WEBVTT - How One TV Startup Thrived in a Shrinking Syndication Market 0:00:00.320 --> 0:00:09.680 H M. Welcome to Strictly Business Varieties weekly podcast featuring 0:00:09.720 --> 0:00:13.600 conversations with industry leaders about the business of media and entertainment. 0:00:14.040 --> 0:00:18.360 I'm Cynthia Littleton, business editor for Variety Today. My guests 0:00:18.360 --> 0:00:21.319 in New York are Mort Marcus and Ira Bernstein, co 0:00:21.520 --> 0:00:26.440 presidents of Debmar Mercury. Debmar Mercury is now Lionsgate Syndication. 0:00:26.560 --> 0:00:29.800 Arm Mort and Ira are industry veterans who know the 0:00:29.840 --> 0:00:33.600 content licensing business inside and out. They've been partners since 0:00:33.640 --> 0:00:36.199 two thousand three, when they were brought together by the 0:00:36.280 --> 0:00:40.720 mission to sell South Park into broadcast syndication. Debmar Mercury 0:00:40.760 --> 0:00:43.920 today is active in first run syndication as the home 0:00:44.000 --> 0:00:47.720 of daytime TV staples, including The Wendy Williams Show and 0:00:47.840 --> 0:00:51.479 Family Feud. This fall, they're taking two big swings with 0:00:51.520 --> 0:00:53.760 the launch of a daily talk show hosted by Nick 0:00:53.840 --> 0:00:58.680 Cannon and a magazine show, Central Avenue from producer Will Packer. 0:00:59.160 --> 0:01:02.440 As always with and Ira, it's a lively discussion about 0:01:02.480 --> 0:01:05.720 the business of selling television shows and taking the pulse 0:01:05.720 --> 0:01:09.560 of the podcast TV landscape in big cities and the heartland. 0:01:10.080 --> 0:01:12.960 It's a fun and candid conversation from the leaders of 0:01:12.959 --> 0:01:16.280 one of the most successful TV startup businesses of the 0:01:16.319 --> 0:01:22.720 past fifteen years. Mart Marcus and Ira Bernstein of deb 0:01:22.760 --> 0:01:24.880 Mark Mercury, thank you so much for taking the time 0:01:24.920 --> 0:01:29.520 to speak with us. See here, this is a big 0:01:29.640 --> 0:01:32.400 year for deb Mark Mercury. You're taking two big swings 0:01:32.400 --> 0:01:35.240 in the fall in First Run Syndication. You've got a 0:01:35.280 --> 0:01:38.000 talk show with Nick Cannon, who is pretty much all 0:01:38.040 --> 0:01:41.040 over the airwaves these days, and you also have an 0:01:41.080 --> 0:01:45.480 interesting magazine type show called Central Avenue from producer Will Packer. 0:01:46.040 --> 0:01:49.960 Let's talk about what it is about this particular year 0:01:50.000 --> 0:01:52.720 that you see this coming fall, that you see opportunity. 0:01:53.200 --> 0:01:55.800 And let's talk about the First Run syndication marketplace, because 0:01:55.800 --> 0:01:58.760 it's been kind of a sleepy environment for the last 0:01:58.760 --> 0:02:02.200 couple of years, but you and other companies in the 0:02:02.280 --> 0:02:05.320 past twelve months have started to really bring some big 0:02:05.400 --> 0:02:07.720 name and some big talents out. What is it that 0:02:07.800 --> 0:02:12.920 you're seeing in First Run these days? Oh, you know, 0:02:13.040 --> 0:02:15.280 I it is a big year for us, but it's 0:02:15.320 --> 0:02:19.480 not We didn't time it to be. In other words, 0:02:19.520 --> 0:02:23.040 I think we're a little bit like sometimes if you 0:02:23.120 --> 0:02:25.480 have the right show, then you bring it out. So 0:02:26.200 --> 0:02:30.440 in this case, we we're lucky enough to find Nick 0:02:31.520 --> 0:02:34.400 Um and then we've been working on stuff with Will Packer, 0:02:34.600 --> 0:02:37.840 So it just it just coincides with the fact that 0:02:37.880 --> 0:02:40.040 they're coming out at the same time. Whenn't we We 0:02:40.040 --> 0:02:42.760 weren't saying, oh, let's put two shows on UM in 0:02:42.760 --> 0:02:46.160 the fall of twenty but look, we're just we're excited 0:02:46.160 --> 0:02:49.040 to have Nick. From a standpoint that a lot of 0:02:49.080 --> 0:02:53.799 times people do talk shows. Not everybody, but a lot 0:02:53.800 --> 0:02:55.120 of times they do. When you get some of the 0:02:55.160 --> 0:02:58.280 big names, they'll do talk shows when they're on the 0:02:58.280 --> 0:03:01.360 the downside of their career. Maybe they can no longer 0:03:01.360 --> 0:03:04.639 get a movie as often or a TV roll as often, 0:03:05.240 --> 0:03:08.200 and they kind of want to then come into the marketplace. 