WEBVTT - Katzenberg Says Hollywood Facing Existential Issues

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Tim

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<v Speaker 1>Stenebeck on Bloomberg Radio. This is the conversation of the

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<v Speaker 1>day for me, as a analyst on Wall Street covering

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<v Speaker 1>the media industry for thirty years, cross paths with this

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<v Speaker 1>gentleman and his companies many times. Jeffre Katzenberg. He's a

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<v Speaker 1>co founder of DreamWorks Animation, former chairman of the Walt

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<v Speaker 1>Disney Studi. He's now also a member of the board

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<v Speaker 1>of ARA. He joins us via Zoom that zoom thing

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<v Speaker 1>from Los Angeles. Jeffrey, thank you so much for joining

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<v Speaker 1>us here. I'd love to get your talk to you

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<v Speaker 1>a little bit about this new move for you Ara.

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<v Speaker 1>What are the folks that are doing and why did

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<v Speaker 1>you join the board?

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<v Speaker 2>Sure? So, about five years ago, my partners and I

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<v Speaker 2>and the founder of Aura sort of saw this explosion

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<v Speaker 2>of online crime, in particular it's on a global basis,

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<v Speaker 2>but in particular focused on American families. One in four

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<v Speaker 2>Americans today have actually fallen victim to some kind of

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<v Speaker 2>online crime. It exceeded ten billion dollars in twenty twenty two.

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<v Speaker 2>So this is a trend that is bad and only

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<v Speaker 2>getting worse. As all of our lives get more and

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<v Speaker 2>more you know, built into our online activities. And it's

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<v Speaker 2>interesting because it's not that there are no solutions to it,

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<v Speaker 2>it's that there are hundreds of them, and they're complicated

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<v Speaker 2>and they're expensive, and it was hard to know, well,

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<v Speaker 2>what do I actually need what would protect me and

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<v Speaker 2>my family? And so that's the what we went out

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<v Speaker 2>to sort of build a company to address that, to

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<v Speaker 2>solve that and have built AURA, I think into what

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<v Speaker 2>today is quickly becoming really the top of the line

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<v Speaker 2>U all in one protection for families, both your children

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<v Speaker 2>and your parents, many of which are the you know,

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<v Speaker 2>have been the victims of scams and robots and all

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<v Speaker 2>of these things that are you know beyond they you know,

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<v Speaker 2>they started annoying and then they get to actually damaging.

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<v Speaker 1>So what are some of the products or what are

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<v Speaker 1>some of the markets in the products that are brings

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<v Speaker 1>that you think can be Well, here are.

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<v Speaker 2>The I just give you some of the features and

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<v Speaker 2>functions that that we have. So we have identity and

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<v Speaker 2>H credit protection, anti virus UH, we have AI UH

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<v Speaker 2>powered call and message protection, so that we actually can

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<v Speaker 2>sort of build this protective UH dome around round you

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<v Speaker 2>in which we can filter anybody penetrating into you, your children,

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<v Speaker 2>lots of things for parents to be able to put

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<v Speaker 2>various controls and monitoring what our kids are doing, what,

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<v Speaker 2>what where they are, what sites they're on, and we

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<v Speaker 2>can go on to a very long list of features

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<v Speaker 2>and functions. Uh here. Our objective is actually to be

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<v Speaker 2>able to offer the widest uh uh uh you know,

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<v Speaker 2>set of features and functions and knowing that different people

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<v Speaker 2>have different needs. You know, I don't know each of you,

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<v Speaker 2>but I promise you your profiles, your needs, your parents,

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<v Speaker 2>whether we have kids or not. And what we want

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<v Speaker 2>to do is just be a one stop shopping for everybody.

