1 00:00:04,440 --> 00:00:12,520 Speaker 1: Welcome to tech Stuff, a production from iHeartRadio. Hey there, 2 00:00:12,560 --> 00:00:15,880 Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland. 3 00:00:15,920 --> 00:00:18,880 Speaker 1: I'm an executive producer with iHeart Podcasts and how the 4 00:00:18,960 --> 00:00:23,439 Speaker 1: tech are you. I am wrapping up my vacation as 5 00:00:23,480 --> 00:00:27,840 Speaker 1: you listen to this. I am sadly bidding a fond 6 00:00:27,920 --> 00:00:33,360 Speaker 1: farewell to the Caribbean, unless, of course, hurricanes ruined my trip, 7 00:00:33,360 --> 00:00:36,720 Speaker 1: which is entirely possible. I'm watching every day as storm 8 00:00:36,800 --> 00:00:40,720 Speaker 1: systems form out there, so we'll see. But anyway, I 9 00:00:40,760 --> 00:00:44,080 Speaker 1: am incapable of recording a new episode today. So this 10 00:00:44,200 --> 00:00:48,480 Speaker 1: episode originally published on May twenty second, twenty twenty three. 11 00:00:48,840 --> 00:00:54,800 Speaker 1: It is titled Streaming Services that sunk Golly, I'm on 12 00:00:54,880 --> 00:00:58,280 Speaker 1: a boat and I've decided to run an episode with 13 00:00:58,400 --> 00:01:02,240 Speaker 1: the words sunk in it. Y'all, just don't be me. 14 00:01:02,840 --> 00:01:09,120 Speaker 1: Hope you enjoy. So. Back in two thousand and seven, 15 00:01:09,280 --> 00:01:13,039 Speaker 1: a rent by mail video business made a move that 16 00:01:13,080 --> 00:01:18,399 Speaker 1: would be a true disruption. We talk about disruptive companies, 17 00:01:19,360 --> 00:01:22,520 Speaker 1: this was definitely one of them. It had already shaken 18 00:01:22,560 --> 00:01:25,080 Speaker 1: things up by taking aim at a huge company that 19 00:01:25,120 --> 00:01:28,680 Speaker 1: had dominated the home video rental market for decades through 20 00:01:28,760 --> 00:01:33,000 Speaker 1: offering customers the chance to access a huge media library 21 00:01:33,319 --> 00:01:36,400 Speaker 1: from the comfort of their own homes, albeit they had 22 00:01:36,400 --> 00:01:38,600 Speaker 1: to wait for titles to make their way through the 23 00:01:38,600 --> 00:01:42,560 Speaker 1: postal system before they could enjoy them. But now, this 24 00:01:42,720 --> 00:01:45,039 Speaker 1: upstart company in two thousand and seven had set up 25 00:01:45,040 --> 00:01:47,680 Speaker 1: a service where, if you can believe it, you could 26 00:01:47,720 --> 00:01:52,000 Speaker 1: actually connect to a media player through the Internet and 27 00:01:52,080 --> 00:01:56,080 Speaker 1: watch movies and television shows by streaming them to your device. 28 00:01:57,000 --> 00:02:01,320 Speaker 1: The upstart company was, of course, Netflix had battled with Blockbuster, 29 00:02:01,760 --> 00:02:05,600 Speaker 1: which actually had the opportunity to buy Netflix at one point, 30 00:02:05,920 --> 00:02:09,239 Speaker 1: but walked away from that deal, and Netflix quickly became 31 00:02:09,639 --> 00:02:13,400 Speaker 1: a big concern for the major studios, which understandably and 32 00:02:13,720 --> 00:02:18,919 Speaker 1: arguably correctly worried that unless someone took action, Netflix would 33 00:02:18,919 --> 00:02:23,799 Speaker 1: become a powerful monopoly for prestige media streaming services. I'm 34 00:02:23,840 --> 00:02:26,200 Speaker 1: not talking about the user generated stuff which you would 35 00:02:26,200 --> 00:02:31,520 Speaker 1: find on platforms like YouTube, but rather studio produced stuff. Now, 36 00:02:31,520 --> 00:02:34,360 Speaker 1: at that point, Netflix would have a lot more leverage 37 00:02:34,360 --> 00:02:36,840 Speaker 1: when negotiating with studios if it was the one and 38 00:02:36,919 --> 00:02:41,079 Speaker 1: only place where customers could go to watch stuff online, 39 00:02:41,320 --> 00:02:45,320 Speaker 1: and studios hate when leverage is given to anyone else. 40 00:02:45,320 --> 00:02:49,160 Speaker 1: See also the Writer's Guild of America Strike. Lots of 41 00:02:49,200 --> 00:02:53,360 Speaker 1: other streaming services would upear over the next decade and 42 00:02:53,360 --> 00:02:56,040 Speaker 1: a half. Some of them were the product of collaboration. 43 00:02:56,320 --> 00:03:00,320 Speaker 1: Hulu initially was I'll talk a little bit about who 44 00:03:00,520 --> 00:03:04,639 Speaker 1: later on in the episode. Some streaming services launched as 45 00:03:04,639 --> 00:03:08,880 Speaker 1: an extension of a television or cable channel, so eventually 46 00:03:08,880 --> 00:03:12,320 Speaker 1: you would get things like Peacock or HBO Max or 47 00:03:12,360 --> 00:03:16,320 Speaker 1: Disney Plus or Paramount Plus, which draws heavily from CBS, 48 00:03:16,880 --> 00:03:21,040 Speaker 1: and lots more, including ones that aren't extension of media companies, 49 00:03:21,440 --> 00:03:25,120 Speaker 1: like things like Amazon Prime Video and Apple TV Plus. 50 00:03:25,840 --> 00:03:29,120 Speaker 1: There are so many streaming services now that if you 51 00:03:29,240 --> 00:03:32,720 Speaker 1: subscribed to all of them, you would be probably paying 52 00:03:32,760 --> 00:03:34,480 Speaker 1: more per month than you would if you went with 53 00:03:34,520 --> 00:03:38,920 Speaker 1: one of those gargantuan cable TV packages. The landscape is 54 00:03:39,000 --> 00:03:43,400 Speaker 1: crowded and it's complicated. I mean, sure, if all you 55 00:03:43,520 --> 00:03:47,160 Speaker 1: consume are Disney films, and let's be honest, the way 56 00:03:47,200 --> 00:03:49,480 Speaker 1: we're going, pretty soon every movie is going to be 57 00:03:49,520 --> 00:03:52,840 Speaker 1: a Disney movie because the Mousehouse just gobbles up everything. Well, 58 00:03:53,280 --> 00:03:56,000 Speaker 1: if that's all you do, then Disney Plus might be 59 00:03:56,120 --> 00:03:58,680 Speaker 1: all you need. But most of us are likely to 60 00:03:58,720 --> 00:04:02,320 Speaker 1: find ourselves subscribing to, or at least wanting to subscribe 61 00:04:02,360 --> 00:04:05,920 Speaker 1: to a few different services to get access to all 62 00:04:05,960 --> 00:04:09,400 Speaker 1: the stuff we like, and even then we're probably giving 63 00:04:09,480 --> 00:04:12,119 Speaker 1: up on a couple of things. For example, I think 64 00:04:12,160 --> 00:04:16,640 Speaker 1: at this point, I have Netflix, I have Amazon Prime, 65 00:04:16,960 --> 00:04:20,479 Speaker 1: I have Apple TV Plus, I have Disney Plus, I 66 00:04:20,520 --> 00:04:25,400 Speaker 1: have HBO Max. That might be at oh, I've got Peacock. 67 00:04:26,640 --> 00:04:28,920 Speaker 1: So like, that's ridiculous, right, I Mean there are ties 68 00:04:28,920 --> 00:04:30,760 Speaker 1: where I sit there and think, do I really need 69 00:04:30,800 --> 00:04:33,640 Speaker 1: all these answers? No, I don't need them all, but 70 00:04:34,400 --> 00:04:37,280 Speaker 1: there are programs that I can only watch through one 71 00:04:37,400 --> 00:04:41,039 Speaker 1: of those services, and there's not really other alternative. So 72 00:04:41,080 --> 00:04:43,359 Speaker 1: there I go. Now, the last couple of years have 73 00:04:43,400 --> 00:04:46,359 Speaker 1: shown us that on the business side, if we go 74 00:04:46,400 --> 00:04:48,480 Speaker 1: to the other side, yeah, things kind of stink if 75 00:04:48,480 --> 00:04:51,680 Speaker 1: you're a consumer because they're all these different competing services. 76 00:04:52,040 --> 00:04:54,560 Speaker 1: But on the other side, things aren't that rosy either. 77 00:04:55,040 --> 00:04:58,560 Speaker 1: While the consumer struggles with which services they're gonna subscribe 78 00:04:58,600 --> 00:05:02,760 Speaker 1: to or pass up, the media companies behind the services 79 00:05:02,800 --> 00:05:05,679 Speaker 1: are trying to carve out a profitable path while also 80 00:05:05,760 --> 00:05:10,039 Speaker 1: competing with one another. Now, maybe that involves producing new 81 00:05:10,160 --> 00:05:13,440 Speaker 1: films and shows that are exclusively for the streaming service. 82 00:05:13,800 --> 00:05:17,440 Speaker 1: Maybe it involves securing licensing for old favorites before a 83 00:05:17,600 --> 00:05:19,640 Speaker 1: rival can do it, though a lot of that stuff 84 00:05:19,720 --> 00:05:23,839 Speaker 1: ends up getting sewn up in existing libraries. Maybe it 85 00:05:23,960 --> 00:05:27,000 Speaker 1: means taking some stuff off the service so that you 86 00:05:27,000 --> 00:05:30,320 Speaker 1: know you're not paying people who made it over and 87 00:05:30,320 --> 00:05:34,960 Speaker 1: over the residuals. Cough. David Zaslov does this a lot, cough. 88 00:05:35,640 --> 00:05:41,800 Speaker 1: The point is, the streaming service business is really, really tough. 