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Speaker 1: Welcome to Strictly Business Varieties, weekly podcasts featuring conversations with

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Speaker 1: industry leaders about the business of media and entertainment. I'm

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Speaker 1: Cynthia Littleton, co editor in chief of Variety Today. My

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Speaker 1: guest is Tony Vince Aquara, Chairman and CEO of Sony

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Speaker 1: Pictures Entertainment. Bencequara is about to begin his fifth year

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Speaker 1: at the helm of the studio owned by the Japanese

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Speaker 1: electronics conglomerate. In recent years, Sony Pictures has been quietly

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Speaker 1: doing a lot of buying and selling of assets. They're

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Speaker 1: not huge dollar deals by comparison to other media m

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Speaker 1: and a, but they are indicators of how the studio

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Speaker 1: is repositioning for the streaming era. In our conversation, Bensequara

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Speaker 1: talks through the rationale for buying assets such as anime

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Speaker 1: distributor crunchy Roll and why it makes sense to sell

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Speaker 1: TV channels in the UK but buy a network studio

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Speaker 1: group in India. Of course, no discussion of recent move

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Speaker 1: it Sony Pictures would be complete without a question in

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Speaker 1: the form of a question about Jeopardy and the recent

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Speaker 1: drama over the selection of its new host. Vince Aquirra

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Speaker 1: wasn't eager to address the subject, but he owns the

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Speaker 1: decision behind the initial selection of Mike Richards, the former

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Speaker 1: Jeopardy producer who got the boot after risque and offensive

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Speaker 1: material from old podcast surface. A deep look behind the

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Speaker 1: studio gates is all coming up after the break for

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Speaker 1: your awards consideration. Hacks the Emmy Award winning Max original

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Speaker 1: series starring Gene Smart. It explores a dark mentorship that

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Speaker 1: forms between a legendary Las Vegas comedian and an entitled,

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Speaker 1: outcast twenty five year old writer played by Hannah Einbinder.

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Speaker 1: Praised by Decider as a masterful, genius and spectacular approach

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Speaker 1: to comedy, the series dazzles as a display of beguiling

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Speaker 1: chemistry between Smart and Einbinder, who the Chicago Sun Times

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Speaker 1: lauds as is stunning lee good together. Hacks is now

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Speaker 1: streaming on HBO Max. Welcome back to Strictly Business, Tony,

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Speaker 1: Ben Sequara, Thank you so much for inviting me to

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Speaker 1: the beautiful Sony Pictures lot in beautiful downtown Culver City.

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Speaker 1: It's great to do this in person. It's great to

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Speaker 1: see you, and we've been overdue for a talk that

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Speaker 1: really kind of takes the measure of your tenure now,

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Speaker 1: which is coming up on five years as chairman and

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Speaker 1: CEO of Sony Pictures Entertainment. And what I wanted to

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Speaker 1: start our conversation with is I have noticed over the

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Speaker 1: last particularly over the last two years or so, that

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Speaker 1: Sony Sony Pictures has been active in acquiring really discrete

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Speaker 1: entertainment assets, a lot of content production, a certain amount

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Speaker 1: of platforms, a certain amount of technology investment. And at

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Speaker 1: the same time we've also seen Sony active in the

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Speaker 1: marketplace selling existing assets, selling bundles of channels in regions

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Speaker 1: like Asia and other territories. And I wanted to kind

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Speaker 1: of have a conversation and say, you've been buying a lot,

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Speaker 1: You've been selling a lot. Let's step back, what's the

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Speaker 1: bigger picture strategy here and and talk through why you've

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Speaker 1: been buying what you've been buying. Well, you've been been

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Speaker 1: noticing a lot. Obviously there's been a lot going on.

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Speaker 1: We you know, when when we started here almost five

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Speaker 1: years ago, four and a half years ago, UM, we

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Speaker 1: needed to have a strategy for the company and put

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Speaker 1: it put the company in a path to profitabilities, to

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Speaker 1: significant profitability, and you know, we saw, having having experienced

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Speaker 1: the linear world for almost my entire career through running

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Speaker 1: TV stations, UH, running the CBS Station Group, running the

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Speaker 1: HER Station Group, and then running obviously running TV stations

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Speaker 1: before that, and then running the Fox building and running

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Speaker 1: the Fox Networks Group, which you know, became the biggest

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Speaker 1: profit generating piece of the whole Fox empire. UM during

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Speaker 1: that tenure, UM, it was clear that linear was on

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Speaker 1: the decline and streaming was on the incline. We don't

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Speaker 1: have here, and we didn't have and don't have the

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Speaker 1: firepower in terms of product and in the library to

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Speaker 1: to go head to head with our competitors. Were much

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Speaker 1: smaller company than most of our competitors, so we needed

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Speaker 1: to zig a little bit when everybody else was agging.

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Speaker 1: We had hundreds of businesses here, individual businesses here, many

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Speaker 1: of them losing money and with no hope of ever

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Speaker 1: being profitable or being a significant part of the company.

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Speaker 1: And and when you're running a company of this size

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Speaker 1: of the stature, it's important to get people focused on

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Speaker 1: what they can build. And our people were spending time

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Speaker 1: and effort and resources on trying to fix these businesses

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Speaker 1: that were unfixable. So UM, we did several things. One,

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Speaker 1: we set a strategy, and for lack of a better term,

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Speaker 1: we called an arms dealers strategy where we knew all

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Speaker 1: of our competitors are going to be building these subscription

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Speaker 1: video services to all entertainment subscription video services. We didn't

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Speaker 1: do that. We decided we would supply them with product

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Speaker 1: that they could fight each other with. That's where the

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Speaker 1: arms deal with strategy comes from. It's too bad that

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Speaker 1: it's such a violent metaphor, but I did, I did

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Speaker 1: want to ask even just what you said there. It

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Speaker 1: seems like that takes so much discipline and so much,

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Speaker 1: like you know, objective sober analysis to be able to say,

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Speaker 1: you know, with ambitious people and all the assets, you know,

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Speaker 1: you have so many shows and so many assets here.