0:03:08.360 --> 0:03:10.839 I've always wanted to do a talk show. We're getting Nick, 0:03:12.080 --> 0:03:14.600 he's on the up in his career, so we're really 0:03:14.600 --> 0:03:17.040 excited about it. I think the issue is it's all 0:03:17.080 --> 0:03:18.720 kind of I mean, the bigger question is it was 0:03:18.760 --> 0:03:21.919 content driven, and we're developing stuff all the time. So 0:03:22.000 --> 0:03:26.520 I think when Nick substituted for Wendy, which was a 0:03:26.639 --> 0:03:30.079 year ago now, we were always developing shows, but we 0:03:30.120 --> 0:03:31.960 literally saw him do the show and we kind of 0:03:31.960 --> 0:03:33.960 looked at each other and said, oh my god, he 0:03:34.000 --> 0:03:36.280 looks like he's been doing this for twenty years. It's 0:03:36.320 --> 0:03:39.000 like it's natural. He's not nervous, he's fun, he's exciting. 0:03:39.200 --> 0:03:40.400 You want to listen to him, you want to see 0:03:40.440 --> 0:03:43.400 him again tomorrow. And so that's what started that conversation. 0:03:43.480 --> 0:03:45.320 It wasn't we got to have a new talk show 0:03:45.320 --> 0:03:47.360 for a fall twenty And then in the case of 0:03:47.400 --> 0:03:49.880 Central Avenue, we've been working with Will for a couple 0:03:49.920 --> 0:03:53.080 of years developing a number of different things. This one 0:03:53.320 --> 0:03:55.520 sort of bubbled to the top at this moment. We 0:03:55.640 --> 0:03:58.800 tested it with Fox. It did really well, but that 0:03:58.840 --> 0:04:01.440 was an example of the market actually was a little 0:04:01.440 --> 0:04:03.720 bit crowded, which is why we moved to do a 0:04:03.760 --> 0:04:07.800 weekend hour. So we kind of backed into the distribution 0:04:08.040 --> 0:04:11.480 form of that show because the market was crowded. But again, 0:04:11.520 --> 0:04:14.440 it was driven by the content that we happened to 0:04:14.520 --> 0:04:17.839 have created at that moment in time, not by we know, 0:04:17.920 --> 0:04:19.920 we need a show for Saturday night at eleven or 0:04:19.960 --> 0:04:23.479 seven o'clock. It was driven by the content and well, 0:04:23.600 --> 0:04:27.800 Nick is a call it alive. It may not be live, 0:04:27.839 --> 0:04:32.640 but a lot effectively alive. Daily UM one hour talk 0:04:32.680 --> 0:04:37.240 show Central Avenue was driven by what Iver said. We 0:04:37.320 --> 0:04:39.480 had a lot of it, spent a lot of time 0:04:39.600 --> 0:04:42.200 Will Packer trying to come up with ideas they wanted 0:04:42.240 --> 0:04:44.800 to do something with him, and we kind of looked 0:04:44.800 --> 0:04:50.080 at two things. One because there's no or so few 0:04:51.240 --> 0:04:55.040 sitcom's coming off the off of the network that stations 0:04:55.080 --> 0:04:58.400 can run. Most of the station was certainly the Fox, 0:04:58.880 --> 0:05:02.520 CW and mind Us stations make most of their money 0:05:02.960 --> 0:05:08.200 selling airing older sitcoms from six to eight o'clock at night, 0:05:08.240 --> 0:05:10.760 like Friends or Two a Man or something like that. 0:05:10.760 --> 0:05:14.760 That's the sweet spot for advertising and the most amount 0:05:14.760 --> 0:05:16.960 of money that you can make and when most people 0:05:17.000 --> 0:05:21.359 are watching TV, and those stations make a huge percentage 0:05:21.360 --> 0:05:24.240 of their profit from sixtight o'clock at night, and they're 0:05:24.279 --> 0:05:29.800 just aren't any new sitcoms to buy. So it's waning, 0:05:29.839 --> 0:05:32.760 has been waning for years. The hits are farther and 0:05:32.839 --> 0:05:35.919 farther between, and so what's happened is you start to 0:05:36.000 --> 0:05:41.799 look out into the two years not twenty two years away, 0:05:41.800 --> 0:05:47.400 but there's there's even less and so plus with the 0:05:47.480 --> 0:05:51.359 streaming services taking Friends in the Office and those things, 0:05:51.920 --> 0:05:53.840 and not even sure if they're gonna let them be on, 0:05:54.160 --> 0:05:56.000 or maybe they will, but the ratings will be lower. 