WEBVTT - Ynon Kreiz 0:00:02.920 --> 0:00:05.240 Unon Cries is the see of Mattel, one of the 0:00:05.360 --> 0:00:08.240 leading toy companies in the world. It's the manufacturer of, 0:00:08.280 --> 0:00:10.960 among other products, the Barbie doll. I had a chance 0:00:10.960 --> 0:00:13.119 to sit down with the CEO recently talk about how 0:00:13.119 --> 0:00:16.520 he's trying to transform a traditional toy company into one 0:00:16.520 --> 0:00:20.880 that takes advantage of, among other technologies, artificial intelligence. Now, 0:00:20.920 --> 0:00:22.880 the toy world is not a world that I know 0:00:23.000 --> 0:00:25.800 that well. I do have some young grandchildren and get 0:00:25.880 --> 0:00:27.760 them some toys from time to time, but I don't 0:00:27.800 --> 0:00:30.440 really pay attention to where the toys are manufactured. My 0:00:30.600 --> 0:00:33.520 assumption is that most toys in the United States are actually 0:00:33.560 --> 0:00:36.720 manufactured overseas, and maybe a large number that was in China. 0:00:36.840 --> 0:00:38.960 Is that a fair assumption, that's correct. 0:00:38.960 --> 0:00:42.000 The industry average is about eighty twenty five percent of 0:00:42.120 --> 0:00:44.040 toys being made in China. 0:00:44.960 --> 0:00:45.880 Fu Mattel. 0:00:46.080 --> 0:00:50.879 We've been reducing and rebalancing a manufacturing footprint so that 0:00:51.440 --> 0:00:53.760 no one country by the end of twenty seven will 0:00:53.840 --> 0:00:57.000 represent more than twenty five percent of our global manufacturing. 0:00:57.680 --> 0:01:01.840 China represent for US today around thirty five percent of 0:01:01.840 --> 0:01:04.560 our global manufacturing. Relative to in this reverage of eighty 0:01:04.600 --> 0:01:08.880 twenty five percent. But this journey was not about China. 0:01:09.280 --> 0:01:14.120 It was about balancing and diversifying manufacturing footprint so that 0:01:14.160 --> 0:01:15.880 we're not dependent on any one country. 0:01:16.120 --> 0:01:18.880 As we talk today, President Trump is shortly going to 0:01:18.880 --> 0:01:22.520 be meeting with the President Cigping, presumably that deal with 0:01:22.560 --> 0:01:25.520 tariffs and other things. But today the tariffs that have 0:01:25.600 --> 0:01:29.080 been imposed on China has had adversely affected toy companies 0:01:29.080 --> 0:01:31.240 and particularly in MATEL. Well. 0:01:31.280 --> 0:01:33.840 At the start of the year, the issue was about 0:01:33.880 --> 0:01:38.400 cost impact of tariff on product. Then the question became 0:01:38.680 --> 0:01:42.880 what about consumer reaction to price increase in response to tariff. 0:01:43.560 --> 0:01:47.200 Now what we're seeing is that we companies have mitigated 0:01:47.240 --> 0:01:51.480 for the cost impact. Consumer demand for toys is growing, 0:01:52.120 --> 0:01:55.640 has been growing every quarter in the US and overseas. 0:01:56.280 --> 0:01:59.520 What we have seen is that retailers have postponed their 0:01:59.520 --> 0:02:01.880 decision and making orders to the very back end of 0:02:01.880 --> 0:02:04.520 the year. But seeing that there is demand, there is 0:02:04.600 --> 0:02:09.280 consumer demand, people are buying product at retailers. We expect 0:02:09.360 --> 0:02:13.359 to see a good Holia decision and a strong growth. 0:02:13.080 --> 0:02:13.880 Core of fu MATEL. 0:02:14.200 --> 0:02:16.680 Now about fifty percent of the tariffs that have been 0:02:16.680 --> 0:02:19.840 imposed by the federal government have not been passed along 0:02:19.880 --> 0:02:22.280 to customers. They are being absorbed by the people that 0:02:22.320 --> 0:02:24.880 are paying the tariffs. Are you absorbing a large part 0:02:24.880 --> 0:02:27.000 of the tariffs or are you passing along some of it? 0:02:27.520 --> 0:02:30.359 Well, we have several mitigating actions that we're taking. Much 0:02:30.400 --> 0:02:34.480 of it is about diversifying manufacturing footprint and using the 0:02:34.520 --> 0:02:37.720 fact that we are making product in seven different countries 0:02:38.240 --> 0:02:41.760 so you can optimize and modulate and create a flexible 0:02:41.800 --> 0:02:45.600 model that respond to tariff and shifting market conditions. And 0:02:45.639 --> 0:02:47.880 this is very much part of our journey to create 0:02:47.960 --> 0:02:50.200 a flexible sublition that is responsive. 