$TRUMP, What’s Next For TikTok, and The State of the Streaming Wars — ft. Rich Greenfield

26:10So looking at these companies and their parent company stocks, which are you most bullish on or bearish? Look, if there was a dislocation, you know, if you think about who benefits the most from TikTok being banned, and I don't think that's going to happen. I mean, I think we're going to figure out a way to survive. But the companies that are leaning in the most and probably have the most to gain because they're creating, you know, certainly their focus on creators, you would certainly look at YouTube Shorts. I mean, I think a lot of people focus on meta and reels, but nobody's making money on meta and reels.

26:43I think YouTube really, I think if you look at what Neil Mohan and Susan before him, like what they were able to sort of build in terms of helping creators really make a living. I would think if there was any place that sort of got like a nice tailwind from the end of TikTok, it would certainly be YouTube Shorts. That being said, look, what's fairly obvious is that all of these short form platforms are taking share timeshare away from other mediums. And when you look at what's happening to viewership on linear television, you know, we spend a lot of time talking about, oh, the Netflix effect and what Amazon Prime now that they have Thursday Night Football and soon going to have the NBA.

27:26Like we spend so much time looking at that sort of macro trend TV to TV effectively. But, Scott, what you're sort of hitting at is like the growth of these short form platforms is eating into just total time spent with entertainment. And I think most consumers don't go, oh, my God, this is an hour long. This is 10 minutes long. Like they are literally just, you know, that cure for boredom is, you know, going through TikTok, going through reels, going through shorts and YouTube. And that's sucking away time that you would otherwise be spending watching video, whether it's linear or streamed. It's probably Netflix's biggest long-term threat, honestly.

28:07Yeah, I would agree with that. And that's where I was headed. Let's look at the – we have the apex predators, if you will. Let's talk about prey. I want to put forward a thesis. It's purely post-marketing anecdotal. But what I have noticed with my own viewing behavior and my sons, and I pay more attention to my sons because they're the folks that advertisers want to reach. I think of it as, quote unquote, size matters. And that is we'd watch a ton of video, but now we're no longer even bothering to turn on the TV. We're not even bothering to open our computers. We're watching all the short form video on our phones.

28:39And to me, obviously, you know, the easy horse that everyone's kicking right now is linear TV, cable news. my understanding is some of the viewership on CNN and MSNBC is off 30, 40 percent, but also Netflix. And it feels like anything that makes its primary living on that screen in your living room, I would think, it's so strange. Just in the last year, we don't even turn on the TV anymore unless it's for Premier League football. What are your thoughts? I want to just sort of frame that the single fastest growth engine on TV screens, like that living room TV screen, is YouTube. I mean, the growth of YouTube, it's now 11 % of total time spent watching TV, you know, watching that big screen device is now YouTube.

29:32I mean, it is staggering how large YouTube has become. And they've done that, Scott. They haven't gone out and bought expensive sports rights. They haven't invested billions and billions of dollars of, you know, in terms of licensing Hollywood content. They've just provided an incredible platform for creators and allowed you to spend, you know, video length. Remember when YouTube started, it was like Charlie bit my finger and double rainbow and these really short videos. Now you can watch, you know, you could watch something like this podcast or hours of content now in a single stream, like the length of time.

30:08And so when you say, you know, short form, short form, certainly getting longer, like even TikTok videos that used to be, you know, six and 10 and 15 seconds now are 10 minutes plus. And so short form is getting longer and short form in that sort of online content is feeding more and more into the TV. TikTok, it's been the one place they've completely failed to date is on the TV. YouTube's done an incredible job. Meta's completely failed to the TV. Like, it's interesting that nobody's really broken through onto that TV. But look, your comment is sort of, hey, isn't all of TV ultimately in trouble because of short form?

30:46And look, I do think that it is just one more problem. You know, when Netflix has a big show, there's no doubt that people turn on Netflix and watch it, and they're investing more and more in content. I think it's a headwind for everybody, and I think it's probably one of the reasons you're seeing Netflix try to diversify into gaming is that they realize that they need to leverage their platform into more than just what they are. They certainly haven't figured out short form. I don't know if they ever will. You know, UGC is a very different practice than what Netflix does today. But it's a really interesting, you know, long term thing to think about.

