WEBVTT - Starz CEO Jeff Hirsch Doesn't Need to Finish First to Win the Streaming Wars 0:00:00.240 --> 0:00:04.800 Huntsville, Alabama, in a city that was as American as 0:00:04.880 --> 0:00:09.960 Apple Strudal From Any Time Studios comes paper Clip, a 0:00:10.039 --> 0:00:13.640 podcast sponsored by Amazon Studios and inspired by its EMI 0:00:13.760 --> 0:00:18.320 eligible dramatic series Hunters, starring Al Pacino and Logan Lerman 0:00:18.840 --> 0:00:21.239 joint host Michael ian Black as he teams up with 0:00:21.280 --> 0:00:25.040 a Cold War scholar to explore Operation paper Clip, a 0:00:25.120 --> 0:00:29.080 real life top secret program that brought Nazi scientists to 0:00:29.120 --> 0:00:32.600 the American heartland to work on government aerospace and medical 0:00:32.680 --> 0:00:37.920 research projects. Available now on Apple Podcasts and all other platforms. 0:00:46.159 --> 0:00:49.519 Welcome to another episode of Strictly Business, the podcast in 0:00:49.560 --> 0:00:51.680 which we talked with some of the brightest minds working 0:00:51.680 --> 0:00:56.680 in media today. I'm Andrew Wallenstein with Variety Intelligence platform. 0:00:56.800 --> 0:00:59.040 New Firepower has come to the streaming wars with the 0:00:59.120 --> 0:01:02.480 launch of HBO Max last week. It joins a crowded field, 0:01:02.520 --> 0:01:07.280 including another holdover from the world of premium cable television. Stars. 0:01:08.000 --> 0:01:10.840 This lions Gate owned brand has graduated to the streaming 0:01:10.840 --> 0:01:13.360 game as well. With me today to talk about the 0:01:13.440 --> 0:01:16.840 road ahead for Stars is It's CEO Jeff Hirsch. Welcome Jeff, 0:01:17.520 --> 0:01:19.640 thanks for having me on. Before we get started, we 0:01:19.720 --> 0:01:23.640 must acknowledge. Jeff is making strictly business podcast history today 0:01:23.640 --> 0:01:27.600 on this the one thirteen episode, You, sir, have the 0:01:27.640 --> 0:01:30.720 distinction of being the first rish Turn guest we've ever 0:01:30.800 --> 0:01:33.880 brought back for a second episode. Well, I guess that 0:01:33.920 --> 0:01:35.680 means maybe I did something right the first time. Who 0:01:35.760 --> 0:01:37.960 know something I put on the top of the resume. 0:01:38.640 --> 0:01:41.360 It's it's will be under my skills, hobbies and instrance 0:01:41.520 --> 0:01:45.760 for sure. So before we get to talking about the 0:01:45.760 --> 0:01:48.200 state of Stars, I do want to point to a 0:01:48.280 --> 0:01:53.320 statement your company, like many different companies across America, released 0:01:53.400 --> 0:01:57.240 over this tragic weekend in the United States. It reads, 0:01:57.280 --> 0:02:00.240 we cannot stand silent while our Black communities are under 0:02:00.280 --> 0:02:04.160 the way to violence, discrimination, and injustice. You go on 0:02:04.280 --> 0:02:07.040 to support organizations like Color of Change in the inn 0:02:07.080 --> 0:02:10.120 double a cp uh. Look, Jeff, I commend you and 0:02:10.160 --> 0:02:12.880 your company for taking the stand. I also want to 0:02:12.960 --> 0:02:16.480 understand what kind of questions a company has to ask 0:02:16.520 --> 0:02:20.399 itself at a time like this about what its responsibilities are. 0:02:21.880 --> 0:02:24.160 That's a great question, you know. I think for Stars, 0:02:24.160 --> 0:02:27.920 there really wasn't that many questions about what our responsibilities 0:02:27.919 --> 0:02:30.840 are in terms of our our communities. We have served, 0:02:30.919 --> 0:02:34.600 underserved audiences. You know, as part of our programming mandate 0:02:34.720 --> 0:02:39.400 for years, UM we have put underserved voices and unheard 0:02:39.440 --> 0:02:42.320 voices and fresh faces on the air, not only on 0:02:42.360 --> 0:02:44.640 the air, but behind the screen and and in the 0:02:44.639 --> 0:02:47.799 writer's rooms and directors, you know, for the last ten 0:02:47.919 --> 0:02:50.560 years and so this has been core to what Stars 0:02:50.639 --> 0:02:53.400 does as a company. And so you know, when this 0:02:54.160 --> 0:02:57.680 unfortunate incident had broke across America, it was very clear 0:02:57.720 --> 0:02:59.280 to us that we needed to act and we needed 0:02:59.320 --> 0:03:04.480 to speak out. Well, if that wasn't disruptive enough, you know, 0:03:04.760 --> 0:03:07.400 we're also smack in the middle of a pandemic here, 0:03:07.560 --> 0:03:10.240 which you know, I have to ask what has the 0:03:10.280 --> 0:03:14.840 impact been for your business? The pandemic has been. You know, 0:03:14.840 --> 0:03:18.240 it's been very trying, I think of all businesses, including ours, UM, 0:03:18.320 --> 0:03:20.480 but it's been you know, with people staying at home 0:03:20.480 --> 0:03:22.960 and sheltered in place, people are looking for a fresh 0:03:23.040 --> 0:03:27.000 content and as a non ad supported you know, premium 0:03:27.120 --> 0:03:30.760 content layer that has fresh content coming on almost every week, 0:03:31.240 --> 0:03:33.720 it's been a place where people have found content and 0:03:33.760 --> 0:03:36.960 continue to see and watch the service. We've seen viewership 0:03:37.000 --> 0:03:40.440 domestically on linear up thirty on our app and our 0:03:40.480 --> 0:03:44.120 digital sides up, and we've seen those same kind of 0:03:44.200 --> 0:03:47.000 viewership numbers increase in the fifty countries we are in 0:03:47.080 --> 0:03:50.400 outside of the US as well, so there's been some 0:03:50.480 --> 0:03:52.800 benefit there, but my guess is there's probably been some 0:03:53.040 --> 0:03:58.160 production disruption. So the We've been fortunate that we really 0:03:58.160 --> 0:04:00.920 produce a year in advance, and so everything that's coming 0:04:00.960 --> 0:04:03.920 onto our Fisical twenty one or twenty slate has been 0:04:03.960 --> 0:04:07.360 pretty much in post production when the pandemic hit, and 0:04:07.400 --> 0:04:10.040 so we've been able to be very creative using virtual 0:04:10.160 --> 0:04:12.560 editing rooms and sound rooms and kind of finished most 0:04:12.600 --> 0:04:14.960 of the content that we have coming on the Earth 0:04:14.960 --> 0:04:16.880 through at least March, and so we're in really good 0:04:16.880 --> 0:04:19.440 shape with fresh content. We were when it hit. We 0:04:19.440 --> 0:04:22.200 were in the middle of Outlander season five, which was 0:04:22.400 --> 0:04:24.520 I think the best season to date and the viewership 0:04:24.560 --> 0:04:27.040 reflects that, and so we had fresh content there. We 0:04:27.160 --> 0:04:30.080 launched the third and final season of Vita in the 0:04:30.080 --> 0:04:32.359 middle of the pandemic and ended just last night and 0:04:32.560 --> 0:04:35.240 do a great, great uh ending of the story. And 0:04:35.279 --> 0:04:37.720 then we launched a new show called high Town Uh 0:04:37.839 --> 0:04:40.720 three weeks ago, which is with Buckheimer Television, which I 0:04:40.760 --> 0:04:42.279 think is gonna be one of the best new shows 0:04:42.279 --> 0:04:46.240 on television year. A couple that with all the Sony 0:04:46.240 --> 0:04:48.040 Pay one movies that we've been getting Once a Time, 0:04:48.160 --> 0:04:51.880 Find a Hollywood, Zombie Land, and the four thousand library 0:04:51.880 --> 0:04:54.080 titles that we have, it's a it's a pretty compelling 0:04:54.120 --> 0:04:56.320 service when you're stick at homeworking for something to watch. 0:04:56.360 --> 0:04:59.040 So um, and then you go overseas to the fifty 0:04:59.080 --> 0:05:01.640 countries we have outside the US. Not only do we 0:05:01.680 --> 0:05:03.440 have the Star shows, but we have shows like The 0:05:03.600 --> 0:05:06.479 Great and The Act of Castle Rock and Killing Even so, 0:05:06.880 --> 0:05:09.280 we've got the best of Little Spot outside the US. 0:05:09.360 --> 0:05:12.839 And so it's been Um, we've been okay in terms 0:05:12.880 --> 0:05:16.200 of production. You know, we are in a good position 0:05:16.240 --> 0:05:18.120 where I think if we're back in production by the 0:05:18.160 --> 0:05:20.760 mid to late summer, that will be in good shape 0:05:20.800 --> 0:05:24.000 for the following year as well. Okay, we'll see what 0:05:24.120 --> 0:05:26.359 happens there. I mean, it's got to be hard to 0:05:26.400 --> 0:05:30.279 sort of it's the moving target of this pandemic. We 0:05:30.320 --> 0:05:33.239 don't know when society comes back to normal, how long 0:05:33.279 --> 0:05:36.279 it stays back to normal. Um. Has that been a 0:05:36.440 --> 0:05:41.000 challenge in terms of long term planning? I think all 0:05:41.120 --> 0:05:43.919 you know, the moving and moving that listen moving the football. 