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<v Speaker 2>And I would tell you when I look at today

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<v Speaker 2>in the trends, you know, we don't none of us

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<v Speaker 2>will get in a car today and not put a

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<v Speaker 2>seat belt on. Ye five years from now, I don't

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<v Speaker 2>believe any of us will be online without having AURA

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<v Speaker 2>or some some version of that. It's just it's our

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<v Speaker 2>vulnerabilities are extreme and only getting greater, and the liability

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<v Speaker 2>is just not worth it anymore. And so I'm quite excited,

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<v Speaker 2>quite as proud of the company that's been built in

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<v Speaker 2>the work that are and my partner souj have done

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<v Speaker 2>in building this company out. Robert Downey just recently came

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<v Speaker 2>on board as a board member, as an investor, and

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<v Speaker 2>you know, as a spokesperson for the company. So we're

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<v Speaker 2>we're on a great path to build something that does

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<v Speaker 2>good while doing good.

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<v Speaker 3>Jeffrey, I wanted to switch gears and get your thoughts

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<v Speaker 3>about the writers actors strike in Hollywood and obviously when

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<v Speaker 3>you're thinking about the proliferation when it.

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<v Speaker 2>Comes to it, I do want to say, I'm surprised

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<v Speaker 2>it only took you the second question to get to that,

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<v Speaker 2>But okay.

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<v Speaker 3>I mean, how do you think this will impact those

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<v Speaker 3>jobs when it comes to the AI hype in the

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<v Speaker 3>future of it.

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<v Speaker 2>Well, I again, I'm not going to try and parse

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<v Speaker 2>out what are I think very challenging issues, but I

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<v Speaker 2>will say there are a few things that I think

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<v Speaker 2>all strikes have in common with one another. One they

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<v Speaker 2>begin and two they end. Also, interestingly, if you look

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<v Speaker 2>at strikes, whether they are lockouts or walkouts, the length

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<v Speaker 2>of a strike does not correlate to a better out.

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<v Speaker 2>And so you know, in this particular one, you actually

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<v Speaker 2>have both parties are facing very very challenging problematic, and

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<v Speaker 2>some would go as far as to say existential issues

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<v Speaker 2>for them. So they're particularly difficult and particularly complex. In

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<v Speaker 2>the case of the writers, the industry structurally has changed

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<v Speaker 2>so significantly the ability to have the type of employment

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<v Speaker 2>that they have had now for seventy five one hundred

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<v Speaker 2>years is diminished, and you can see that it's on

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<v Speaker 2>a path to continue to so that's really problematic. Obviously,

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<v Speaker 2>the introduction of AI is a creative tool. It's both

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<v Speaker 2>an asset but also I think could be a liability.

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<v Speaker 2>From the producer studio standpoint, you have, you know, an

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<v Speaker 2>equally challenging and complex set of structural changes that they

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<v Speaker 2>are wrestling with. And so you know, I've tried to

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<v Speaker 2>be objective and understanding that both parties here are looking

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<v Speaker 2>at very very challenging circumstances, which is why it's seemingly

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<v Speaker 2>become very difficult to get them aligned. But here's the

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<v Speaker 2>thing I would say to you, as certain as we

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<v Speaker 2>are in a conversation about this, in this moment, this

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<v Speaker 2>strike will.

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<v Speaker 1>End, right and.

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<v Speaker 2>It will end. And whether it's going to end in

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<v Speaker 2>a day or a week, or a month or four months,

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<v Speaker 2>a year, it will end. And so the damage that

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<v Speaker 2>is being felt on both sides of this isn't actually

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<v Speaker 2>ultimately going to determine the outcome. So for me, I

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<v Speaker 2>just desperately want to see both sides get back to

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<v Speaker 2>the table and actually wrestle these things through.

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<v Speaker 1>And Jeffer you mentioned the big existential issue for the

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<v Speaker 1>media in industry, and as a Wall Street analyst covering

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<v Speaker 1>the space for thirty years, I've never seen anything like

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<v Speaker 1>it where this industry has to pivot from the traditional

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<v Speaker 1>model where cable companies and salite companies aggregated a big

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<v Speaker 1>bunch of audience and then the content creators leveraged that

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<v Speaker 1>and that's everybody kind of had a nice economic return

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<v Speaker 1>to now one it's streaming.