89 00:05:41,880 --> 00:05:44,599 Speaker 1: I mean it's great when you're on a meteoric rise. 90 00:05:44,680 --> 00:05:47,920 Speaker 1: You know, you launch, people find you, they talk you up. 91 00:05:48,279 --> 00:05:53,520 Speaker 1: Your subscription rates soar. You're just doing gangbusters. It's growth 92 00:05:53,520 --> 00:05:57,160 Speaker 1: all the way, baby. But eventually you start to hit 93 00:05:57,200 --> 00:06:00,440 Speaker 1: a plateau and fewer people are signing up this quarter 94 00:06:00,520 --> 00:06:03,760 Speaker 1: compared to last quarter, or worse, you might hit a 95 00:06:03,800 --> 00:06:06,680 Speaker 1: point where you actually see subscriber numbers go down, and 96 00:06:06,720 --> 00:06:11,720 Speaker 1: that's super bad. Now, maybe you supplement your revenue by 97 00:06:11,800 --> 00:06:15,839 Speaker 1: showing ads against content. Maybe it's not just subscriptions. Maybe 98 00:06:15,920 --> 00:06:21,200 Speaker 1: advertisers offer some stuff for you as well. Maybe you 99 00:06:21,240 --> 00:06:24,080 Speaker 1: give customers options. Maybe they can subscribe it a higher 100 00:06:24,120 --> 00:06:27,560 Speaker 1: tier and they can get an ad free experience. That's 101 00:06:27,560 --> 00:06:30,120 Speaker 1: pretty common these days and then if they subscribe it 102 00:06:30,400 --> 00:06:33,400 Speaker 1: a lower tier, they're spending less per month, but they're 103 00:06:33,400 --> 00:06:36,679 Speaker 1: also having to sit through ads to watch the content 104 00:06:36,760 --> 00:06:40,400 Speaker 1: they want. You still have to balance costs with revenue, 105 00:06:40,440 --> 00:06:43,320 Speaker 1: and if you have to keep producing high quality content 106 00:06:43,680 --> 00:06:47,520 Speaker 1: to both attract and keep customers, you might find that 107 00:06:47,560 --> 00:06:50,600 Speaker 1: your profit margins are so thin they only have one side, 108 00:06:51,160 --> 00:06:53,920 Speaker 1: or maybe even that you're losing money. And if you're 109 00:06:54,000 --> 00:06:57,919 Speaker 1: seriously unlucky, you might find that you're on borrowed time, 110 00:06:58,200 --> 00:07:02,000 Speaker 1: that you're losing money, and there's no pathway out of that. 111 00:07:02,600 --> 00:07:04,359 Speaker 1: You know, the hope is that you scale up to 112 00:07:04,440 --> 00:07:08,520 Speaker 1: a point where you ultimately are making more money than 113 00:07:08,520 --> 00:07:13,560 Speaker 1: you're spending, but depending on how the landscape is, that 114 00:07:13,680 --> 00:07:16,520 Speaker 1: might not even be a possibility. So we're going to 115 00:07:16,560 --> 00:07:19,680 Speaker 1: take a look at some failed streaming services, ones that 116 00:07:20,240 --> 00:07:22,840 Speaker 1: made an effort to hang with the cool kids, but 117 00:07:23,000 --> 00:07:26,720 Speaker 1: ultimately flopped or faded away, as the case may be, 118 00:07:26,840 --> 00:07:32,160 Speaker 1: and in one case, stopped a month after it had started. Now, 119 00:07:32,160 --> 00:07:34,880 Speaker 1: I think I'm gonna start with a fairly recent example, 120 00:07:35,280 --> 00:07:38,720 Speaker 1: one that I talked about a lot as the service launched, faltered, 121 00:07:38,800 --> 00:07:43,200 Speaker 1: and then flopped. And that's quibi do you remember Quibi. 122 00:07:43,800 --> 00:07:49,520 Speaker 1: In case you don't, here's the deal. So Jeffrey Katzenberg, 123 00:07:49,800 --> 00:07:54,720 Speaker 1: who famously founded DreamWorks Animation after he left Walt Disney Studios. 124 00:07:55,160 --> 00:07:57,520 Speaker 1: That story is a crazy one, by the way, full 125 00:07:57,720 --> 00:08:03,160 Speaker 1: of like corporate drama, a lot of like like executives 126 00:08:03,640 --> 00:08:08,840 Speaker 1: being really bitter about each other. Unfortunately, it's the kind 127 00:08:08,840 --> 00:08:11,480 Speaker 1: of stuff that really blogs in a different kind of podcast. 128 00:08:11,560 --> 00:08:13,360 Speaker 1: So as much as I would love to gush about it, 129 00:08:13,400 --> 00:08:16,640 Speaker 1: I'm just gonna leave it here. Anyway, he decided he 130 00:08:16,680 --> 00:08:20,640 Speaker 1: wanted to create a short form, highly produced video delivery 131 00:08:20,680 --> 00:08:24,760 Speaker 1: platform aimed at the smartphone market. So you know, like 132 00:08:25,400 --> 00:08:31,080 Speaker 1: TikTok is a user generated platform, right, But what Katzenberg 133 00:08:31,160 --> 00:08:35,760 Speaker 1: wanted to do was make a studio produced version of 134 00:08:35,840 --> 00:08:39,400 Speaker 1: short form video platforms. So instead of it being you know, 135 00:08:39,920 --> 00:08:44,600 Speaker 1: some kid hitting on a really cool dance or something 136 00:08:44,760 --> 00:08:49,320 Speaker 1: and then getting virally famous, it would be studios making 137 00:08:49,440 --> 00:08:52,600 Speaker 1: content and then using this platform to distribute that content. 138 00:08:53,360 --> 00:08:57,200 Speaker 1: And you could sort of see the logic behind the 139 00:08:57,280 --> 00:09:01,240 Speaker 1: decision because people are on their phones a lot. They 140 00:09:01,280 --> 00:09:04,760 Speaker 1: are using their phones more and more to access entertainment, 141 00:09:04,880 --> 00:09:08,800 Speaker 1: and short form content works well in situations where you 142 00:09:08,920 --> 00:09:11,319 Speaker 1: might not have the time or desire to sit down 143 00:09:11,440 --> 00:09:14,840 Speaker 1: to an hour or more of video, so why not 144 00:09:14,920 --> 00:09:20,440 Speaker 1: create a platform specifically for that kind of audience. Katzenberg 145 00:09:20,640 --> 00:09:24,520 Speaker 1: founded QUIBI, which kind of stands for quick Bites. He 146 00:09:24,600 --> 00:09:27,920 Speaker 1: founded it in the summer of twenty eighteen. Originally it 147 00:09:28,000 --> 00:09:31,240 Speaker 1: had the name new TV, but it would change to 148 00:09:31,320 --> 00:09:34,520 Speaker 1: QUIBBI a little bit later. In twenty eighteen, he hired 149 00:09:34,720 --> 00:09:37,720 Speaker 1: Meg Whitman, who was the former CEO of Hewlett Packard, 150 00:09:38,200 --> 00:09:41,240 Speaker 1: and she became the CEO of Quibi, and Katzenberg and 151 00:09:41,240 --> 00:09:45,520 Speaker 1: Whitmen very quickly were making the rounds to various studios 152 00:09:45,840 --> 00:09:49,160 Speaker 1: in an effort to drive up investments for Quibi, and 153 00:09:49,200 --> 00:09:52,600 Speaker 1: they did. They raised like a billion dollars in the process. 154 00:09:53,160 --> 00:09:55,959 Speaker 1: So the plan was to get production ramped up in 155 00:09:56,000 --> 00:09:59,959 Speaker 1: twenty nineteen in preparation for a launch of the actual 156 00:10:00,240 --> 00:10:04,440 Speaker 1: platform in the spring of twenty twenty. The hope was 157 00:10:04,480 --> 00:10:07,520 Speaker 1: to create all sorts of different kinds of content across 158 00:10:07,559 --> 00:10:12,520 Speaker 1: all genres reality, television, comedy, action, everything, and that they 159 00:10:12,559 --> 00:10:16,000 Speaker 1: would take the form of stuff like short form television episodes, 160 00:10:16,080 --> 00:10:19,400 Speaker 1: so things that lasted like ten minutes, to films that 161 00:10:19,440 --> 00:10:23,439 Speaker 1: could be divided into ten minute long chapters, again, all 162 00:10:23,480 --> 00:10:26,920 Speaker 1: designed to be watched on your mobile device. In fact, 163 00:10:27,160 --> 00:10:30,280 Speaker 1: they even had this weird morphing technology where you could 164 00:10:30,440 --> 00:10:34,520 Speaker 1: watch content either in portrait or landscape mode, and your 165 00:10:34,559 --> 00:10:39,120 Speaker 1: experience of watching that program would depend upon what mode 166 00:10:39,160 --> 00:10:43,240 Speaker 1: you were using, because you would get different views. Like 167 00:10:43,280 --> 00:10:47,199 Speaker 1: it was shot with this in mind. It was kind 168 00:10:47,240 --> 00:10:51,000 Speaker 1: of it was really ambitious, but also kind of odd 169 00:10:51,400 --> 00:10:53,520 Speaker 1: to make that choice. It almost meant like you had 170 00:10:53,520 --> 00:10:56,240 Speaker 1: to make two versions of your movie in order to 171 00:10:56,280 --> 00:10:58,240 Speaker 1: do it so that way, like, if you're watching it 172 00:10:58,280 --> 00:11:01,600 Speaker 1: in portrait mode, you're not missing some pivotal piece of 173 00:11:01,640 --> 00:11:05,040 Speaker 1: information way off to the side in the frame, because 174 00:11:05,040 --> 00:11:07,000 Speaker 1: it wouldn't show up due to the fact that your 175 00:11:07,080 --> 00:11:13,240 Speaker 1: screen is vertical rather than horizontal. Anyway, they really pushed this, 176 00:11:13,559 --> 00:11:16,400 Speaker 1: and producing stuff takes a lot of money, right You 177 00:11:16,480 --> 00:11:20,240 Speaker 1: mentioned that earlier, like it is expensive to make studio 178 00:11:20,400 --> 00:11:23,760 Speaker 1: level content, highly produced content. Even if you're cutting corners, 179 00:11:23,760 --> 00:11:27,880 Speaker 1: it's still expensive. And meanwhile, the launch date was getting closer. 180 00:11:28,160 --> 00:11:31,640 Speaker 1: Now It is impossible for us to say if Quibi 181 00:11:32,240 --> 00:11:36,040 Speaker 1: would have survived if things had been a little different. Personally, 182 00:11:36,320 --> 00:11:38,880 Speaker 1: I think Quibi was doomed to fail no matter what, 183 00:11:39,720 --> 00:11:43,040 Speaker 1: But the decline may have taken a lot longer if 184 00:11:43,160 --> 00:11:46,640 Speaker 1: things had been very different in twenty twenty, because it 185 00:11:46,640 --> 00:11:49,240 Speaker 1: seems to me like the mobile focused approach really limited 186 00:11:49,320 --> 00:11:52,120 Speaker 1: Quibi's usefulness. But maybe it would have held on, and 187 00:11:52,160 --> 00:11:54,199 Speaker 1: maybe it would have even been a success. I'll never 188 00:11:54,240 --> 00:11:57,840 Speaker 1: be able to tell, but you know, something major happened 189 00:11:58,000 --> 00:12:01,280 Speaker 1: in twenty twenty. We had the COVID nineteen pandemic hit 190 00:12:01,800 --> 00:12:04,880 Speaker 1: and nearly everyone was stuck at home for a long time, 191 00:12:04,960 --> 00:12:09,040 Speaker 1: so the use case for Quibi was reduced significantly. I mean, 192 00:12:09,120 --> 00:12:11,680 Speaker 1: here was a product that was intended to go to 193 00:12:11,880 --> 00:12:15,280 Speaker 1: folks who were looking for some sort of entertainment while 194 00:12:15,280 --> 00:12:17,960 Speaker 1: they were like on a bus or on a subway 195 00:12:18,400 --> 00:12:20,839 Speaker 1: or standing in line, you know, doing all the things 196 00:12:20,840 --> 00:12:24,000 Speaker 1: that they could not do because they were stuck at home. 197 00:12:24,360 --> 00:12:27,240 Speaker 1: And at home they had access to tons of other 198 00:12:27,400 --> 00:12:32,960 Speaker 1: entertainment services that were designed to work with their lifestyles. 