0:05:43.960 --> 0:05:45.640 You know, it's kind of hard to kind of pick 0:05:45.680 --> 0:05:48.840 a spot, as you said, but I think it's an organization. 0:05:48.880 --> 0:05:50.599 You have to pick a date and go for it. 0:05:50.680 --> 0:05:53.240 And so we picked a very early date on return 0:05:53.279 --> 0:05:55.839 to production and return to the office, and so that 0:05:55.880 --> 0:05:58.560 our protocols are ready to go. We're prepared. We have 0:05:58.600 --> 0:06:01.680 a great plan and then as soon as the governments 0:06:01.680 --> 0:06:04.560 allow us to start going back to work, hopefully we'll 0:06:04.560 --> 0:06:05.920 be one of the first out of the gate back 0:06:05.920 --> 0:06:09.880 to production. So you mentioned, I mean, you know, the 0:06:09.920 --> 0:06:14.960 pandemic has created some circumstances that have helped drive subscriber 0:06:15.000 --> 0:06:18.200 growth here and abroad. I have to ask, though, is 0:06:18.279 --> 0:06:20.520 any of that done by It seems like there's a 0:06:20.560 --> 0:06:22.640 lot of players out there in the streaming space that 0:06:22.640 --> 0:06:26.719 are doing a lot of free and and you know Quimby, 0:06:27.120 --> 0:06:29.919 Grow coup all these different brands. Does that sort of 0:06:30.000 --> 0:06:33.560 juice the numbers of it? It made for them, But 0:06:33.600 --> 0:06:36.039 we we took a much different strategy one when we 0:06:36.080 --> 0:06:39.160 sat down. You know, we've we've built a direct the 0:06:39.240 --> 0:06:42.080 consumer product of scale. We've got over two million subscribers 0:06:42.120 --> 0:06:44.800 on our own app where we built the data engine 0:06:44.800 --> 0:06:47.320 behind it and so we've been looking at the data 0:06:47.560 --> 0:06:51.679 for years in terms of offers, free offers, seven day free, 0:06:51.720 --> 0:06:54.520 thirty day free, what the conversion is to paid with 0:06:54.600 --> 0:06:57.640 the lifetime value is of those customers. And we've never 0:06:57.680 --> 0:07:00.280 been big friends of thirty days free. It's just isn't 0:07:00.320 --> 0:07:03.240 It doesn't use both for the business long term, and 0:07:03.279 --> 0:07:05.559 when the pandemic hit it we actually took a much 0:07:05.600 --> 0:07:08.200 longer view of what was going to go on. We 0:07:08.240 --> 0:07:10.400 thought this would last much longer than thirty days, and 0:07:10.440 --> 0:07:13.040 so we actually put longer term offers in the marketplace 0:07:13.120 --> 0:07:17.120 that reduced rates so the consumer economically challenged consumers could 0:07:17.120 --> 0:07:19.600 actually get the service and afford the service, but would 0:07:19.640 --> 0:07:21.360 have it for a longer period of time. So we 0:07:21.360 --> 0:07:24.240 were in the market with a five dollars for three 0:07:24.240 --> 0:07:27.040 months offer and twenty five dollars up front for six 0:07:27.040 --> 0:07:31.040 months offer um that we ran through the pandemic, and 0:07:31.080 --> 0:07:33.440 we've seen great, you know, retention on the back end 0:07:33.480 --> 0:07:36.160 of those from our using it historically, and so we 0:07:36.200 --> 0:07:37.880 feel really good that not only did we seeing a 0:07:37.920 --> 0:07:40.960 spike in consumers because they're home looking for content, but 0:07:41.000 --> 0:07:42.680 we'll be able to keep them long term. On the 0:07:42.720 --> 0:07:46.480 other side, well, You're also coming off a quarter though, 0:07:46.520 --> 0:07:52.200 where you've had some issues, most specifically with the losing 0:07:52.680 --> 0:07:57.560 linear placement for Stars on Comcast, which I think was 0:07:57.600 --> 0:08:02.080 a loss of about over six million linear subscribers. So 0:08:02.160 --> 0:08:05.120 this also, I think hurt your revenues, your profit for 0:08:05.160 --> 0:08:08.200 the quarter. It raises a lot of questions about Stars. 