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Speaker 1: It must take a lot of discipline to be able

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Speaker 1: to say, here's here's the marketplace, here's where our larger

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Speaker 1: competitors are going. We can't do that, so where do

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Speaker 1: we go? You need to have discipline to make decisions

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Speaker 1: that adhere to your strategy. Once you set your strategy,

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Speaker 1: you have to make decisions that complement the strategy. Now,

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Speaker 1: most decisions will be right on the strategy, many will

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Speaker 1: be kind of on the edge of the strategy and

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Speaker 1: some will be just off the strategy, and those are

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Speaker 1: the ones you have to make decisions about whether you

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Speaker 1: keep that, you you keep, you, do you build, you divest,

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Speaker 1: you shut down, do you do whatever with them? And

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Speaker 1: that's really what we did. And we started we looked

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Speaker 1: at all these businesses and decided, well, these are the

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Speaker 1: ones that we're going to get out of, these are

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Speaker 1: the ones that are going to focus on, and these

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Speaker 1: are the ones this is these are the directions we're

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Speaker 1: going to go to build the company. You know, we

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Speaker 1: all know that the traditional media business is a very

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Speaker 1: very mature business, not going to grow in an exponential way, right,

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Speaker 1: and so it's kind of adopted the sort of melting

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Speaker 1: ice cube that's still a big hunk of something, but

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Speaker 1: it is gradually shrinking, right. Although fortunately here that's not

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Speaker 1: happening because we had a lot of ground that was

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Speaker 1: just waiting for us to take and our traditional businesses

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Speaker 1: are doing extremely well um as well as our new businesses.

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Speaker 1: So we set the strategy of again I hate to

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Speaker 1: use the term, but arms dealer um to get the

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Speaker 1: business rolling. And we you know, one of the first

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Speaker 1: things we did was start to set the strategy for

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Speaker 1: what we're gonna do with our pay one deal when

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Speaker 1: it came up, and that started four years ago. Movies

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Speaker 1: are really the thing, right, It's a huge commodity for

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Speaker 1: these streaming services. Unfortunately, having the career I've had and

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Speaker 1: been exposing things I've been exposed to, I saw that

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Speaker 1: and it was very easy to go down go down

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Speaker 1: that road. So so we set the strategy of that

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Speaker 1: army dealer strategy. Again, if you have a better term,

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Speaker 1: please let me know. I asked the Sony board of

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Speaker 1: directors if they had a better idea for yesterday. As

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Speaker 1: a matter of fact, they didn't that one either. Um,

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Speaker 1: So we set the strategy to do that, to align

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Speaker 1: our assets in a way that knowing that in three

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Speaker 1: or four or five years all these assets would come

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Speaker 1: up for sale again, and how do we position them

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Speaker 1: to maximize the the profitability for the company, and and

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Speaker 1: and to do that, we also I mean, there's a

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Speaker 1: lot of pieces to this, and you know, I'll bore

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Speaker 1: you to death if I went through every piece of it.

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Speaker 1: But you know, we we saw that there were a

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Speaker 1: whole bunch of businesses we had to get out of

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Speaker 1: because as I said, distractions are what killed businesses. If

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Speaker 1: your management is focused on trying to resuscitate things that

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Speaker 1: are non resuscitatable, if that's a word, they will not

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Speaker 1: be focused on growing the things that have a future.

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Speaker 1: So we had to get rid of all that. So

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Speaker 1: we set that strategy that was that you know, we

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Speaker 1: went through, We've gone through four years plus of the investitures,

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Speaker 1: shutting down, giving away and that's hard because people have

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Speaker 1: people have their passion projects well and people work in

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Speaker 1: these businesses too. And you know, you when you shut

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Speaker 1: the shut a business down, you're you're taking people's jobs away. Um,

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Speaker 1: and when you sell businesses, there's a period of frustrating

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Speaker 1: and you have to you have to deal with that

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Speaker 1: and you have to be aware of that as you

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Speaker 1: do it. So so so that's that's the divestiture part.

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Speaker 1: But then, um, you know the other strategy we just

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Speaker 1: talked about of what we're gonna do with the assets

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Speaker 1: we have. You know, the pay one deal we knew

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Speaker 1: was coming up. We had those are your movie rights,

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Speaker 1: the streaming rights and streaming and pay cable, HBO, Showtime exactly,

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Speaker 1: were with Stars and now we're with Disney. The new

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Speaker 1: deal goes to Disney and Netflix starting next year. Those

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Speaker 1: deals which five years ago people were saying, Oh, they're

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Speaker 1: not gonna They're just not going to pay what they

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Speaker 1: used to for those things. Now they couldn't be more valuable,

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Speaker 1: as we've seen with the launch of Disney Plus and

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Speaker 1: HBO man right, but again having the vision. We had

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Speaker 1: the vision of seeing that Disney and Fox and everybody

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Speaker 1: else was setting up their own spots or Universal. Warner

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Speaker 1: Brothers discussed, everybody is setting up their own spot service.

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Speaker 1: They were going to sell their product to themselves, and

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Speaker 1: we didn't. So we were the only ones that were

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Speaker 1: actually selling the complete package of pay one to in

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Speaker 1: the marketplace. Not brain surgery. It was easy to figure out.

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Speaker 1: I mean, clearly it's not brain surgery. If we could

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Speaker 1: figure it out, every made you the best looking kid

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Speaker 1: at the dam exactly. We had seven offers for our

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Speaker 1: pay one deal, so but we didn't we I suspected

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Speaker 1: that would be the case four years ago, and obviously

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Speaker 1: last year it came to four. So that's one piece.

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Speaker 1: Then we knew we had the Spider Man universe of characters,

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Speaker 1: Marvel characters. We've made I don't know how many Spider

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Speaker 1: Man movies, three or four Spider Man movies, five Spider

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Speaker 1: Man movies, just Spider Man. There are nine characters in

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Speaker 1: the Spider Man universe and we never did anything with them.

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Speaker 1: So since five years ago, we now have more bus

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Speaker 1: We now have Venom, we now have Craven, we now

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Speaker 1: have Silk, a lot of movies coming forward and a

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Speaker 1: lot of TV shows coming forward. So that's a whole

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Speaker 1: the whole cash of I p that we have. You know,

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Speaker 1: Um and Joe mind you was in the works before

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Speaker 1: I got here, and now we're turning that into the universe.