31:27Obviously, given that Netflix is eight, nine percent of TV viewing today, there's still a lot of market share to grab, even if the whole, you know, even if that whole TV pie ultimately comes under pressure. But I would say just the one thing that pushes back on your thesis, overall time spent with TV is growing. it's just all of the linear forms are losing. That's interesting. So let's talk, let's keep on this topic of prey. Let's now talk about the traditional folks, Warner Brothers, Disney, Comcast, all right, missing a Paramount. Stack rank from like bad to worst. Well, remember you lump all of these companies and it's not you, Scott, I do the same thing.

32:07We lump all these companies together because they create entertainment content. Historically, we lump them together because they all had, you know, cable networks, right? Like that was the unifying element, cable networks and studios. And so we threw these major media companies into a bucket for years and years. But when you look at the scale of Comcast, which owns NBC Universal and is primarily a broadband provider of connectivity in this country, or Disney, which has, you know, half or more of the value of the company coming from its theme park business, which includes its cruise lines, it's sort of hard to lump those companies into the same bucket that you put Warner Brothers Discovery and Paramount in.

32:48You know, the relative market caps, enterprise values, scale, balance sheet depth is completely different. And it's look, it's one of the reasons why Paramount is now being acquired by Skydance, which is essentially being acquired by the Ellison family, right? Like you're it wasn't able to stand on its own because you're looking at a world where the core businesses are in secular decline. I mean, being in the cable network business, you mentioned you don't even turn on the TV. I mean, you think about how much money consuming, because remember, 68 million people are still paying for cable television today, meaning $100 plus a month bills for something that they're actually not using nearly as much as they used to.

33:39They still watch broadcast because lots of sports on broadcast, but they're watching less and less cable television. And when you think about WWE Raw, which used to be on cable, now it's on Netflix. Thursday Night Football used to be on Fox. Now it's on Amazon. NBA moving from Turner on cable, moving over to Amazon and NBC broadcasts, like the cable network headwinds. I should scare everybody who is investing in these media companies. And look, it's no surprise, right? Comcast looking to spin off. You know, you look at what the sort of internal restructuring that Warner Brothers is doing. Disney did that same ESPN internal restructuring last year.

34:20Like they're all realizing like the alarm bells have gone off over the last six to nine months. And I think the problem is, you know, that funny cartoon where like the door isn't wide enough for everyone who's trying to exit. You can't get out of it because who are the buyers of these assets? Like that's the problem right now. But of those four, who are you most bullish or bearish on relative to the fact that they look inexpensive compared to the other companies we were talking about? It's always interesting when everyone has the same thesis, right? And so I think there was a, you know, really consistent thesis across Wall Street that, hey, Warner Brothers was losing the NBA.

34:57Turner's dead. Warner Brothers is dead. Zaslav is going to get fired. Activists are going to come in. Company's going to be, you know, completely restructured. And the reality is they lost the NBA, which wasn't a surprise to us. And they didn't get dropped by any of the, you know, Comcast didn't drop them. Charter didn't drop them. DirecTV didn't drop them. Dish didn't drop them like nobody's dropped them. And the reality is, you know, it is a lot harder to exit a large chunk of cable networks for any of these distributors. And so you sort of look at the one where everyone has been skeptical and where, you know, David Zaslav has taken a lot of hate and has he made mistakes?

35:39There's no doubt there's been unforced errors. I wouldn't have sued the NBA per se. But like The reality is it's certainly interesting to me how wrong investors have been about the fortunes of WBD relative to where they are today. And I think that sort of hasn't really been reflected in the stock. And look, it's hard. The core fundamentals, as we just talked about, are clearly for everyone heading in the wrong direction. But I do think it's interesting that they have weathered this storm far better than anyone expected.

36:17We'll be right back.

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37:34We're back with ProfG Markets. Rich, you mentioned the purchase of Paramount Global by Skydance, which is, of course, owned by David Ellison, who is the son of Larry Ellison, who is the founder of Oracle. I have written about this and called it the dumbest purchase of the year. and my view is that he, along with a lot of these guys who are part of this transaction, suffer from what I would call Hollywood derangement syndrome, where they think they're still fixated on this bygone era of a glitzy, glamorous world of Hollywood, and they're paying all this money to try to relive it, or they maybe think it still exists, but actually, Paramount just doesn't have any of the cultural currency that it used to have.