199 00:12:33,280 --> 00:12:35,960 Speaker 1: So trying to fit Quibbi in when they were no 200 00:12:36,040 --> 00:12:41,880 Speaker 1: longer in those use cases it just didn't really catch. Now. 201 00:12:41,960 --> 00:12:44,760 Speaker 1: At launch, Quibi did see quite a few downloads. I 202 00:12:44,760 --> 00:12:47,400 Speaker 1: think it hit like number three on the most popular 203 00:12:47,440 --> 00:12:50,160 Speaker 1: apps for the week that it debuted, but then the 204 00:12:50,200 --> 00:12:54,920 Speaker 1: following week, those download numbers dropped drastically. Signing up would 205 00:12:54,960 --> 00:12:57,400 Speaker 1: give you access to Quibi for three months for free, 206 00:12:57,520 --> 00:12:59,719 Speaker 1: and after that you were supposed to pay for a subscription. 207 00:13:00,120 --> 00:13:03,280 Speaker 1: So about three quarters of Quibi's users just opted to 208 00:13:03,360 --> 00:13:06,360 Speaker 1: bounce off the service rather than convert to a paid 209 00:13:06,400 --> 00:13:09,840 Speaker 1: subscription once their free trial was up. So the company 210 00:13:09,880 --> 00:13:12,560 Speaker 1: attempted to bail water out of the sinking boat, but 211 00:13:12,720 --> 00:13:15,600 Speaker 1: six months after going live, the writing was on the wall, 212 00:13:15,679 --> 00:13:18,760 Speaker 1: so in mid October twenty twenty, the Wall Street Journal 213 00:13:18,800 --> 00:13:21,080 Speaker 1: reported that Quibi was on the way out, and by 214 00:13:21,160 --> 00:13:25,000 Speaker 1: December of twenty twenty, the lights had gone off in Quibi. 215 00:13:25,440 --> 00:13:29,640 Speaker 1: Roku ended up purchasing Quibi's library, and thankfully creators retained 216 00:13:29,640 --> 00:13:32,240 Speaker 1: the rights to their intellectual property, which gave them the 217 00:13:32,320 --> 00:13:35,280 Speaker 1: chance to find some other platform to host their work. 218 00:13:35,559 --> 00:13:37,880 Speaker 1: We're going to talk about a different company later here, 219 00:13:38,160 --> 00:13:41,520 Speaker 1: where it's like the opposite of that to an extreme. 220 00:13:42,160 --> 00:13:44,840 Speaker 1: But yeah, Quibi came and went so fast it didn't 221 00:13:44,880 --> 00:13:49,480 Speaker 1: even say goodbye. Now there's a lot more we're going 222 00:13:49,520 --> 00:13:53,280 Speaker 1: to talk about today with various failed streaming services, But 223 00:13:53,360 --> 00:13:55,600 Speaker 1: before we get into all of that, so that we 224 00:13:55,760 --> 00:14:06,839 Speaker 1: don't fail. Let's take a quick break to thank our sponsors. 225 00:14:09,440 --> 00:14:13,640 Speaker 1: So yeah, Quibi. There were some major players in entertainment 226 00:14:13,640 --> 00:14:17,400 Speaker 1: behind the scenes, both directly working for Quibi and also 227 00:14:17,600 --> 00:14:21,240 Speaker 1: investing into the company. But our next example was an 228 00:14:21,280 --> 00:14:26,640 Speaker 1: actual extension of a truly massive media conglomerate. So NBC Universal, 229 00:14:26,720 --> 00:14:30,880 Speaker 1: which itself is a branch of Comcast, decided to dip 230 00:14:30,960 --> 00:14:34,680 Speaker 1: its corporate tow in the subscription based video on demand 231 00:14:34,800 --> 00:14:39,680 Speaker 1: service back in twenty fifteen. So a media executive named 232 00:14:39,800 --> 00:14:43,640 Speaker 1: Evan Shapiro led the charge, and the goal was to 233 00:14:43,680 --> 00:14:48,280 Speaker 1: create a video service centered around comedy. So the question 234 00:14:48,520 --> 00:14:52,640 Speaker 1: was could yuck yucks bring in the buck bucks. The 235 00:14:52,680 --> 00:14:55,960 Speaker 1: service would be called CISO, and it launched to a 236 00:14:56,000 --> 00:14:58,840 Speaker 1: small beta test in December twenty fifteen, but the actual 237 00:14:58,880 --> 00:15:03,800 Speaker 1: service went live in early twenty sixteen. Shapiro spared no 238 00:15:03,920 --> 00:15:06,600 Speaker 1: expense when it came to curating content for the service. 239 00:15:06,920 --> 00:15:11,360 Speaker 1: He wanted all things comedy, including older material like episodes 240 00:15:11,360 --> 00:15:15,040 Speaker 1: of Monty Python's Flying Circus or the Great Sketch show 241 00:15:15,120 --> 00:15:18,080 Speaker 1: The Kids in the Hall. That Saturday Night Live library 242 00:15:18,160 --> 00:15:19,920 Speaker 1: was part of it. Remember this was an extension of 243 00:15:20,040 --> 00:15:24,440 Speaker 1: NBC Universal. He also initially had eyes on making CISO 244 00:15:25,120 --> 00:15:29,440 Speaker 1: the exclusive platform to stream episodes of the Office and 245 00:15:29,520 --> 00:15:34,200 Speaker 1: Parks in rec Those plans would ultimately fall through, not 246 00:15:34,320 --> 00:15:38,080 Speaker 1: Shapiro's fault, really, but it was a part of his 247 00:15:38,160 --> 00:15:40,200 Speaker 1: plan where he thought, if we can do this, then 248 00:15:40,200 --> 00:15:44,320 Speaker 1: that's going to attract a huge base of users. He 249 00:15:44,400 --> 00:15:46,960 Speaker 1: made licensing deals left, right and center. He brought in 250 00:15:47,000 --> 00:15:49,920 Speaker 1: a ton of popular comedy under one roof, and he 251 00:15:49,960 --> 00:15:53,560 Speaker 1: also empowered his staff to produce original content for the 252 00:15:53,600 --> 00:15:58,280 Speaker 1: platform as well. NBC Universal was kind of using CISO 253 00:15:58,640 --> 00:16:01,480 Speaker 1: as a sort of experiment mental platform, the idea of 254 00:16:01,520 --> 00:16:05,880 Speaker 1: being that if a comedy centric video on demand service 255 00:16:06,000 --> 00:16:10,400 Speaker 1: and over the top streaming service, if that could work well, 256 00:16:10,480 --> 00:16:15,160 Speaker 1: then NBC Universal might launch other genre or interest specific 257 00:16:15,200 --> 00:16:19,480 Speaker 1: streaming platforms in the future, like maybe one based around horror. 258 00:16:19,560 --> 00:16:23,640 Speaker 1: Universal famously has a really deep horror library that they 259 00:16:23,720 --> 00:16:28,040 Speaker 1: keep trying to exploit in the modern era and often 260 00:16:28,080 --> 00:16:31,720 Speaker 1: failed to do so, or maybe like a streaming service 261 00:16:31,760 --> 00:16:35,400 Speaker 1: that's really focused on things like reality television programming, which 262 00:16:35,760 --> 00:16:38,760 Speaker 1: arguably can be scarier and more disturbing than horror is. 263 00:16:39,560 --> 00:16:43,720 Speaker 1: The cisow subscription was just three dollars ninety nine cents 264 00:16:43,760 --> 00:16:47,640 Speaker 1: per month, when it launched. The initial catalog was heavy 265 00:16:47,640 --> 00:16:50,320 Speaker 1: on stuff that comedy fans were likely to gravitate toward, 266 00:16:50,640 --> 00:16:55,480 Speaker 1: including a sizable library of British comedy that could actually 267 00:16:55,480 --> 00:16:57,640 Speaker 1: be a little tricky to access here in the United 268 00:16:57,680 --> 00:17:00,840 Speaker 1: States outside of some notable exceptions like everyone's heard of 269 00:17:01,400 --> 00:17:04,560 Speaker 1: Bonty Python's Flying Circus. But there are a lot of 270 00:17:04,600 --> 00:17:09,240 Speaker 1: other British comedies that the average American may not be 271 00:17:09,320 --> 00:17:12,720 Speaker 1: familiar with. Some of them are really famous. I mean, 272 00:17:13,280 --> 00:17:16,520 Speaker 1: like some you might have encountered on other channels like 273 00:17:16,600 --> 00:17:19,240 Speaker 1: Adult Swim showed The Mighty Boosh for a while, which 274 00:17:19,280 --> 00:17:24,040 Speaker 1: is a bizarre, absurd comedy series. And then there were 275 00:17:24,040 --> 00:17:26,480 Speaker 1: some sketch comedies, like one of my favorites was that 276 00:17:26,560 --> 00:17:32,119 Speaker 1: Mitchell and Weblook, which Netflix carried briefly and then it 277 00:17:32,160 --> 00:17:35,800 Speaker 1: became unaccessible to an American public. I finally ended up 278 00:17:35,800 --> 00:17:39,280 Speaker 1: breaking down and buying the British DVDs and a region 279 00:17:39,359 --> 00:17:41,960 Speaker 1: free DVD player so I could find I could watch 280 00:17:42,000 --> 00:17:45,480 Speaker 1: them again. But anyway, the goal of CISO was to 281 00:17:45,520 --> 00:17:49,159 Speaker 1: create original content. That was the long term goal, to 282 00:17:49,359 --> 00:17:52,880 Speaker 1: make its own content that would build its own following, 283 00:17:53,400 --> 00:17:56,000 Speaker 1: much like Netflix had done with things like Orangees of 284 00:17:56,000 --> 00:17:59,560 Speaker 1: the New Black and A House of Cards and Stranger Things. 