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Speaker 1: We have Ghostbusters, which is just had a phenomenal launch

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Speaker 1: two weeks ago. It's doing really good. I don't know

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Speaker 1: if you've seen the movie, but it's a really good movie.

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Speaker 1: You should see it. You'll be crying at the unbelieve

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Speaker 1: it or not, And to believe it or not, you'll

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Speaker 1: be crying at the under Ghostbusters. Um, and that's now

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Speaker 1: a universe will be You'll be seeing a lot more

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Speaker 1: Ghostbusters product there. So you know, those are those are

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Speaker 1: another part of the strategy that we said at the time.

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Speaker 1: So you know, again going back to the fact that

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Speaker 1: we know that these traditional media businesses are not going

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Speaker 1: to be long for the world. Linear networks are not

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Speaker 1: going to be long I'm not going to be growth businesses.

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Speaker 1: So we got out a lot of those, but we

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Speaker 1: did focus on and let me ask you, so, you know,

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Speaker 1: as you say getting out of a business, and it

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Speaker 1: involves people, it also involves revenue and and and earnings,

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Speaker 1: even if maybe the earnings picture isn't a great long

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Speaker 1: term that that alone, again is corporate adjustment. And did

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Speaker 1: you have to prepare Tokyo that you know, we were

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Speaker 1: going to take hits in some places while we do this?

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Speaker 1: Like was that? Was that even just getting there through

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Speaker 1: that process? Was that? Well, it's not easy, but what

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Speaker 1: were the what were the hurdles about doing all that

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Speaker 1: in a changing marketplace like this? Even trying to value

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Speaker 1: the assets that you were identifying, I can imagine it

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Speaker 1: was just well, it's it's a lot like change a

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Speaker 1: tyroun and moving car, you know, and and we you know,

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Speaker 1: we spent a lot. I spent a lot of time

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Speaker 1: at the start building credibility with Tokyo and and making

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Speaker 1: sure they understood what we're doing. And now they get it,

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Speaker 1: they understand what we're doing. Actually three years ago they

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Speaker 1: got it and now you know, allowed us to do

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Speaker 1: what we needed to do. And they have been consisting,

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Speaker 1: consistently vocal about their about from Sony Corp. About their

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Speaker 1: belief and faith and you know, desire to remain in

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Speaker 1: the entertainment business despite persistence specularly is true. In fact,

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Speaker 1: in fact, the day the day that I my first

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Speaker 1: day on a lot here, there was a big sign

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Speaker 1: on the water tower saying we're not for sale if

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Speaker 1: you're remember, and we're not. And we have not entertained that.

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Speaker 1: What we've been entertained is building the business, not going

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Speaker 1: away from the business. So so back to the strategy,

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Speaker 1: the strategy of you know, resuscitating our our television and

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Speaker 1: film businesses. And we have a lot of assets here

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Speaker 1: that you know, well fortunate in Jeopardy. You know, we

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Speaker 1: have the biggest cash of game show i P of

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Speaker 1: anybody in the in the world. Um, we have you know,

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Speaker 1: the Columbia Library and with plenty of i P to

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Speaker 1: draw from and we've drawn from a lot of that,

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Speaker 1: and the same on the television side we have, while

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Speaker 1: not as big as other people, we have a lot

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Speaker 1: of a lot of IP that we never really took

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Speaker 1: advantage of so you see remakes and you know, we

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Speaker 1: have Fantasy Island now on Fox, just got renewed for

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Speaker 1: the second year. I mean, there's examples of that all

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Speaker 1: over the place. But people are focused on growing as

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Speaker 1: opposed to dealing with bad businesses on the traditional side.

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Speaker 1: Then we needed to figure out where to go for

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Speaker 1: the future and very important part. And we looked around

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Speaker 1: and you know, anime is a is a important part

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Speaker 1: of the business of our companies in Japan, Antiplex, and

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Speaker 1: we saw Fundimation was for sale and that process actually

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Speaker 1: started before I got here and buying the business, but

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Speaker 1: I don't think we had any idea where that was

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Speaker 1: going to go. It was a very tiny business. We

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Speaker 1: bought it and saw that the marketplace was just waiting

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Speaker 1: for someone to consolidate. We saw what crunchy roll was doing, um,

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Speaker 1: and we've sent Block crunchy roll um and now we're

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Speaker 1: putting those two businesses together, So go ahead. Anime is

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Speaker 1: one of those is one of those content forms that really,

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Speaker 1: you know, for people in the US that think they

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Speaker 1: know the entertainment business, when you look at what that

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Speaker 1: world is in markets around the world, you realize that

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Speaker 1: it is not you know, this is not this is

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Speaker 1: not the business of years ago. This is there is

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Speaker 1: a whole worlds that these companies have built in characters

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Speaker 1: and it anime is one of those that really reinforces

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Speaker 1: how much of a global village of entertainment exactly? Which

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Speaker 1: is so interesting? And is that? Is that one of

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Speaker 1: the things that attracted you just travels so well, It

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Speaker 1: travels well. Plus it fits into our you know, part

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Speaker 1: of our strategies expanding into areas of communities of interest.

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Speaker 1: Spider Man universe of characters, that's a community of interest.

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Speaker 1: People that like Spider Man, like all these characters, people

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Speaker 1: like Jumanji will like what we do with that. People

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Speaker 1: who like Ghostbusters will like what we do with that

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Speaker 1: universe as we go forward, you know, and back to

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Speaker 1: Spider Man just for a second. It's going to be

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Speaker 1: the biggest launch movie of the year by far. It's

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Speaker 1: going to be a massive launch in terms of number

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Speaker 1: of screens or worldwide, worldwide, whoopie, do just qualify that big,

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Speaker 1: biggest because we know we we now know how many

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Speaker 1: tickets sold the first day of pre sales in in England.