38:16I'd love to get your reaction to specifically David Ellison's purchase of Paramount Global. Am I being too harsh or is this not kind of dead on arrival? Well, I have a lot of gray hair, as you probably can tell. I've seen a lot of people say they're coming into Hollywood. They've got a better plan. They're going to fix it. They're going to make better films. They're going to make better TV shows and they're going to win. And we've seen, you know, you've seen international companies from Asia and Europe. Like, it's not like a new thing of people trying to come into Hollywood, make a big splash with a supposedly better model.

38:53You know, when people say, I'm going to make better movies or I'm not going to lose money on movies, like there's always that special sauce. And look, some of this of just simply loving film and technology may be behind this. But I will say what's interesting about this purchase is it's essentially a family, right? Like it's basically the Ellison family putting their money where their mouth is. And we'll see if this is just about cost cutting and running the business as we see today. You're probably right, Ed. This is a mistake and probably was something they shouldn't have done. Maybe it's just completely, you know, sort of the glamour and excitement of being in Hollywood.

39:33On the other hand, like there is an opportunity if you take a long term. And I mean, when I say long term, 10 years, 20 years, like if you're, you know, Ellison is what, 41. Like if he's really taking a 20 plus year approach to this and he's going to invest aggressively, not worry about what people like I think, not worry about what Wall Street does to his stock. Like, who cares if his stock goes from, you know, 10 to 1? Like, you know, if the goal is to win, like to truly build a great, sustainable, long-term company, to really build a streaming service that can rival, meaning going out and hiring not talent, but the best tech talent.

40:11Because Paramount Plus is not a great app today. Could it be a lot better? Absolutely. Could there be a ton more content? I mean, how many times, Scott, do you ever hear anyone talk about, hey, did you watch this on Paramount Plus? Like if it isn't part of the Yellowstone franchise, like no one even mentions it, like unless you have kids who are watching like SpongeBob. So, you know, how do you get sort of if you're if the goal, the goal of every streaming company, actually, the goal of any company in this new world, right, is all about winning time spent. It's why we started off this conversation talking about what short form is doing, because it's all this war for your entertainment time spent.

40:47Netflix understands that, right? Like they they don't create more content. you go, oh, could they still survive and have the same price if they had half as much content? Sure. But the goal is to win time spent so that you grow your subscriber base at a higher and higher price. Like it is all about engagement and time spent. If you're Paramount and Skydance's new owners, you know, in the Ellison family, if you're really gunning for time spent, you need to put a ton, I mean, multiples of the content that's on Paramount Plus today and really build an incredible, put tech, the quality of your technical team and technical infrastructure has to be on par with the content.

41:27I don't think most media companies do that or even think about that issue today. But if they're serious about it, could you build a real player? I think everyone believes Netflix, Amazon, and Disney will be around for many, many years to come. I don't think Comcast, no matter what you think of Peacock, they're not shutting it down. they're certainly in it for the long term. Everyone sort of believed a year ago, like if we had done this one year ago today, I would have stood up here and said Paramount Plus in a year doesn't exist. Now I think we can all know under Ellison, it's going to exist. And my guess is of every company that's going to invest incrementally from today through the next two or three years, my guess is the one that has the most increase relative to where we are today is going to be Paramount+.

42:13I think that's why they bought it and they want to win. Whether they can, we'll see, but they are at least the vision is to win in streaming, which is a pretty bold vision. Yeah, absolutely. I just want to pivot us to news and political news. So Rupert Murdoch. So Rupert has been trying to hand control of his media empire to his son, Lachlan, whose political views he agrees more with. And he did so by attempting to amend the rules of his family's trust, which ultimately failed when the courts determined he was acting in bad faith. So this is sort of an ongoing story. Your prediction coming out of this was that Rupert Murdoch will now sell Fox News, which would be quite the move.

43:01Tell us why you believe that and what you think is going to happen to the future of the Murdoch empire. First of all, this was step one. You know, I mean, the probate commissioner that came back and ruled against Rupert and Lachlan in changing the trust. And there is zero visibility into this process. You know, the the ruling wasn't made public, at least yet. Some reporters have gotten copies and read some of it, but we certainly have not seen the whole thing. From what the reports have been, it's it does sound like an appeal is challenging. It doesn't mean it'll stop them from appealing and maybe tying this up for one to two years.