0:02:50.400 --> 0:02:53.240 As the tariff have now come in and some extent 0:02:53.280 --> 0:02:55.160 there might be increased, it might be a decreased. But 0:02:55.200 --> 0:02:57.919 how has that changed your relationship with retailers? Are they 0:02:58.160 --> 0:03:00.720 absorbing the tariffs or you obs or in the tariffs 0:03:00.760 --> 0:03:01.320 or as it split. 0:03:02.160 --> 0:03:06.280 We work very closely with our retail partners. We are 0:03:06.480 --> 0:03:10.720 fundamentally a business to business company. We sell to the retailers, 0:03:10.840 --> 0:03:14.120 they sell to the consumers. But together we are trying 0:03:14.120 --> 0:03:18.040 to create a holistic experience that drives demand and we 0:03:18.200 --> 0:03:20.760 work with them to help them sell products. We spend 0:03:20.800 --> 0:03:25.840 significant resources in demand creation. We sell product as a 0:03:25.880 --> 0:03:30.080 company in five hundred thousand stores globally. This is just 0:03:30.120 --> 0:03:32.520 a brick and mortar business, not including online retail and 0:03:32.560 --> 0:03:37.120 e commerce. So understanding the retail landscape and working in 0:03:37.200 --> 0:03:41.280 close collaboration with our retail partners is core competence to 0:03:41.320 --> 0:03:43.360 what we do, and we do that really well. 0:03:43.400 --> 0:03:45.760 The most famous toy you probably have, I assume it's 0:03:45.800 --> 0:03:49.040 Barbie Doo. When was the Barbie doo actually invented? And 0:03:49.040 --> 0:03:51.320 why is it so popular for such a long period 0:03:51.320 --> 0:03:51.560 of time. 0:03:51.640 --> 0:03:56.600 Barbie was invented in nineteen fifty nine. But Barbie is 0:03:56.640 --> 0:04:00.240 so much more than a doll. Barbie is a pop 0:04:00.280 --> 0:04:04.400 culture icon. And we as a company, what we do 0:04:04.480 --> 0:04:09.000 really well is we keep our brands fresh, relevant, current 0:04:09.760 --> 0:04:14.080 and culturally relevant a clear a clear part of our 0:04:14.120 --> 0:04:18.760 playbook is infuse brand purpose and cultural relevance, the relevance 0:04:18.800 --> 0:04:21.720 into everything we do. And Barbie is the posted child 0:04:21.720 --> 0:04:22.680 of that strategy. 0:04:22.960 --> 0:04:25.560 All right, So there's the can dow, there's the Barbie down. 0:04:25.640 --> 0:04:27.200 It still is your biggest selling toy. 0:04:27.960 --> 0:04:31.080 Actually, Hot Wheels right now is a bigger selling product 0:04:31.160 --> 0:04:35.400 than Barbie. Hot Wheels was created eight years nine years 0:04:35.400 --> 0:04:38.880 sorry after Barbie, and Hot Wheels is very much about 0:04:39.000 --> 0:04:42.920 car culture. Hot wheels as a as a toy is 0:04:42.960 --> 0:04:46.039 the number one selling item in the industry. So these 0:04:46.040 --> 0:04:50.800 cars are performance cars. The race in orange tracks and 0:04:51.120 --> 0:04:56.120 around that we make content, video games, location based entertainment, 0:04:56.680 --> 0:05:02.720 car shows, races, and it's a whole encompassing experience around cars. 0:05:02.920 --> 0:05:06.120 Let's talk about film. Barbie had a movie a few 0:05:06.200 --> 0:05:08.960 years ago which turned out to be spectacularly successful, was 0:05:09.000 --> 0:05:12.159 nominated for Academy Awards, and it did incredible at the 0:05:12.160 --> 0:05:14.960 box office. I assume you were behind that because you 0:05:14.960 --> 0:05:16.719 have a background in that area. Was that your idea 0:05:16.720 --> 0:05:17.800 to do a Barbie. 