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<v Speaker 2>But it's even more complicated than that, because what you

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<v Speaker 2>have is is seventy five years of an ecosystem that

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<v Speaker 2>was built on a waterfall of rights from window to

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<v Speaker 2>window to window of various distribution platforms, both domestically and globally,

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<v Speaker 2>and as those have consolidated, there is less opportunity to

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<v Speaker 2>exploit the content and therefore less opportunity for talent to

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<v Speaker 2>participate in the rewards of that yep. And so it's

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<v Speaker 2>challenged on both sides of the equation, both for the

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<v Speaker 2>production and studios who are making the content. They don't

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<v Speaker 2>have as many outlets to exploit their content. And for

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<v Speaker 2>the creators, you know, who were rewarded for their success,

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<v Speaker 2>and they were rewarded through a very long pipeline of

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<v Speaker 2>you know, whether it was from free TV to pay

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<v Speaker 2>to cable, to syndication and international. There were all of

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<v Speaker 2>these different places of exploitation of which they actually got

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<v Speaker 2>rewards for great work.

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<v Speaker 4>Yeah.

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<v Speaker 1>I know it's been It's an incredibly difficult time, but

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<v Speaker 1>one could argue maybe it's a good time for strikeing

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<v Speaker 1>get all these issues out on the table. Jeffreykatzenberg, thank

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<v Speaker 1>you so much for joining us. Jeffrey Katzenberg is a

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<v Speaker 1>co founder of dream Works Animation, former chairman of the

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<v Speaker 1>Walt Disney Studios, and member of the board of aur.

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<v Speaker 1>He joins us on the phone on the Zoom actually

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<v Speaker 1>from the City of Angels, Los Angeles. Bringing our next

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<v Speaker 1>guest here, Marcus Shaw. He's the chief executive officer for

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<v Speaker 1>a company called Alt Finance. He joined us live here

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<v Speaker 1>in our Bloomberg Interactive Brokers studio. Marcus just set us

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<v Speaker 1>the stage here. What is all Finance. What are you

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<v Speaker 1>trying to do at All Finance?

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<v Speaker 4>So All Finance is an organization that's dedicated to helping

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<v Speaker 4>encourage more students from historically black colleges and universities understand

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<v Speaker 4>careers in finance, specifically alternative investments, and providing them with

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<v Speaker 4>the education, experience, and exposure to help pursue careers in

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<v Speaker 4>alternative investments, private equity, private credit, in real estate.

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<v Speaker 3>And you also have a fellowship program. Talk to us

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<v Speaker 3>about that, correct.

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<v Speaker 4>We have an amazing fellowship program. We now have one

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<v Speaker 4>hundred and nineteen fellows. They're currently in our program. We

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<v Speaker 4>graduated our first fourteen fellows in May of twenty twenty three,

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<v Speaker 4>and those fellows that are going on to work in

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<v Speaker 4>investment banks and alternative investment firms and management consulting firms

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<v Speaker 4>focusing on private equity. We're so excited about the success

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<v Speaker 4>that we had with that first class, but our fellows

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<v Speaker 4>are growing and so we expect even more success than

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<v Speaker 4>years to go.

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<v Speaker 1>How is what is wall Street's view on hiring from

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<v Speaker 1>HBCUs just in generally or minority hiring in general? You know,

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<v Speaker 1>what are they trying to exist so competitive?

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<v Speaker 4>Well, it's a very competitive industry, and I think the perspective,

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<v Speaker 4>particularly around HBCUs are that the companies really didn't know

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<v Speaker 4>where these schools were. HBCUs have a rich history and

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<v Speaker 4>are a big part of the fabric of this country. Obviously,

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<v Speaker 4>our current Vice President, Kamala Harris is an HBCU alum,

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<v Speaker 4>along with many other you know, luminaries and politics and

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<v Speaker 4>entertainment and business and so forth. So it's been a

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<v Speaker 4>contributing factor to the American fabric for several hundred years

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<v Speaker 4>now a couple of hundred years, but has not been

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<v Speaker 4>a big part of the recruiting process for finance and

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<v Speaker 4>for Wall Street. And so what we're trying to do

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<v Speaker 4>is create those relationships, those pathways so that the best

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<v Speaker 4>and brightest students at places like Howard University, of Morehouse College,

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<v Speaker 4>Spellman College, clark Atlanda University are aware of the career

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<v Speaker 4>opportunities that exist outside of sales and trading and investment.