43:37But the important thing for everyone to understand is regardless of whether Rupert is alive at age 100, the trust kicks in. So his control over Fox and News Corp, two large public companies, ends at age 100 and automatically the trust kicks in. And so the question is, how is the trust controlled and whether it is Lachlan in sole control, which is what he was trying to do, versus the four children where that might not lead to an outcome that he likes for the assets that the trust controls, which is all of the Fox assets and all of the News Corp assets. You know, the reality is, if he can't change this trust over the next couple of years, I would certainly think that any form of unwind dispositions he wants to do during a quote unquote friendly President Trump era.

44:34So that doesn't give you all that much time when you think about, you know, it's going to take one to two years for this trust to play out. Then any type of sales or disposition, it takes time for these things to clear regulatory hurdles, as you know. So so I do feel like time is of the essence and I wouldn't be surprised if the trust appeals do not go well. I think Rupert's going to look for some solution. Is that putting Fox into News Corp and trying to buy out two of his children? Is that going to be a sale and disposition of all of the Fox assets? I mean, you know, everyone talks about media M &A coming off of, you know, coming into a Trump presidency.

45:13I don't think Comcast is selling Peacock. You know, Ellison just took over Paramount. We just talked about why Zaslav is not under the same pressure he was before. I think the only asset that might come available over the next 12 to 18 months could be Fox. And it's a really interesting chess piece. If you're David Zaslav, that is a chess piece you want to figure out a way to own. Because if you could get broadcast, you think about how Zaslav stepped up from Discovery. He bought a better asset in Scripps. Then he bought a better asset in WarnerMedia and HBO and Warner Brothers Studio. The kind of the next logical step was, well, how do you get from cable networks into broadcast?

45:51You would do that through that type of a transaction. So I don't know. I'd keep my eye on what happens to Fox. It could be one of the biggest media shifts over the next 12 to 18 months that not enough people are talking about. Yeah. And one last question here on sports, which I find sports programming the most confusing, complicated thing in all of media. Meaning where to find? Where to find it and who owns these things and who owns the rights and what exactly those rights entail and do people share it? So I'll start this with this attempted merger that we saw between ESPN and Fox and Warner Brothers Discovery.

46:35and they all try to create this new streaming service dedicated to sports, which, by the way, sounds pretty great to me, regardless of any monopoly power or monopoly abuse we might see there. But as of a week ago, it was called off. So the whole thing is just a little confusing. So could you just give us an overview on sports programming right now? Who's winning in sports content? Who's losing? And what does the future of this content look like? You know, Ed, I'd love to say your life is going to get easier, but I think, unfortunately, it's not, Because even when you mentioned venue, you know, you still have the fact that more sports are flowing to things like Amazon, right, that are not part of it.

47:14You know, Amazon, which was losing money, they now believe based on their allocations. And I know that's sort of some magic, but they believe that they are now profitable, spending over a billion dollars a year for the NFL, where Fox was losing money at six hundred and sixty million a year on the NFL Thursday night. So what does that tell me? whether or not you believe the math, if they believe it, they're going to buy more sports. They obviously did that with the NBA. Netflix, I think, has been very happy with how Raw is doing on Netflix since they took over WWE, which I know is not sports, but it's in the live entertainment world.

47:53I think you're going to see more and more sports flowing to streaming. Keep an eye on what happens with UFC. You know, Brandon, my partner, has talked about whether, you know, it ends up on Amazon or do you see part of it on Netflix? Like there's going to be more sports on streaming. And so sort of the how much sports is left for linear TV is going to shrink. And so even that those bundles of linear channels that you're talking about, you know, DirecTV is launching a sports bundle even in, you know, even after venues demise, you're going to see lots of sports bundles. But remember, that's only what's on linear TV.

48:28Then you have to deal with what's on all of these streaming services. Do you subscribe to them? what's where. And I think I feel like as you've seen a big advertising push out of Amazon and Netflix, it really emboldens them to put more money into sports because once you can amortize it across everyone, because remember, NFL on Christmas Day on Netflix, it didn't matter whether you were an ad-free subscriber or an ad subscriber. Everybody saw ads during that programming. And so sports has that benefit of you expect ads during the programming. And so it actually makes it easier to spread the cost and to build your ad business by investing in sports now that you're in that business for those two companies.