285 00:18:00,080 --> 00:18:03,600 Speaker 1: Now every streaming services is following that same kind of philosophy. 286 00:18:03,920 --> 00:18:08,280 Speaker 1: So you use the library to first attract your ground 287 00:18:08,320 --> 00:18:11,879 Speaker 1: base of subscribers, and then you create original content to 288 00:18:11,920 --> 00:18:15,560 Speaker 1: attract new ones and to keep everybody there. Now, one 289 00:18:15,640 --> 00:18:19,760 Speaker 1: early mistake that the executives made over at SISO, though 290 00:18:19,760 --> 00:18:22,920 Speaker 1: according to Shapiro, was actually folks higher up at NBC 291 00:18:23,080 --> 00:18:26,199 Speaker 1: Universal that made this mistake, was to flinch at a 292 00:18:26,280 --> 00:18:29,480 Speaker 1: deal that would have made CISO the exclusive streaming home 293 00:18:29,560 --> 00:18:33,840 Speaker 1: for the Office. As I mentioned earlier, so Netflix was 294 00:18:33,880 --> 00:18:37,680 Speaker 1: really interested in having access to the Office. They really, 295 00:18:37,720 --> 00:18:42,199 Speaker 1: really really wanted it, and the plan was originally that 296 00:18:42,320 --> 00:18:45,520 Speaker 1: CISO was going to get the exclusive deal. But Netflix 297 00:18:45,560 --> 00:18:49,600 Speaker 1: made NBC Universal executives an offer they couldn't refuse, and 298 00:18:49,640 --> 00:18:54,120 Speaker 1: they agreed to let Netflix get access to those programs, 299 00:18:54,119 --> 00:18:57,600 Speaker 1: which meant SISO would not have that exclusivity. And even 300 00:18:57,600 --> 00:19:00,320 Speaker 1: if SISO were to show episodes of the Office, the 301 00:19:00,320 --> 00:19:02,639 Speaker 1: fact that you could already get it on Netflix and 302 00:19:02,680 --> 00:19:05,600 Speaker 1: a lot of people were already Netflix subscribers meant you 303 00:19:05,640 --> 00:19:09,520 Speaker 1: weren't going to lure Netflix users to SISO, just based 304 00:19:09,560 --> 00:19:13,240 Speaker 1: on the office, so one of the things that possibly 305 00:19:13,440 --> 00:19:17,600 Speaker 1: could have brought over a larger base of subscribers fell through. 306 00:19:18,119 --> 00:19:20,920 Speaker 1: On the flip side, it also meant that Ciso had 307 00:19:21,000 --> 00:19:25,680 Speaker 1: some budget freed up for making original content. Now apparently, 308 00:19:26,119 --> 00:19:29,040 Speaker 1: Shapiro initially was told that NBC Universal was going to 309 00:19:29,040 --> 00:19:32,959 Speaker 1: have this enormous marketing campaign to promote Ciso, like a 310 00:19:33,040 --> 00:19:37,359 Speaker 1: ten million dollar effort to highlight the service across the 311 00:19:37,400 --> 00:19:41,600 Speaker 1: company's various networks, But that really didn't manifest and Ciso 312 00:19:41,720 --> 00:19:47,199 Speaker 1: received relatively little marketing support, which not surprisingly meant that 313 00:19:47,240 --> 00:19:50,760 Speaker 1: subscription numbers were lackluster. I mean, it's hard to get 314 00:19:50,760 --> 00:19:53,520 Speaker 1: excited about subscribing to a service if you've never heard 315 00:19:53,520 --> 00:19:56,760 Speaker 1: of it, or if the promotion you see doesn't really 316 00:19:56,840 --> 00:20:00,399 Speaker 1: talk it up enough. Making matters worse is that Ciso 317 00:20:00,520 --> 00:20:04,600 Speaker 1: had its own video player that occasionally had technical issues 318 00:20:04,880 --> 00:20:08,000 Speaker 1: and wasn't compatible with some of the hardware consumers used 319 00:20:08,040 --> 00:20:12,440 Speaker 1: to access streaming content. So again, let's contrast this with Netflix. 320 00:20:12,880 --> 00:20:15,760 Speaker 1: Netflix had made a decision a long time ago to 321 00:20:16,040 --> 00:20:19,200 Speaker 1: pretty much make sure it was anywhere where there's a screen. 322 00:20:19,800 --> 00:20:23,080 Speaker 1: Netflix worked to create apps that were compatible with video 323 00:20:23,160 --> 00:20:28,879 Speaker 1: game consoles with streaming boxes connected to televisions to smart TVs. 324 00:20:29,400 --> 00:20:32,080 Speaker 1: In fact, like if you have a fridge that has 325 00:20:32,119 --> 00:20:34,520 Speaker 1: a video screen incorporated in it, there's a chance that 326 00:20:34,560 --> 00:20:38,280 Speaker 1: there's a Netflix app native for that particular device. But 327 00:20:38,440 --> 00:20:42,600 Speaker 1: Comcast's approach wasn't as broad a and this is kind 328 00:20:42,600 --> 00:20:46,960 Speaker 1: of a pun a spectrum as what Netflix was taking now. 329 00:20:47,000 --> 00:20:50,359 Speaker 1: CISO did end up joining Amazon's streaming partners program in 330 00:20:50,440 --> 00:20:53,480 Speaker 1: mid twenty sixteen. That helped a little. By the end 331 00:20:53,520 --> 00:20:56,600 Speaker 1: of twenty sixteen, it was finally compatible with Apple TV. 332 00:20:56,920 --> 00:20:58,879 Speaker 1: But you know, this was like a full year in 333 00:20:58,960 --> 00:21:03,000 Speaker 1: operation when these things started to click into place. While 334 00:21:03,040 --> 00:21:05,720 Speaker 1: CISO failed to take off to the moon, it did 335 00:21:05,800 --> 00:21:08,879 Speaker 1: grow in its second year, so in twenty seventeen it 336 00:21:08,920 --> 00:21:13,800 Speaker 1: began an upward trajectory for subscriber growth. The famous podcast 337 00:21:13,840 --> 00:21:16,400 Speaker 1: My Brother, My Brother, and Me launched a television show 338 00:21:16,520 --> 00:21:20,040 Speaker 1: on the network in twenty seventeen. They often joke about 339 00:21:20,040 --> 00:21:25,359 Speaker 1: how the CISO platform subsequently died on their podcast a lot, 340 00:21:25,680 --> 00:21:27,919 Speaker 1: But while they make jokes about it, their show was 341 00:21:27,960 --> 00:21:31,280 Speaker 1: not likely to have been a contributing factor to ciso's demise. 342 00:21:31,920 --> 00:21:34,959 Speaker 1: The service was spending a lot more money than it 343 00:21:35,040 --> 00:21:38,720 Speaker 1: was bringing in and Arguably this was necessary in order 344 00:21:38,760 --> 00:21:41,760 Speaker 1: to scale to a level that could compete with bigger, 345 00:21:41,880 --> 00:21:46,080 Speaker 1: more established services like Netflix, But a prestige show on 346 00:21:46,160 --> 00:21:51,160 Speaker 1: cso called There's Johnny About Johnny Carson may have been 347 00:21:51,160 --> 00:21:54,760 Speaker 1: the straw that broke NBC Universal's back. It was an 348 00:21:54,880 --> 00:21:58,720 Speaker 1: expensive show to produce and with the numbers headed in 349 00:21:58,760 --> 00:22:00,920 Speaker 1: the wrong direction, At least for the higher ups at 350 00:22:01,000 --> 00:22:04,879 Speaker 1: NBC Universal. It meant Evan Shapiro got his walk in 351 00:22:04,960 --> 00:22:09,280 Speaker 1: papers in May twenty seventeen. CISO kept on going for 352 00:22:09,320 --> 00:22:11,800 Speaker 1: a little bit, but it didn't last long. A couple 353 00:22:11,800 --> 00:22:14,520 Speaker 1: of months after Shapiro had left, SISO announced it would 354 00:22:14,560 --> 00:22:16,600 Speaker 1: be shutting down by the end of the year, and 355 00:22:16,640 --> 00:22:18,800 Speaker 1: it didn't even make it that far. It actually went 356 00:22:18,920 --> 00:22:24,560 Speaker 1: dark in mid November twenty seventeen. Ciso's failure is complicated. 357 00:22:24,600 --> 00:22:27,280 Speaker 1: It probably relates to a lot of different factors. One 358 00:22:27,320 --> 00:22:29,920 Speaker 1: is that it didn't get the marketing push it needed 359 00:22:29,920 --> 00:22:32,760 Speaker 1: from its parent company, a less an NBC Universal appears 360 00:22:32,760 --> 00:22:35,879 Speaker 1: to have learned because you can't turn around without running 361 00:22:35,920 --> 00:22:39,359 Speaker 1: into a promo for Peacock these days, so they've definitely 362 00:22:39,440 --> 00:22:43,240 Speaker 1: changed their tune on that. But for another SISO failed 363 00:22:43,280 --> 00:22:46,440 Speaker 1: to explore ad supported options, which potentially could have brought 364 00:22:46,480 --> 00:22:50,640 Speaker 1: in revenue to help offset the costs. Third, some of 365 00:22:50,680 --> 00:22:53,560 Speaker 1: the moves to produce original content might have been a 366 00:22:53,560 --> 00:22:56,960 Speaker 1: bit too ambitious so early on, Like it's really good 367 00:22:57,520 --> 00:23:00,640 Speaker 1: to have the goal to create prestige content, but it's 368 00:23:00,640 --> 00:23:03,040 Speaker 1: possible that the service needed the ground to be a 369 00:23:03,080 --> 00:23:07,680 Speaker 1: touch more firm before trying to create something like There's Johnny. 