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Speaker 1: It was a multiple of the number of tickets that

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Speaker 1: sold for Bond in the US. It was right in

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Speaker 1: the same vein of what Endgames sold. So it's going

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Speaker 1: to be massive. Peter Parker still has this call Peter

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Speaker 1: Parker and Doctor Strange and all the other surprises that

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Speaker 1: you'll see in Spider Man. It's very exciting um hoping

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Speaker 1: that the and hoping that the the pen emic doesn't

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Speaker 1: continue and hurt us with this, and hoping that we

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Speaker 1: get into China, which is a whole another story to

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Speaker 1: talk about at some other time, whole another podcast. But

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Speaker 1: you know, we're looking very, very very happy about where

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Speaker 1: that's going. Spiderman is going to be massive this year.

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Speaker 1: Let me ask you though, just even in something like

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Speaker 1: Spider Man and I know we'd also need a whole

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Speaker 1: another podcast to talk about the Byzantine deal between Marvel

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Speaker 1: and Sony and how those rights are, but I'm we

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Speaker 1: are not. That's another day. But can you talk about

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Speaker 1: what was the process? Was it Tom Rothman sitting people

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Speaker 1: down and saying, here's the I p let's what's our

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Speaker 1: what's our best path to making these movies? How did

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Speaker 1: how did you energize people around the idea of hey,

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Speaker 1: there's a whole lot more to Spider Man. Well, first

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Speaker 1: we had to but to get the dysfunctionality out of

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Speaker 1: the film business that was here for so many years.

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Speaker 1: I'll leave it at that. Um. And once we got

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Speaker 1: people working together instead of just the distribution people just

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Speaker 1: a distribution the marketing people just did marketing that we

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Speaker 1: got people together, working together, and you know, Tom was

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Speaker 1: obviously an important part of it, and so we're Sanford

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Speaker 1: and and and Josh Queenstein. Um. Once we got them

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Speaker 1: working together in a very positive way. You know, it's

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Speaker 1: once you get people working together towards your goal, towards

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Speaker 1: a vision, it just happens. You've definitely been investing in

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Speaker 1: you know, very very specific kind of production assets, certain producers,

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Speaker 1: a lot in a number of investments in England and

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Speaker 1: English producers. Can you talk about that strategy as or

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Speaker 1: a reason is it attractive to have, you know, production assets,

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Speaker 1: people on the ground working outside the US at this

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Speaker 1: moment when there's so much competition for talent. Well, I mean,

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Speaker 1: all you have to do is look at where the

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Speaker 1: successful shows are coming from England is the producers and

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Speaker 1: creators in England have been on fire for the last

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Speaker 1: ten years and will continue to be for some reason.

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Speaker 1: I don't know the reason. Some might say that the

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Speaker 1: some might say that it's the potential to make a

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Speaker 1: lot of money for the first time in a long time.

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Speaker 1: That got the creative juices going back. But people, the

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Speaker 1: people that people, the companies, And I say people because

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Speaker 1: really what we've done is bought people. And I don't

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Speaker 1: mean that in any vijorative way or a negative way

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Speaker 1: for your listenors. No, No, we bought their companies. But

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Speaker 1: we're really hiring these people, is really what we're doing,

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Speaker 1: but buying by buying their companies because they're terrifically creative.

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Speaker 1: You know, Left Bank, eleven, Bad Wolf there, these are

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Speaker 1: the little show called The Crown. They came from Left

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Speaker 1: called the Crown, a little show quot sex Education which

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Speaker 1: came from eleven and Bad Wealth has the tremendous track

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Speaker 1: record in England which we think will will travel um

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Speaker 1: going forward. Um, so you know it's it's all about

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Speaker 1: people again, come back to people. Have you? Um, how

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Speaker 1: do you do you? Have? You had like a desire

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Speaker 1: to say we want to we really want to build

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Speaker 1: up our our roster of content providers, both in the

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Speaker 1: US and outside. Like has there been a has there

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Speaker 1: been a goal of like we want to get to

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Speaker 1: a level of of you know, having x many content

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Speaker 1: providers under the under the Sony Pictures Team umbrella or

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Speaker 1: that has been a little more organic and opportunities actually

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Speaker 1: done the opposite. We started with way more production companies

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Speaker 1: internationally than we have today. We've shut a bunch down

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Speaker 1: because they were not producing and they were again a distraction.

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Speaker 1: They were our management was spent, our management resources were

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Speaker 1: being spent on businesses that we're not being productive. So

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Speaker 1: get those out of the way. They can. If you

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Speaker 1: have forty or fifty or sixty hours a week to

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Speaker 1: spend instead of spending thirty of it on negative businesses,

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Speaker 1: spending on positive businesses. That's not brain surgery. I mean

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Speaker 1: it just so we got rid of a bunch and

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Speaker 1: we're focused on the ones that are productive. Don't go anywhere.

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Speaker 1: We'll be right back with more from Sony Pictures Entertainments.

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Speaker 1: Tony vince Aquara after this for your awards consideration. Mayor

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Speaker 1: of Easttown. The HBO original limited series starring Emmy Award

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Speaker 1: winners Kate Winslett, Evan Peters, and Julianne Nicholson. The series

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Speaker 1: follows a small town Pennsylvania detective investigating a local murder

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Speaker 1: as her personal life crumbles around her. Lauded by Indie

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Speaker 1: Wire as an absorbing character drama with an impeccable ensemble cast,

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Speaker 1: the gripping drama explores the dark side of a close

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Speaker 1: community and provides an authentic examination of how family and

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Speaker 1: past tragedies can define our present. Mayor of Eastown is

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Speaker 1: now streaming on HBO Max and we're back with more

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Speaker 1: from Sony Pictures Entertainment. Tony vince Aquara, you've made it

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Speaker 1: very clearly articulated that you know, Sony is not going

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Speaker 1: to be in the global streaming platform game. No, but

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Speaker 1: we will be in the genre of based s FOD

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Speaker 1: service business. And we are with Pure Flicks, which is

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Speaker 1: a family and faith based business. And we are in

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Speaker 1: um anime with Funimation and Crunchy Role, which we're now

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Speaker 1: merging together. It's a that is a tremendous business and

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Speaker 1: those are really even those very discrete streamers can be

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Speaker 1: good businesses. Well, I don't know that. Well, we have three,

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Speaker 1: we have three real streaming directions right now. We'll have

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Speaker 1: more that are fairly directed and fairly involved with communities

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Speaker 1: of interest um, they're all profitable. I don't think no,