49:09So, Rich, I'd love for you to talk about or touch on the motion picture business box office receipts. I keep hearing filmmakers talk about it strikes me that any sign of life, we say, oh, dad's back from the dead. And then it resumes its structural decline. I don't know how cynical that is, but. No, Scott, you nailed it. I mean, look, first of all, I should answer your question from earlier in the podcast where you asked me, like, which of the four do you have a favorite? Like, the problem is it's hard to have any and this will relate to box office. It's hard to have a favorite on a bad block, right?

49:42Like when the headwinds of these industries are going in the wrong direction, fragmentation, like it is really challenging, especially as advertising is moving to the metas and the Googles and the Netflixes and Amazons. It's really hard to be excited. And I think things like box office just add to it. like movie business isn't fixed. Is it better than it was during the pandemic and during the strike, you know, the strike impacted last year? Like this year will be better, I assume, than last year. But, you know, you're still dramatically below where you were in 2019. So the pre-pandemic box office, do certain movies do incredible box office?

50:19Have we proven that when you make good content, people still come to the movies? For sure. There's no doubt about it. People love getting out of their homes and seeing content. I don't think that's ever going to change. But, you know, we did$11.3 billion of box office in 2019. You know, I don't know if we're getting above 10 this year. That seems like a stretch. You know, can next year, like people are already saying, well, just wait till next year. Like it's always just a wait till next year. It'll get better. I think it's just tough. There's so much incredible content in your pocket, let alone on your laptop or your TV screen, like leaving home for a movie, especially if the reviews are terrible and you can all see what those reviews are on social media and beyond.

51:00Like you need great content to leave the home. And there's more and more great content without leaving the home. So there is a natural sort of headwind facing the theatrical business. It's not dying like it's not going to die. But can it ever recover to where it was? That's a challenge. Last question as we wrap up here. Podcasts. Your turn. I think it's an amazing medium. I mean, I look at our own podcasts and yours and you think about what it meant to the election. I mean, the medium is incredible because there's a sort of emotional, intimate relationship you develop with your listener or viewer.

51:40And I think video only takes it to another level when you can introduce video. And I think Spotify deserves a lot of credit for what they've done. You know, obviously, YouTube started it, but making I think this is going to be the real year of video podcasting on Spotify. You know, I think that creates a much bigger advertising business that in turn gives creators ways of making more money and making you want to do podcasting in a bigger way. So I do have a I have a strong love of what the business can do. It's still a relatively small business. You know, when you think about the overall media universe, it's just, you know, again, I think this is an interesting opportunity where you think about what's happened.

52:24Amazon really hasn't invested heavily in podcasting. You haven't really seen Apple do anything. And Spotify is just creating yet another growth lane to really take advantage and to build a bundle of audio and video products that are differentiated. And it's why that stock's been great. Why I think it will continue to be great is that they understand the power of this medium. Totally agree. Don't you think, just one final comment, don't you think they also understand the power of interaction in terms of comments on the platform and now they let you put out polls? It feels like they're taking another page out of YouTube's book, which is that YouTube is a highly interactive space where you get to talk to your friends and talk to strangers about the content you're watching as opposed to just consume it.

53:08Daniel is a tech CEO. He truly understands and, you know, he's been very good friends with Zuckerberg from the very beginning. You know, I think he truly understands engagement. You know, this goes back full circle. Like, it's all about minutes per day. Daniel doesn't ever want you. He wants you listening to Spotify. Doesn't matter whether it's an audio book or whether it's a podcast or whether it's music or maybe it's education, which they've started in the UK. Like, I think you'll see more categories. Like, I'm surprised they don't own the comedy category. Like, I think there's so much they can do to win minutes per day.

53:41And I think that is something that as a tech executive, he, if you think about what Netflix is trying to do, like there's just a really different strategy in how tech executives approach media than how media executives approach media. And it shows in the results. This is all about winning time spent. Rich Greenfield is a co-founder, partner, and media and technology analyst at Lightshed Partners and general partner at Lightshed Ventures. Prior to Lightshed, Rich was a managing director and analyst at BTIG and Pali Capital. where he started his career at Goldman Sachs in 1995, where he spent eight years covering entertainment, cable system, and leisure industries.

54:16Rich, this was awesome. Loved getting your perspective, and thank you for joining us. We should do it again. We will. 100%. I love it. Thanks, Rich. Thank you, guys. This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Mia Silverio is our research lead. Jessica Lange is our research associate. Drew Burrows is our technical director. And Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. If you liked what you heard, give us a follow and join us for a fresh take on markets on Monday.

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