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<v Speaker 3>Bank How are the resources when it comes to things

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<v Speaker 3>like endowments.

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<v Speaker 4>So one place where historically black collegees the universities have

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<v Speaker 4>certainly struggled is having the financial resources to keep up

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<v Speaker 4>with the infrastructure battle that is happening in higher education.

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<v Speaker 4>The students are brilliant, the professors are incredibly resourceful, but

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<v Speaker 4>building the endowments has been a place of a place

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<v Speaker 4>of challenge. There is not a single HBCU today that

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<v Speaker 4>has an end over a billion dollars. When you look

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<v Speaker 4>at other schools right that are non HBCUs schools, even

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<v Speaker 4>of the same size, many of them will have larger endowments.

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<v Speaker 4>And that allows students to have a lower cost of attendance,

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<v Speaker 4>That allows you to build scholarships, It allows you to

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<v Speaker 4>endow professorships, which allows you to also retain professors for

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<v Speaker 4>a longer period of time. So HBCUs are doing all

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<v Speaker 4>of this great work without all of the resources that

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<v Speaker 4>some of the other schools have.

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<v Speaker 3>So why is that so?

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<v Speaker 4>I think there's a couple of key issues. Number One,

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<v Speaker 4>you're dealing with a population of student an alum that

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<v Speaker 4>historically have served a higher population of low income students.

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<v Speaker 4>All right, that's number one. Number two, and this is

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<v Speaker 4>part of what we're solving for through all finance, is

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<v Speaker 4>that there hasn't been as much awareness of some of

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<v Speaker 4>the higher compensated career paths, like alternative investments that can

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<v Speaker 4>lead to you know, very well rewarded and highly compensated

0:13:59.679 --> 0:14:02.480
<v Speaker 4>alum that can then pour back into the school and

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<v Speaker 4>use their networks to pour back into the school. So

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<v Speaker 4>one of the things that we're doing is trying to

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<v Speaker 4>show highly talented students where high paying, high rewarding career

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<v Speaker 4>paths are and encouraging them to continue to give back

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<v Speaker 4>to their schools in a higher level. And so I

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<v Speaker 4>think that's part of it. I think that there's also

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<v Speaker 4>you know, what we see naturally is the reason why

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<v Speaker 4>HBCUs needed to exist is because we were in a

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<v Speaker 4>segregated education system. The vestiges of that continue to exist

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<v Speaker 4>in some ways that show up in terms of funding

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<v Speaker 4>for the schools. And so we need more corporate funding,

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<v Speaker 4>we need more alumni giving, we need greater fundraising so

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<v Speaker 4>that we can continue to give the students at hpc

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<v Speaker 4>US all the best and brightest infrastructure and opportunities that

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<v Speaker 4>they deserve.

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<v Speaker 1>HBC used this is ignorance on my part. Are they private,

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<v Speaker 1>are they public? Or are there some of each?

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<v Speaker 4>There's a mix. There is a mix of both. And

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<v Speaker 4>actually it was through the Civil Rights Act of nineteen

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<v Speaker 4>sixty four that the government designated historically black colleges and universities,

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<v Speaker 4>and there are one hundred and four roughly one hundred

0:15:07.280 --> 0:15:10.160
<v Speaker 4>and four HBCUs in the country. There's a portion of

0:15:10.200 --> 0:15:12.240
<v Speaker 4>them that are public, there's a portion of them that

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<v Speaker 4>are private, and the funding model for those can be

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<v Speaker 4>very different, much like a non HBCU school. But generally

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<v Speaker 4>across the board, we still see that HBCUs are underfunded,

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<v Speaker 4>whether they're public or private.

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<v Speaker 3>So, as a CEO, and you started your career at IBM,

0:15:28.760 --> 0:15:31.320
<v Speaker 3>you obviously got your MBA from Duke at you and

0:15:31.360 --> 0:15:34.880
<v Speaker 3>Paul were talking about that earlier. What's your view and

0:15:35.000 --> 0:15:37.520
<v Speaker 3>your vision when it comes to students that are in

0:15:37.560 --> 0:15:39.800
<v Speaker 3>your programs and as far as what that could mean

0:15:39.840 --> 0:15:41.960
<v Speaker 3>for other potential future CEOs.