370 00:23:07,920 --> 00:23:10,680 Speaker 1: This is no shade on There's Johnny. I'm not saying 371 00:23:10,720 --> 00:23:13,760 Speaker 1: that that was a bad series by far, just that 372 00:23:14,560 --> 00:23:17,040 Speaker 1: it was. It was a big risk considering how much 373 00:23:17,080 --> 00:23:20,800 Speaker 1: it costs, and maybe the wise move would have been 374 00:23:20,880 --> 00:23:24,119 Speaker 1: to hold off just a bit longer to try and 375 00:23:24,640 --> 00:23:28,040 Speaker 1: establish a standing before going into it. It's hard to say, 376 00:23:28,600 --> 00:23:31,320 Speaker 1: like these things in hindsight, it's really easy to say 377 00:23:31,320 --> 00:23:32,840 Speaker 1: one way or the other. But at the time, I'm 378 00:23:32,880 --> 00:23:35,960 Speaker 1: sure these decisions were not easy ones. Some of the 379 00:23:36,000 --> 00:23:38,720 Speaker 1: content that was on CISO would end up going to 380 00:23:38,760 --> 00:23:43,960 Speaker 1: other platforms, including another one then no longer exists VRV 381 00:23:44,200 --> 00:23:48,159 Speaker 1: or VERVE. So the history of VRV or I'm just 382 00:23:48,200 --> 00:23:50,480 Speaker 1: gonna call it VERV why not. The history of VERV 383 00:23:50,560 --> 00:23:53,680 Speaker 1: is also pretty short. So for one thing, it launched 384 00:23:53,720 --> 00:23:56,919 Speaker 1: in late twenty sixteen, so CISO was wrapping up its 385 00:23:56,960 --> 00:23:59,840 Speaker 1: first year in twenty sixteen. That's when Verve launched, and 386 00:24:00,119 --> 00:24:03,199 Speaker 1: it was sort of a sister service to the anime 387 00:24:03,400 --> 00:24:08,560 Speaker 1: focused streaming platform called crunchy Roll. Crunchy Role still exists. 388 00:24:09,040 --> 00:24:13,320 Speaker 1: Verv was kind of a similar streaming service, but Crunchy 389 00:24:13,400 --> 00:24:16,920 Speaker 1: Role focused on anime. Verve would end up getting lots 390 00:24:16,920 --> 00:24:19,880 Speaker 1: of different content from all sorts of companies. They included 391 00:24:20,080 --> 00:24:23,920 Speaker 1: companies like Geek and Sundry, which was really a YouTube 392 00:24:23,920 --> 00:24:29,760 Speaker 1: studios channel. Rooster Teeth was another company that provided content 393 00:24:29,840 --> 00:24:33,240 Speaker 1: to VERV, and other partners included College Humor, which would 394 00:24:33,240 --> 00:24:36,920 Speaker 1: subsequently develop its own subscription streaming service called Dropout TV 395 00:24:38,720 --> 00:24:41,639 Speaker 1: Machinima dot Com, which we will talk about more in 396 00:24:41,680 --> 00:24:44,159 Speaker 1: a second. So there's a spoiler. We know Maine is 397 00:24:44,160 --> 00:24:46,800 Speaker 1: not gonna last forever. They were also a partner with VERV. 398 00:24:47,400 --> 00:24:50,320 Speaker 1: Shutter provided content to verv for a while. Shutter is 399 00:24:50,320 --> 00:24:55,159 Speaker 1: a horror based company Rifftracks, which is made up of 400 00:24:55,240 --> 00:24:57,480 Speaker 1: people who used to be part of Mystery Science Theater 401 00:24:57,600 --> 00:25:01,840 Speaker 1: three thousand. They partnered with VERV while and like crunchy Roll, 402 00:25:01,960 --> 00:25:05,720 Speaker 1: Verve wasn't over the top streaming service. It contained multiple 403 00:25:05,760 --> 00:25:10,800 Speaker 1: channels of content, ranging from animation to geeky lifestyle programming 404 00:25:11,119 --> 00:25:15,000 Speaker 1: to horror. So you could log into the little service, 405 00:25:15,119 --> 00:25:18,160 Speaker 1: you know, you subscribe to Verve and you could access 406 00:25:18,240 --> 00:25:22,639 Speaker 1: all this different stuff. So partners joined and dropped out 407 00:25:22,680 --> 00:25:25,840 Speaker 1: of Verve over the years, so it's actually really hard 408 00:25:25,880 --> 00:25:28,440 Speaker 1: to talk about what was on Verve because it all 409 00:25:28,480 --> 00:25:31,280 Speaker 1: depended upon what year it was. So, like I said, 410 00:25:31,280 --> 00:25:33,760 Speaker 1: at one point you had Shutter as part of Verve, 411 00:25:34,119 --> 00:25:38,240 Speaker 1: and then Shutter would leave Verve in twenty nineteen. That 412 00:25:38,320 --> 00:25:43,720 Speaker 1: same year, Nerdiced left Verve, Curiosity, Stream, Geek, and Sundry 413 00:25:43,760 --> 00:25:47,000 Speaker 1: they all left Verve in twenty nineteen, but others would 414 00:25:47,080 --> 00:25:50,600 Speaker 1: join the service. So there was this fluctuating list of 415 00:25:50,680 --> 00:25:54,520 Speaker 1: content that was available throughout its short history. Makes it 416 00:25:54,600 --> 00:25:56,800 Speaker 1: a little difficult to talk about Verve because it's not 417 00:25:56,840 --> 00:26:00,280 Speaker 1: like there was a central identity you could easily point out, 418 00:26:00,720 --> 00:26:04,160 Speaker 1: because it was serving as a distribution platform for lots 419 00:26:04,160 --> 00:26:07,760 Speaker 1: of different partners, and those partners kept changing. By early 420 00:26:07,800 --> 00:26:11,520 Speaker 1: twenty twenty two, all those partners were pretty much gone. 421 00:26:12,000 --> 00:26:15,240 Speaker 1: They had left after the terms of their licensing contracts expired, 422 00:26:15,840 --> 00:26:18,320 Speaker 1: and in March twenty twenty two, word got out that 423 00:26:18,440 --> 00:26:21,280 Speaker 1: verv was going to cease to exist to be its 424 00:26:21,359 --> 00:26:24,920 Speaker 1: own thing, it would merge with crunchy Roll. The Verve 425 00:26:24,920 --> 00:26:27,119 Speaker 1: app went dark just a couple of weeks before I 426 00:26:27,160 --> 00:26:30,760 Speaker 1: recorded this episode on May eighth, twenty twenty three. So 427 00:26:31,240 --> 00:26:36,399 Speaker 1: even the backup plan needed a backup plan, And this 428 00:26:36,440 --> 00:26:38,240 Speaker 1: really shows how challenging it could be to run a 429 00:26:38,320 --> 00:26:42,560 Speaker 1: streaming service successfully. Now, a lot of partners I mentioned 430 00:26:42,600 --> 00:26:45,359 Speaker 1: they still have their own platforms. Many of them are 431 00:26:45,400 --> 00:26:49,119 Speaker 1: part of much larger companies. So even though Verve doesn't 432 00:26:49,160 --> 00:26:52,320 Speaker 1: exist anymore, some of a lot of the partners that 433 00:26:52,440 --> 00:26:54,800 Speaker 1: worked with verv, they do still exist in one form 434 00:26:54,920 --> 00:26:58,840 Speaker 1: or another. So, for example, rooster Teeth, which initially launched 435 00:26:58,840 --> 00:27:02,320 Speaker 1: as a sort of independent content company, is today part 436 00:27:02,359 --> 00:27:06,600 Speaker 1: of Warner Brothers Discovery Shutter, the horror themed over the 437 00:27:06,640 --> 00:27:10,040 Speaker 1: top streaming services owned by ABC Networks, and it can 438 00:27:10,080 --> 00:27:13,120 Speaker 1: also be accessed not just through its own app, but 439 00:27:13,200 --> 00:27:21,399 Speaker 1: also through Amazon Video. So there are different places you 440 00:27:21,440 --> 00:27:23,880 Speaker 1: can find this content. You just can't go to one 441 00:27:23,960 --> 00:27:27,080 Speaker 1: central location and find it all there anymore, which is 442 00:27:27,080 --> 00:27:30,080 Speaker 1: part of the problem. Right. It's a big challenge we 443 00:27:30,200 --> 00:27:33,960 Speaker 1: consumers face is that we might hear about something we're 444 00:27:34,000 --> 00:27:36,920 Speaker 1: interested in. Just figuring out where the heck you can 445 00:27:36,960 --> 00:27:40,520 Speaker 1: get hold of that content can be a huge headache. 446 00:27:41,200 --> 00:27:43,520 Speaker 1: Figuring out, Hey, do I actually subscribe to the service 447 00:27:43,560 --> 00:27:45,399 Speaker 1: that runs this thing or am I going to have 448 00:27:45,400 --> 00:27:48,320 Speaker 1: to subscribe to something else? All Right, we're going to 449 00:27:48,400 --> 00:27:50,560 Speaker 1: take another quick break. When we come back, I've got 450 00:27:50,600 --> 00:28:04,040 Speaker 1: some more failed streaming platforms to talk about. We're back, 451 00:28:04,080 --> 00:28:07,600 Speaker 1: And as I said, I had mentioned Machinema earlier. By that, 452 00:28:07,680 --> 00:28:11,439 Speaker 1: I mean machinima dot com. It has also ceased to 453 00:28:11,520 --> 00:28:15,359 Speaker 1: be It operated for about twenty years before it went away, 454 00:28:15,880 --> 00:28:19,560 Speaker 1: and it's a fascinating story all by itself. And I'm 455 00:28:19,560 --> 00:28:21,399 Speaker 1: going to give a very brief one. I could do 456 00:28:21,480 --> 00:28:25,480 Speaker 1: a full episode about Machinima dot com because holy cow, 457 00:28:25,600 --> 00:28:27,720 Speaker 1: there's a lot to talk about, both from a tech 458 00:28:27,880 --> 00:28:32,200 Speaker 1: side and from a business side, and really a talent 459 00:28:32,320 --> 00:28:35,960 Speaker 1: side as well. Uh. It launched a ton of different shows, 460 00:28:35,960 --> 00:28:38,280 Speaker 1: including one that I still followed today, though you could 461 00:28:38,360 --> 00:28:41,160 Speaker 1: argue that the show I followed today is very different 462 00:28:41,200 --> 00:28:44,600 Speaker 1: from the show as it originated back in the Maschionama days. 463 00:28:45,000 --> 00:28:50,320 Speaker 1: But but Machinima is a portmanteau of machine and cinema, 464 00:28:50,560 --> 00:28:55,000 Speaker 1: or sometimes machine and anime. It typically refers to a 465 00:28:55,040 --> 00:28:59,800 Speaker 1: type of entertainment where you use computer generated characters, often 466 00:29:00,080 --> 00:29:03,800 Speaker 1: video game characters, and you use them like digital puppets, 467 00:29:04,120 --> 00:29:06,840 Speaker 1: and you tell a story, and that includes stories that 468 00:29:06,840 --> 00:29:10,520 Speaker 1: have nothing to do with the platform you're using, the 469 00:29:10,600 --> 00:29:13,640 Speaker 1: video game you're using. So in the old days, folks 470 00:29:13,640 --> 00:29:15,800 Speaker 1: did this just for the fun of it. They used 471 00:29:15,920 --> 00:29:20,000 Speaker 1: in game tools to cobble together and record short sketches 472 00:29:20,160 --> 00:29:24,160 Speaker 1: or stories. So typically your camera was provided by someone 473 00:29:24,200 --> 00:29:26,640 Speaker 1: who is recording their point of view as the story 474 00:29:26,680 --> 00:29:29,880 Speaker 1: played out, or maybe they were using in game tools 475 00:29:29,880 --> 00:29:34,520 Speaker 1: to position a virtual camera somewhere in an environment. Rooster Teeth, 476 00:29:34,600 --> 00:29:37,440 Speaker 1: which I mentioned earlier in this episode, had a monumentally 477 00:29:37,480 --> 00:29:41,120 Speaker 1: successful show in this genre called Red Versus Blue. They 478 00:29:41,240 --> 00:29:46,160 Speaker 1: used the Xbox game Halo as the foundation for that show. Anyway, 479 00:29:46,560 --> 00:29:52,920 Speaker 1: a mashinima creator named Hugh Hancock registered mashinema dot com 480 00:29:52,960 --> 00:29:55,760 Speaker 1: in two thousand. The site would serve as a place 481 00:29:55,800 --> 00:30:01,440 Speaker 1: for creators to store and make available their videos two thousand. 