WEBVTT - Starz CEO Jeffrey Hirschm Talks Remaining a Small Focused Streamer

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>One year after it's spin off. Stars is under pressure

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<v Speaker 2>to prove that it can deliver profits, and strong content

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<v Speaker 2>is helping it. It's sustaining momentum as consolidation reshapes the industry.

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<v Speaker 2>Joining us now, please to stay. Star CEO Jeffrey Hirsch, Jeff,

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<v Speaker 2>thank you so much for joining. And I think this

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<v Speaker 2>in particular is kind of an interesting part about Stars.

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<v Speaker 2>It's a world where Warner Brothers paramount, all the behemoths

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<v Speaker 2>are coming together, and yet you fought the trend with

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<v Speaker 2>now where you're spinning out of Lions Gates. So why

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<v Speaker 2>exist in this rarefied air of being a smaller company

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<v Speaker 2>when everybody else is coming together?

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<v Speaker 3>So thanks for having me on this morning. It's been

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<v Speaker 3>a year. It's been a great year.

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<v Speaker 4>We're a lot stronger as a company today than we

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<v Speaker 4>were a year ago when we were part of Lionskate.

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<v Speaker 3>We've done a lot of work to.

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<v Speaker 4>Unwind a lot of the ownership of a studio structure,

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<v Speaker 4>becoming really a strong network, and you've seen that in

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<v Speaker 4>the numbers. Like we are a focused streamer, we focus

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<v Speaker 4>on women and underrepresented audiences, and as we're complementary to

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<v Speaker 4>all the broad based streamers. And what that means is

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<v Speaker 4>we can focus on our audience, is we can do

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<v Speaker 4>it in more in depth than anybody else and on

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<v Speaker 4>scale than anywhere else. So as much as those other

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<v Speaker 4>broad based streamers are bigger in size, financially, if you

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<v Speaker 4>look at our audiences, we're probably the number one or

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<v Speaker 4>two brand in the homes of each of our audiences

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<v Speaker 4>because we are that destination for that content.

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<v Speaker 1>Will they pay more? Will those will your customers pay

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<v Speaker 1>more for it because it's geared specifically at them.

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<v Speaker 4>Look, I think we've always wanted to be priced as

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<v Speaker 4>a complementary service. So I think what you've seen over

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<v Speaker 4>the last two or three years, as as streamers have

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<v Speaker 4>moved away from chasing Netflix subsubscriber to drive profitability and

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<v Speaker 4>raise rates, it's given us room to continue to raise

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<v Speaker 4>our rate. So as long as we are there's a

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<v Speaker 4>good gap between a broad based streamer and not so

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<v Speaker 4>we can continue to have some pricing power.

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<v Speaker 2>By the way, do you think it's an unhealthy thing

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<v Speaker 2>for the overall ecosystem for there to be so much consolidation?

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<v Speaker 2>Does it make differences? And sort of like the creative

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<v Speaker 2>output I know a lot of actors are very unhappy

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<v Speaker 2>that this sort of thing is going. What does it

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<v Speaker 2>do to the overall media environment to have people fighting

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<v Speaker 2>exactly the thing you're doing.

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<v Speaker 4>I think the stronger the broad based players are. And

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<v Speaker 4>if you look at the natural evolution of the space,

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<v Speaker 4>you had cable companies at satellite companies, and now you

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<v Speaker 4>have content companies becoming distribution platforms. And so the more

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<v Speaker 4>the Warner brothers in Paramount are stronger to compete with

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<v Speaker 4>the Amazons, to compete with the netflixes, with the Hulus

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<v Speaker 4>and the Disneys, it gives us a great platform to

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<v Speaker 4>be sold on top of. So today we're sold with

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<v Speaker 4>the second largest channel on Amazon, We're sold on top

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<v Speaker 4>of Hulu, and so as those guys settle what they're doing,

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<v Speaker 4>it gives us another opportunity to be sold on top

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<v Speaker 4>of another broad based streamer that's the number one or

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<v Speaker 4>number two streamer in the home. And so that gives

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<v Speaker 4>us a lot of opportunity to continue to grow what

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<v Speaker 4>we do, which is very focused on those demos.