0:05:17.440 --> 0:05:21.040 Film, Well, it was part of our strategy, and yes, 0:05:21.640 --> 0:05:24.359 three weeks after I started, after I joined the company, 0:05:24.800 --> 0:05:28.919 we started that journey. The goal was not simply to 0:05:29.000 --> 0:05:32.560 create a movie, and it wasn't a movie that was 0:05:32.560 --> 0:05:35.640 designed to sell toys. It was about creating a cultural event. 0:05:36.440 --> 0:05:39.159 And this movie went on to become one of the 0:05:39.160 --> 0:05:42.200 most successful movies of all time, and in fact, became 0:05:42.360 --> 0:05:46.200 Warner Brothers most successful movie at the box office ever 0:05:46.240 --> 0:05:47.120 in one hundred years. 0:05:47.680 --> 0:05:51.559 Now. Hollywood is not famous for doing sequels, right, so 0:05:51.760 --> 0:05:54.680 I assume there will be a sequel. Barbie and Barbie two, 0:05:54.680 --> 0:05:55.520 three and four right. 0:05:55.839 --> 0:05:58.400 Well, we always said we're looking to build film franchises. 0:05:58.720 --> 0:06:02.279 We haven't announced anything a second live action movie, but 0:06:02.400 --> 0:06:06.080 we have announced that we're developing an animated Barbie movie 0:06:06.120 --> 0:06:10.279 with Chris Maladandris Illumination, which is one of the most 0:06:10.320 --> 0:06:14.279 successful animated filmmakers of all time. So it's going to 0:06:14.320 --> 0:06:18.040 be a very exciting project that we'll reimagine Barbie in 0:06:18.080 --> 0:06:18.560 a new way. 0:06:18.960 --> 0:06:22.560 Now, in many companies, when there's a manufacturer product, the 0:06:22.640 --> 0:06:26.200 CEO tests the product and says works or not. So 0:06:26.200 --> 0:06:28.240 how do you say, yes, let's do this toy, or 0:06:28.360 --> 0:06:30.719 we're not going to do this toy. Who's your expert 0:06:30.760 --> 0:06:32.320 in deciding to do this or not? 0:06:32.520 --> 0:06:35.080 This is what we do as a company. 0:06:36.200 --> 0:06:40.520 We make product that engages and connects with people, and 0:06:40.640 --> 0:06:43.560 we have experts all over the world. We have people 0:06:43.560 --> 0:06:47.280 that specialize in different categories of product, and of course 0:06:47.320 --> 0:06:49.760 we do a lot of testing, a lot of trials 0:06:49.800 --> 0:06:54.159 and testing in our own labs, innovation labs, play labs. 0:06:54.600 --> 0:06:58.960 One such example that just recently came to life is 0:06:59.000 --> 0:07:02.919 a reinvention of the hot wheels orange tracks that have 0:07:02.960 --> 0:07:07.640 been around for decades, and we discovered through research that 0:07:07.720 --> 0:07:11.800 it's actually a little hard for young kids to connect parts, 0:07:12.160 --> 0:07:14.640 and we came up with a whole new system that 0:07:14.960 --> 0:07:18.360 is very simple and easy to connect with a snap 0:07:18.960 --> 0:07:21.480 just to one hand, and at the same time is 0:07:21.520 --> 0:07:24.200 actually higher performing in terms of speed the speed of 0:07:24.200 --> 0:07:26.280 the car that the cars can drive on the tracks. 0:07:26.840 --> 0:07:30.280 So it was a way to reimagine a tried and 0:07:30.360 --> 0:07:33.880 tested play pattern in new and exciting ways through research. 0:07:34.360 --> 0:07:37.440 When you have advertisement for toys, are you doing the 0:07:37.440 --> 0:07:40.600 advertisement so it appeals to a child four or five 0:07:40.720 --> 0:07:42.600 sixty seven or to the adult? How do you make 0:07:42.640 --> 0:07:45.200 the advertisements appear to both if possible, or just do 0:07:45.240 --> 0:07:48.080 you tag target just one age group, the children or 0:07:48.160 --> 0:07:48.640 the parent. 0:07:49.640 --> 0:07:52.000 We don't think of it in terms of advertising or 0:07:52.040 --> 0:07:56.960 even marketing. It's about demand creation. Children are the most 0:07:57.000 --> 0:08:00.440 sophisticated consumer out there. They can smell any thing that 0:08:00.520 --> 0:08:03.560 is not authentic a mile away. So whatever we do 0:08:04.160 --> 0:08:07.160 has to be authentic and connect to the brand values. 