Episode 21
Kids Media Club Podcast - Special Guest, Andrew Rosen
In this episode of Kids Media Club Podcast, Andy, Jo, and Emily chat with special guest, Andrew Rosen, the Founder of PARQOR, a newsletter which covers the seismic shifts under way in the media business.
Transcript
Speaker 1
Hello and welcome to another episode of the Kids Media Club podcast. I'm Andy Williams.
::Speaker 2
Hi, I'm Joe Redfern and we are delighted to have Emily back with us today and we have a special guest. Over to you, Emily.
::Speaker 3
Yeah, my name's Ebony Horgan. I'm an independent media consultant and I managed to convince a very smart guy called Andrew Rosen to come and join us. Andrew would like to introduce yourself and give. Give your spiel.
::Speaker 4
Yeah, sure. I thank you. But I thank you all for having me. My name is Andrew Rosen. I'm the founder of Parker. Parker is a newsletter that's about the sort of seismic shifts in media and helps you identify them and navigate them. And then secondly, I write a monthly column for the information called Medium Shift, where I talk about transformation in media.
::Speaker 4
The Parker is distributed by the information, and I've started to build out a consulting business with media companies, too.
::Speaker 3
and as we go into: ::Speaker 3
So can we can we kick off there? Would that be okay?
::Speaker 4
Yeah, that's fine. I mean, you know, I'm happy to talk about the trends and much more interested in getting your guys perspectives on them just because, you know, I spend so much time with them that when I when I'm with three really smart people, it's much more interesting. They of it here, how they see them.
::Speaker 3
Oh, awesome. And well so the first one like on your website Parker dot com is that media companies have millions of credit cards on file on what's next in streaming. So I'd love to hear you explain a little bit more about how you see the implications of that and examples of stuff like that. Yeah, and then we can start we can start shooting the thought.
::Speaker 4
Sure. I mean, so it's a it's the the being the most relevant one for this podcast is Disney, right? That Disney has I mean, they tell you they have 235 million, but there's a lot of double counting and triple accounting in there. So let's say there's 150, 160 million in there, but they have 150, 260 million credit cards on file with recurring payments monthly.
::Speaker 4
That is an entirely new business. And the, you know, and it's replacing the legacy linear model where you just got you got those payments from cable companies in addition to advertising revenues. But now you have this direct to consumer relationship with over a hundred million people for Paramount, that's what, 70, 80. I mean, they get they're getting the start to climb up, but then closer to 90 million consumers worldwide.
::Speaker 4
And then Peacock has 20 million. But then, you know, I guess you have to include, you know, Sky, Showtime and all these other services. But the point is that all these legacy media companies have never really wanted to understand the customer the way that a direct to consumer business does. And now they have all these credit cards on file.
::Speaker 4
Now they have all these these relationships. Now they need to understand their consumers. What do they do? What happens next? Yeah, And and, you know, I got really you know, my ears perked up when Bob Chapek the Chapek was Chapek was the CEO of Disney and he was talking about Disney Prime. And, you know, at D23, they had all those announcements about people who had a Disney Plus account getting all these special perks.
::Speaker 4
And so I think that the the do not disturb but the the I think that the problem is the problem is that you know, it's fascinating the chapter was pushed out because I actually think the business logic of what he was saying was right like if you do have these if you do have these credit cards and file and if you know what they what they want, then there's ways to create additional delight.
::Speaker 4
Right. That that Yeah. And that you can monetize and you know what does it mean all of a sudden somebody's attachment to your content is no longer through your first party content through a third party distributor. It's your first party content through a first party distributor. And then it can also be through a first party merchandizing channel, right?
::Speaker 4
and: ::Speaker 4
But I actually think Chapek Chapek, I'm getting his name wrong and just totally butchering it. But when you hear it last year, if you forget what it sounds like but that he was but that he was that I do think that it was notable that he was a direct to consumer CEO. Sorry I guess back to the direct to consumer division who was talking about Disney as a direct to consumer business and the board, and Iger rejected that.
::Speaker 4
And that to me is a really interesting dynamic presented by having hundreds of million over 100 million credit card debt.
::Speaker 1
But that that's that's inches I had one thought on that which was that. Do you think that his background in parks might have helped that mindset? Because in a way we parks once you're in the parks, you're kind of in an ecosystem where you're trying to kind of reduce any of the barriers to people being able to spend their money.
::Speaker 4
So so I think there's two answers to that question. I think the answer is yes. But the other answer to that question, which I'm on a learning curve on, and, you know, it was it was an insight that led me to start parkour. And the more that I write parkour and the more that I do my research and my analysis, the more that it emerges as a disconnect, which is, I think, Chadwick's understanding of the consumer and of the direct to consumer business model is actually not a company wide skill set.
::Speaker 4
And I think that the disconnect I think I think both I think Iger, the Disney board, even think Chapek may have underestimated the dynamics of that disconnect. Right. That, you know, there's a there's a great quote from they used in a recent opinion piece from a comic named Mitch Hedberg. He talks about moving to Los Angeles after being, you know, a standup comic in this era.