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<v Speaker 1>You lean into the strategy to the IP strategy basically

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<v Speaker 1>of something like Atlander or Power.

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<v Speaker 3>Does that differentiate you?

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<v Speaker 1>You think enough from the other streamers that people pay

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<v Speaker 1>attention specifically to your channel because they want those you know,

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<v Speaker 1>or BMF or or whatever it may be.

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<v Speaker 4>Yeah, I think the more that we're focused, the more

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<v Speaker 4>we continue to put network shows on the air. So

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<v Speaker 4>we just coming out of the last season of Outlander.

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<v Speaker 4>The fan base is obsessed with that show and they're

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<v Speaker 4>very sad that it's ending, but I think it's going

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<v Speaker 4>to be a great ending next week for the base.

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<v Speaker 4>MMA dais premiered last weekend, you know, and we've been

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<v Speaker 4>trying to turn our slate over and get ownership back

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<v Speaker 4>on the network. So fight Land with Curtis fifty cent

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<v Speaker 4>Jackson is our first Stars owned original from separation that

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<v Speaker 4>will premiere July thirty first.

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<v Speaker 3>So our view, as long as we continue every.

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<v Speaker 4>Week to have something on the air that really serves

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<v Speaker 4>those two demos, we become the destination for those demos

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<v Speaker 4>and makes us very important for the broad based ecosystem

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<v Speaker 4>to be added.

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<v Speaker 3>On top of much like we were in the old

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<v Speaker 3>cable days.

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<v Speaker 2>Well, what is the process like? Again, you have shows

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<v Speaker 2>that have a lot of fans, and I know fight

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<v Speaker 2>Land you're hoping is going to be one of these

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<v Speaker 2>other really strong ips. What is the process, like, I mean,

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<v Speaker 2>you have again fifty cents signed on to it. I'm

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<v Speaker 2>sure it's not cheap to create one of these programs.

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<v Speaker 2>What is sort of the math and thought that goes

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<v Speaker 2>into it to say, Okay, we're going to bet behind

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<v Speaker 2>this horse and we're going to build it up to

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<v Speaker 2>be an IP that again, you know, reaches the status

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<v Speaker 2>to some of your others.

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<v Speaker 4>I think we're uniquely positioned because we focus on those

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<v Speaker 4>two demos. We know what those demos like, so we

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<v Speaker 4>know what the Outlander fan base loves. We've been doing

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<v Speaker 4>it for fourteen years. So we have shows like Amma

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<v Speaker 4>Dais that feeds that fan base. We had a series

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<v Speaker 4>of Queens, White Queens Spanish Princess that really feeds the

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<v Speaker 4>historical time travel piece of that. Fight Land has a

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<v Speaker 4>lot of the same feel as the original Power. It's

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<v Speaker 4>boxing in the UK, but it's in the world of

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<v Speaker 4>crime and family drama.

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<v Speaker 3>We have a show that we just.

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<v Speaker 4>Announced which doesn't have a title yet, called the untitled

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<v Speaker 4>Black Rodeo Show. It's based a family drama based on

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<v Speaker 4>a Black rodeo in Texas that feels a lot like

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<v Speaker 4>BMF and so as we look at our development strategy,

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<v Speaker 4>we're not trying to make swings at things that the

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<v Speaker 4>customers have never seen before. Every show that we have

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<v Speaker 4>is kind of mapped to a different show. That gives

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<v Speaker 4>us great confidence that these will be hits for us.

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<v Speaker 2>Are we done making shows about like New York and LA?

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<v Speaker 2>It feels like every new big program that's coming out

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<v Speaker 2>is about like Middle America somewhere else.