0:08:08.280 --> 0:08:12.280 I mean, was comcast decision is surprise to you? Do 0:08:12.320 --> 0:08:14.160 we need to be worried about the rest of your 0:08:14.240 --> 0:08:18.960 linear subscribers elsewhere? It's a great question. Uh, you know, 0:08:19.080 --> 0:08:22.160 Comcast was a very unique situation for us for the 0:08:22.200 --> 0:08:24.520 most part, and the rest of all of our operators 0:08:24.520 --> 0:08:26.200 were all the cart so we were already in a 0:08:26.240 --> 0:08:28.400 red share deal where we make a lot of money 0:08:28.480 --> 0:08:31.320 together and the incentives are aligned together. So in direct TV, 0:08:32.080 --> 0:08:34.200 you know, the better we do, the better they do. 0:08:34.360 --> 0:08:36.719 So those incentives are aligned. On Amazon the same thing. 0:08:37.320 --> 0:08:40.480 Comcast that had had a bunch of different strategy packaging, 0:08:40.520 --> 0:08:43.680 strategy and the others long term and so we were, 0:08:43.720 --> 0:08:46.679 you know, always part of this big kind of health 0:08:46.760 --> 0:08:50.640 health heavy healthy bundle that um, you know that they like. 0:08:50.760 --> 0:08:53.560 But as the business has changed and pivoted away and 0:08:53.640 --> 0:08:56.840 consumers have more options now, um, those you know, and 0:08:56.880 --> 0:08:59.280 you see what's happening with the traditional business drinking three 0:08:59.320 --> 0:09:02.360 to four percent year, those bundles are starting to shrink 0:09:02.360 --> 0:09:05.240 pretty significantly. And so when we looked at the business 0:09:05.320 --> 0:09:08.360 during the renewal, you know, we said, Okay, long term, 0:09:08.360 --> 0:09:11.640 it's healthier for us to pivot from these bundle deals 0:09:11.679 --> 0:09:14.240 that are a quick race to the bottom to an 0:09:14.240 --> 0:09:16.720 all the cart business that we can both make money 0:09:16.720 --> 0:09:18.840 of our together. And so we've gone now from being 0:09:18.840 --> 0:09:21.320 a cost center from Comcast to being a revenue center, 0:09:21.600 --> 0:09:23.600 and I think long term that makes us just a 0:09:23.600 --> 0:09:26.400 healthier business with two of us. So, you know, we 0:09:26.480 --> 0:09:29.320 worked out a couple of year transition plan that would 0:09:29.320 --> 0:09:32.600 allow us to transition from bundles to all the cart um. 0:09:32.679 --> 0:09:36.119 We started it on February eleven with the premiere of Outlander. 0:09:36.920 --> 0:09:38.680 In the first six weeks, we've grown to over a 0:09:38.679 --> 0:09:41.320 million subscribers on the footprint. And as you think about 0:09:41.360 --> 0:09:43.800 that and we start to come into The Power Universe, 0:09:43.840 --> 0:09:46.280 which is our largest show and our biggest acquisition show, 0:09:46.760 --> 0:09:48.679 we we fully believe that we'll be able to get 0:09:48.800 --> 0:09:50.840 north of two to three million subs on that platform 0:09:50.880 --> 0:09:54.320 pretty quickly. But doesn't that still leave about three million 0:09:54.640 --> 0:09:59.400 left behind because you had six point two on linear Comcast. Yeah, 0:09:59.400 --> 0:10:03.040 but the average revenue per customer on Comcast on the 0:10:03.080 --> 0:10:05.440 six point two was so low because of the bundling. 