::Speaker 4
You know, can you act? And he's like, yeah, that's like being a world class chef and being there. I somebody look, you're saying, Well, you can cook, but can you farm? And I do think that that people have built careers based on very specific skill sets that don't account for direct to consumer business logic, that don't account for the complexities of owning the consumer relationship.
::Speaker 4
And I think that in a weird way, I it's a it's a disconnect that I'm starting to realize that I may not have appreciated the scale of. But I think that Disney may have realized that it didn't appreciate the scale of it. That may be why it may maybe one of the reasons why I ever came back.
::Speaker 3
Yeah.
::Speaker 2
I have a quick question in terms of what what are their options then, given that they have all of this data, this knowledge and insight into their consumers behavior, what in your view, could they do differently? Could could they do kind of vertical bundling direct to consumer products? What what are the choices? What are their options?
::Speaker 4
You know, I mean, I think I mean, this goes back to the you know, the I think that that's why I think that Chapek was right. Right. Which is I do think that he was he was basically saying we have to monetize these assets in multiple ways. We have to figure out how to make these people happy, like we have to do this.
::Speaker 4
And, you know, I don't know if the organization was ready to do that, but I don't you know, at the same time, I don't think it's the organizations and the organizing because that is sort of controversial. But I do think this is true, which is I don't I don't if the organization is wrong. And so what like if he if he's if he's understands where this is headed, then he should have had the backing of the board and shouldn't be allowed to do what he needs to do.
::Speaker 4
Now, Disney is a creative company, right also. And the creative institution is really powerful. And they said, you know, we can't do this. So. So the answer to your question ends up being kind of a hypothetical, right? Which is what is a business? What is what is a media conglomerate with a powerful creative culture supposed to do when it's very clear that for for for in order for it to evolve, it has to take the 100, 150 million credit cards it has on file and figure out different monetization models to plug into it.
::Speaker 4
You've talked about Crunchyroll on past podcast and you know, I've written about Crunchyroll and Crunchyroll is a really interesting example because, you know, they are they're tiny, right? I mean, with a 5 million subscribers, so they are at a fraction of that scale. So they don't and they don't they're not I mean, they're young. I mean, they're but they're less than a decade old.
::Speaker 4
And so they don't have these operational or cultural constraints, but they are constructed to say it's interesting, they were streaming company and then when Sony acquired them, they merged with fun emotion and then they but they didn't merge them for the purposes of having a streaming business. They merged them for the purposes of having an anime entertainment business and a business that could do first, you know, could do theatrical releases, could do second party secondary distribution, could do merchandise.
::Speaker 4
And so it ends up being this hybrid of streaming, being the the subscription, and then they offer different mechanisms within the ecosystem to monetize the consumer. So this they released a movie recently, I don't remember the name of it. And oddly, all the conversations about it don't mention the name, but they had to. They released a movie in the past two weeks in theaters and it grossed 10 million.
::Speaker 4
to: ::Speaker 4
What went to the theaters to watch it. And so all of a sudden you have this powerful ecosystem where it's they're taking original content that they own and they're going to the ecosystem and they're saying, hey, you know, you've seen you may have seen this, but go see this in theaters as a as a unique experience and people pay money for it.
::Speaker 4
And so now you've got the monthly recurring monthly revenues, but then you're grossing or you're netting out whatever from theatrical for basically a sunk cost for content and for real heroes. And so it's a really it's a it's just a very it's the reason our cultural is interesting is because it has echoes of the Disney mom. It's not the conglomerate, but it's anyway, you can look at the individual moving pieces and you can look at the business logic.
::Speaker 4
If you look at the 5 million credit cards and file and you can say this isn't that hard for Disney to pull off.
::Speaker 1
Yeah, but Crunchyroll has also got an incredibly passionate grassroots tribal fan base. The Yes found a way to monetize. And it's very interesting, the theatrical example that you gave, because I think that potentially opens up a window into how the studios might strategize between between streaming and theatrical releases as well. In a way that's kind of a win for both aspects of the business.
::Speaker 4
But and Sony CEO Tony, I love the point about the the passionate fan base like the Sony Entertainment Pictures CEO Tony Vinciquerra was interviewed by the anchor recently and he said he said they're obsessed. I mean, they're loyal. Obsessed. And so and they're not, you know, his he's I don't know if he's talking about 100% of the subscribers, but the fact that that that the thing that's interesting about them is that if you can just figure out how to monetize even a fraction of them to get them to pay some multiple more per month, you've got a great business.
::Speaker 4
You've got you've got the people who are just going to be totally irrational. I mean, that's that's the mobile gaming business, right? What was that like? The top you know, that majority of 80% of the sales come from like the top 1% of users? I mean, it's the brand. I mean, there's the there's something about these models where if you can you figure out how to make the people who are really obsessed and really involved really happy that you can do quite well.