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Speaker 1: they're all subscription and I don't think anybody else in

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Speaker 1: the business can say that we have three here and

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Speaker 1: we have so many live in India, which has eight

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Speaker 1: million subscribers and is a su that is that actually

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Speaker 1: is a violation of my strategy because it is a

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Speaker 1: general entertainment um spot service. But it's a India is

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Speaker 1: a very different country, a very different territory. What has

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Speaker 1: made the difference for those streaming services is it controlling

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Speaker 1: your tent cost It is being focused on your audience

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Speaker 1: and not having to go spend twenty billion dollars on

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Speaker 1: content costs. Yeah, yeah, and so and so like the

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Speaker 1: production and the producer acquisitions are kind of things that

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Speaker 1: you look to feed those lanes of Is that kind

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Speaker 1: of well, you know, you you mentioned that you you're

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Speaker 1: going down the road of the question earlier about you know,

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Speaker 1: do you need to have more people and more creators? Again,

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Speaker 1: we've gone we've actually done the opposite and film we

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Speaker 1: have far fewer creator contracts now because it's about it's

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Speaker 1: about the material. And you know what we did was

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Speaker 1: go out, We went and made a partnership with HarperCollins

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Speaker 1: and we get you know, first look at the books. Um,

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Speaker 1: so we and we have deals with people that we

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Speaker 1: know are going to be productive, that you know that

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Speaker 1: that will bring product to us. On television, we're in

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Speaker 1: the process of doing that and making sure that we're

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Speaker 1: the creators that we have are again people that we

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Speaker 1: know are going to be delivering as opposed to just

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Speaker 1: having a thousand people we're going to have these are

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Speaker 1: numbers and picking up hundred instead of a thousand, but

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Speaker 1: we know they'll be productive. And in the in the

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Speaker 1: big picture of you know, content licensing, series deals, all

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Speaker 1: of you know, the profit model on that is has

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Speaker 1: changed in television. But my television series, you know that

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Speaker 1: that profit model that was so lucrative for so long,

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Speaker 1: you know, the hits paid for a lot of the misses,

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Speaker 1: that has changed. Obviously you're investing big in content you

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Speaker 1: see of you see even with the changes to a

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Speaker 1: much more upfront kind of payment structure for for producers,

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Speaker 1: clearly you see a lot of opportunity there you wouldn't

431
00:23:43,840 --> 00:23:47,600
Speaker 1: be investing is well. Again in the US on the

432
00:23:47,840 --> 00:23:51,760
Speaker 1: on the television side, it's the businesses just going topsy turvy.

433
00:23:51,840 --> 00:23:56,480
Speaker 1: It's going completely upside down. Um, as you said, there

434
00:23:56,480 --> 00:23:59,639
Speaker 1: there are no more feels like The Blacklist or the

435
00:23:59,640 --> 00:24:03,320
Speaker 1: Golds or Swat or Good Doctor. Those things are not

436
00:24:03,359 --> 00:24:06,119
Speaker 1: going to happen anymore. Those kind of of sales of

437
00:24:06,200 --> 00:24:09,760
Speaker 1: rerun rights that bring in so much, Well, the real

438
00:24:09,920 --> 00:24:13,600
Speaker 1: the real description is the real comparative is those were

439
00:24:13,680 --> 00:24:17,840
Speaker 1: deficit finance programs that we invested in knowing that if

440
00:24:17,880 --> 00:24:20,600
Speaker 1: you got to four or five seasons, you had a

441
00:24:20,600 --> 00:24:24,480
Speaker 1: significant back end on and you make significant money. If

442
00:24:24,520 --> 00:24:28,199
Speaker 1: you compared The Blacklist and its profit profile to The

443
00:24:28,240 --> 00:24:33,160
Speaker 1: Good Doctor, both very very successful shows, um, you'd see

444
00:24:33,200 --> 00:24:36,600
Speaker 1: Blacklists far more profitable at the time. It's not anymore

445
00:24:36,760 --> 00:24:39,800
Speaker 1: because it's in its ninth season. Um, but the but

446
00:24:39,880 --> 00:24:42,080
Speaker 1: the Good Doctor is a very good show, but it's

447
00:24:42,119 --> 00:24:45,080
Speaker 1: not the home run that it might have been years ago.

448
00:24:45,160 --> 00:24:48,359
Speaker 1: And in that continuum is a lot of concern for

449
00:24:48,960 --> 00:24:51,160
Speaker 1: for you know, for somebody running a studio such as yourself.

450
00:24:51,400 --> 00:24:54,120
Speaker 1: But do you make it up in volume? Well, exactly,

451
00:24:54,760 --> 00:24:57,320
Speaker 1: there's several things have happened on the television side. So

452
00:24:57,440 --> 00:24:59,480
Speaker 1: number one, you're not going to get twenty two or

453
00:24:59,520 --> 00:25:03,919
Speaker 1: twenty four episode orders anymore. You're probably really lucky to

454
00:25:03,960 --> 00:25:07,280
Speaker 1: get three seasons out of any particular show. Um, so

455
00:25:07,320 --> 00:25:09,359
Speaker 1: you're gonna get eight or ten episodes and you're gonna

456
00:25:09,400 --> 00:25:13,360
Speaker 1: get two to three seasons. So it's now a voying business.

457
00:25:13,840 --> 00:25:17,040
Speaker 1: And that implies a whole different kind of infrastructure that

458
00:25:17,080 --> 00:25:20,800
Speaker 1: you support your television business with from from your legal

459
00:25:20,800 --> 00:25:23,760
Speaker 1: department and your business affairs department. Now have a lot

460
00:25:23,760 --> 00:25:26,280
Speaker 1: more to do because the deals are far more complicated,

461
00:25:26,320 --> 00:25:29,920
Speaker 1: and then the way you compensate people is far more complicated.