0:10:05.720 --> 0:10:07.400 That was a deal that was done in two thousand 0:10:07.440 --> 0:10:09.800 and five, and so we only need a third of 0:10:09.800 --> 0:10:12.439 the customers on Comcast to actually replace the revenue that 0:10:12.480 --> 0:10:15.640 we had in an old money deal. So, so will 0:10:15.679 --> 0:10:18.479 you be able to grow your O T T subscribers 0:10:18.840 --> 0:10:22.400 at a rate fast enough to make up for any 0:10:22.480 --> 0:10:27.840 further linear losses? So the million over million subs that 0:10:27.880 --> 0:10:30.560 I talked about was actually linear. Those are ala carte 0:10:30.559 --> 0:10:33.760 subs on Comcast platform the first six weeks, so we 0:10:33.760 --> 0:10:36.880 were able pretty quickly to replace you know, almost half 0:10:36.880 --> 0:10:39.240 of what we need to break even um from where 0:10:39.240 --> 0:10:41.520 we were before. And so we feel very good about 0:10:41.520 --> 0:10:44.439 that platform. UH. Their flex product, I think is a 0:10:44.679 --> 0:10:47.720 is a great competitor Roku, and we're really excited about 0:10:47.720 --> 0:10:49.960 working with them on that uh. And we think that 0:10:50.000 --> 0:10:52.040 we can quickly make up, you know, and break even 0:10:52.040 --> 0:10:54.400 and make more money long term between the two of us. 0:10:54.800 --> 0:10:57.520 Based on the program that we put in place. We 0:10:57.600 --> 0:10:59.880 continue to see great growth in the quarter on a 0:11:00.040 --> 0:11:03.640 cut um. We we grew almost a million one subs 0:11:03.679 --> 0:11:06.240 in the quarter. Uh, A lot of that was coming 0:11:06.280 --> 0:11:09.119 in pre COVID, but then post COVID we saw that accelerate. 0:11:09.320 --> 0:11:12.360 It continues to accelerate into this quarter as well, and 0:11:12.440 --> 0:11:15.040 so we're you know, we're seeing great, great growth in 0:11:15.120 --> 0:11:18.240 terms of transitioning from a traditional linear world to this 0:11:18.280 --> 0:11:20.760 new digital or I like to call it revenue share world, 0:11:21.120 --> 0:11:24.040 because we can't forget that the linear side. There's a 0:11:24.040 --> 0:11:27.120 lot of opportunity for premium. Uh. You know, we at 0:11:27.240 --> 0:11:30.000 most HBO and the heyday of HBO is thirty three 0:11:30.040 --> 0:11:33.839 or penetrated on the traditional business. And so it's not 0:11:33.920 --> 0:11:35.959 like we were an a m C or a Discovery 0:11:36.360 --> 0:11:38.520 where there's no room to go and it's just shrinking. 0:11:43.280 --> 0:11:48.239 We'll be right back after this short break. Huntsville, Alabama, 0:11:48.280 --> 0:11:53.160 in a city that was as American as Apple Strudal 0:11:53.960 --> 0:11:57.920 from any Time Studios comes paper Clip, a podcast sponsored 0:11:57.920 --> 0:12:01.760 by Amazon Studios and inspired by it's Amy eligible dramatic 0:12:01.840 --> 0:12:06.280 series Hunters, starring Al Pacino and Logan Lerman joint host 0:12:06.360 --> 0:12:08.600 Michael ian Black as he teams up with a Cold 0:12:08.640 --> 0:12:12.600 War scholar to explore Operation paper Clip. A real life, 0:12:12.679 --> 0:12:16.600 top secret program that brought Nazi scientists to the American 0:12:16.640 --> 0:12:20.680 heartland to work on government aerospace and medical research projects. 0:12:21.440 --> 0:12:31.640 Available now on Apple Podcasts and all other platforms. Welcome 0:12:31.640 --> 0:12:34.400 back to strictly Business. Here's more of my conversation with 0:12:34.520 --> 0:12:38.920 Stars CEO jeff ersh. But I'm wondering how you feel 0:12:38.960 --> 0:12:43.160 about these, uh, the new distribution partners that you're dealing with. 0:12:43.800 --> 0:12:47.640 Looking at what happened to HBO Max, which recently launched 0:12:47.679 --> 0:12:51.480 and you saw had some pretty significant, uh problems in 0:12:51.559 --> 0:12:54.800 terms of getting some pretty key distribution in place at launch? 0:12:55.559 --> 0:12:59.240 Should that be giving programmers a pause in terms of 0:12:59.760 --> 0:13:04.080 the the power dynamic between these distributors and say what 0:13:04.200 --> 0:13:07.600 it was like with the distributors of old. You know, 0:13:07.679 --> 0:13:10.680 I think the HBO Max conversation is so unique because 0:13:10.679 --> 0:13:14.320 they're actually kind of putting more content around an existing 0:13:14.360 --> 0:13:17.319 product at the same price. And so it's a really 0:13:17.400 --> 0:13:20.400 unique conversation with the traditional distributors and some of the 0:13:20.400 --> 0:13:23.600 new ones they already have existing deals. Um and as 