::Speaker 4
And and I think in theory, having 150 million credit cards on file, insert and and having a database of parks visitors should make that easier. But I you know, the Disney hasn't gone down that path or they've rejected that.
::Speaker 3
But is there a point there, Andrew, though, that like when you've 5 million who are passionate about one thing, finding those new shoes are easier. I mean, the example of control like actually reminds me of something many of you probably haven't heard of. It's a Latin American telenovela telenovela called Violeta, which was one of Disney Europe's major franchises outside of English speaking markets.
::Speaker 3
So lots of people haven't heard of heard of it. And, you know, they did they ran theatrical releases of like episode one of the new season and that were hugely subscribed. But that was again, a really passionate individual fan base. And I guess the question with Disney is like they would have so many niches, you know, in the 160 million subscribers they have there's many millions like, you know, increments of 5 million who are passionate about, wow, Marvel loves is going to be higher like Star Wars.
::Speaker 3
Do they need to kind of like pull it out and kind of, you know, smorgasbord it a bit more if that's even a verb?
::Speaker 2
Yeah, I think just just to qualify, I think that's interesting. And again, it brings to mind WWE for me as well, slightly different, but still a passionate fanbase and you look at WWE and they have one of the biggest YouTube channels on YouTube, right? Because they're super serving their fans and their fans reward them with that passionate kind of tribal loyalty.
::Speaker 2
They've they found a way to do it. It's a slightly different monetization strategy, but they found a way, a similar way to Crunchyroll to do it. So, you know what? What are Disney missing, I guess?
::Speaker 1
Well, yeah, maybe. Go ahead. Anyway, I was all I was going to I was just going to add that you can see how it would work for Netflix to do, for instance, a movie, a theatrical release of Stranger Things. So kind of a only in the theater to our story around that universe and those characters and and I think that would do do really well and it's kind of the marketing is already built into the to the franchise so you can see how Disney surely would be able to kind of leverage that aspect of it.
::Speaker 4
ontent is a niche business in: ::Speaker 4
But the point that you're making is an interesting one, right? Which is that Disney is actually if Disney really stepped back and looked at what it had 350 million credit cards and files, that it actually just has all these pockets of really passionate niche fare and that the business, you know, that the creators can keep on doing what they're doing.
::Speaker 4
But it's actually the the distribution and marketing aspects of the business that really need to be rethought and that, that and, and if you keep going down that path and think, well, actually the thing the chamber got wrong is not that it shouldn't be, you know, Disney Plus is this mass marketing tool. It's actually Disney Plus as a tactical marketing tool.
::Speaker 4
Right. That that maybe the people who engage with Bluey are just like super crazy and passionate about Bluey and Disney Plus should be the tool for engaging Bluey fans. But it may it may not be as valuable for engaging fans of Mickey Mouse. I mean, it's just a but it's you know, it's a very different business model. And again, it requires a very different understanding of conversion funnels and the direct to consumer relationship and consumer data that let's be real, probably isn't taught in most MBA programs right now or in most major programs.
::Speaker 4
I mean, it's I do know that it's taught at like in IAC that they but they have it off. IAC has a bunch of direct to consumer businesses and they have like an off campus off site for new employees down in Texas or something that where they they they teach them kind of understand the direct to consumer business model in economics and but it's it's a really again it comes back to me saying really like maybe Disney just doesn't understand the direct to consumer funnel right that it's there are people within it who understand it.
::Speaker 4
But operationally and culturally beyond the parks business, they just don't.
::Speaker 2
And it makes me realize how much money potentially Disney is leaving on the table, given that even if they're even if they picked five, ten potential niche niches and move towards the kind of value that I suppose Crunchyroll has, you think about how that multiplies and that's a huge amount of money that they're leaving on the table.
::Speaker 3
And it's not Disney. Like, you know, Disney actually have the operations to monetize direct to consumer beyond streaming, whereas all the other like, you know, Viacom and you know, Peacock, etc., they don't have you know, they don't have parks, they don't have Disney Store, they don't have, you know, their operations that direct to consumer are totally limited.
::Speaker 1
Yeah, absolutely. Talking about passionate fan bases, that would make me think they kind of it's set up the next question quite nicely which was we talk a lot about the creator economy. Well I find it more useful to think of it as the personality economy a lot of the time. But Hollywood and kind of a lot of the big studios, they kind of rely on being able to discover new talent and utilize new talent.
::Speaker 1
Is that creator economy, personality, economy a good source for that talent or is it just a category error to think that that's going to feed naturally into the talent pool of kind of Hollywood and all the studios are?
::Speaker 4
It's a good question. I mean, it's it's a related problem, right? Which is and you guys have talked about this, which is that you have all these creators who have spent have built their careers and their content models around an obsessive understanding of the consumer. And but the you know, do that does that translate into Hollywood? And you can look at somebody like Logan Paul who is a successful creator.