482 00:30:01,520 --> 00:30:06,160 Speaker 1: This was before YouTube. If you created digital video, you 483 00:30:06,240 --> 00:30:09,720 Speaker 1: had to host that somewhere online. Typically you would host 484 00:30:09,760 --> 00:30:12,120 Speaker 1: it on a server, and then people would have to 485 00:30:12,280 --> 00:30:15,480 Speaker 1: navigate to a web page and download the video in 486 00:30:15,600 --> 00:30:17,880 Speaker 1: order to watch it, because streaming was not really a 487 00:30:17,920 --> 00:30:22,040 Speaker 1: thing yet. So the website let creators tap into a 488 00:30:22,120 --> 00:30:25,080 Speaker 1: growing audience for the medium. So there became like this 489 00:30:25,160 --> 00:30:29,600 Speaker 1: kind of clearing house for machinema based entertainment, so people 490 00:30:29,680 --> 00:30:32,120 Speaker 1: knew where to go to get it, and then creators 491 00:30:32,160 --> 00:30:34,720 Speaker 1: had a place to put it so that they didn't 492 00:30:34,760 --> 00:30:37,480 Speaker 1: have to try and do everything themselves, you know, host 493 00:30:37,520 --> 00:30:39,960 Speaker 1: the material, market it, get people aware of it, that 494 00:30:40,040 --> 00:30:45,360 Speaker 1: kind of thing. But hosting media files is expensive, right, 495 00:30:45,480 --> 00:30:48,200 Speaker 1: especially if people are downloading them. That's a lot of 496 00:30:48,200 --> 00:30:51,920 Speaker 1: bills you have to pay. So Mashinima was making revenue 497 00:30:51,960 --> 00:30:54,960 Speaker 1: through an online store, so they would sell various types 498 00:30:54,960 --> 00:30:58,840 Speaker 1: of merchandise to fans, and they also sold ad space 499 00:30:59,080 --> 00:31:02,960 Speaker 1: on the site. And Hancock was pretty much responsible for 500 00:31:03,040 --> 00:31:07,040 Speaker 1: running the whole darn thing for about six years, and 501 00:31:07,240 --> 00:31:11,080 Speaker 1: in two thousand and six he decided that he needed 502 00:31:11,080 --> 00:31:14,120 Speaker 1: a rest. That he had been running it and did 503 00:31:14,120 --> 00:31:16,600 Speaker 1: about as much as he could as a single person, 504 00:31:17,120 --> 00:31:20,120 Speaker 1: so he sold it to the former operators of a 505 00:31:20,160 --> 00:31:25,600 Speaker 1: company called Creative Planet. Now not long after that you 506 00:31:25,760 --> 00:31:29,160 Speaker 1: had the impact of YouTube, And in two thousand and seven, 507 00:31:29,240 --> 00:31:33,480 Speaker 1: Mashinima established a YouTube channel and began to upload videos 508 00:31:33,560 --> 00:31:37,760 Speaker 1: to YouTube itself. The company became rather dependent on YouTube actually, 509 00:31:38,080 --> 00:31:41,880 Speaker 1: both as a place to store videos and to monetize them. 510 00:31:42,320 --> 00:31:46,440 Speaker 1: Mashinima grew rapidly. It hit one billion monthly video views 511 00:31:46,480 --> 00:31:51,600 Speaker 1: on YouTube in November twenty eleven. That is an incredible statistic. 512 00:31:52,160 --> 00:31:56,760 Speaker 1: Mashinima was one of the largest most successful channels on YouTube. 513 00:31:56,760 --> 00:31:58,400 Speaker 1: I think the only one that was ahead of it 514 00:31:58,600 --> 00:32:03,680 Speaker 1: was Vivo, the music video channel. It had incredible engagement. 515 00:32:03,680 --> 00:32:06,280 Speaker 1: People would go to Mashinema and stay there for more 516 00:32:06,320 --> 00:32:09,360 Speaker 1: than an hour. But the company was also spending money 517 00:32:09,600 --> 00:32:12,480 Speaker 1: very quickly, and in twenty twelve that caught up with 518 00:32:12,520 --> 00:32:15,240 Speaker 1: them and they had to make some cutbacks because they 519 00:32:15,240 --> 00:32:18,120 Speaker 1: were running out of cash. So they laid off more 520 00:32:18,160 --> 00:32:20,959 Speaker 1: than twenty employees, which doesn't sound like a lot of people, 521 00:32:21,240 --> 00:32:24,400 Speaker 1: but Mashinima was a lean operation that was like ten 522 00:32:24,440 --> 00:32:28,360 Speaker 1: percent of all staff at the time. Then there was 523 00:32:28,440 --> 00:32:30,880 Speaker 1: this expose and this is where I was really talking 524 00:32:30,880 --> 00:32:34,760 Speaker 1: about how Mashinima was different from Quibi. You know, like 525 00:32:34,880 --> 00:32:38,760 Speaker 1: Quibi creators, they retained intellectual property rights for their stuff. 526 00:32:39,360 --> 00:32:41,840 Speaker 1: That wasn't how it was a Machinema. So this expose 527 00:32:42,120 --> 00:32:45,880 Speaker 1: showed how predatory Mashinima could be. The Dallas Observer published 528 00:32:45,920 --> 00:32:49,800 Speaker 1: an article that said when creators were signed on with Mashinema, 529 00:32:50,360 --> 00:32:54,720 Speaker 1: they were agreeing to a lifelong contract that everything they 530 00:32:54,760 --> 00:32:59,800 Speaker 1: made from that point forward would essentially belong to Mashinema forever. 531 00:33:00,000 --> 00:33:02,600 Speaker 1: Even if they left the company, Mashinima would retain rights 532 00:33:02,600 --> 00:33:06,200 Speaker 1: to that and to all the stuff they made afterward. That, y'all, 533 00:33:06,360 --> 00:33:09,080 Speaker 1: is a bad deal. I mean pulling back the curtain. 534 00:33:10,040 --> 00:33:13,320 Speaker 1: iHeart owns the rights to text stuff, so if I 535 00:33:13,440 --> 00:33:16,320 Speaker 1: were ever to part ways with iHeart, I would not 536 00:33:16,480 --> 00:33:18,720 Speaker 1: be able to take tech stuff with me. It does 537 00:33:18,760 --> 00:33:22,120 Speaker 1: not belong to me. It belongs to iHeart. However, I 538 00:33:22,320 --> 00:33:26,160 Speaker 1: could still create my own shows later on, and those 539 00:33:26,200 --> 00:33:30,520 Speaker 1: would belong to me, because that's reasonable, right. But Mashinima's 540 00:33:30,520 --> 00:33:33,239 Speaker 1: agreements sounded like something out of a fairy tale, like 541 00:33:33,320 --> 00:33:36,800 Speaker 1: you belong to me forever. Like Ursula was in charge 542 00:33:36,800 --> 00:33:40,880 Speaker 1: of the contracts department at Mashinema. The company was growing 543 00:33:41,160 --> 00:33:44,600 Speaker 1: but also operating at a loss. In twenty fourteen, Warner 544 00:33:44,600 --> 00:33:48,880 Speaker 1: Brothers invested around fourteen million dollars in the company. Masha 545 00:33:48,960 --> 00:33:51,920 Speaker 1: got a new CEO in the form of Chad Gutstein, 546 00:33:52,440 --> 00:33:55,800 Speaker 1: He reorganized the company, He landed some licensing deals with 547 00:33:55,840 --> 00:33:58,520 Speaker 1: Warner Brothers, and he managed some other deals that have 548 00:33:58,720 --> 00:34:01,840 Speaker 1: ultimately tempted Warner brook There's even more, and in twenty sixteen, 549 00:34:02,800 --> 00:34:08,480 Speaker 1: Mashinima accepted a buyout offer for one hundred million smackaroos. 550 00:34:09,600 --> 00:34:13,960 Speaker 1: So Gutstein joins in twenty fourteen and twenty sixteen, he says, 551 00:34:14,360 --> 00:34:17,360 Speaker 1: my job here is done, and he leaves because he 552 00:34:17,560 --> 00:34:22,360 Speaker 1: was essentially leading the company toward this acquisition, and Russell Aerins, 553 00:34:22,400 --> 00:34:25,000 Speaker 1: who was a Warner Brothers executive, became the new head 554 00:34:25,000 --> 00:34:28,279 Speaker 1: of Mashinema. By the way, this is also around the 555 00:34:28,280 --> 00:34:33,080 Speaker 1: same time when AT and T acquired Warner Brothers and 556 00:34:33,200 --> 00:34:37,160 Speaker 1: formed Warner Media. It is weird to think that it 557 00:34:37,320 --> 00:34:42,080 Speaker 1: hasn't been that long since AT and T bought Warner Brothers, 558 00:34:42,640 --> 00:34:47,000 Speaker 1: much less than divested itself of Warner Brothers, where Warner 559 00:34:47,000 --> 00:34:49,759 Speaker 1: Brothers then merged with Discovery. It's crazy how much has 560 00:34:49,840 --> 00:34:54,000 Speaker 1: changed in just in less than a decade. It's it's bonkers, 561 00:34:54,440 --> 00:34:59,040 Speaker 1: all right. So anyway, WarnerMedia reorganized and put Mashinima under 562 00:34:59,040 --> 00:35:03,960 Speaker 1: a division call Otter Media. This was in December twenty eighteen. 