0:13:23.679 --> 0:13:25.760 you know, you know from your years in the business 0:13:25.800 --> 0:13:28.480 in my fifteen years and that side, you know, anything 0:13:28.480 --> 0:13:29.880 that you can do to open up a deal and 0:13:29.920 --> 0:13:31.480 try to save money and you're going to use it 0:13:31.520 --> 0:13:34.280 to your advantage. And so you know, and a few 0:13:34.320 --> 0:13:37.160 of our renewals that we've done, there was language that 0:13:37.200 --> 0:13:39.320 was put in to just trying to make sure that 0:13:39.320 --> 0:13:42.360 that the operator, the distributor was protected against us doing 0:13:42.400 --> 0:13:44.960 that similar thing. And so I think it's a very 0:13:45.080 --> 0:13:48.960 unique kind of point of view. Um, you know, the 0:13:48.960 --> 0:13:52.560 new operators, the Amazons, the Hulus, the you know, Um, 0:13:54.080 --> 0:13:57.000 Disney Plus is all this because I think ultimately there's 0:13:57.040 --> 0:13:59.240 the world change is. The more changes, the more it's 0:13:59.240 --> 0:14:01.480 gonna look at the same game. Um, I think you're 0:14:01.480 --> 0:14:04.520 gonna see people start to bundle up together to compete 0:14:04.520 --> 0:14:07.040 that you haven't seen before. As you can see now, 0:14:07.080 --> 0:14:10.160 Disney Plus is selling stars on Disney plus dot Com 0:14:10.200 --> 0:14:12.840 after you sign up, because it's I think a really good, 0:14:13.400 --> 0:14:15.960 uh kind of kind of quasi bundle where the mother 0:14:16.000 --> 0:14:18.640 and the home find stars for Outlander and they get 0:14:18.679 --> 0:14:20.760 Disney Plus for kids, so they can start to see 0:14:20.760 --> 0:14:23.880 a bunch of strange bedfellows. To a certain extent, as 0:14:23.920 --> 0:14:26.640 the world becomes more competitive, and we feel we're really 0:14:26.640 --> 0:14:30.360 well positioned to be that complementary partner to everybody. Um, 0:14:30.400 --> 0:14:33.920 but all these deals, you know, unlike I think traditional 0:14:33.960 --> 0:14:36.080 Hollywood deals. One side wants to save money and when 0:14:36.080 --> 0:14:37.720 once side wants to make money, and so that, oh, 0:14:37.800 --> 0:14:40.280 you always start off on that foot, um, and you 0:14:40.320 --> 0:14:42.040 just have to be creative together to figure out how 0:14:42.080 --> 0:14:45.280 you can make money together. But explain that complementary part, 0:14:45.320 --> 0:14:47.080 because I think a lot of people might assume this 0:14:47.120 --> 0:14:50.440 is sort of a zero sum game. You're against Disney Plus, 0:14:50.440 --> 0:14:54.120 which is against Netflix. But I think there's something and 0:14:54.120 --> 0:14:57.960 how you've structured stars the price point where you see 0:14:57.960 --> 0:15:00.880 this as sort of tucking in behind, uh, some of 0:15:00.880 --> 0:15:05.320 the other bigger players in the streaming space. Yeah, I 0:15:05.360 --> 0:15:09.000 think the world's gonna fold into three tiers of spot services, 0:15:09.040 --> 0:15:11.040 you know, and I'll look a lot like the traditional 0:15:11.080 --> 0:15:15.120 business did years ago, where you have these very large, 0:15:15.360 --> 0:15:18.960 very broad programming based services like the Netflix is, like 0:15:19.040 --> 0:15:22.720 the Amazon's, like the Hulus, like the HBO Max is 0:15:23.120 --> 0:15:25.200 all trying to kind of be that kind of first 0:15:25.200 --> 0:15:28.040 one in the home we you know, kids, content, ad 0:15:28.120 --> 0:15:32.760 supported content, news, sports, the docuseries, documents, you know, just 0:15:32.840 --> 0:15:36.840 a very broad, uh you know view of content, much 0:15:36.880 --> 0:15:40.160 like Charter was is today and Direct TV and Comcast 0:15:40.200 --> 0:15:42.480 is and trying to you know, replace those guys in 0:15:42.520 --> 0:15:44.640 the home is the first one in the home. UM 0:15:44.760 --> 0:15:48.400 Stars has never played that role. We've always been this premium, 0:15:48.560 --> 0:15:54.120 bespoke tier of adult content, very authentic, no ads, UM 0:15:54.160 --> 0:15:56.840 you know, very