::Speaker 4
He's gone into the WWE seamlessly. But I mean, it's really kind of impressive that he's become that kind of character and that much of a talented athlete. He's a talented athlete anyway. But to be to be able to be a WWE wrestler, a professional athlete, a sort of a professional athlete is really it's quite something. You know, I it's it really has been a tension over the past few years.
::Speaker 4
Right. Who is as Miranda sings who failed horribly on Netflix. Right. That she just it just didn't go anywhere after she had and Netflix show and so there's there is that angle like the individual talent are they Hollywood talent right I mean I think the answer is no because they reject they reject anybody shaping their personas. They control their personas.
::Speaker 4
They evolve their personas that they prefer to be dynamic and agile. And Hollywood is not dynamic and agile or package somebody and you repeat the package of them. And so I think that, you know, the but at the same time that I think that the interesting he did a presentation in Germany for a German media company for the trainees and I talked about the creator economy they've talked to the exact topic that we're talking about and they all looked at me funny and they said, you know, we don't have it's not as important for us in Germany because the creators are not the German culture is not about showing your success and showing off your
::Speaker 4
success and showing your wealth, that actually, you know, that we were kind of horrified by Mr. Beast going to Antarctica and planting a flag for Shopify on a mountain that that was not at all something that we thought was that that resonated with us. And that's, you know, and I think that there's you could say that there's Hollywood aims to be more universal in themes, but you get the sense of the creator economies is actually a lot more local and in themes.
::Speaker 4
And so it's I don't know it's it's the challenge in all this is even even if it's more local themes, even if it's if the talent is different, even in towns more agile and how they evolve in their relationship with the consumers. The problem for Hollywood is that advertisers increasingly see that as premium content that that the IAB just recently observed that spending on creator content by advertisers is growing, is growing faster than spending on legacy media content that was traditionally in Hollywood.
::Speaker 4
Content is traditionally considered premium content. And so that the the the comparison is very much an advertiser driven one. Right. But it's also one that's kind of driven by the how technology is democratized, the ability to create great looking content and edit it.
::Speaker 2
And I think going back to your point about advertising as well, what I like about the creator economy and that I've certainly observed is going back to your point about, you know, by nature it's more local. They have forensic knowledge of their audiences and therefore the advertisers know that that advertising dollar is going to be much more efficiently spent.
::Speaker 2
Right. We all know about how you might as well just spend money rather than put it into Facebook ads, But actually these creators know their audience. And so advertisers are looking at these creators with their authenticity and with their knowledge of their particular niche and knowing that those advertiser dollars are going to work much harder in that sense.
::Speaker 3
Yeah, yeah, yeah. I think that's what I would think. Joe, about it. It's actually relates to point one of like really, really understanding your niche even amidst and it doesn't always have to be the kind of traditional audience segments. It's down to the kind of fandoms and the communities that these creators cultivate and then they know how to monetize.
::Speaker 1
Yeah, and they kind of demonstrate that themselves. So kind of this personality economy where you can kind of you can create your own brand, your own your own products like prime, for example, we saw in men that that that was an enormous endorsement of the fact that you've got an incredibly powerful marketing base to be able to launch a product that kind of suddenly they've got one of the biggest drinks products on the market based on their personality.
::Speaker 1
I'm drunk and maybe it tastes delicious.
::Speaker 4
You know, it's not a good drink, but as I've heard, some have had a drink. They had a drink that was like for public consumption. And I felt like this thing is engineered in a way where it doesn't really care. Like, it made me feel better after drinking. It.
::Speaker 1
Yeah, that doesn't surprise me.
::Speaker 2
Yeah. And you know, in your view, sorry to jump in, Emily, this this idea of creating this media businesses. Oh, burgeoning media businesses. I mean, again, going back to this, taking control of their own destinies, which is not something that Hollywood necessarily would let them do. They are taking control of their own, licensing the brand extensions we've got from this that looking at hospitality now, you know, we've got Mr. Based with his festivals line.
::Speaker 2
How soon before one of these creative media businesses decide that they're going to get into animation or creating IP themselves?
::Speaker 4
It's a good question. I mean, I think Mr. Beast is an interesting conversation yesterday where, you know, was Mr. Beast festivals, his idea and he approached a chocolate company or was it the chocolate company approached him and he came up with the idea right. And I think that that's that that's there's a way of answering your question. Right.
::Speaker 4
Which is that I don't know if they naturally have ideas for pushing their brand into animation or businesses that don't really make you know, that that may not seem like they make sense, but they can make sense, right, that Mr. Beast made a chocolate business happen because got 220 120 million subscribers to his channel on YouTube and there's 2.6 billion monthly active users of YouTube around the world.
::Speaker 4
So there's, you know, he doesn't need a subscriber for it to be consumed and to sell a chocolate bar. I do think it's a really great question because, you know, I do think it's the thing that the Chernin Group seems to be focused on. And they, you know, they just made that Invision that investment in night studios and now they've launched Knight Capital to find other creators.