462
00:25:29,920 --> 00:25:31,640
Speaker 1: And you saw a lot of that in the film

463
00:25:31,720 --> 00:25:35,280
Speaker 1: side just recently with you know what happened with Warner

464
00:25:35,880 --> 00:25:38,720
Speaker 1: when they went to Dane Date and with the Scottetower

465
00:25:38,800 --> 00:25:41,119
Speaker 1: heard there was some conversations about a lot of conversations

466
00:25:41,119 --> 00:25:44,480
Speaker 1: about that, but a lot of that The contractual arrangements

467
00:25:44,560 --> 00:25:46,639
Speaker 1: for these shows are very, very different than that. You

468
00:25:46,680 --> 00:25:48,879
Speaker 1: literally had to bulk up in business affairs and legal

469
00:25:49,320 --> 00:25:51,679
Speaker 1: for sure. Well yeah, and now we're you know, the

470
00:25:51,800 --> 00:25:54,080
Speaker 1: number of shows that we do now is far greater

471
00:25:54,160 --> 00:25:59,240
Speaker 1: than it was. And this fewer episodes. As I said,

472
00:25:59,400 --> 00:26:02,160
Speaker 1: somebody has somebody. You have to put all this on paper,

473
00:26:02,160 --> 00:26:03,480
Speaker 1: and you have to make the deals, and you have

474
00:26:03,520 --> 00:26:05,919
Speaker 1: to make the arrangements and the agreements, and you have

475
00:26:05,960 --> 00:26:08,120
Speaker 1: to find a place to shoot it. You have to

476
00:26:08,280 --> 00:26:11,720
Speaker 1: you know, the logistical support is enormous for all these things.

477
00:26:11,720 --> 00:26:14,960
Speaker 1: So the world has changed dramatically and we have not

478
00:26:15,640 --> 00:26:17,439
Speaker 1: let me be clear, we are in the process of

479
00:26:17,440 --> 00:26:19,240
Speaker 1: trying to figure all this out. On the TV side,

480
00:26:19,240 --> 00:26:21,240
Speaker 1: we have not solved that issue yet. Even some of

481
00:26:21,240 --> 00:26:24,440
Speaker 1: the smaller equity groups and the companies that have been

482
00:26:24,720 --> 00:26:26,600
Speaker 1: that you've been dealing with in selling some of your

483
00:26:26,640 --> 00:26:30,800
Speaker 1: channel groups and other in certain areas like talking to them,

484
00:26:31,119 --> 00:26:34,200
Speaker 1: they see great opportunity. It's that kind of that sense

485
00:26:34,200 --> 00:26:37,879
Speaker 1: of that creative destruction, Like they see great opportunity in

486
00:26:37,880 --> 00:26:41,879
Speaker 1: in having their their companies being able to focus laser

487
00:26:41,920 --> 00:26:45,439
Speaker 1: focused on building these channels with the local expertise that

488
00:26:45,520 --> 00:26:47,760
Speaker 1: they bring to it. So it's an interesting it's an

489
00:26:47,800 --> 00:26:51,680
Speaker 1: interesting period of reinvention. Well, you know again on that line,

490
00:26:51,720 --> 00:26:54,359
Speaker 1: on the line we just discussed of when when the

491
00:26:54,440 --> 00:26:56,760
Speaker 1: business goes one way, it creates opportunities to the fact

492
00:26:56,800 --> 00:27:00,720
Speaker 1: that the fact that many comp and he's are getting

493
00:27:00,720 --> 00:27:03,960
Speaker 1: out of the linear television. You know, at Fox we

494
00:27:04,040 --> 00:27:07,400
Speaker 1: built the international business. It started in two thousand and three.

495
00:27:08,240 --> 00:27:10,399
Speaker 1: Remember you had a swap team of people that just

496
00:27:10,440 --> 00:27:12,960
Speaker 1: went around the world. Right We built four hundred four

497
00:27:13,040 --> 00:27:17,399
Speaker 1: hunding stakes into the ground, four h channels we built,

498
00:27:18,080 --> 00:27:20,879
Speaker 1: and it got to a business generating one point two

499
00:27:20,920 --> 00:27:25,240
Speaker 1: billion dollars in operating profit from zero in two thousand three.

500
00:27:25,560 --> 00:27:27,359
Speaker 1: Did it kill you a couple of year or so

501
00:27:27,359 --> 00:27:30,080
Speaker 1: ago and Disney just pulled the plug on a bunch

502
00:27:30,080 --> 00:27:32,280
Speaker 1: of them, No, it didn't, because that's there was the

503
00:27:32,359 --> 00:27:38,960
Speaker 1: right thing and by the in the and But my

504
00:27:39,359 --> 00:27:43,320
Speaker 1: point though is because they're going that direction and others

505
00:27:43,359 --> 00:27:46,440
Speaker 1: are going that direction, you know, we have we still

506
00:27:46,520 --> 00:27:49,840
Speaker 1: we are maintaining our channel business in some places because

507
00:27:50,600 --> 00:27:54,440
Speaker 1: the transition from linear to streaming has not been as

508
00:27:54,480 --> 00:27:58,480
Speaker 1: fast in Spain and in Latin America and in India.

509
00:27:58,800 --> 00:28:00,840
Speaker 1: But because all these companies getting out, it's creating a

510
00:28:00,840 --> 00:28:04,200
Speaker 1: great opportunity for people who do have channels because there's

511
00:28:04,240 --> 00:28:08,240
Speaker 1: fewer channels to compete with, and the paid TV providers

512
00:28:08,280 --> 00:28:11,320
Speaker 1: are not going to zero. They might go to penetration,

513
00:28:12,160 --> 00:28:15,679
Speaker 1: but they need product, so there it does provide opportunity

514
00:28:15,680 --> 00:28:17,960
Speaker 1: in some places, and that's why we're so focused on

515
00:28:17,960 --> 00:28:20,879
Speaker 1: India right now. And it could actually you know, and

516
00:28:20,960 --> 00:28:23,760
Speaker 1: I mean, like we're seeing so much infrastructure arrive in

517
00:28:23,880 --> 00:28:26,639
Speaker 1: like Africa and in parts of Asia, and this, you know,

518
00:28:26,720 --> 00:28:29,720
Speaker 1: this process of almost like puzzle pieces being moved around

519
00:28:29,800 --> 00:28:33,760
Speaker 1: could could help even engender some more local infrastructure for

520
00:28:34,080 --> 00:28:37,040
Speaker 1: the larger entertainment. Well interesting. You know when I was