563 00:35:04,200 --> 00:35:09,000 Speaker 1: Another company that was under Otter Media Rooster Teeth. Well. 564 00:35:09,040 --> 00:35:12,440 Speaker 1: Then just a few weeks later, on January nineteenth, twenty nineteen, 565 00:35:12,600 --> 00:35:16,640 Speaker 1: Otter Media wiped all of Mashinima's YouTube videos off the 566 00:35:16,800 --> 00:35:21,000 Speaker 1: face of the earth, like the whole channel was nuked 567 00:35:21,000 --> 00:35:23,800 Speaker 1: from orbit. It's the only way to be sure. Every 568 00:35:23,840 --> 00:35:27,640 Speaker 1: single video was deleted or at least removed from public view. Then, 569 00:35:27,719 --> 00:35:30,359 Speaker 1: at the beginning of February twenty nineteen, word got out 570 00:35:30,360 --> 00:35:35,040 Speaker 1: that Otter Media had laid off every single Machinema employee. 571 00:35:35,080 --> 00:35:39,799 Speaker 1: All eighty plus of them were fired or moved to 572 00:35:39,840 --> 00:35:43,560 Speaker 1: a different division within Otter Media. So what gets Why 573 00:35:43,680 --> 00:35:46,560 Speaker 1: was Machinima wiped out like that? Well, the idea was 574 00:35:46,600 --> 00:35:51,080 Speaker 1: to consolidate digital media offerings in WarnerMedia, so the company 575 00:35:51,239 --> 00:35:54,440 Speaker 1: owned a whole bunch of different digital media production companies 576 00:35:54,440 --> 00:35:59,120 Speaker 1: and channels like a bunch, including Rooster Teeth, Full Screen, 577 00:35:59,320 --> 00:36:03,160 Speaker 1: crunchy Roll. Warner would later sell Crunchy Role to Sony 578 00:36:03,239 --> 00:36:06,960 Speaker 1: in twenty twenty, and they just wanted to kind of 579 00:36:07,080 --> 00:36:09,640 Speaker 1: streamline things they felt like there was too much overlap. 580 00:36:10,320 --> 00:36:13,439 Speaker 1: It probably ended up being for the best, because, as 581 00:36:13,480 --> 00:36:16,439 Speaker 1: we all know, Discovery would acquire Warner Brothers after AT 582 00:36:16,520 --> 00:36:19,120 Speaker 1: and T decided that its earlier decision to buy the 583 00:36:19,120 --> 00:36:23,640 Speaker 1: company was a booboo, and knowing how David zaslovorx I imagined, 584 00:36:23,560 --> 00:36:26,080 Speaker 1: Mishinima would have been an early candidate for the chopping 585 00:36:26,120 --> 00:36:29,359 Speaker 1: block in an effort to reduce costs if it had 586 00:36:29,480 --> 00:36:33,160 Speaker 1: still been a thing. On a similar note, here in Atlanta, 587 00:36:33,440 --> 00:36:37,440 Speaker 1: we had a company called film Struck. Technically this was 588 00:36:37,480 --> 00:36:40,880 Speaker 1: a division under Warner Brothers and Turner Classic Movies. The 589 00:36:41,000 --> 00:36:45,600 Speaker 1: service launched in twenty sixteen with two tiers, so for 590 00:36:45,760 --> 00:36:48,120 Speaker 1: six dollars ninety nine cents a month, you would have 591 00:36:48,160 --> 00:36:52,360 Speaker 1: access to a basic digital library of various movies, mostly 592 00:36:52,440 --> 00:36:56,120 Speaker 1: film classics. But if you coughed up ten dollars ninety 593 00:36:56,200 --> 00:36:58,560 Speaker 1: nine cents a month, you would also have access to 594 00:36:58,640 --> 00:37:04,680 Speaker 1: the criterion collection libraries. There's lots of different, highly regarded movies, 595 00:37:05,000 --> 00:37:09,239 Speaker 1: so the whole concept behind this particular streaming platform was 596 00:37:09,280 --> 00:37:12,600 Speaker 1: to attract movie lovers who wanted to be able to 597 00:37:12,640 --> 00:37:16,200 Speaker 1: watch classics and foreign films and independent films the stuff 598 00:37:16,200 --> 00:37:20,879 Speaker 1: that you often can't find on most streaming platforms. They said, well, 599 00:37:20,880 --> 00:37:23,400 Speaker 1: here's the solution. We're going to make this platform and 600 00:37:23,440 --> 00:37:27,640 Speaker 1: you'll be able to access those titles here. The service 601 00:37:27,719 --> 00:37:31,360 Speaker 1: lasted two whole years and then shut down in twenty eighteen. 602 00:37:31,800 --> 00:37:34,680 Speaker 1: So why did it shut down? Well, remember how I 603 00:37:34,680 --> 00:37:37,960 Speaker 1: said AT and T merged with WarnerMedia. Well, part of 604 00:37:38,000 --> 00:37:41,439 Speaker 1: that process involved slimming down and streamlining things, and film 605 00:37:41,520 --> 00:37:45,560 Speaker 1: Struck was struck because it was seen as having a 606 00:37:45,640 --> 00:37:49,640 Speaker 1: limited appeal. It was a niche product, so it didn't 607 00:37:49,719 --> 00:37:53,400 Speaker 1: last at all due to corporate maneuvers. I mean that 608 00:37:53,520 --> 00:37:59,000 Speaker 1: was the reason why it died. So if that hadn't happened, 609 00:37:59,000 --> 00:38:01,200 Speaker 1: if the corporate manu had not been a thing, if 610 00:38:01,320 --> 00:38:04,200 Speaker 1: giant companies weren't trying to figure out what can we 611 00:38:04,239 --> 00:38:07,040 Speaker 1: strike from our record books to make this deal look better, 612 00:38:07,560 --> 00:38:11,960 Speaker 1: then would Film Struck have been a big success. Probably not, 613 00:38:12,160 --> 00:38:15,400 Speaker 1: but it might have done just fine, especially being supported 614 00:38:15,400 --> 00:38:20,520 Speaker 1: by a community of film lovers. But we're never gonna know. Also, 615 00:38:20,800 --> 00:38:24,080 Speaker 1: we had another streaming service launched out of Atlanta that 616 00:38:24,200 --> 00:38:27,879 Speaker 1: lasted a whole month and then it was a shock 617 00:38:27,920 --> 00:38:30,440 Speaker 1: when it got shut down. So in this case, and 618 00:38:30,600 --> 00:38:35,040 Speaker 1: it relates back to Warner again. I'm talking about CNN Plus, 619 00:38:35,520 --> 00:38:39,480 Speaker 1: the subscription based streaming service related to CNN, but it 620 00:38:39,560 --> 00:38:42,960 Speaker 1: was going to carry things like documentaries, TV specials, that 621 00:38:43,040 --> 00:38:45,560 Speaker 1: kind of thing, stuff that goes into much more depth 622 00:38:45,600 --> 00:38:48,480 Speaker 1: than would be a lot of original programming. The division 623 00:38:48,560 --> 00:38:52,600 Speaker 1: spit something like three hundred million dollars in building up 624 00:38:52,719 --> 00:38:55,520 Speaker 1: to the launch, because, as I mentioned, this sort of 625 00:38:55,560 --> 00:38:59,280 Speaker 1: production ain't cheap. Throughout twenty twenty one, it was gearing 626 00:38:59,400 --> 00:39:03,120 Speaker 1: up for this event. It actually launched on March twenty ninth, 627 00:39:03,239 --> 00:39:07,399 Speaker 1: twenty twenty two, and it didn't immediately crush it. It's 628 00:39:07,400 --> 00:39:10,640 Speaker 1: not like they suddenly were overwhelmed by subscribers, but you know, 629 00:39:10,920 --> 00:39:13,080 Speaker 1: they had just gotten started. But by the following month 630 00:39:13,080 --> 00:39:17,240 Speaker 1: it got shut down. So again this would be because 631 00:39:17,280 --> 00:39:22,480 Speaker 1: of David the Grim Reaper Zaslov because CNN was part 632 00:39:22,520 --> 00:39:26,560 Speaker 1: of Warner Brothers. Discovery merged with Warner Brothers after AT 633 00:39:26,640 --> 00:39:31,000 Speaker 1: and T bounced off of that partnership, and Zaslov needed 634 00:39:31,040 --> 00:39:33,800 Speaker 1: to take a serious swing at cutting costs because both 635 00:39:33,880 --> 00:39:37,920 Speaker 1: Discovery and Warner Brothers were in some fairly tough times. 636 00:39:38,200 --> 00:39:41,880 Speaker 1: So once upon a time, this show tech stuff was 637 00:39:41,920 --> 00:39:46,480 Speaker 1: actually part of Discovery Communications, and David Zaslov was CEO 638 00:39:46,600 --> 00:39:50,480 Speaker 1: of Discovery and now he's CEO of Warner Brothers Discovery. 639 00:39:50,640 --> 00:39:53,399 Speaker 1: So I got to see how things operated to a 640 00:39:53,440 --> 00:39:56,120 Speaker 1: certain extent. It's not like I was in the room 641 00:39:56,160 --> 00:39:59,440 Speaker 1: where it happens to quote Hamilton, but you know, I 642 00:39:59,520 --> 00:40:01,839 Speaker 1: was in the company, so I could kind of see 643 00:40:01,880 --> 00:40:05,920 Speaker 1: what was going on. And the cable business is really tough, 644 00:40:06,239 --> 00:40:08,640 Speaker 1: similar to streaming. You know, things are great when you're 645 00:40:08,640 --> 00:40:12,040 Speaker 1: pouring on subscribers. It's a money train at that point, baby, 646 00:40:12,440 --> 00:40:14,919 Speaker 1: All those monthly fees are pouring in throughout the year, 647 00:40:15,000 --> 00:40:19,200 Speaker 1: those big carriage deals with cable companies, they're huge and 648 00:40:19,520 --> 00:40:23,960 Speaker 1: they bring in billions of dollars. However, eventually you hit 649 00:40:24,040 --> 00:40:27,560 Speaker 1: saturation and it gets a lot harder to grow as 650 00:40:27,560 --> 00:40:31,839 Speaker 1: a company, and growth is what investors want. So yeah, 651 00:40:31,880 --> 00:40:33,759 Speaker 1: you could still be making huge amounts of money, but 652 00:40:33,760 --> 00:40:37,400 Speaker 1: if you're not growing, that's a problem. So Discovery was 653 00:40:37,480 --> 00:40:39,839 Speaker 1: kind of running up against that. Back when I was there. 