0:05:56.839 --> 0:05:59.240 What are these stations going to run? And so when 0:05:59.240 --> 0:06:03.039 you start looking at availably from six to eight o'clock, 0:06:03.520 --> 0:06:06.800 we believe that the stations are going to be much 0:06:06.880 --> 0:06:10.120 more in the business of looking at brand new, original, 0:06:10.480 --> 0:06:13.960 first run productions for those time periods. Central Avenue was 0:06:14.040 --> 0:06:19.120 made on the theory that Entertainment Tonight and Inside Edition 0:06:20.240 --> 0:06:23.640 have gotten really old and and and and honestly too 0:06:23.640 --> 0:06:27.039 white as a as a business. Too white. Because the 0:06:27.080 --> 0:06:31.159 marketplace and that's watching TV, is a much more multicultural viewer. 0:06:31.680 --> 0:06:35.080 So we set out to and will sent out to 0:06:35.200 --> 0:06:39.400 make something that would address the needs of the Entertainment 0:06:39.400 --> 0:06:42.840 Tonight Inside Editions address those people who want to watch that, 0:06:43.080 --> 0:06:46.080 but take a little more multicultural point of view. Aimed 0:06:46.160 --> 0:06:48.479 to air from six to eight o'clock. We just thought 0:06:48.480 --> 0:06:50.600 it was a little too crowded in twenty and that's 0:06:50.640 --> 0:06:52.000 why we're going to do it as a once a 0:06:52.040 --> 0:06:54.560 week show and hopefully we'll work and then we'll bring 0:06:54.560 --> 0:06:57.240 it out as a five day run show later. And 0:06:57.279 --> 0:06:59.320 then one of the show we're doing, which we haven't mentioned, 0:06:59.320 --> 0:07:01.679 but we're bringing out. We've already sold it. His Ship's Creek, 0:07:02.200 --> 0:07:05.120 and that's not first run, the rerun rights to rerun 0:07:05.200 --> 0:07:08.360 rights to that, that's sort of all that's and that's 0:07:08.440 --> 0:07:10.400 in those in those same spots, and we've already we 0:07:10.400 --> 0:07:12.880 had already sold that. But but that's kind of an 0:07:12.880 --> 0:07:16.360 interesting show that has gotten ridiculous number of awards and 0:07:16.400 --> 0:07:19.320 accolades all over the place. They keep getting them in 0:07:19.360 --> 0:07:23.040 their sixth season, and we're really excited about that one too. 0:07:23.120 --> 0:07:25.680 And that's you know, on Fox stations and clear throughout 0:07:25.680 --> 0:07:28.120 the country. That's a show that kind of came to 0:07:28.160 --> 0:07:31.360 prominence in its third season off of Netflix, meaning it 0:07:31.400 --> 0:07:34.240 was running on Pop, the cable network, and it's produced 0:07:34.240 --> 0:07:37.320 out of Canada, and all of a sudden, the show 0:07:37.440 --> 0:07:39.760 became this hot thing. A few years ago we acquired 0:07:39.760 --> 0:07:42.240 the rights, and now it's in its sixth season, going 0:07:42.280 --> 0:07:45.440 into its sixth season, and we're all living in this 0:07:45.480 --> 0:07:49.200 world where the TV business is changing so much, so 0:07:50.320 --> 0:07:56.280 nobody really knows. There's not there's very few shows that 0:07:56.400 --> 0:08:00.200 have been sold coming off of a streaming plat form 0:08:00.320 --> 0:08:03.840 into a free platform. We we're actually the only ones 0:08:03.880 --> 0:08:10.320 who've ever sold a original streaming show um and on Netflix, 0:08:10.680 --> 0:08:14.480 which was bo Jack bo Jack Horseman. We sold it 0:08:14.560 --> 0:08:18.600 to Comedy Central this one. While it's it's there's been 0:08:18.640 --> 0:08:21.920 shows sold off cable, which is what Pop is. But 0:08:22.040 --> 0:08:25.240 Pop is such a small network that almost nobody watched 0:08:25.240 --> 0:08:27.680 it on Pop and they all watched it on Netflix. 0:08:28.120 --> 0:08:31.559 And so now we're going to syndicate this it's coming 0:08:31.560 --> 0:08:33.880 off Pop, but really it's kind of coming off Netflix. 