0:08:07.360 --> 0:08:10.080 So let's talk about most recently, you had earnings and 0:08:10.120 --> 0:08:12.480 your earnings didn't go quite what the analyst thought it 0:08:12.520 --> 0:08:14.800 was going to be. Is that always a problem with 0:08:14.840 --> 0:08:18.200 analysts or always have higher expectations and the reality, you. 0:08:18.120 --> 0:08:20.880 Know, we don't manage the company quarter by quarter. We 0:08:21.000 --> 0:08:23.400 guide it for certain numbers for the full year and 0:08:23.520 --> 0:08:27.000 we expect to meet those numbers. As I said that 0:08:27.000 --> 0:08:30.000 at the beginning, part of what is shaping this year 0:08:30.560 --> 0:08:35.040 is shifting orders by retailers to delay some of their decisions. 0:08:35.400 --> 0:08:38.959 So we saw a lesser third quarter and we expect 0:08:38.960 --> 0:08:40.160 a higher fourth quarter. 0:08:40.480 --> 0:08:43.160 So as people are getting ready to buy toys for 0:08:43.360 --> 0:08:46.960 Christmas season, what do you want them to know the 0:08:47.000 --> 0:08:49.320 most about what they should be buying in the toy world. 0:08:50.280 --> 0:08:52.880 You know, we are so proud of what we do 0:08:53.760 --> 0:08:57.080 Every Christmas. We create product that we believe stands out 0:08:57.600 --> 0:09:01.360 in a very crowded aisle, the toy isle, and our 0:09:01.480 --> 0:09:04.240 job is to continue to do things that will excite 0:09:04.240 --> 0:09:08.080 and delight fans and partner with our retailers to create 0:09:08.160 --> 0:09:10.920 an offering that will be very compelling. Of course, it's 0:09:10.960 --> 0:09:17.000 always about Barbie, Hot Wheels, American Girl, Fisher Price U, 0:09:17.160 --> 0:09:23.760 No Monster, High Endless collection across multiple price points. You 0:09:23.800 --> 0:09:27.600 can buy a Hot Wheels Dykas's car for a dollar 0:09:27.640 --> 0:09:31.160 twenty five, or you can buy a collector set that 0:09:31.240 --> 0:09:35.000 we did together with Daniel Arsham, a famous artist, for 0:09:35.120 --> 0:09:37.320 seven hundred dollars on matel creation. 0:09:38.160 --> 0:09:40.959 And when you're dealing with Christmas, you have to figure 0:09:40.960 --> 0:09:44.880 out you get new toys designed so that that's something different, 0:09:45.000 --> 0:09:47.320 or you get old, reliable toys that you know the 0:09:47.400 --> 0:09:49.440 parent is going to say, yes, this kid will like 0:09:49.480 --> 0:09:51.040 it because it's been around for a while. 0:09:51.480 --> 0:09:55.120 It's it's a combination of both, and it's art and science. 0:09:55.720 --> 0:09:59.920 There's no playbook and there's no predictable you know Panett 0:10:00.040 --> 0:10:02.080 patent that you try to follow in many ways, you 0:10:02.160 --> 0:10:06.079 invent and you create product and create the demand. But 0:10:06.240 --> 0:10:09.280 what we are seeing in a world of unlimited shelf 0:10:09.320 --> 0:10:15.640 space and ubiquitous distribution, the big brands win. The big 0:10:15.679 --> 0:10:18.800 brands that have the awareness and built in fan base 0:10:19.120 --> 0:10:20.439 always have the advantage. 0:10:21.040 --> 0:10:23.440 So if I could ask you the obvious question, what 0:10:23.559 --> 0:10:27.040 is somebody who was born in Israel, educated to some 0:10:27.120 --> 0:10:30.320 extent the United States, and really a media executive doing 0:10:30.360 --> 0:10:31.480 running a toy company. 0:10:32.080 --> 0:10:34.880 Well, the opportunity was to take a company that thought 0:10:35.520 --> 0:10:38.840 it's a toy manufacturing company and turn it into an 0:10:38.880 --> 0:10:39.640 IP company. 0:10:40.480 --> 0:10:42.120 We own one of the strongest. 