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<v Speaker 4>We are not done with shows about New York LA.

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<v Speaker 4>We'll announce a show within the Power Universe pretty soon

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<v Speaker 4>that brings folks back into New York City and it's

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<v Speaker 4>a little more modern times than before. And I look,

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<v Speaker 4>New York and LA are obviously a great place to

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<v Speaker 4>shoot programming. New Jersey is a great place with tax

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<v Speaker 4>credits today. But I think you have to serve the

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<v Speaker 4>entire country, not just that the coasts.

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<v Speaker 2>It.

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<v Speaker 3>I mean that makes business sense.

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<v Speaker 1>The new properties that you're developing, what about keeping the

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<v Speaker 1>old ones alive? As a businessman who's trying to apply

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<v Speaker 1>like the science, you know, to the creativity, how do

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<v Speaker 1>you avoid like jumping the shark and make sure that

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<v Speaker 1>you can have five seasons, ten seasons, twenty seasons, so you.

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<v Speaker 4>Know, It's interesting again because the components are pretty similar,

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<v Speaker 4>and then you can bring the talent from one show

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<v Speaker 4>to the next and so that it's a recognizable name

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<v Speaker 4>and a new to bring audience across. When we premiered

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<v Speaker 4>BMF Season one coming out of Ghost, which was one

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<v Speaker 4>of the big power spinoffs, eighty percent of the audience

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<v Speaker 4>went from Ghost into BMF. It was half the cost,

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<v Speaker 4>and so we make that trade all day from a

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<v Speaker 4>financial point of view, and so having ownership, getting control

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<v Speaker 4>of the inception point of a show and then be

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<v Speaker 4>able to monetize it globally allows us to take cost

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<v Speaker 4>off the business. And what you saw on our last

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<v Speaker 4>quarter report Thursdays, we moved our twenty percent guide from

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<v Speaker 4>coming out of Calendar twenty justin riebit a guide or

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<v Speaker 4>margin guide coming out of calendar twenty eight to the

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<v Speaker 4>back half of twenty seven, and so we feel like

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<v Speaker 4>we're actually, you know, putting great content on the air

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<v Speaker 4>that the audience loves, but we're also able to actually

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<v Speaker 4>drive margin at the same time.

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<v Speaker 2>I mean, we're talking about this a bit in the break,

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<v Speaker 2>but I was having conversation with a director from a

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<v Speaker 2>Netflix film film that was basically like it was an

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<v Speaker 2>action one said we had to have an explosion in

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<v Speaker 2>the first five minutes or we knew we'd lose our audience.

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<v Speaker 2>Just how much has a creative process changed because of

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<v Speaker 2>the competition for what is increasingly shorter attention span.

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<v Speaker 3>Yeah, I think you have.

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<v Speaker 4>To really in the first one, two, three episodes have

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<v Speaker 4>to get the audience, keep the audience, and you know,

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<v Speaker 4>really kind of drive with an intense, perpossive move to

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<v Speaker 4>get the audience excited about the show. And if you

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<v Speaker 4>wait to the back half, you may not have them

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<v Speaker 4>there to get there. So we're in a much you know,

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<v Speaker 4>shorter attention span period. There's a lot of different vehicles

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<v Speaker 4>that pull people's attention. It's not used to just be books,

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<v Speaker 4>newspaper and cable. Now it's everything, and so your shows

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<v Speaker 4>really have to pop. And I think the one thing

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<v Speaker 4>that we do better than most is just that. I mean,

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<v Speaker 4>if you look at the Power franchise and all the

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<v Speaker 4>spin offs, every one of those episodes is packed with action.

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<v Speaker 4>You'll continue to see that with Stars.

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<v Speaker 1>It's such a fascinating industry that you're in, Jeff, So

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<v Speaker 1>we'd love to have you back when you can. Jeff

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<v Speaker 1>Hirsch there he is the President and CEO of Stars