0:08:34.440 --> 0:08:37.920 So the question is it's coming off to be aware 0:08:37.960 --> 0:08:40.800 of by Netflix? Right? So, and by the way, I mean, 0:08:41.120 --> 0:08:44.760 you know, we're we're realist about this. We think Ship's 0:08:44.760 --> 0:08:50.360 Creek is absolutely hysterically an amazing show. You think it's 0:08:50.360 --> 0:08:53.000 the kind of show that should have legs in syndications. 0:08:53.080 --> 0:08:55.360 It's a little quirky. I mean, it's a little quirky, 0:08:55.440 --> 0:08:58.199 then say it to enough manners. It's not quite a 0:08:58.320 --> 0:09:01.520 straight down the middle shot, but it's legit funny. But 0:09:01.559 --> 0:09:06.880 it's coming off Netflix, so is that our people are 0:09:06.960 --> 0:09:09.960 just finding out about it. So we're hoping it catches fire. 0:09:10.720 --> 0:09:12.280 But you know, like I said, I think we're all 0:09:12.320 --> 0:09:15.800 living at a different time these days that if this 0:09:15.920 --> 0:09:19.760 was you know, thirty years ago and Ship's Creek was 0:09:19.800 --> 0:09:22.600 coming off of CBS and it's as good as it is, 0:09:23.480 --> 0:09:27.520 this would be a huge deal. But because it's Pop 0:09:27.600 --> 0:09:30.320 to Neflix, I mean, we don't know the stations that 0:09:30.400 --> 0:09:33.760 nobody really knows what the value of the proposition is. 0:09:34.240 --> 0:09:35.719 But we're all going to try it. You're gonna find 0:09:35.760 --> 0:09:39.200 out interesting when you sit and talk to a station 0:09:39.240 --> 0:09:42.000 manager or a station group buyer and you talk about, 0:09:42.160 --> 0:09:44.320 you know, well, this is coming off of Netflix, or 0:09:44.360 --> 0:09:47.199 this is coming like, what kind of questions do they 0:09:47.240 --> 0:09:49.800 ask you because this it seems like this is all 0:09:49.840 --> 0:09:52.439 such a world of unknowns. Let me go back to 0:09:52.440 --> 0:09:55.240 our roots, which is we started the company with with 0:09:55.360 --> 0:09:58.160 South Park. And so the only thing you can say, 0:09:58.280 --> 0:10:00.960 because this isn't coming off of it's not an ABC 0:10:01.120 --> 0:10:02.760 sitcom that you can say, God if it breaks at 0:10:02.800 --> 0:10:05.240 one point seven rating and it does that for three years, 0:10:05.240 --> 0:10:07.720 it's going to do this in syndication. This is coming 0:10:07.720 --> 0:10:10.320 off a Pop which has really low ratings, but it's 0:10:10.360 --> 0:10:13.280 the highest rated show that they have by a wide margin. 0:10:13.440 --> 0:10:16.240 Just like fifteen years ago or eighteen years ago whatever. 0:10:16.280 --> 0:10:18.360 With South Park. We were sitting there saying, I still 0:10:18.360 --> 0:10:20.320 remember the presentation because that's how we started the company. 0:10:20.320 --> 0:10:22.680 It was a three hundred and sixty five percent index 0:10:23.120 --> 0:10:26.280 to the regular rating on Comedy Central. So when something 0:10:26.559 --> 0:10:30.480 outperforms whatever its environment is, to that great an extent, 0:10:31.080 --> 0:10:33.000 we just think you have something. It just means that 0:10:33.559 --> 0:10:35.480 three and a half times the amount of people that 0:10:35.520 --> 0:10:37.880 normally watched watch of this. You know, people come to 0:10:37.960 --> 0:10:41.840 the right come to find it. So so I think 0:10:42.400 --> 0:10:44.760 we know that it has that ability to it. But 0:10:44.840 --> 0:10:48.640 it is also on Netflix, so not exclusively, so you 0:10:48.640 --> 0:10:50.439 can say, yeah, I'm just gonna watch them and watch 0:10:50.520 --> 0:10:52.880 them all tonight. I don't mean but but people watch 0:10:52.920 --> 0:10:55.680 TV differently, you know. So the people that are watching 0:10:56.080 --> 0:10:59.560 Channel five or Channel eleven, um, you know in this 0:10:59.679 --> 0:11:03.760 mark it in New York are are watching TV passively. 