521
00:28:37,080 --> 00:28:39,440
Speaker 1: at TPG in between Fox and here, we we looked

522
00:28:39,440 --> 00:28:41,920
Speaker 1: at Africa a lot. I really was looking to figure

523
00:28:41,960 --> 00:28:44,200
Speaker 1: out how to do that. Africa is an interesting case

524
00:28:44,200 --> 00:28:48,840
Speaker 1: where they've skipped over several technology progressions. They've gone right

525
00:28:48,880 --> 00:28:53,120
Speaker 1: from note technology to modern technology. You know what's what's

526
00:28:53,160 --> 00:28:57,440
Speaker 1: available today. So it's going to grow quickly. The pandemic

527
00:28:57,480 --> 00:28:59,000
Speaker 1: is getting in the way of bank. You don't need

528
00:28:59,000 --> 00:29:00,920
Speaker 1: to set top box. He doesn't need a WiFi, you

529
00:29:00,960 --> 00:29:03,440
Speaker 1: need a WiFi connection or just a phone. I mean

530
00:29:03,480 --> 00:29:05,640
Speaker 1: India in the same way. You know, Reliance did an

531
00:29:05,640 --> 00:29:10,280
Speaker 1: amazing job building for g uh In in India. Um

532
00:29:10,480 --> 00:29:15,480
Speaker 1: and and the little known facts Indians people in India

533
00:29:15,760 --> 00:29:19,800
Speaker 1: use four times the data that Americans do on their

534
00:29:19,840 --> 00:29:22,280
Speaker 1: four at least, this was about a year ago. That

535
00:29:22,360 --> 00:29:24,480
Speaker 1: may have changed now, but that was a year ago.

536
00:29:24,560 --> 00:29:26,120
Speaker 1: That was the case, and that's got to be a

537
00:29:26,120 --> 00:29:28,440
Speaker 1: lot of it's got to be media consumption absolutely what

538
00:29:28,520 --> 00:29:30,840
Speaker 1: eats up all the data exactly. And the middle you know,

539
00:29:30,920 --> 00:29:34,400
Speaker 1: the lower middle class in India doesn't have sixty in

540
00:29:34,600 --> 00:29:38,240
Speaker 1: televisions in their homes, so they're watching their entertainment on

541
00:29:38,320 --> 00:29:40,880
Speaker 1: the phone that reliance provides. I would be remiss if

542
00:29:40,880 --> 00:29:43,400
Speaker 1: I didn't ask you a tough question here about no

543
00:29:43,480 --> 00:29:48,000
Speaker 1: discussion of Sony pictures recently would be complete. Let me guess,

544
00:29:48,160 --> 00:29:51,080
Speaker 1: I gotta I gotta ask you the Jeopardy question. Let

545
00:29:51,080 --> 00:29:54,120
Speaker 1: me let me ask you, if you had a chance

546
00:29:54,160 --> 00:29:57,000
Speaker 1: to do something differently, would you would you have taken

547
00:29:57,000 --> 00:30:00,440
Speaker 1: a different approach if I'd known that this was out there?

548
00:30:00,720 --> 00:30:03,400
Speaker 1: You can't search these things. We did an enormous people

549
00:30:03,440 --> 00:30:06,680
Speaker 1: say we didn't look at him. We looked very deep

550
00:30:06,720 --> 00:30:10,440
Speaker 1: at him, had many conversations with him, looked at his history.

551
00:30:10,920 --> 00:30:14,760
Speaker 1: America didn't want the host of Jeopardy to be even

552
00:30:14,840 --> 00:30:18,400
Speaker 1: if even if you know, I accept your point that

553
00:30:18,760 --> 00:30:21,040
Speaker 1: people these are the kinds of things that people have

554
00:30:21,080 --> 00:30:23,960
Speaker 1: said on other you know, even if that's true, America

555
00:30:24,000 --> 00:30:27,600
Speaker 1: doesn't want Howard Stern as the host. That that's a

556
00:30:27,680 --> 00:30:29,880
Speaker 1: very fair point. And you know, and like I said,

557
00:30:29,920 --> 00:30:33,240
Speaker 1: if I had known that this was out there without

558
00:30:33,280 --> 00:30:38,800
Speaker 1: affected probably, but I didn't know. I didn't know. But

559
00:30:38,920 --> 00:30:43,760
Speaker 1: it's a very fair point that the affirmation of Jeopardy

560
00:30:43,840 --> 00:30:47,160
Speaker 1: and will Fortune was so great through this period that

561
00:30:47,200 --> 00:30:49,880
Speaker 1: we know that our our assets and our brands are

562
00:30:49,920 --> 00:30:52,560
Speaker 1: even stronger. And by the way, the ratings now are

563
00:30:52,640 --> 00:30:56,920
Speaker 1: higher than they were a year ago, so you know,

564
00:30:57,000 --> 00:31:01,320
Speaker 1: it's it's actually going pretty well. It's an indestruct it

565
00:31:01,400 --> 00:31:04,040
Speaker 1: is an indestructible format. Would I have rather not lived

566
00:31:04,040 --> 00:31:08,440
Speaker 1: through that? Absolutely? I think it was um. There are

567
00:31:08,480 --> 00:31:11,200
Speaker 1: a lot of mistakes made, obviously not being able to

568
00:31:11,240 --> 00:31:14,720
Speaker 1: find the stuff that we didn't know about. Uh As

569
00:31:14,720 --> 00:31:17,160
Speaker 1: I said, I think if I had known that, probably

570
00:31:17,160 --> 00:31:20,800
Speaker 1: would have had a different path. But absent knowing that,

571
00:31:20,920 --> 00:31:23,800
Speaker 1: I would have made the same decision because he was

572
00:31:23,880 --> 00:31:26,960
Speaker 1: the guy that tested best Tony. What energizes you? What

573
00:31:27,000 --> 00:31:31,400
Speaker 1: are you looking forward to in? It's right around the corner?