deep storylines. When the storyline gets to 0:15:56.880 --> 0:15:59.240 go very R rated, it goes very rrated, and we 0:15:59.280 --> 0:16:01.880 don't have any and we're proud of that. And so 0:16:02.440 --> 0:16:04.960 we've always been that kind of second tier in the home. 0:16:05.040 --> 0:16:07.200 When you've got by Charter or direct TV, you can 0:16:07.200 --> 0:16:10.280 always add Stars on top of UM and so that's 0:16:10.280 --> 0:16:12.280 the role will continue to play. And so as people 0:16:12.320 --> 0:16:15.280 start to pick Hulu for their first you know, you know, 0:16:15.360 --> 0:16:17.680 broad based service in the home, you can buy Stars 0:16:17.680 --> 0:16:20.479 on top. Same thing with Amazon, where one of Amazon's 0:16:20.480 --> 0:16:23.400 best partners globally right now. Because of that, I think 0:16:23.400 --> 0:16:25.960 you'll see a day where Netflix will a Netflix Stars 0:16:26.000 --> 0:16:28.720 bundle will show up as well at some point, UM, 0:16:28.760 --> 0:16:30.880 because I think as everybody starts to figure out how 0:16:30.920 --> 0:16:34.360 to compete, these complementary services sitting on top of them 0:16:34.480 --> 0:16:36.440 are things that you're gonna need to add not only 0:16:36.440 --> 0:16:39.640 revenue to your company, but more content. And so we 0:16:39.760 --> 0:16:43.480 see ourselves as that complementary tier behind all these big 0:16:43.520 --> 0:16:46.000 broad services. And as I like to say, if we're 0:16:46.000 --> 0:16:48.120 the number three spot in the home and in the 0:16:48.200 --> 0:16:50.680 fifty countries outside the US and the US, that's a 0:16:50.680 --> 0:16:52.880 great place for stars to live. Well. But then I 0:16:52.960 --> 0:16:56.600 wonder if the world is heading to you know, a 0:16:56.720 --> 0:17:02.600 recession type uh economics that you nation people's disposable income, 0:17:02.640 --> 0:17:04.600 they're gonna be a little STINGI or maybe the number 0:17:04.640 --> 0:17:08.320 three isn't a great place to be. Well, look, you 0:17:08.359 --> 0:17:10.560 know I've spent I've been through two recessions on the 0:17:10.600 --> 0:17:13.199 cable side, and you know, when things get tough in 0:17:13.200 --> 0:17:16.200 people's homes, they tend to stay home, you know. They unfortunately, 0:17:16.200 --> 0:17:17.600 they don't tend to go to the movies and buy 0:17:17.640 --> 0:17:19.679 a bunch of popcorn and hot thoughts for the family. 0:17:19.720 --> 0:17:22.680 They will kind of revert back to home for their content. 0:17:22.760 --> 0:17:24.520 And that's a great place for us as well, just 0:17:24.600 --> 0:17:27.720 like you're seeing in the current pandemic. But again, with 0:17:27.760 --> 0:17:30.440 our price point at eight nine, I think we're very 0:17:30.880 --> 0:17:33.840 nicely priced based on the fact that we've got almost 0:17:33.920 --> 0:17:37.280 ninety hours of fresh original content, we've got four thousand 0:17:37.359 --> 0:17:39.960 library titles, and we've got the Sony Pay one. I 0:17:40.000 --> 0:17:43.120 think it's a really good value proposition, Uh, to sit 0:17:43.200 --> 0:17:45.760 behind one of these other services. Don't forget we have 0:17:45.840 --> 0:17:49.680 a very very unique programming strategy. We are focused, hyper 0:17:49.720 --> 0:17:53.280 focused on prodding you know, premium content for women and 0:17:53.400 --> 0:17:56.560 underserved audiences, and nobody else is really doing that today. 0:17:56.600 --> 0:17:59.439 And so you know, we we've got this core demo 0:17:59.560 --> 0:18:02.800 of women and African American women that nobody really has 0:18:02.840 --> 0:18:05.520 to the extent that we do, will continue to program 0:18:05.560 --> 0:18:07.959 for them in a big way. And so again, if 0:18:08.119 --> 0:18:10.439 if you're in that demos, it Stars is you know, 0:18:10.600 --> 0:18:12.640 is the service that you want. So again, we think 0:18:12.640 --> 0:18:14.119 we play a nice role in the home for that 0:18:14.200 --> 0:18:18.840 as well. And so when you look at the larger 0:18:19.000 --> 0:18:22.320 streaming