0:11:03.800 --> 0:11:10.480 They're not choosing two on. They may say tonight, after dinner, 0:11:11.280 --> 0:11:13.160 my wife and I are gonna sit down and we're 0:11:13.160 --> 0:11:17.160 gonna put Netflix on and watch. Um I'm sure they're 0:11:17.160 --> 0:11:21.800 gonna watch right, But right now I'm home and I'm 0:11:21.840 --> 0:11:25.960 flicking around the channels and I've stopped at you know, 0:11:26.040 --> 0:11:29.240 TMZ or I'm watching Ship's Creeker. I'm and that's how 0:11:29.240 --> 0:11:33.719 they watch. So it's so hopefully they'll they'll watch naturally 0:11:33.800 --> 0:11:36.160 like that. The people to watch TV watch that way 0:11:36.280 --> 0:11:40.240 and hopefully it will coincide nicely. Even though it's on Netflix. 0:11:40.600 --> 0:11:42.560 By the way, Friends has been on Netflix, it's been 0:11:42.600 --> 0:11:47.679 on broadcast, So it is it a different viewer. I mean, no, 0:11:47.679 --> 0:11:50.559 nobody knows, nobody, There could be all kinds of research. 0:11:51.480 --> 0:11:53.720 No one really knows what's going on. There's a there's 0:11:53.760 --> 0:12:00.120 a teutonic shift in what's happening, and yet most the 0:12:00.160 --> 0:12:03.280 money that's being made is still in the old version 0:12:03.880 --> 0:12:08.719 and the old live linear. Yeah. I mean, so everything's 0:12:08.800 --> 0:12:12.000 up in the air. But we're all, you know, trying 0:12:12.040 --> 0:12:14.760 to figure out how to stay in business. And there's 0:12:14.840 --> 0:12:18.199 plenty of business and um, but I do think we're 0:12:18.200 --> 0:12:21.840 at a time where there's just so many things changing. Um, 0:12:21.960 --> 0:12:23.800 you gotta keep your hand the ball. What is the 0:12:23.840 --> 0:12:26.880 mood when you talk to people? I always think of stations. 0:12:26.880 --> 0:12:30.120 Are the retail level of television in the local markets? 0:12:30.160 --> 0:12:32.320 When you when you talk to people in local markets, 0:12:32.400 --> 0:12:36.959 especially outside of the top five markets, UM, what do 0:12:37.040 --> 0:12:40.280 you hear? Do you hear concerned? Do you hear handwringing 0:12:40.320 --> 0:12:42.480 about all of what we've been talking about, or do 0:12:42.520 --> 0:12:45.880 you feel like there's still that that there is still 0:12:46.520 --> 0:12:49.600 people still feel very positive about broadcast television. I think 0:12:49.640 --> 0:12:52.560 the issue is they're all very challenged. Everybody's challenged, but 0:12:52.600 --> 0:12:56.760 the broadcast TV business operates that depending on what group 0:12:56.760 --> 0:12:58.800 you're looking at, between you know, A thirty five and 0:12:58.840 --> 0:13:03.760 its profit margin. So yes, they're all being squeezed because 0:13:04.000 --> 0:13:06.679 they're most of these are owned by public companies. So 0:13:06.720 --> 0:13:09.199 if you're making a billion dollars and you'r the X 0:13:09.320 --> 0:13:11.600 y Z big, one of the big groups, you know, 0:13:11.640 --> 0:13:14.280 your whole goal is to make a billion and fifty 0:13:14.520 --> 0:13:16.800 next year. So it's really hard to make the billion, 0:13:17.040 --> 0:13:20.040 and it's even harder in what is basically an amazing 0:13:20.080 --> 0:13:24.040 business but relatively flat slight growth that extra fifties really 0:13:24.080 --> 0:13:28.120 hard that if you ask them what was the five 0:13:28.200 --> 0:13:35.160 year plan on your business plan revenue, most of them 0:13:35.200 --> 0:13:38.280 would tell you that it's at least flat that they 0:13:38.320 --> 0:13:43.360 made They at least made it. Yeah, that continue that 0:13:43.480 --> 0:13:46.560 not their profit, but that their revenue should be around 0:13:46.640 --> 0:13:50.040 flat like the and they don't think it's going down. 0:13:50.280 --> 0:13:53.120 It is soft. There's just so Here's the other thing 0:13:53.160 --> 0:13:55.960 is that advertising. You know, with all these streaming services, 0:13:56.600 --> 0:14:01.440 advertiser needs places to go. So the local TV station 0:14:01.600 --> 0:14:05.280 is still a great you self. I mean, the reason 0:14:05.360 --> 0:14:08.000 people buy ads on the local TV stations, They've been 0:14:08.000 --> 0:14:10.440 around a long time now, these local TV stations. The 0:14:10.520 --> 0:14:13.800 reason people are buying ads is it sells their product. 