Business Breakdowns
· Blake Saunders, Matt Reustle
They're bringing it in the form where you're not going to do the pay-per-view, but I think it'll still feel like a premium product that you can only watch on Paramount. [00:00:00] S0: Yeah, it's interesting for both of those properties. You seem to hit a specific demographic as well and you have this die-hard audience, for lack of a better term, where you can feel more comfortable that they're going to port over with you versus there's many other large audiences where if it went behind a paywall—I always referenced The Economist had an 85% drop in its podcast listenership after they brought their podcast behind a paywall, which there's, I'm sure, other things going on in the numbers. But it's interesting to me where there's a test of when something is free versus when something moves and you see that same audience go with them. So it's interesting just to hear the dynamics of what they targeted. How many assets do you think are out there that are that particularly powerful in terms of they have the scale, but they also have this engagement which feels stronger than you would find? Top decile is what I would say easily.
· Blake Saunders
[00:00:00] S1: The interesting thing in media is that it's ever changing. New shows come along. One thing I heard from a producer is the unfortunate dynamic of all these numbers and all these statistics is a lot of shows are not getting a chance to breathe. And so most of the good content that we look back and say that was a really good fucking show, it took them two or three seasons and now they get cut after one if they don't show the right metrics. A lot of the best shows, when Netflix first came out, they were basically green-lighting their own content. So much of it was built in a way to have you binge. A lot of new content that's being created is more addictive but is not as good. So I don't know if it will have the underlying IP and asset value. I think the way to think about it is: what do you watch? I don't watch TV, so I have a hard time saying what's valuable. I think there's probably some really good podcasts. The next iteration is some of these podcasts can have the same amount of advertising weight as a good TV show. And you've seen SiriusXM do a really good job of partnering because they have an insane audio sales team. The best, and that's why they do these deals is because they know that they're going to get the deepest penetration with the right advertisers, get good CPMs. Again, I don't watch TV, so I don't know any other valuable IP that's the same weight as South Park because that's a lot of money.
· Matt Reustle, Blake Saunders
[00:00:00] S0: And there’s very few appointment viewing things. I think that's why you've seen this flock towards live sports. It is truly appointment viewing. UFC I would put into that category. South Park, one of the last things that I'm sure their audience would still view as appointment viewing. Maybe not as strong as it once was. [00:00:00] S1: Sports is probably a big miss on my part. So sports is probably the easiest, the heaviest weighted thing where you're going to see a different adjudication of who owns the rights, how they're able to be used, because there's been sort of a shakeup because the rights are controlled at a couple different levels—in market versus national broadcast. And it was a way to basically put more value back to the teams. When Sinclair acquired a bunch of the RSNs and then ended up having to restructure those businesses, a lot of those rights got put back into different areas. They just changed. Those were really valuable for the sports teams. It was driving a lot of the value. So probably sports is the place where you're going to see billion-dollar-plus M&A type deals or rights deals. I was having a hard time thinking about specific content. [00:00:00] S0: It's incredibly rare to have that type of you want to be there in the moment because now things you might want to watch, they just pile up. You're just getting fed with so much content. So I have books, TV shows, things that have just been on my list for a while, which is a lot different than it used to be.
· Matt Reustle, Blake Saunders
[00:00:00] S0: It's incredibly rare to have that type of you want to be there in the moment because now things you might want to watch, they just pile up. You're just getting fed with so much content. So I have books, TV shows, things that have just been on my list for a while, which is a lot different than it used to be. [00:00:00] S1: One of the things that's always been misjudged is the value of IP libraries, meaning people misperceive them as being more valuable because there's just a ton of degradation in most content formats. The first 30 to 60 days is where all the value is. And then it degrades exceptionally quickly with technology now. I think there's going to be unique opportunities with these libraries of IP: music, TV shows, scripts, books, all this stuff, because you can reimagine it in a much quicker way. I'm sure there's some crazy esoteric union rules about what you can and can't do and how you can use the actors, but it is something interesting to think about. Good stories and narratives can be reimagined in a lot of different ways. I think there's going to be opportunities to use these libraries to reimagine content in the future. And imagine if instead of having to hire actors and stuff, it was just a kid behind a keyboard. When Disney recolored some of the movies, it's that quick with obviously new content, better content, things like that.
· Matt Reustle
[00:00:00] S0: It taps into what a lot of the studios did with Marvel originally, but these ideas of superhero movies where the superheroes sold the movie, not the actors, and there was a way to not have to pay nearly as much. Now things fully came full circle. But if it's not the humans that are attracting the audience, you can hire lower-cost labor, you can juice that up, you can recreate the same things, and you're still going to get a similar audience, which I think is interesting. And on the technology, I think you saw it in the music industry where a lot of those old catalogs, I mean, this wasn't even reimagining it, but by having the streaming come into play, you saw Spotify reinvigorate a lot of these royalty streams. And then not only did you have a pickup in terms of the income that was coming in, you in theory had better visibility, or at least that's what the funds were selling. That because of you having this hard data, you had better visibility into what it would look like in the future. And that industry took off. And that was from technology unlocking historic IP and bringing new income streams to it.
· Blake Saunders
[00:00:00] S1: Taking the music one, because in music a lot of musicians never make a lot. So you have hobbyists and stuff like that. There's a company right now where they focus on a couple songs each week and have 20-plus musicians do different versions of that because there's been a few songs that have been put as the intro or outros to TV shows that have become hits. What they're using is technology to help them produce faster. So they send the songs out to everybody, everybody works on it for a week. They come on Friday, they have a listening session where they listen to everyone's songs, they pick five and then they fully produce those and then they go repitch those songs for commercials and all these different things. Taking it a next step further where they're using this base of IP and then they're reimagining it with a slightly different tone and turning it back on. Basically one, they don't have to pay these musicians that much at all, and two, if they hit it and they can grow the value of one song, it could change the entire value of a portfolio of songs.