war, you know, since we last talked last July, 0:18:22.600 --> 0:18:27.720 Disney Plus is here, HBO Max is here, Peacock is coming, CBS, 0:18:27.800 --> 0:18:32.760 Viacom is gonna come. You know how you know you're 0:18:32.800 --> 0:18:35.679 you're talking about strange bed fellows. You're talking about talking 0:18:35.680 --> 0:18:38.800 in behind some of these other choices. But to this 0:18:38.960 --> 0:18:47.480 broader marketplace, can this number of players coexist? It's gonna 0:18:47.520 --> 0:18:49.640 be hard. I think you're gonna see four to six 0:18:49.720 --> 0:18:52.679 kind of the four to six broad based services that 0:18:52.720 --> 0:18:54.480 are going to be you know, that will survive a 0:18:54.520 --> 0:18:56.600 long term, and then you'll see two or three or 0:18:56.640 --> 0:18:59.720 four of these premium talkins behind and then I think 0:18:59.720 --> 0:19:01.640 you'll five or six or which is the tier three 0:19:01.680 --> 0:19:04.320 that we never got to, which is like the acorns 0:19:04.320 --> 0:19:06.399 and the chillers, and then and there really you know, 0:19:06.880 --> 0:19:09.359 I f c s and sun Dances that are really 0:19:09.480 --> 0:19:11.720 niche audiences that have a love for it but that 0:19:11.840 --> 0:19:14.520 and are very loyal um. But I think you'll see 0:19:14.560 --> 0:19:17.639 for the six kind of big broad based players laft Um. 0:19:17.760 --> 0:19:19.760 From what I can see from HBO Max today, it 0:19:19.760 --> 0:19:22.239 looks like it's more of a Disney Plus competitor than 0:19:22.240 --> 0:19:25.560 it is a Netflix competitor. Um. But again, you know, 0:19:25.600 --> 0:19:28.359 with the new leadership, they're coming in two days or 0:19:28.359 --> 0:19:30.439 whatever before the launch. I'm sure there's gonna be some 0:19:30.520 --> 0:19:34.520 changes coming to the service as well. But again, the 0:19:34.560 --> 0:19:39.760 better they all do in getting consumers too to adopt Spot, 0:19:39.840 --> 0:19:41.600 the better it is for US tucking in behind them. 0:19:41.640 --> 0:19:44.600 And we're seeing that outside the US right as you know, 0:19:44.640 --> 0:19:48.399 we're the third biggest US spot outside the US. And 0:19:48.440 --> 0:19:51.080 as Netflix and the Amazons and US kind of get 0:19:51.080 --> 0:19:53.320 into markets to start to educate people. We're starting to 0:19:53.320 --> 0:19:58.600 see that behavior follow like us. Okay, um, you know 0:19:59.040 --> 0:20:03.200 we should also talk about your parent company in lions Gate. 0:20:03.840 --> 0:20:07.720 You know, you both uh separately together have been subject 0:20:07.760 --> 0:20:11.040 to reports of potential deals M and A you know, 0:20:11.280 --> 0:20:13.719 maybe not in the pandemic climate, but in the longer 0:20:13.880 --> 0:20:17.320 term could start to pick up again. So it stars 0:20:17.440 --> 0:20:20.760 truly plug in play. Where should it end up within 0:20:21.000 --> 0:20:24.159 a different company or lions Gate ends up within a 0:20:24.200 --> 0:20:27.920 different company? You're well situated, do you think that far ahead? 0:20:29.440 --> 0:20:31.680 You know, we don't speculate on M and A A activity, 0:20:31.760 --> 0:20:34.280 Uh Lake grun But used to say to me that 0:20:34.320 --> 0:20:36.679 if M and A was your strategy, you have no strategies. 0:20:36.720 --> 0:20:38.960 So you know, I think we are really you know, 0:20:39.119 --> 0:20:43.359 three great businesses. Uh. You know, the home entertainment business 0:20:43.400 --> 0:20:45.520 in the library right now is probably doing as well 0:20:45.520 --> 0:20:47.520 as any other part of the business in this pandemic 0:20:47.680 --> 0:20:50.080 because people are looking for content for their services, and 0:20:50.160 --> 0:20:52.520 so like I think John and Michael built a really 0:20:52.560 --> 0:20:55.720 great you know company with Motion Picture you know, and 0:20:55.760 --> 0:20:58.760 you know some of the franchises and tv UM in 0:20:58.800 --> 0:21:01.199 a seventeen thousand title library, which has given us the 0:21:01.240 --> 0:21:05.000