Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: One year after it's spin off. Stars is under pressure
Speaker 2: to prove that it can deliver profits, and strong content
Speaker 2: is helping it. It's sustaining momentum as consolidation reshapes the industry.
Speaker 2: Joining us now, please to stay. Star CEO Jeffrey Hirsch, Jeff,
Speaker 2: thank you so much for joining. And I think this
Speaker 2: in particular is kind of an interesting part about Stars.
Speaker 2: It's a world where Warner Brothers paramount, all the behemoths
Speaker 2: are coming together, and yet you fought the trend with
Speaker 2: now where you're spinning out of Lions Gates. So why
Speaker 2: exist in this rarefied air of being a smaller company
Speaker 2: when everybody else is coming together?
Speaker 3: So thanks for having me on this morning. It's been
Speaker 3: a year. It's been a great year.
Speaker 4: We're a lot stronger as a company today than we
Speaker 4: were a year ago when we were part of Lionskate.
Speaker 3: We've done a lot of work to.
Speaker 4: Unwind a lot of the ownership of a studio structure,
Speaker 4: becoming really a strong network, and you've seen that in
Speaker 4: the numbers. Like we are a focused streamer, we focus
Speaker 4: on women and underrepresented audiences, and as we're complementary to
Speaker 4: all the broad based streamers. And what that means is
Speaker 4: we can focus on our audience, is we can do
Speaker 4: it in more in depth than anybody else and on
Speaker 4: scale than anywhere else. So as much as those other
Speaker 4: broad based streamers are bigger in size, financially, if you
Speaker 4: look at our audiences, we're probably the number one or
Speaker 4: two brand in the homes of each of our audiences
Speaker 4: because we are that destination for that content.
Speaker 1: Will they pay more? Will those will your customers pay
Speaker 1: more for it because it's geared specifically at them.
Speaker 4: Look, I think we've always wanted to be priced as
Speaker 4: a complementary service. So I think what you've seen over
Speaker 4: the last two or three years, as as streamers have
Speaker 4: moved away from chasing Netflix subsubscriber to drive profitability and
Speaker 4: raise rates, it's given us room to continue to raise
Speaker 4: our rate. So as long as we are there's a
Speaker 4: good gap between a broad based streamer and not so
Speaker 4: we can continue to have some pricing power.
Speaker 2: By the way, do you think it's an unhealthy thing
Speaker 2: for the overall ecosystem for there to be so much consolidation?
Speaker 2: Does it make differences? And sort of like the creative
Speaker 2: output I know a lot of actors are very unhappy
Speaker 2: that this sort of thing is going. What does it
Speaker 2: do to the overall media environment to have people fighting
Speaker 2: exactly the thing you're doing.
Speaker 4: I think the stronger the broad based players are. And
Speaker 4: if you look at the natural evolution of the space,
Speaker 4: you had cable companies at satellite companies, and now you
Speaker 4: have content companies becoming distribution platforms. And so the more
Speaker 4: the Warner brothers in Paramount are stronger to compete with
Speaker 4: the Amazons, to compete with the netflixes, with the Hulus
Speaker 4: and the Disneys, it gives us a great platform to
Speaker 4: be sold on top of. So today we're sold with
Speaker 4: the second largest channel on Amazon, We're sold on top
Speaker 4: of Hulu, and so as those guys settle what they're doing,
Speaker 4: it gives us another opportunity to be sold on top
Speaker 4: of another broad based streamer that's the number one or
Speaker 4: number two streamer in the home. And so that gives
Speaker 4: us a lot of opportunity to continue to grow what
Speaker 4: we do, which is very focused on those demos.
Speaker 1: You lean into the strategy to the IP strategy basically
Speaker 1: of something like Atlander or Power.
Speaker 3: Does that differentiate you?
Speaker 1: You think enough from the other streamers that people pay
Speaker 1: attention specifically to your channel because they want those you know,
Speaker 1: or BMF or or whatever it may be.
Speaker 4: Yeah, I think the more that we're focused, the more
Speaker 4: we continue to put network shows on the air. So
Speaker 4: we just coming out of the last season of Outlander.
Speaker 4: The fan base is obsessed with that show and they're
Speaker 4: very sad that it's ending, but I think it's going
Speaker 4: to be a great ending next week for the base.
Speaker 4: MMA dais premiered last weekend, you know, and we've been
Speaker 4: trying to turn our slate over and get ownership back
Speaker 4: on the network. So fight Land with Curtis fifty cent
Speaker 4: Jackson is our first Stars owned original from separation that
Speaker 4: will premiere July thirty first.
Speaker 3: So our view, as long as we continue every.
Speaker 4: Week to have something on the air that really serves
Speaker 4: those two demos, we become the destination for those demos
Speaker 4: and makes us very important for the broad based ecosystem
Speaker 4: to be added.
Speaker 3: On top of much like we were in the old
Speaker 3: cable days.
Speaker 2: Well, what is the process like? Again, you have shows
Speaker 2: that have a lot of fans, and I know fight
Speaker 2: Land you're hoping is going to be one of these
Speaker 2: other really strong ips. What is the process, like, I mean,
Speaker 2: you have again fifty cents signed on to it. I'm
Speaker 2: sure it's not cheap to create one of these programs.