0:14:15.200 --> 0:14:17.360 If you want to sell the Toyota on Saturday, there's 0:14:17.360 --> 0:14:19.240 a lot of things you can do. But even want 0:14:19.240 --> 0:14:21.920 to actually pile you know, eight thousand people in your 0:14:21.920 --> 0:14:25.040 local Toyota dealership, You're gonna take some broadcast ads out 0:14:25.080 --> 0:14:27.800 because that's on Thursday and Friday. It's right. And by 0:14:27.840 --> 0:14:31.360 the way, why do the why do the candidates spend 0:14:31.440 --> 0:14:36.000 so much money on the local team? They want their Toyota. 0:14:36.000 --> 0:14:38.920 People are watching it and you're reaching a person in 0:14:38.960 --> 0:14:41.960 a city. And and again I don't know how far 0:14:42.000 --> 0:14:44.680 tangent you want to go, but like, what's really happening 0:14:44.680 --> 0:14:48.640 here is is that on a big picture basis, we 0:14:48.720 --> 0:14:53.640 all have heard of cord cutting. Well, what what's happened 0:14:53.640 --> 0:14:55.200 is is that I don't know the year that it 0:14:55.240 --> 0:14:58.920 was the peak, but let's say that the top cable networks, 0:14:59.520 --> 0:15:01.200 it was probably maybe ten years ago. If I had 0:15:01.200 --> 0:15:02.840 to get I'm not looking at it thing, so I 0:15:02.920 --> 0:15:06.440 called it ten years ago, they were probably all around 0:15:06.760 --> 0:15:10.920 a hundred million homes full distribution to it was about 0:15:10.960 --> 0:15:13.360 eight years ago, I believe about a hundred million homes. 0:15:13.760 --> 0:15:20.720 Those now are about millions and drop heading to and 0:15:20.800 --> 0:15:24.200 so when the cable network, if the guy who had 0:15:24.200 --> 0:15:28.280 a hundred million homes has now eight dropping frat fast 0:15:28.360 --> 0:15:31.400 can probably in the seventies as we're speaking, um going 0:15:31.480 --> 0:15:34.120 to most of them think it's going to fifty. So 0:15:34.160 --> 0:15:38.800 what happens is those cable there's other than Fox News 0:15:38.880 --> 0:15:42.760 or CNN or ESPN. Maybe if you're just a general 0:15:42.840 --> 0:15:48.200 Comedy Central, USA, T and T whatever, they can't get 0:15:48.240 --> 0:15:51.520 in front of more homes. There's no other option for them. 0:15:52.080 --> 0:15:55.120 So for the most part, when they're getting cord cut, 0:15:55.280 --> 0:15:58.480 they're losing. And yes there's some services that are having 0:15:58.520 --> 0:16:00.800 skinny bundles they're getting some of back, but for the 0:16:00.840 --> 0:16:03.840 most part, their footprints going from a hundred going down 0:16:03.880 --> 0:16:07.840 to fifty. So if you're on a TV station, there's 0:16:07.880 --> 0:16:10.800 good and bad news. The good news the bad news. 0:16:10.840 --> 0:16:14.680 The bad news is your cable universe is a little 0:16:14.720 --> 0:16:19.240 smaller because the cable operator has less subscribers, and your 0:16:21.080 --> 0:16:26.560 commend that the good news is right now there's twenty 0:16:26.640 --> 0:16:29.160 two million of people. Don't even I can't believe people 0:16:29.320 --> 0:16:32.760 talk about this. There are twenty two million homes in 0:16:32.760 --> 0:16:36.520 the United States then watch their television on an antenna, 0:16:37.240 --> 0:16:41.600 old fashioned over the air in the back of the TV. 0:16:41.640 --> 0:16:45.840 It's really so much. It's more like an Apple device's antenna. 