::Speaker 4
But it just Kindle media is focused on a version of this tier right at the Academy that is actually doing this right that they've started to roll out individual characters from Cocomelon, I think, into their new show. So so it's I think the short answer is it depends. I mean, it's a very weird you've you've asked a great question that kind of hits upon the weakness of the model that there aren't you can't look at it and say, well, that's, you know, that's where they're going to take this business now.
::Speaker 4
Right. That that 40 years ago when there was a sitcom on TV and there was a popular character, you know, the writing room and be like, actually, we could probably do a spinoff show for this character. And you can sort of guess that for shows now, but it's harder to do that for a creator. They are, you know, the spin offs tend to be like the people who guest appear.
::Speaker 4
They're in their videos and they're compelling enough characters that they start their own channels. Oh, it's it's a it's a really great question. And I don't know, I don't even know how to begin thinking about it.
::Speaker 2
I do I do wonder that as these creators that have grown up living their lives on the channels become parents themselves, then all of a sudden the interest in creating and perhaps a new animated kid's IP is going to peak. So, you know, we might we might see it in the next five years or so.
::Speaker 4
Yeah. There you go.
::Speaker 3
You see that Teen Vogue piece that you see, that Teen Vogue piece about a like a vlogger family. She would she wouldn't be named a vlogger family kid, though, who was like my my childhood was sold like all the all the problems all the problems that that particularly for kids who are brought up in these kind of larger families like she was like my whole childhood was taken away from me.
::Speaker 3
I've like, I worked my whole way through. None of that money is even been put aside for me. I'm going have to leave home. I leave my house towards my parents and I don't see this end of it. And yeah, that was that was an interesting one I saw recently. I have to say pretty brutal. Um, I think the funny the weird thing, the unique thing about creators is Bozo is that kind of relationship with the consumer.
::Speaker 3
And you know, it is also it's a very it's very, very earnest. Right, that that's they've come up on platforms like YouTube and and you know and TikTok and that where the whole point is it's free to access and you know that they're able to access that kind of an audience and that kind of have me thinking about one of the other trends you'd mentioned, Andrew, which is, you know, this this idea of scarcity in content, previously scarcity with value and definitely Netflix where we're we're very invested in that approach for a long time where iron clad keeping their content for their platform was the key way they saw it was adding value.
::Speaker 3
So love to hear a bit more about what what you think about that because definitely for kids scarcity when you're building kid's brand isn't isn't going to serve you. You need to have everything everywhere all at once Like the film.
::Speaker 4
Yeah, it's a scarcity is an interesting one because scarcity is an ad is ultimately about advertising. I mean, it is about it's informed by do things right So it is it's it's the theme is informed by the trend is informed by upfronts. Right. That in the U.S. there's upfront sales where the entire advertising sales process was basically networks would be able to go to advertisers and they say, you know what, our distribution is through our third party linear distributor, whether it's a Comcast or I mean, all these guys have changed names over the years or Charter or Cablevision.
::Speaker 4
And so it's so these are the audiences we reach. And because we reach 100 million homes around the U.S. and you want to reach 18 to 34 year olds, but we have 18 to 34 year olds watching TV in the millions and and therefore we have scarcity. And therefore, you should spend money with us. And now scarcity is Google, Facebook, Roku going to advertisers and saying, you know, if you want to find 18 to 34 year olds in the U.S., just spend money with you, spend however much you want with us Over the course of the next month, we'll easily reach a million 18,000,018.
::Speaker 4
If there are millions of 18 to 34 year olds around the U.S. And and so, you know, the question becomes, well, what is scarcity, right? That that that when you start going down the path of streaming, scarcity becomes ephemeral. That becomes it just becomes instantaneous and then gone and Netflix is model or the binge model creates scarcity over a 28 day to a period of 28 days.
::Speaker 4
And then it's a steep decline in consumption. And so you start you start have to when you start looking at that through the lens of scarcity and you realize that scarcity is ephemeral, then you can start thinking about their advertising business, you can start thinking about the scale of their business, and you sort of have to start having to ask like there is if there's not scarcity anymore, how is the, you know, what is the purpose of this business, right?
::Speaker 4
That that in of this because it's scarcity is probably the strongest counterargument to any of these streaming businesses. Right. That it's you know Paramount is Paramount has surprised everybody with the accomplishment of the scale of it's of Paramount Plus. But if you sat down and you said, well, what do people really use it for? You know, you know, from antenna data that they have like a 6.6% monthly churn rate and that you and that beyond the top gun and and Yellowstone sort of offshoot shows they don't have anything I mean they have Nickelodeon content but it's clear Nickelodeon's a big part of what they do, but they don't we don't really know how Nickelodeon content
::Speaker 4
performs because they don't really show up in any of the ratings, the third party ratings. And so you just have this scarcity just ends up being a question of what do you actually have, Right? Like, what is the purpose of this business? Because it's not because it's it's not just a you know, the old is the great old days that, you know, of scarcity and linear and now it's gone.