Speaker 2: What is sort of the math and thought that goes
Speaker 2: into it to say, Okay, we're going to bet behind
Speaker 2: this horse and we're going to build it up to
Speaker 2: be an IP that again, you know, reaches the status
Speaker 2: to some of your others.
Speaker 4: I think we're uniquely positioned because we focus on those
Speaker 4: two demos. We know what those demos like, so we
Speaker 4: know what the Outlander fan base loves. We've been doing
Speaker 4: it for fourteen years. So we have shows like Amma
Speaker 4: Dais that feeds that fan base. We had a series
Speaker 4: of Queens, White Queens Spanish Princess that really feeds the
Speaker 4: historical time travel piece of that. Fight Land has a
Speaker 4: lot of the same feel as the original Power. It's
Speaker 4: boxing in the UK, but it's in the world of
Speaker 4: crime and family drama.
Speaker 3: We have a show that we just.
Speaker 4: Announced which doesn't have a title yet, called the untitled
Speaker 4: Black Rodeo Show. It's based a family drama based on
Speaker 4: a Black rodeo in Texas that feels a lot like
Speaker 4: BMF and so as we look at our development strategy,
Speaker 4: we're not trying to make swings at things that the
Speaker 4: customers have never seen before. Every show that we have
Speaker 4: is kind of mapped to a different show. That gives
Speaker 4: us great confidence that these will be hits for us.
Speaker 2: Are we done making shows about like New York and LA?
Speaker 2: It feels like every new big program that's coming out
Speaker 2: is about like Middle America somewhere else.
Speaker 4: We are not done with shows about New York LA.
Speaker 4: We'll announce a show within the Power Universe pretty soon
Speaker 4: that brings folks back into New York City and it's
Speaker 4: a little more modern times than before. And I look,
Speaker 4: New York and LA are obviously a great place to
Speaker 4: shoot programming. New Jersey is a great place with tax
Speaker 4: credits today. But I think you have to serve the
Speaker 4: entire country, not just that the coasts.
Speaker 2: It.
Speaker 3: I mean that makes business sense.
Speaker 1: The new properties that you're developing, what about keeping the
Speaker 1: old ones alive? As a businessman who's trying to apply
Speaker 1: like the science, you know, to the creativity, how do
Speaker 1: you avoid like jumping the shark and make sure that
Speaker 1: you can have five seasons, ten seasons, twenty seasons, so you.
Speaker 4: Know, It's interesting again because the components are pretty similar,
Speaker 4: and then you can bring the talent from one show
Speaker 4: to the next and so that it's a recognizable name
Speaker 4: and a new to bring audience across. When we premiered
Speaker 4: BMF Season one coming out of Ghost, which was one
Speaker 4: of the big power spinoffs, eighty percent of the audience
Speaker 4: went from Ghost into BMF. It was half the cost,
Speaker 4: and so we make that trade all day from a
Speaker 4: financial point of view, and so having ownership, getting control
Speaker 4: of the inception point of a show and then be
Speaker 4: able to monetize it globally allows us to take cost
Speaker 4: off the business. And what you saw on our last
Speaker 4: quarter report Thursdays, we moved our twenty percent guide from
Speaker 4: coming out of Calendar twenty justin riebit a guide or
Speaker 4: margin guide coming out of calendar twenty eight to the
Speaker 4: back half of twenty seven, and so we feel like
Speaker 4: we're actually, you know, putting great content on the air
Speaker 4: that the audience loves, but we're also able to actually
Speaker 4: drive margin at the same time.
Speaker 2: I mean, we're talking about this a bit in the break,
Speaker 2: but I was having conversation with a director from a
Speaker 2: Netflix film film that was basically like it was an
Speaker 2: action one said we had to have an explosion in
Speaker 2: the first five minutes or we knew we'd lose our audience.
Speaker 2: Just how much has a creative process changed because of
Speaker 2: the competition for what is increasingly shorter attention span.
Speaker 3: Yeah, I think you have.
Speaker 4: To really in the first one, two, three episodes have
Speaker 4: to get the audience, keep the audience, and you know,
Speaker 4: really kind of drive with an intense, perpossive move to
Speaker 4: get the audience excited about the show. And if you
Speaker 4: wait to the back half, you may not have them
Speaker 4: there to get there. So we're in a much you know,
Speaker 4: shorter attention span period. There's a lot of different vehicles
Speaker 4: that pull people's attention. It's not used to just be books,
Speaker 4: newspaper and cable. Now it's everything, and so your shows
Speaker 4: really have to pop. And I think the one thing
Speaker 4: that we do better than most is just that. I mean,
Speaker 4: if you look at the Power franchise and all the
Speaker 4: spin offs, every one of those episodes is packed with action.
Speaker 4: You'll continue to see that with Stars.
Speaker 1: It's such a fascinating industry that you're in, Jeff, So
Speaker 1: we'd love to have you back when you can. Jeff
Speaker 1: Hirsch there he is the President and CEO of Stars