0:10:41.679 --> 0:10:45.680 Portfolios in the world in children and family entertainment, and 0:10:45.720 --> 0:10:48.959 the opportunity that I saw that excited me was to 0:10:49.040 --> 0:10:52.480 come in and help the company capitalize and capture the 0:10:52.520 --> 0:10:56.559 full value of our intellectual properties outside of the toy isle, 0:10:56.960 --> 0:10:59.760 not instead of what we're doing toys, but in addition 0:10:59.800 --> 0:11:00.120 to that. 0:11:00.600 --> 0:11:03.680 So when you recruited to run Mattel, they had already 0:11:03.679 --> 0:11:05.920 had a lot of CEOs who didn't last. So why 0:11:05.920 --> 0:11:07.040 would you take this job? 0:11:08.120 --> 0:11:11.600 Yes, being the fourth CEO in four years is a 0:11:11.679 --> 0:11:15.800 challenging start, but I always believed in the company. I 0:11:15.920 --> 0:11:19.200 believed in the brands, and I really saw the potential 0:11:19.240 --> 0:11:22.200 of taking a company the thought it's in the manufacturing 0:11:22.280 --> 0:11:27.080 business and tended to become an IPA company. And today 0:11:27.440 --> 0:11:30.920 we're evolving even further from being an IPA company to 0:11:31.000 --> 0:11:34.640 being a brand management company. And in a world where 0:11:34.720 --> 0:11:38.920 everything revolves around big brands, this is a very exciting opportunity. 0:11:39.120 --> 0:11:41.400 Let's talk about your background for a moment. You don't 0:11:41.400 --> 0:11:44.400 have a Los Angeles accent where you live now, so 0:11:44.520 --> 0:11:46.760 let's talk about where you were born. Where were you born? 0:11:47.000 --> 0:11:50.080 I was born in Tel Aviv, Tel Aviv, and how 0:11:50.120 --> 0:11:50.960 long did you live there? 0:11:51.040 --> 0:11:52.040 I grew up in Israel. 0:11:52.200 --> 0:11:55.160 I lived there until I was twenty six, and then 0:11:55.200 --> 0:11:59.360 I came to America, went to Los Angeles to study 0:11:59.400 --> 0:12:04.040 business to UCLA, and I stayed in the US and 0:12:04.120 --> 0:12:05.760 lived in Europe ever since. 0:12:06.000 --> 0:12:07.959 So when you were a boy, what was your ambition 0:12:08.040 --> 0:12:09.679 to be a toy manufacturer or what. 0:12:10.920 --> 0:12:15.679 I was a very happy kid, into sports and outdoors 0:12:16.360 --> 0:12:21.280 and always wanted to get into business. When I grew up, 0:12:21.640 --> 0:12:26.160 I always had a map of the world in my bedroom. 0:12:26.520 --> 0:12:30.320 My mother came from England and her side of the 0:12:30.360 --> 0:12:34.240 family lived in the UK, and we used to have 0:12:34.559 --> 0:12:37.760 guests and friends from her side coming to Israel. And 0:12:37.840 --> 0:12:42.640 I was always fascinated meaning people from other countries, other places, 0:12:43.200 --> 0:12:46.240 and that probably formed part of my interest to do 0:12:46.360 --> 0:12:49.200 things that would be more global. 0:12:49.720 --> 0:12:53.240 But you were a champion athlete as a child, Is 0:12:53.280 --> 0:12:53.680 that true? 0:12:54.520 --> 0:12:59.280 I was an active athlete. I used to compete in swimming. 0:12:59.559 --> 0:13:03.560 I played soccer in the league. I got into water sports. 0:13:03.760 --> 0:13:05.800 Always did something to do with sports. 0:13:05.800 --> 0:13:09.280 Okay. So you went to university in Tel Aviv, Tel 0:13:09.280 --> 0:13:11.480 Aviv University, and what did you major? In? 0:13:11.760 --> 0:13:12.920 Economics and management? 0:13:13.160 --> 0:13:14.920 Okay? So you get your degree and you say to 0:13:14.960 --> 0:13:17.760 your parents, thank you for raising me here, but I'm 0:13:17.760 --> 0:13:19.760 going to move all the way to the United States. 0:13:19.760 --> 0:13:21.520 In fact, so far in the United States, it's going 0:13:21.559 --> 0:13:23.440 to be in California, so you maybe not see me 0:13:23.559 --> 0:13:25.360 too much anymore. Is that what you said? 0:13:25.440 --> 0:13:27.200 Pretty much? And what did they say? 0:13:27.840 --> 0:13:30.880 They say, we'll support you, We right behind you. It's 0:13:30.960 --> 0:13:33.200 what my mother did to her parents when she moved 0:13:33.200 --> 0:13:37.600 from London to Tel Aviv and ended up doing the 0:13:37.600 --> 0:13:38.640 same thing to her right. 