0:16:46.240 --> 0:16:48.680 But when they say antenna, they also have it's not 0:16:48.760 --> 0:16:50.880 like the old guy or the you know, the guy 0:16:50.920 --> 0:16:53.280 I ate TV, but I'll just do the antenna. It's 0:16:53.320 --> 0:16:56.840 the younger demographic. Actually, that's the cord cutters. So they 0:16:56.920 --> 0:16:59.560 might be watching this. Two constituents of antennas. One is 0:16:59.560 --> 0:17:02.000 the older and that's a bit of what we're thinking 0:17:02.040 --> 0:17:04.399 about when you think about who watches on antenna, But 0:17:04.560 --> 0:17:07.760 the majority of it are younger people, you know, eighteen 0:17:07.800 --> 0:17:10.919 to thirty four, who are cord cutters, who say, I 0:17:10.920 --> 0:17:12.880 don't want to do a deal with you know, Time, 0:17:12.880 --> 0:17:16.040 Warner Cable or Cox Cable whatever. I will do my 0:17:16.160 --> 0:17:19.240 antenna and then I'm gonna buy Netflix. I'm gonna buy Apple, Hulu, 0:17:19.680 --> 0:17:24.560 um and three other services. By the way, these this 0:17:24.640 --> 0:17:30.359 is a growing business. And think about this. Your little 0:17:30.359 --> 0:17:33.280 Fox station gets a much higher rating in the antenna 0:17:33.320 --> 0:17:36.640 home than it ever did in the cable and there's 0:17:36.680 --> 0:17:41.080 not an opportunity ative more than you think. And then again, 0:17:41.080 --> 0:17:42.240 I don't we don't want to get to Front of 0:17:42.240 --> 0:17:44.840 the Week. But you obviously have the digit nets, so 0:17:44.880 --> 0:17:48.320 the multi cast channel. So if you stick your antenna, 0:17:48.760 --> 0:17:50.879 you do have like thirty five forty channels, but you 0:17:50.920 --> 0:17:54.080 don't have a hundred, fifty or thousand when you get cable. 0:17:54.359 --> 0:17:59.200 And really some of the digit nets are relatively entertaining, 0:17:59.200 --> 0:18:01.840 and they're decent, they're not as good. They're not spending 0:18:01.880 --> 0:18:04.000 the kind of money USA or T and T or 0:18:04.080 --> 0:18:07.160 COMBEDT cential word yet, so the product is older generally, 0:18:07.240 --> 0:18:10.280 some of the movie prints are a little acting exactly so. 0:18:10.440 --> 0:18:13.119 But my point is, so if you're a TV station, 0:18:14.440 --> 0:18:17.720 you're getting some of the people the cord cut are 0:18:17.760 --> 0:18:20.040 going to an antenna, and not all of them. And 0:18:20.080 --> 0:18:23.159 then but almost all of them that go to a 0:18:23.200 --> 0:18:26.320 skinny bundle get a broadcaster. So as we sit in 0:18:26.359 --> 0:18:30.040 the universe that we are right now, broadcast stations are 0:18:30.080 --> 0:18:34.240 still covered in the United States where the cable nets 0:18:34.280 --> 0:18:39.920 are getting down to So if you're an advertiser, again, 0:18:40.680 --> 0:18:42.880 where are you gonna go? You got less places to go. Yes, 0:18:42.880 --> 0:18:45.199 there's there's a lot of a V O D and 0:18:45.280 --> 0:18:48.440 things like that, But at the same time, networks are 0:18:48.440 --> 0:18:51.800 fully covered and stations are fully covered. And as the 0:18:51.840 --> 0:18:55.760 cable net was dropped further, that spread gets even bigger 0:18:56.240 --> 0:19:01.320 between antennas skinny bundling. I think the broadcast broadcast business 0:19:02.040 --> 0:19:04.200 is not going anywhere anytime soon. Well, I think when 0:19:04.240 --> 0:19:07.199 you look at the upfronts, that's really the most illustrative 0:19:07.200 --> 0:19:10.320 at this point because every year since I did my 0:19:10.400 --> 0:19:13.400 first presentation, I think it was like six on how 0:19:13.440 --> 0:19:16.119 the networks were declining and how could this check demand. 0:19:16.440 --> 0:19:19.080 It's the same exact thing, you know, thirty four years 0:19:19.200 --> 0:19:22.359 later because what's happening, and it's even more exacerbated today 0:19:22.359 --> 0:19:24.280 because of all these other things. So you have a 0:19:24.359 --> 0:19:26.359 decline in rating. It's not huge, but it's a slight 0:19:26.400 --> 0:19:29.159 you know, the chip keeps chipping away. But because the 0:19:29.160 --> 0:19:32.639 advertisers have to place that money, the increase in the 0:19:32.680 --> 0:19:35.359 cost per thousand or the cost per point locally is 0:19:35.359 --> 0:19:40.199 outpacing the decline in the available for some years. Overall, 0:19:40.240 --> 0:19:42.600 if you look at ten years net net, you're probably 0:19:42.680 --> 0:19:45.280 up a little bit. As a broadcast Sometimes that sometimes 0:19:45.280 --> 0:19:49.160 that networks are flat in revenue, but because their rating 0:19:49.200 --> 0:19:50.800 drops about the same. In general, if you look at 0:19:50.800 --> 0:19:54.080 a ten year trend, they're all up as all the stations. 