,200 --> 00:27:56,280 Speaker 1: that was compelling enough to have you leave Disney? You know, Um, 492 00:27:56,320 --> 00:27:59,960 Speaker 1: I would say a bunch of different things. I felt 493 00:28:00,200 --> 00:28:04,040 Speaker 1: like from a business perspective, you know, when you saw 494 00:28:04,080 --> 00:28:07,600 Speaker 1: the proliferation of content, it wasn't hard to, you know, 495 00:28:07,640 --> 00:28:09,800 Speaker 1: for anybody really to see that this was not a 496 00:28:09,840 --> 00:28:12,560 Speaker 1: short term dynamic. It was really a long term trend 497 00:28:13,359 --> 00:28:15,600 Speaker 1: that the world has changed the world, the world of 498 00:28:15,680 --> 00:28:19,320 Speaker 1: pay television has definitely changed, has changed, and I don't 499 00:28:19,359 --> 00:28:22,280 Speaker 1: think we're going back. I felt like, you know, that 500 00:28:22,400 --> 00:28:25,040 Speaker 1: was a long term sort of opportunity, So it wasn't 501 00:28:25,080 --> 00:28:27,600 Speaker 1: sort of betting on something that was a sephemeral one 502 00:28:27,680 --> 00:28:31,320 Speaker 1: year sort of thing. I felt like the business in 503 00:28:31,359 --> 00:28:35,119 Speaker 1: general was not mom and pop, but it was independent, 504 00:28:35,440 --> 00:28:38,840 Speaker 1: many many independent owners, and it wasn't really yet institutional 505 00:28:38,960 --> 00:28:42,600 Speaker 1: independent studio sound stage lots are exactly and a lot 506 00:28:42,600 --> 00:28:46,280 Speaker 1: of the even the production services business, it wasn't institutionalized. 507 00:28:46,520 --> 00:28:48,640 Speaker 1: Nobody had figured out how to put it all together, 508 00:28:48,680 --> 00:28:51,800 Speaker 1: and those who had tried, I felt, put together a quiote. 509 00:28:51,840 --> 00:28:54,520 Speaker 1: It wasn't a blanket, and I think a blanket is 510 00:28:54,560 --> 00:29:00,960 Speaker 1: what's needed here. It's not just buying services, integrating, but threat. 511 00:29:01,040 --> 00:29:03,920 Speaker 1: It's a woven threat, it's a it's a it's a sensible, 512 00:29:03,960 --> 00:29:08,680 Speaker 1: bundled thing that really solves a problem, you know, for 513 00:29:08,680 --> 00:29:12,120 Speaker 1: for for the studio. So I saw that as an opportunity. Frankly, 514 00:29:12,200 --> 00:29:16,440 Speaker 1: I think, you know, uh, Victor Coleman, the CEO of Hudson, 515 00:29:16,960 --> 00:29:19,240 Speaker 1: was a big reason because I saw in him somebody 516 00:29:19,240 --> 00:29:24,040 Speaker 1: who's just very entrepreneurial and he saw this, and you know, 517 00:29:24,120 --> 00:29:25,920 Speaker 1: I felt like he was going to be like a 518 00:29:25,960 --> 00:29:29,800 Speaker 1: really good endorser and supporter of going out and doing this. 519 00:29:29,880 --> 00:29:33,720 Speaker 1: He's entrepreneurial, he's willing to take risk, and it requires that. 520 00:29:34,440 --> 00:29:37,760 Speaker 1: When um Hudson brought on Blackstone, I think that gave 521 00:29:37,880 --> 00:29:41,440 Speaker 1: us sort of the heft and the capital to go 522 00:29:41,480 --> 00:29:45,600 Speaker 1: out and actually execute against a vision that really requires 523 00:29:45,600 --> 00:29:49,440 Speaker 1: a lot of capital. So I kind of was thinking 524 00:29:49,480 --> 00:29:52,080 Speaker 1: about all these different things, and I felt like, you know, 525 00:29:54,040 --> 00:29:56,520 Speaker 1: I could get back to more of my entrepreneurial roots 526 00:29:56,560 --> 00:29:59,720 Speaker 1: and really build something of scale, and it was kind 527 00:29:59,720 --> 00:30:02,640 Speaker 1: of a nique opportunity. And so for all those reasons, 528 00:30:02,680 --> 00:30:05,040 Speaker 1: I just got really excited about it, and I thought 529 00:30:06,320 --> 00:30:15,560 Speaker 1: it's time to really go for it. M thanks for listening. 530 00:30:16,000 --> 00:30:18,440 Speaker 1: Be sure to leave us a review with Apple Podcasts, 531 00:30:18,720 --> 00:30:21,720 Speaker 1: we love to hear from listeners. Please go to Variety 532 00:30:21,760 --> 00:30:25,080 Speaker 1: dot com and sign up for the free Strictly Business newsletter, 533 00:30:25,520 --> 00:30:28,000 Speaker 1: and don't forget to tune in next week for another 534 00:30:28,080 --> 00:30:29,520 Speaker 1: episode of Strictly Business.