0:13:38.720 --> 0:13:41.400 She went to business school at UCLA. When you showed 0:13:41.480 --> 0:13:43.640 up at UCLA where a lot of Israeli students there 0:13:43.679 --> 0:13:44.199 then or not. 0:13:44.360 --> 0:13:46.319 There were no no Israeli students. 0:13:46.000 --> 0:13:49.240 No no, So you said to them, I want to 0:13:49.240 --> 0:13:51.760 break into the movie business, and they said to you, 0:13:51.880 --> 0:13:55.600 nobody Jewish is in the movie business right the uh? 0:13:55.880 --> 0:13:59.480 You know, back in the day, it was a lot 0:13:59.520 --> 0:14:04.480 about making building connections and relationships. Of course, today with 0:14:04.559 --> 0:14:09.640 the advent of the Internet and availability of information, is 0:14:09.679 --> 0:14:11.240 a lot harder. Back in the day, you had to 0:14:11.280 --> 0:14:15.520 really find your way around, and I exactly did that. 0:14:15.840 --> 0:14:19.440 I interned at five different companies when I was a 0:14:19.480 --> 0:14:23.080 student at UCLA. With the calling card of an NBA student, 0:14:23.800 --> 0:14:26.720 you can open a few doors. But from then on 0:14:26.800 --> 0:14:29.840 it's about gaining the experience and building the relationships. 0:14:29.960 --> 0:14:32.280 You graduated what did you do when you graduated UCLA 0:14:32.320 --> 0:14:32.840 Business School. 0:14:33.000 --> 0:14:34.560 One of the things I did not want to do 0:14:34.880 --> 0:14:38.840 is to follow the bit and path of what NBA 0:14:38.880 --> 0:14:40.960 students use to do at the time, get a job 0:14:41.000 --> 0:14:45.440 in consulting or banking. I try to. I said, I 0:14:45.440 --> 0:14:49.400 would find my own thing or do something unique and 0:14:49.440 --> 0:14:53.880 different that is not in line with the business school playbooks. 0:14:53.880 --> 0:14:55.720 In other words, you didn't want to be something important 0:14:55.760 --> 0:15:00.800 like a private equity investor that's excited not to all right, 0:15:00.840 --> 0:15:02.800 and you didn't want to be a McKinsey consultant. So 0:15:03.160 --> 0:15:03.800 what did you do? 0:15:04.440 --> 0:15:09.080 I ended up as part of my networking meeting Heim Saban. 0:15:10.320 --> 0:15:13.600 A famous Israeli born businessman in the la right. But 0:15:13.800 --> 0:15:16.600 at the time and he just started to come out 0:15:16.640 --> 0:15:19.360 to the Power Rangers. He was not the hims Saban 0:15:19.440 --> 0:15:21.920 that you know today. It was actually an American friend 0:15:21.920 --> 0:15:24.600 who connected us. We spoke English in the beginning when 0:15:24.640 --> 0:15:29.080 we met. He was not looking for to hire anyone 0:15:29.120 --> 0:15:32.760 and I was not looking for a job. But within 0:15:32.800 --> 0:15:37.920 fifteen minutes there was a physical clique between us, and 0:15:37.920 --> 0:15:40.520 he said to me, why didn't you join me? I'll 0:15:40.560 --> 0:15:43.640 teach you everything about my company. I always say that 0:15:43.800 --> 0:15:47.960 I got my BA from Tel Aviv University, my MBA 0:15:48.080 --> 0:15:52.120 at UCLA, and my PhD with him. Saban now Heim 0:15:52.160 --> 0:15:55.080 Saban made a lot of money in cartoons. I think 0:15:55.080 --> 0:15:56.880 it was at one point he sold it I thank 0:15:56.960 --> 0:15:58.800 to Disney or it was it Disney or the Fox, 0:15:58.800 --> 0:16:00.800 I can't remember who he sold it to. He sold 0:16:00.840 --> 0:16:03.440 his UH cartoon company at a very good price and 0:16:03.480 --> 0:16:06.800 then stayed in UH. The m the motion picture book 0:16:06.800 --> 0:16:10.040 world and and the communications world. So you went into that. 0:16:10.200 --> 0:16:13.960 He had a small production company UH in Los Angeles. 