::Speaker 4
It's that they're still pursuing the same model that worked in scarcity and streaming. But the value of scarcity is so different and it's so different to advertisers and the things that create scarcity, that create moments of of scalable viewing online are fewer and fewer. I mean, you know, the Chris Rock concert is a perfect example of it on Netflix that that was that was actually scarcity in the legacy media sense.
::Speaker 4
But in the global sense which is unusual that that I was watching it at the same time as somebody who might have been watching it in the morning in Korea. Right. I mean, you know, it's great that that was very different to me. I never felt that watching the Super Bowl, I might have known it, but that person watching the Super Bowl was not watching it on the same app as me, but I'm on the same app for both on Netflix that were both getting this live stream that's scarcity, but it's not scarcity because it ended.
::Speaker 4
Yeah, there was no.
::Speaker 1
Yeah, yeah, I'm good because it becomes kind of how we, how you ration the content in some respects doesn't it. That the the time is kind of an ultimate way of rationing content. If it's a live experience then you've only got that window in which to see it. So as you said, that's the scarcity there. And I wonder with Netflix whether the we've talked about the add to platform aspect of Netflix and whether that will allow them to kind of almost introduce scarcity onto the ad tier platform.
::Speaker 1
So, you know, you have kind of what's the classic scarcity model for sales is time limited offer that the you have content that's only on the ad tier for a limited period of time. So that's kind of scarcity. And I wonder whether effectively we're going to have find that platforms are having to introduce kind of elements of scarcity scarcity into their content.
::Speaker 4
And if they understand their consumers well enough. Right. Which goes back to the earlier conversation.
::Speaker 1
Yeah, Yeah.
::Speaker 3
The one the interesting thing about Paramount plus the so the next is that they they continue to license stuff. There's no like the walled garden didn't come up the same way as it did for Disney like it did with Disney content. They license that to Netflix, they license it to like older series. But still SpongeBob, you know like is a that comfort TV return viewership subscriber retainer of it's that yeah subscriber retention kind of flavor and and yet they still put it everywhere I'm sure they still have it for paramount+ but it is it is it is in wide distribution for sure.
::Speaker 4
And they're amusingly like split personalities about it, right. Because the one time they'll say, you know, like we are not we are not limited to a streaming model. You know, it's not our future, you know, but at the same time they'll say, you know, we might have regretted licensing out South Park and Yellowstone. It's like, okay, well, thank you and have it both ways.
::Speaker 3
Yeah, yeah, yeah, definitely.
::Speaker 2
Is is curation something we we spoke to about curation so and is curation something that you see always making a comeback really you know we we've gone through this this period where there's been unprecedented choice particularly for kids and families. You know, there's all of this content out there. But certainly with younger kids, it's not always all that self-directed viewing that came with this unprecedented choice didn't always follow kids developmental stage or even the the mood they were in, in, you know, the day at the right time of day, you know, that we're watching things that we were hacking them up, but it was naptime, you know, And actually you've had sky kids launch in
::Speaker 2
the UK and you've got fast channels popping up that are adopting more of that old curation that we saw on kids linear TV channels back in the day. Do you think that's something that will make a comeback and again, might be a lever that that these that Hollywood can pull in order to attract more quality advertising dollars?
::Speaker 4
It's a great question. The I mean, the fast model I don't know if you heard the interview with the head of BBC Fast on the End Screaming Screen Media podcast, but she had this really wonderful quote where she said she said that I think of fast as the grandchild of five, and it was it was like, that's a profoundly interesting point.
::Speaker 4
But her basic point was that that sort of grandchild of linear, that is a child of that like that, that actually that that linear, fast, faster. The next hour, actually the next phase of slide where it solves for the creation that that that S4 does it and I think that you know the I really enjoy the curated experience on Pluto there a really wonderful conversation on on the watch podcast about slow TV as some of the best TV to watch segment, but it changes the definition of entertainment.
::Speaker 4
But that like watching trains going through the countryside and we I know that you watch with your son but like that that that that that image that that content is actually kind of mesmerizing and it's a form of entertainment on a television. But the but then when you think about the business model of curation, I mean, the fast model is kind of a weird model, right?
::Speaker 4
I mean, Pluto has, what, 70 million users and make $1,000,000,000 a year. And so it's it's it that's it's not a great business. It's not really growing. And it's and it exposes itself to a lot of the weaknesses of the ad market because the ad market is not is not cohesive enough to really make that model turn into a rocket ship.
::Speaker 4
But it's you know, the point about curation is a really fascinating one. Right. Which is, you know, the algorithm curates, the algorithm curates because it sort of understands what you engage with versus what you don't engage with. But then there's cultural curation, which is, you know, here's this Zeitgeisty moment, and here are the things that kind of reflect this moment, right?
::Speaker 4
That was what MTV was as a channel years ago. And and that's what every entertainment brand has ever been. When they understand that there's a moment or every and every distribution channels ever been where they've said they have, executives are saying this is the cultural moment and this is how we're going to speak to it that. It's like, I don't know how you solve for curation in in in streaming.