654 00:40:39,920 --> 00:40:43,560 Speaker 1: The company was focusing a lot on establishing a presence 655 00:40:43,680 --> 00:40:47,440 Speaker 1: in countries where it previously didn't have service, like Central 656 00:40:47,440 --> 00:40:52,080 Speaker 1: America or South America, and it was because that represented 657 00:40:52,280 --> 00:40:54,879 Speaker 1: a place where it could actually grow. You couldn't really 658 00:40:54,920 --> 00:40:57,880 Speaker 1: grow in the United States because the Discovery channel was 659 00:40:57,920 --> 00:41:01,120 Speaker 1: already on pretty much all the different cable packages it 660 00:41:01,239 --> 00:41:05,319 Speaker 1: could be on in the US, so you're not really 661 00:41:05,360 --> 00:41:09,399 Speaker 1: growing there. Once you established your presence in a part 662 00:41:09,440 --> 00:41:13,480 Speaker 1: of the world that dried up so that you had 663 00:41:13,480 --> 00:41:16,680 Speaker 1: to go into different It almost becomes like colonization, but 664 00:41:17,480 --> 00:41:21,040 Speaker 1: through cable channels again, kind of similar to streaming, right, Like, 665 00:41:21,080 --> 00:41:25,759 Speaker 1: once you reach a saturation point where the people who 666 00:41:25,760 --> 00:41:29,479 Speaker 1: are likely to subscribe are already subscribed, you don't really 667 00:41:29,520 --> 00:41:33,719 Speaker 1: grow after that. That's a problem. So anyway, Zasov took 668 00:41:33,719 --> 00:41:37,080 Speaker 1: a look at CNN Plus's business plan and its performance figures, 669 00:41:37,120 --> 00:41:39,760 Speaker 1: and he said, well, there's no reason to keep this around. 670 00:41:39,800 --> 00:41:43,560 Speaker 1: It's super expensive, it's going to take forever for it 671 00:41:43,600 --> 00:41:47,200 Speaker 1: to reach a point where it might be profitable, and 672 00:41:47,239 --> 00:41:50,920 Speaker 1: in the meantime, we need to cut billions of dollars 673 00:41:50,920 --> 00:41:53,959 Speaker 1: off of our costs. So he shut it down after 674 00:41:54,000 --> 00:41:56,160 Speaker 1: it had been open for a month. Now, there's no 675 00:41:56,239 --> 00:41:59,040 Speaker 1: denying the service was costing Warner Brothers a lot of money, 676 00:41:59,040 --> 00:42:02,280 Speaker 1: and that subscribers have exactly gone gaga over it. Plus 677 00:42:02,320 --> 00:42:05,040 Speaker 1: both Warner Brothers and Discovery also already had their own 678 00:42:05,080 --> 00:42:08,880 Speaker 1: streaming services, which of course raises the possibility that it 679 00:42:08,920 --> 00:42:13,000 Speaker 1: could end up competing against itself in the market. You know, 680 00:42:13,200 --> 00:42:15,680 Speaker 1: maybe one streaming service is a little more expensive than 681 00:42:15,719 --> 00:42:18,319 Speaker 1: the others, but it doesn't have the number of subscribers 682 00:42:18,320 --> 00:42:20,920 Speaker 1: that it should because you've kind of already convinced people 683 00:42:20,920 --> 00:42:23,719 Speaker 1: to go to this other subscription service for less, even 684 00:42:23,760 --> 00:42:26,600 Speaker 1: though it's a different offering. That's a real issue, right, 685 00:42:26,680 --> 00:42:30,200 Speaker 1: So the plug got pulled. Now, there are lots of 686 00:42:30,200 --> 00:42:32,680 Speaker 1: other streaming services that didn't stick around. Like I didn't 687 00:42:32,680 --> 00:42:35,719 Speaker 1: even touch on Vine, which is another user generated one. 688 00:42:35,760 --> 00:42:38,200 Speaker 1: We've talked about that one in the past and how 689 00:42:38,320 --> 00:42:42,000 Speaker 1: Vine was kind of a precursor to Mega hit like TikTok. 690 00:42:42,640 --> 00:42:45,440 Speaker 1: But yeah, there are other examples, not just the highly 691 00:42:45,520 --> 00:42:48,800 Speaker 1: produced stuff that I focused on in this episode. Also, 692 00:42:49,280 --> 00:42:55,359 Speaker 1: a lot of these existing streaming services are headed toward consolidation, right, 693 00:42:55,480 --> 00:42:59,440 Speaker 1: Like we know that Discovery and HBO Max are becoming Max. 694 00:42:59,840 --> 00:43:03,280 Speaker 1: That Max is going to be this combination of material. 695 00:43:03,320 --> 00:43:05,840 Speaker 1: Although from why I understand, Discovery is still going to 696 00:43:05,840 --> 00:43:10,600 Speaker 1: continue to operate its own independent streaming service because there's 697 00:43:10,640 --> 00:43:14,160 Speaker 1: a fear that by combining, some of those subscribers will 698 00:43:14,200 --> 00:43:17,759 Speaker 1: just jump ship because they don't want the max stuff, 699 00:43:17,760 --> 00:43:20,960 Speaker 1: they don't want to spend more money on content, so 700 00:43:21,000 --> 00:43:23,040 Speaker 1: they might leave. So I think that both of those 701 00:43:23,080 --> 00:43:26,000 Speaker 1: are going to continue to exist. We found out not 702 00:43:26,120 --> 00:43:30,440 Speaker 1: long ago that Disney is merging Hulu and Disney Plus 703 00:43:30,480 --> 00:43:33,000 Speaker 1: into a single service by the end of this year, 704 00:43:33,480 --> 00:43:36,000 Speaker 1: and that the Disney Plus subscription, at least for the 705 00:43:36,040 --> 00:43:39,319 Speaker 1: ad free experience, will also be going up. So yeah, 706 00:43:39,360 --> 00:43:44,320 Speaker 1: we're still seeing stuff consolidate. We're seeing streaming services merge 707 00:43:44,360 --> 00:43:47,840 Speaker 1: together because I think all of them have come to 708 00:43:47,880 --> 00:43:52,319 Speaker 1: the same conclusion that it's clear there's a demand for 709 00:43:52,440 --> 00:43:56,000 Speaker 1: these services. It's clearer people want them, but it's also 710 00:43:56,080 --> 00:44:00,319 Speaker 1: clear that there are real challenges to making it a profitable, 711 00:44:00,640 --> 00:44:06,480 Speaker 1: scalable business while also producing you know, the content that's 712 00:44:06,520 --> 00:44:09,440 Speaker 1: going to keep people there, because that content is so 713 00:44:09,520 --> 00:44:13,880 Speaker 1: expensive and it's not like you know, serving ads against stuff. 714 00:44:13,920 --> 00:44:15,880 Speaker 1: I mean, even though some of these streaming services do 715 00:44:16,000 --> 00:44:19,320 Speaker 1: serve ads or have opportunities for people to subscribe it 716 00:44:19,360 --> 00:44:23,240 Speaker 1: an ad supported tier, but there's no like Box Office 717 00:44:23,960 --> 00:44:28,600 Speaker 1: for these streaming you know, pieces of content. So it's 718 00:44:28,640 --> 00:44:33,600 Speaker 1: it's harder to get it to monetize properly. You know. 719 00:44:33,640 --> 00:44:37,719 Speaker 1: It's the old models don't work on the streaming approach, 720 00:44:38,160 --> 00:44:40,600 Speaker 1: so new models need to be formed. And I think 721 00:44:40,600 --> 00:44:42,840 Speaker 1: we're still seeing that shake out, which is kind of 722 00:44:42,840 --> 00:44:46,440 Speaker 1: funny because, like I said, Netflix launched theirs way back 723 00:44:46,480 --> 00:44:49,399 Speaker 1: in two thousand and seven, not long after YouTube had 724 00:44:49,440 --> 00:44:53,600 Speaker 1: become a thing. So the fact that we've been around 725 00:44:53,600 --> 00:44:56,839 Speaker 1: this long with these streaming services and we're still trying 726 00:44:56,880 --> 00:44:59,359 Speaker 1: to figure out a way of making them, you know, 727 00:44:59,440 --> 00:45:02,279 Speaker 1: make money at a level where we're gonna get that 728 00:45:02,360 --> 00:45:06,400 Speaker 1: prestige content, it's really interesting. I don't think it's gonna change. 729 00:45:06,480 --> 00:45:08,600 Speaker 1: I don't think we're gonna lose these streaming services. We 730 00:45:08,680 --> 00:45:11,960 Speaker 1: might lose some of them when companies just can't afford 731 00:45:12,040 --> 00:45:15,120 Speaker 1: to continue the business. But I think that's still like 732 00:45:15,160 --> 00:45:18,439 Speaker 1: the future of entertainment for at least the near term. 733 00:45:19,600 --> 00:45:21,279 Speaker 1: But yeah, a lot of stuff's going to have to 734 00:45:21,280 --> 00:45:25,480 Speaker 1: shake out for it to be sustainable and to be profitable. 735 00:45:26,000 --> 00:45:28,560 Speaker 1: All Right, that's it for this episode. Like I said, 736 00:45:28,560 --> 00:45:30,560 Speaker 1: there were a ton of other streaming services, some of 737 00:45:30,600 --> 00:45:34,000 Speaker 1: which were more about audio streaming rather than video, but 738 00:45:34,040 --> 00:45:35,600 Speaker 1: there's a lot of others that we could talk about. 739 00:45:35,680 --> 00:45:38,200 Speaker 1: Maybe I will in future episodes, but I really wanted 740 00:45:38,200 --> 00:45:41,440 Speaker 1: to focus on these and kind of explore what went wrong. 741 00:45:41,719 --> 00:45:43,719 Speaker 1: A lot of times it wasn't the fault of the 742 00:45:43,719 --> 00:45:46,400 Speaker 1: people who were running the program. It was literally because 743 00:45:46,960 --> 00:45:50,440 Speaker 1: folks above them had to make some tough decisions while 744 00:45:50,800 --> 00:45:54,000 Speaker 1: there were all these mergers and acquisitions going on. So yeah, 745 00:45:54,200 --> 00:45:58,080 Speaker 1: tough story, but one that I think is worth examining. 746 00:45:58,920 --> 00:46:02,120 Speaker 1: I hope you are all doing well, and I will 747 00:46:02,160 --> 00:46:12,160 Speaker 1: talk to you again really soon. Tech Stuff is an 748 00:46:12,160 --> 00:46:17,680 Speaker 1: iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, 749 00:46:17,840 --> 00:46:24,480 Speaker 1: Apple Podcasts, or wherever you listen to your favorite shows.