0:16:14.920 --> 0:16:17.600 We ended up creating a joint venture with Fox that 0:16:17.760 --> 0:16:20.640 was called Fox Kids or Fox Family at the time. 0:16:21.160 --> 0:16:25.200 I moved to London to build the European business for 0:16:25.320 --> 0:16:27.760 him for this joint venture for him and group at 0:16:27.800 --> 0:16:31.520 Murdock at the time, and the UH opportunity was to 0:16:31.600 --> 0:16:36.840 create and launch children's channels in local languages across Spay 0:16:36.920 --> 0:16:40.800 television in Europe. This was the beginning of digital television 0:16:40.800 --> 0:16:44.080 in Europe and we ended up building a company that 0:16:44.320 --> 0:16:49.000 broadcasted children channels in over fifty countries and seventeen languages 0:16:49.600 --> 0:16:52.240 that we took priv We took public and eventually sold 0:16:52.240 --> 0:16:54.600 the whole group to Disney. 0:16:55.240 --> 0:16:58.200 And uh, what background did you have that qualified you 0:16:58.320 --> 0:16:58.920 to do all this? 0:17:00.800 --> 0:17:03.200 It's a question that I used to ask myself at 0:17:03.200 --> 0:17:07.840 the time, because the deetre for this joint venture was 0:17:07.880 --> 0:17:11.000 to take the success in the US and export it 0:17:11.040 --> 0:17:13.919 to the world. I was actually looking for someone to 0:17:14.280 --> 0:17:16.960 run this business, to build this business from scratch and 0:17:17.080 --> 0:17:20.160 run it, and we couldn't find the right person. And 0:17:20.200 --> 0:17:22.480 I was going down the list of candidates with time 0:17:22.560 --> 0:17:25.680 one day and no one was quite right for the job. 0:17:26.160 --> 0:17:30.080 And he said to me, you know what, why don't 0:17:30.320 --> 0:17:33.520 you do it? Why didn't you do it? And I said, 0:17:33.600 --> 0:17:37.000 you know what, I will. When will you start? I 0:17:37.160 --> 0:17:40.119 just did and I ended up we were on our 0:17:40.119 --> 0:17:41.960 way to New York at the time. I continued from 0:17:41.960 --> 0:17:45.399 New York to London, hired rented an office on my 0:17:45.440 --> 0:17:48.000 way to the airport in London, went straight from the 0:17:48.000 --> 0:17:50.879 airport to the office and launched the business. 0:17:51.400 --> 0:17:54.480 So a headhunter presumably called you and said, what about 0:17:54.560 --> 0:17:57.600 running a toy company? And you said, I don't really 0:17:57.640 --> 0:17:59.000 know toys, or you didn't say that. 0:17:59.040 --> 0:18:02.440 The opportunity in Mattel and what I was doing back 0:18:02.480 --> 0:18:06.760 then is much broader than that. I was not pay 0:18:06.840 --> 0:18:11.760 television executive per se. But we saw the opportunity of 0:18:11.880 --> 0:18:16.840 taking brands and building businesses around them, and leveraging the 0:18:16.920 --> 0:18:20.080 fandom and the relationship would have with people to create 0:18:20.119 --> 0:18:21.480 commercial enterprises. 0:18:21.880 --> 0:18:25.880 You're a toy manufacturer, but what percentage of your revenues, 0:18:25.960 --> 0:18:27.679 let's say five years from now, would you like to 0:18:27.680 --> 0:18:31.840 actually have revenues and er earnings coming from non toys, 0:18:31.880 --> 0:18:35.120 let's say pictures or motion picture television, things like that. 0:18:35.840 --> 0:18:39.679 We expect a significant amount of profit to come through entertainment. 0:18:40.040 --> 0:18:44.840 This is all of the activities around around the brands 0:18:44.840 --> 0:18:49.960 and IP. Most of this business is royalty driven, so 0:18:50.040 --> 0:18:53.320 you see most of the lift in profit, some in revenue, 0:18:53.320 --> 0:18:57.640 but mostly in profit. So much higher margin and better 0:18:57.760 --> 0:19:01.120 quality profit and growing at a significant rate. 0:19:01.480 --> 0:19:04.400 The toy that I remember brand that I remember buying 0:19:04.400 --> 0:19:07.400 a lot of toys was called Fisher Price, and the 0:19:07.400 --> 0:19:10.800 theory was that these were educational toys more than regular 0:19:10.840 --> 0:19:13.399 display toys. But is that what Fisher Price was about. 