::Speaker 4
I mean, I think that fast do solve for it. I think that it's a really great experience, but the algorithm also offers something really valuable, right? That it's like when you turn this on, here's here's the content we know you want to watch served on a plate for you, right? But every time I turn on YouTube, a podcast or a short clip show that I watch is always served up or something, that's another version of something that I watched on a whim is served up.
::Speaker 4
It's a I don't know how curation makes a comeback in an algorithm driven world, but it does have a role. I think it's probably the easiest answer.
::Speaker 2
Now, Emily.
::Speaker 3
You might want to find a way to monetize this, find a way to monetize.
::Speaker 4
The ad, the ad things such as the dirties, I mean, the sort of the, the thing that people will say sotto voce is the you know, the ad in whispers is the ad market is totally broken. Right. That that there's. Yeah, there's a guy who I really respect that the CEO of social media Dave Morgan, and he writes about this and he's just been talking about like like why are we living through a moment where everybody's taking all the ad tech that very clearly did not work in display and repurposing it for video?
::Speaker 4
Why is this happening and why does this market work this way? Because it is everybody understands that the market shouldn't work this way. But then they make but then they perpetuate all the bad mistakes of the past markets that didn't work. And so it's a it's a really messy moment for advertising. I've stopped writing about it mainly because you know, if I you're sort of writing about a broken glass, right?
::Speaker 4
That's like you're describing different shards of a broken glass. And at some point people don't want to know that. They just like, okay, there's a broken glass. That's all I need to know. Thank you. Write that it's nobody needs to know that a shard happens to look like a diamond, right? That's like there's just no there's no reason to go into the details if it doesn't tie into something much greater.
::Speaker 4
And it's very hard to pull the pull of bigger picture out of all the little details.
::Speaker 1
Yeah, it's tricky, isn't it? It kind of almost feels a bit like the algorithms kind of drive driving the car. That kind of the ad industry is all in and and it's going somewhere. So nobody kind of really worries too much about it right there. But you mean it doesn't feel like there's anyone behind the wheel? A lot of the time?
::Speaker 4
Yes, I agree. 120%. It doesn't. And I think the people who are, you know, the trade organizations that are trying to drive the conversation forward and are finding that I mean, I went to an IAB video leadership summit a year ago and, you know, the yeah, it was the differences in not opinion, but in perspective like in terms of what people were seeing and whether you thought it was positive or negative were stark.
::Speaker 4
They weren't like they weren't they weren't disagreements over nuance. It was like somebody saying, this thing works and somebody saying this thing really doesn't work and here's the evidence. And the other person saying, well, I don't care about the evidence because I have I've seen it myself. And your evidence doesn't tell the story that my evidence tells tells me.
::Speaker 4
So like, it's very clear that there's a disconnect here. And so everybody kind of left. They're happy to see each other, but also frustrated that that there was no aggregation moment. Right. There's no curatorial moment. There was nothing that sort of moved everybody in as a herd in the right direction.
::Speaker 1
Yeah.
::Speaker 3
Yeah.
::Speaker 2
I think just before we wrap up, I wanted to speak about gaming and how important gaming is to the younger generations, particularly kids. But you know, we've seen the last of us do pretty well as well. So, you know, we've got, we've got gaming that enjoying this kind of resurgence is being taken seriously by creative storytellers. And in the last few weeks that there's been announced that they're making, you know, there's a couple of shows in development that are making narrative animation out of roadblocks games.
::Speaker 2
So this Twilight day care, this one called Creatures of Scenario. I wonder if you can foresee a time when much like Netflix took Cocomelon from YouTube, are we going to see narrative scripted narrative kind of animated content that perhaps is coming more from places like robots, even Fortnite creative?
::Speaker 4
I think the answer is I'll start with the answer that I know, which is I know from a sort of a C-suite executive, one of the major gaming companies that they're seeing are Gen Alpha, you know, waking up, playing their PlayStation, their Xboxes for 15 minutes and then starting their school day. And that used to be time where people watch cartoons and and morning programing.
::Speaker 4
rse engineer, let's say, from: ::Speaker 4
You start to say, all right, there's IP, there's experiences as characters of these people are going to become familiar with, and yet EA is not going into original content production for video or streaming. But to your point, the IP is that much more a day to day part of people's lives, which, you know, could be what explains the success of Last of US, right?
::Speaker 4
Versus something like Castlevania, which is like 40 years old, and this has not been the day to day part of anybody's lives for a long time. And so I sort of wonder about and so if you take that logic, you go back to Roblox, be like in Fortnite, you think, Yeah, I mean, it becomes a question of, of, of what?
::Speaker 4
You know, what it is about that day to day experience that can be replicated in a show, right? I mean that the beauty of the Last of US is that it was written it was written kind of cinematically as a game, and they knew that it could also be a show, but things had to fall in place for it to become a show.