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<v Speaker 4>I think and I'd like to also give a shout

0:15:44.680 --> 0:15:46.240
<v Speaker 4>out more House College. So I was a more House

0:15:46.560 --> 0:15:50.520
<v Speaker 4>alum as well, and I think that as I look

0:15:50.560 --> 0:15:54.400
<v Speaker 4>at students that they are graduating from HBCUs today, I

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<v Speaker 4>see them as having an incredible network of young men

0:15:57.920 --> 0:16:00.080
<v Speaker 4>and young women that they're going to school with. And

0:16:00.160 --> 0:16:02.200
<v Speaker 4>the same way that IVY leagues have an incredible network,

0:16:02.240 --> 0:16:03.880
<v Speaker 4>in the same way that large state schools have an

0:16:03.920 --> 0:16:07.080
<v Speaker 4>incredible network, many of these students will go on to

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<v Speaker 4>great graduate schools, law school, medical school, business school, and

0:16:11.760 --> 0:16:15.280
<v Speaker 4>they will build even broader networks that are more powerful.

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<v Speaker 4>There's real value because we believe that there is power

0:16:19.040 --> 0:16:22.640
<v Speaker 4>and diversity of networks, diversity of thought, diversity of experience.

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<v Speaker 4>These students, ultimately in the workplace will have some of

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<v Speaker 4>the most diverse experiences of any person in this country,

0:16:30.200 --> 0:16:33.400
<v Speaker 4>and that's valuable to companies and corporations that are looking

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<v Speaker 4>for people that are bringing new ideas, new experiences to

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<v Speaker 4>the table so that they can develop and innovate, so

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<v Speaker 4>that they can invest, so that they can lead.

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<v Speaker 1>Marcus, what's the biggest challenge that you faced just day

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<v Speaker 1>to day here?

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<v Speaker 4>I think the biggest challenge that we see is getting students,

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<v Speaker 4>number one, to understand what the opportunity set looks like

0:16:56.360 --> 0:16:59.680
<v Speaker 4>for a career and alternative investments. For many of our

0:16:59.720 --> 0:17:03.080
<v Speaker 4>student although they are incredibly bright and always will be

0:17:03.120 --> 0:17:06.440
<v Speaker 4>destined for a great career, they don't have a lot

0:17:06.480 --> 0:17:08.919
<v Speaker 4>of transparency or a lot of clarity around what a

0:17:08.960 --> 0:17:12.240
<v Speaker 4>career and alternative investments will look like. And so creating

0:17:12.240 --> 0:17:15.600
<v Speaker 4>that exposure and some of that co education around how

0:17:15.600 --> 0:17:19.040
<v Speaker 4>to manage a career moving from banking to private equity

0:17:19.800 --> 0:17:22.679
<v Speaker 4>is something that's very new to students that don't have

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<v Speaker 4>a network of people that are already in that business

0:17:25.400 --> 0:17:28.400
<v Speaker 4>or not highly exposed to that even before college. So

0:17:28.440 --> 0:17:30.480
<v Speaker 4>that's one of the challenges that we face.

0:17:31.400 --> 0:17:33.159
<v Speaker 1>That is fascinating stuff. I'm glad we got to get

0:17:33.200 --> 0:17:35.480
<v Speaker 1>a few minutes of your time. It's Marca Shaw. He's

0:17:35.520 --> 0:17:38.639
<v Speaker 1>a chief executive officer for al Finance, joining us here

0:17:38.680 --> 0:17:40.840
<v Speaker 1>in a Bloomberg and Active Broker studio. We appreciate that

0:17:41.400 --> 0:17:44.400
<v Speaker 1>doing some important work increasing diversity on Wall Street, which

0:17:44.440 --> 0:17:47.920
<v Speaker 1>continues to be a challenge, but a lot of good

0:17:47.920 --> 0:17:50.400
<v Speaker 1>folks are doing some good work there, so we appreciate

0:17:50.400 --> 0:17:51.920
<v Speaker 1>getting a few minutes of Marcus's time.