0:19:13.800 --> 0:19:19.240 Absolutely, Fisher Price is for obviously younger consumers, babies, toddlers, 0:19:20.600 --> 0:19:24.479 and infants, and this is about quality, trusted product that 0:19:24.560 --> 0:19:30.119 has deep educational and developmental value. We spend significant resources 0:19:30.200 --> 0:19:34.520 in defining and creating product that do exactly that. And 0:19:34.560 --> 0:19:39.000 we still have labs the headquarter of Fisher Prices in 0:19:39.080 --> 0:19:42.520 East Aurora, Upstate New York, and this is what the 0:19:42.560 --> 0:19:47.879 team does. This part of the industry is product driven 0:19:48.800 --> 0:19:51.920 where you sell to the parents under the umbrella of 0:19:51.960 --> 0:19:56.199 the Fisher Price brand, which stands for trust, quality and 0:19:56.680 --> 0:19:58.280 developmental values for the child. 0:19:58.400 --> 0:20:01.200 Now, every parent I know always says when their child 0:20:01.240 --> 0:20:04.240 is about six months old, my child might be a genius, 0:20:04.480 --> 0:20:05.600 really brilliant. 0:20:05.720 --> 0:20:10.359 You know the many proofs that play is a very 0:20:10.440 --> 0:20:15.639 important part of developing children, and we think about it 0:20:15.680 --> 0:20:19.240 all the time in terms of what patterns, what engagement 0:20:19.760 --> 0:20:22.320 can we do to develop children through play. 0:20:22.480 --> 0:20:25.520 When I talk to somebody, the question you invariably want 0:20:25.520 --> 0:20:29.120 to ask is how is artificial intelligence affecting your industry. 0:20:29.240 --> 0:20:32.760 We're very excited about AI. We just recently announced a 0:20:32.760 --> 0:20:37.280 partnership with open AI that has two parts. It's about 0:20:37.320 --> 0:20:39.760 how we work and how we do things in terms 0:20:39.800 --> 0:20:45.239 of infusing technology to accelerate innovation, invention and do what 0:20:45.280 --> 0:20:48.399 we do even better and faster. The other part is 0:20:48.480 --> 0:20:54.560 infusing technology into product and experiences and elevating and elevating 0:20:54.600 --> 0:20:56.960 the play pattern and creating something that would be even 0:20:57.000 --> 0:20:59.280 more attractive and more engaging to fans. 0:20:59.640 --> 0:21:02.080 What type of toys do you imagine would come out 0:21:02.119 --> 0:21:05.320 of a relationship with an artificial intelligence company. 0:21:05.520 --> 0:21:09.399 As we're being very mindful of creating product that will 0:21:09.600 --> 0:21:14.639 leverage and benefit from the technology, clearly thinking about safety, privacy, 0:21:14.680 --> 0:21:19.479 and other important issues when we think about product that 0:21:19.560 --> 0:21:24.840 infuses AI. This is not about an AI speaking Barbie. 0:21:25.920 --> 0:21:29.200 We're thinking of AI in other ways to elevate the 0:21:29.280 --> 0:21:33.600 play pattern and create experiences that are more engaging through technology. 0:21:33.760 --> 0:21:35.800 You had a Barbie movie, maybe you'll have another one. 0:21:36.080 --> 0:21:38.439 You have any other toys that might be made in 0:21:38.480 --> 0:21:40.720 the movies or theatrical presentations. 0:21:41.359 --> 0:21:44.040 Well, we are releasing next year in twenty twenty six 0:21:44.200 --> 0:21:49.200 two big movies Masses of the Universe, a big world 0:21:49.200 --> 0:21:53.640 creation superhero franchise that we are launching as a big 0:21:53.680 --> 0:21:57.919 movie in partnership with Amazon MGM, and right after that 0:21:58.520 --> 0:22:02.560 a movie based on Matchbak the Cars together with Skuidance. 0:22:03.400 --> 0:22:06.520 What will be interesting is for people to see the 0:22:06.920 --> 0:22:11.240 breadth of our offering from the Barbie Pink through the 0:22:11.320 --> 0:22:15.200 dark world of Eternia and everything in between. But it's 0:22:15.240 --> 0:22:18.480