Business Breakdowns
· 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.
· Matt Reustle
[00:00:00] S0: Going back into some of the new dynamics of the media upstarts that we're seeing today. One of the interesting themes up until the Chernin deal with Barstool was: how do you apply a multiple on a business where there's such high key-man risk? Where does that stand today just in terms of the comfort level of acquiring businesses that are built around individuals and it's hard to separate the individual from the brand, versus those that are able to accomplish the brand while being a key individual, versus those that just try to go the full brand route and limiting the individual connectivity?
· Blake Saunders
[00:00:00] S1: I think the reason why you see more person-driven brands is the easiest way to get audience and get scale. Obviously most podcasts are led by the person because you can't have a brand. Certain forms of media, cooking, it's really personal. If you're selling a recipe website, you'll get dinged because they're worried about it. But what you're trying to show is, look, this person's been producing content for 10 or 15 years. Even though they may get a large check at the end of a transaction, there's ways to tie them into whatever company going forward each time. It's a unique situation, but MrBeast I think has done it pretty well from the perspective of he's been able to raise a lot of money around the Feastables and other things like that. And when you look at his go-to-market, it's not just the YouTube channels. It's everything else he's going to build that will create ongoing value. But I think people see Jimmy as someone who is much more than just his YouTube channel. And if you talk to people that work with him, he's very focused on this business, not just the content. How he drives to metrics and things like that sounds like any other really strong founder. It's a case-by-case basis. Most large media companies do a pretty good job of trying to get a sense of who that person is and that's what they'll base what they're buying. But when TCG invested in Barstool, Dave smartly said, I'm going to step back from the day-to-day CEO role. But he still drove so much of the engagement. And I think most media companies at a smaller scale need someone like that or they have a team of people. There's a reason why you're showing up and it's not just because of the brand.