574
00:31:31,480 --> 00:31:33,920
Speaker 1: Isn't it a couple of weeks away? Wow? What am

575
00:31:33,960 --> 00:31:36,880
Speaker 1: I looking for it? In? Two? Look? I think I

576
00:31:36,920 --> 00:31:41,320
Speaker 1: think that the hard work to get this company talking

577
00:31:41,320 --> 00:31:44,040
Speaker 1: about so many pictures, the hard work to get this

578
00:31:44,080 --> 00:31:45,320
Speaker 1: company to where it is. And by the way, one

579
00:31:45,320 --> 00:31:47,920
Speaker 1: of the things we didn't talk about was the third.

580
00:31:48,120 --> 00:31:50,160
Speaker 1: The fourth part of the strategy that we that we

581
00:31:50,280 --> 00:31:53,640
Speaker 1: put together was working with the other Sony companies. There

582
00:31:53,680 --> 00:31:57,600
Speaker 1: never was any coordination amongst the Sony companies before Music

583
00:31:57,760 --> 00:32:03,440
Speaker 1: PlayStation Electronics. We of enormous, enormous cooperation going now. We

584
00:32:03,480 --> 00:32:06,920
Speaker 1: have a movie coming out in February UM called and Charted,

585
00:32:07,800 --> 00:32:11,200
Speaker 1: which is a PlayStation i P and we know that's

586
00:32:11,200 --> 00:32:12,680
Speaker 1: been a goal for a while, right and we have

587
00:32:12,720 --> 00:32:15,280
Speaker 1: ten other projects or nine other projects in the works

588
00:32:15,400 --> 00:32:19,480
Speaker 1: right now using PlayStation IP. And we made a movie

589
00:32:19,520 --> 00:32:22,600
Speaker 1: with We made a movie with a big talent from

590
00:32:22,760 --> 00:32:28,960
Speaker 1: Sony Music and were in Rad Pitt's movie, right Cinderella,

591
00:32:29,240 --> 00:32:33,000
Speaker 1: and then in Brad Pitt's movie Bullet Train. We have

592
00:32:33,080 --> 00:32:37,280
Speaker 1: a very big um Sony music artist as well, which'll

593
00:32:37,400 --> 00:32:38,880
Speaker 1: I'm not going to tell you the name because I

594
00:32:38,880 --> 00:32:43,800
Speaker 1: don't think they've released it yet. So um it's bad Bunny. Um. So.

595
00:32:44,360 --> 00:32:46,840
Speaker 1: So that has been a really big driver as well,

596
00:32:46,920 --> 00:32:49,320
Speaker 1: and they must love that because you know, PlayStation not

597
00:32:49,360 --> 00:32:51,680
Speaker 1: only does the IP get a nice platform, but I'm

598
00:32:51,680 --> 00:32:54,200
Speaker 1: sure that you know, I'm sure that that PlayStation gets

599
00:32:54,200 --> 00:32:57,520
Speaker 1: some remuneration for providing the i P and no they

600
00:32:57,560 --> 00:33:00,760
Speaker 1: don't actually know, but they will sell but it is

601
00:33:00,880 --> 00:33:05,240
Speaker 1: uncharted uncharted, uh, I p they'll sell a lot of

602
00:33:05,240 --> 00:33:09,040
Speaker 1: the uncharted games to their PlayStation, to the polaystation and

603
00:33:09,200 --> 00:33:11,280
Speaker 1: participant to your point, I guess it's all. It's all

604
00:33:11,320 --> 00:33:13,920
Speaker 1: under the same roof exactly. We're all the same company,

605
00:33:13,920 --> 00:33:17,200
Speaker 1: well by the same company. So so what I what

606
00:33:17,480 --> 00:33:20,280
Speaker 1: going back to your question, what do I anticipate? I

607
00:33:20,320 --> 00:33:22,240
Speaker 1: think the hard most of the hard work is done,

608
00:33:22,240 --> 00:33:23,800
Speaker 1: not at all, but most of the hard work is done,

609
00:33:23,840 --> 00:33:25,920
Speaker 1: and we have to always be vigilant about making sure

610
00:33:25,960 --> 00:33:29,400
Speaker 1: that our organization matches what the world out there is

611
00:33:29,440 --> 00:33:33,280
Speaker 1: asking for. Um. But you know we're gonna benefit from

612
00:33:33,680 --> 00:33:36,440
Speaker 1: were You'll see in our results that we did very

613
00:33:36,480 --> 00:33:38,240
Speaker 1: well this year. We're gonna do very well next year

614
00:33:38,280 --> 00:33:41,840
Speaker 1: and even better in the years you're beyond. So black

615
00:33:41,920 --> 00:33:45,120
Speaker 1: Ink is always welcome, Tony. Thank you, thank you for

616
00:33:45,600 --> 00:33:48,200
Speaker 1: taking me through the last five years and your rationale

617
00:33:48,200 --> 00:33:50,680
Speaker 1: and your decision making, and I really appreciate your candor.

618
00:33:51,720 --> 00:34:00,600
Speaker 1: Very welcome. Nice to see you again. Thanks for listening.

619
00:34:00,840 --> 00:34:03,360
Speaker 1: Be sure to leave us a review at Apple Podcast.

620
00:34:03,480 --> 00:34:06,080
Speaker 1: We love to hear from listeners, and be sure to

621
00:34:06,120 --> 00:34:09,240
Speaker 1: tune in next week for another episode of Strictly Business

622
00:34:20,160 --> 00:34:25,280
Speaker 1: for your awards consideration. Succession, the HBO original drama praised

623
00:34:25,320 --> 00:34:28,799
Speaker 1: by Vulture as the best show on TV. Season three

624
00:34:28,880 --> 00:34:33,120
Speaker 1: spines Wastar Roy COO CEO Logan Roy in a perilous position,

625
00:34:33,400 --> 00:34:38,720
Speaker 1: scrambling to secure familial political and financial alliances as tension

626
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Speaker 1: rise and a bitter corporate battle threatens to turn into

627
00:34:42,520 --> 00:34:45,640
Speaker 1: a family civil war. Hailed by the Chicago Sun Times

628
00:34:45,719 --> 00:34:49,800
Speaker 1: for being wickedly funny and wildly entertaining and by Vulture

629
00:34:49,880 --> 00:34:54,560
Speaker 1: for being ferociously active, Succession is now streaming on HBO

630
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Speaker 1: Max