0:19:54.119 --> 0:19:56.600 If you look ten years ago to today, there's blips, 0:19:56.640 --> 0:20:00.520 but you're getting more for their a way of with 0:20:00.640 --> 0:20:04.280 the smaller rating, right or they're getting more per point, 0:20:05.160 --> 0:20:09.240 so they're offsetting the decrease with a higher higher cost 0:20:09.280 --> 0:20:11.199 per point even though the ratings are lower. And the 0:20:11.240 --> 0:20:13.639 same thing with the syndicated shows, you know, are all 0:20:13.680 --> 0:20:16.280 of the shows are getting lower ratings than they used 0:20:16.320 --> 0:20:19.919 to get for the same reasons, but they're getting higher 0:20:19.960 --> 0:20:24.879 CPMs which offset some of that um default. Let's talk 0:20:24.920 --> 0:20:28.119 about Let's talk about your company, Denmark Mercury, because I 0:20:28.200 --> 0:20:31.800 love your story. You guys came together. You both had 0:20:32.040 --> 0:20:36.240 long careers in syndication and in advertising more you worked 0:20:36.240 --> 0:20:38.640 for Disney IRA, you worked for Reischer, and you worked 0:20:38.640 --> 0:20:43.480 in advertising for many years and through the vagaries of 0:20:43.480 --> 0:20:47.280 of you know, consolidation and changes in the business, you 0:20:47.320 --> 0:20:50.720 guys both wound up. You had your own companies late 0:20:50.800 --> 0:20:54.159 nineties early two thousand's. You came together in two thousand 0:20:54.320 --> 0:20:57.680 three for a specific project by comedy Central to come 0:20:57.720 --> 0:21:01.040 in and help them monetize south Park, which was racking 0:21:01.080 --> 0:21:03.680 up episodes, had become an institution for them. But and 0:21:03.800 --> 0:21:07.439 somebody realized, hey, there might be and yet another afterlife 0:21:07.440 --> 0:21:09.320 for this that could come that could bring in a 0:21:09.359 --> 0:21:12.840 couple of bucks. Um. And you never intended to build 0:21:12.840 --> 0:21:15.760 Devmar into the you know, to quite the shop that 0:21:15.840 --> 0:21:18.200 it is today. Well, we never actually did a business 0:21:18.200 --> 0:21:21.919 plan that we never did a power point, and we 0:21:21.960 --> 0:21:25.359 never did any of those things. We just don't. We 0:21:25.440 --> 0:21:28.520 still don't. We literally just you know, it's the old 0:21:28.600 --> 0:21:30.359 fashioned you know, how did you make all this money? 0:21:30.400 --> 0:21:31.679 Is that? Well, we bought stuff for a dollar and 0:21:31.680 --> 0:21:33.480 we sold it for two dollars. It's kind of a 0:21:33.600 --> 0:21:36.000 version of that. And on south Park, mort was acquiring 0:21:36.000 --> 0:21:38.080 it asked me to join him. I was actually a 0:21:38.080 --> 0:21:40.520 Lionsgate had a worldwide TV at that point, but I 0:21:40.560 --> 0:21:43.560 had Mercury because this was early days of Lionsgate. It 0:21:43.600 --> 0:21:46.359 wasn't the you know, eight billion dollar company it was today. 0:21:46.359 --> 0:21:48.359 It was, you know, a few hundred million making some 0:21:48.480 --> 0:21:50.879 movies and some TV shows here and there. And I 0:21:50.880 --> 0:21:54.560 had started their international distribution. There wasn't even domestic, wasn't 0:21:54.560 --> 0:21:57.280 a need for domestic. So I had kept Mercury as 0:21:57.320 --> 0:22:00.639 a separate company and my deal with them, and this 0:22:00.760 --> 0:22:02.800 was a couple of years into it, and more approached 0:22:02.800 --> 0:22:05.320 me and it just seemed like a fun thing to do. 0:22:05.760 --> 0:22:07.240 I was allowed to do it. I went back to 0:22:07.320 --> 0:22:11.080 John Feldheimer and basically it became so much more fun. 0:22:11.119 --> 0:22:13.679 I said, I'm gonna quit because this is what I 0:22:13.720 --> 0:22:15.399 really want to do, but I'll take care of you. 0:22:15.480 --> 0:22:17.480