::Speaker 4
Alpha at this point are like: ::Speaker 4
And I you know, I don't know and I don't know I'm just thinking about that. I don't know if the nature of these platforms where the stories are ephemeral, right. That you play the game and then, you know, the sort of overarching storylines, but the experience for the users is ephemeral. I don't know. It's it's the we are at a point, though, where I think we're going to see a lot of experimentation.
::Speaker 4
So that'll be that'll be absolutely worth watching. And then circling back and reviewing.
::Speaker 2
I think the looking at YouTube, the machinima content that's on YouTube where people are playing the games and making their own little stories out of it has been so popular. But again, that doesn't necessarily mean that it will stretch into a longform series or a narrative content. I mean, I guess it might, right? You know, kids still like narrative.
::Speaker 2
They like stories based around characters that they love, even if they just manipulate them on roadblocks and largely hang out, don't necessarily do much with them. But it's something I think I think your point is right, actually. I think we'll see a lot of experimentation, but I wouldn't be surprised if one or two do land, whether it is.
::Speaker 2
Yeah, and I think it's going to be a really interesting source of new narrative. I think in that in the next 12 months or so.
::Speaker 3
I think it definitely has to go. I think I'll take my money. Just take my money, take my money, place the bet like it, you know, and, and like you say, not every single not every single IP, but you know, there's still decks being built there, you know, and I think there's been like there has been a bit of a struggle with Hollywood to convert game gaming to games, to streaming a bit.
::Speaker 3
There's definitely been like cultural disconnect between the two industries and it's taken a while for them to get it really, really right, which I think, you know, The Last of US has done and there's been durations that haven't been as strong and there'll be those same teething issues with the Metaverse and Metaverse games and and traditional media formats.
::Speaker 3
But it has to happen.
::Speaker 4
That's definitely been and one last point on that. I do think that the that it does also reflect the thing that we were talking about earlier. Right. That gaming is a direct to consumer business that that evolves based on consumer feedback, consumer engagement, the super passionate fan and Hollywood doesn't.
::Speaker 1
Yeah. And interestingly, the production side of it is merging as well, really. So particularly on the animation, is that now animation for you with the same engines that a lot of gaming programmers use. So you're kind of having teams kind of moving from gaming to animation and back again so that that makes a difference in the mindset of the team.
::Speaker 4
Yeah, the, the unity, the unity and unity platform that, that that is the dirty that's a very we could have a whole other podcast conversation on how that impacts yet but it's a huge point you've just made huge and nobody's in I know people in the effects business who don't either they haven't begun to appreciate it or they appreciate it and they won't share it with me.
::Speaker 4
But I like the fact that, you know, the minute all this Hollywood production goes down, the people who are very good at working on them, what's the epic games? What I'm just totally blanking because it's unreal. Unreal the engine like, you know, all these people who work on these two platforms for visual effects and you know, the more that Hollywood production goes down, the more that gaming is going to go up.
::Speaker 4
But to your point, like it's a seamless transition to go between both for design. And I think that that may be kind of the really interesting market dynamic that that it's we won't get a lot of visibility into just because of the nature of the of the effects market, but in the post-production marketplace. But I do think that to your point, and I'm happy that you raise it because it's a really important point, is that the talent behind all the of the way that these shows are made are are sitting literally like, you know, the colossus of Rhodes.
::Speaker 4
They got one foot on one side, one foot, and there they are. It's a really powerful place there. And it's also a powerful dynamic that's probably more important in shaping where the future of entertainment is going. Then, like any of these CEOs thinks of, thinks they're doing.
::Speaker 1
Great, that's a follow up discussion then for for another episode.
::Speaker 4
I love that topic. I just I don't know how to begin to research it, but I love it.
::Speaker 2
We've we've gotten through most of everything. And yet almost an hour is gone, which seems like a few minutes.
::Speaker 4
No, I really love chatting with you guys. Really excited. I mean, it's sort of walk through the wilderness that you hear people speaking your language, you get very excited. So it's been great to connect with you guys and admire all of your work. And because I follow each of you on on the various different platforms. So it's a real pleasure.
::Speaker 4
Thank you.
::Speaker 2
And would you like to just give a quick plug for your newsletter for our listeners?
::Speaker 4
Sure. So. So I write part for two essays per week. I really focus on something that's happened in media and try and connect the dots for you. It's something seismic and just try to connect the dots for you in a way that you may not be seeing quietly. I'm sort of emphasizing on the direct to consumer business logic and the disconnect between that business logic and then sort of legacy media, business logic.
::Speaker 4
And there's other fun stuff that that plays out in there. But that's really the gist of what I do. And then and then I also have the medium shift column and you can sign up for both. You can read both and sign up for both on on the information dot com. But you can also learn more about me and Parker Kirkham at our QR, our icon.
::Speaker 2
Great. Thank you so much for joining us. It's been absolutely fascinating.
::Speaker 4
And our pleasure, guys. Thank you.
::Speaker 1
Thank you.
::Speaker 3
Thanks guys.
