The Business of Media: 60 Minutes, Billionaire Owners, and the Podcast Economy — with Sara Fischer

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0:36Scott Galloway:Support for the show comes from Ferragamo. This Father's Day, Ferragamo presents their The Things I Have Learned From You collection. Because a father's influence is reflected in the details, in the way they dress, in the appreciation of materials, and in making considered choices. These elements build over time and become part of a shared identity. And Ferragamo wants to highlight the style, assertiveness, and poise that are naturally showcased with the everyday moments between a father and the ones they love. Discover Ferragamo's Father's Day gifting selection at ferragamo.com or in-store.

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1:43Scott Galloway:In today's Office Hours, we discuss who will replace 60 Minutes or what will replace 60 Minutes, why billionaires keep mind media companies, and whether podcasting has already passed its peak. We're joined today by Sarah Fisher, media correspondent at Axios. Sarah, welcome to Prop G's Office Hours. Hi, thanks for having me. We're excited about this. Our producers, when we tried to find a talented, insightful person on media, two separate people on the team, came back and suggested and your name was floated. So we're happy you're here. You ready to go? I'm ready. There we go. Our first question comes from John McCauley on Instagram, who says, as the old 60 Minutes crashes and burns, what in new media will carry on the mission?

2:27Scott Galloway:So the first thing I would ask as a prelude to that question, Sarah, is it's a bit of a loaded question that assumes 60 is going away. What are your thoughts on what happens to 60? And if, in fact, if it is, in fact, does decline, does that create an opening for something else? What do you think happens here? Well, I think that three major correspondents signaling that they're going to stay on, including Leslie Stahl and Bill Whitaker, means that this show won't ultimately die. If they had chosen not to renew contracts, Scott, I think that 60 Minutes would have been done as we knew it and would have been replaced by a far different product.

3:03Because they're staying, I think you can and should expect the mission of 60 Minutes to carry on, but with a caveat, which is that, one, I do think there's some audience trust that has been lost, given Scott Pelley coming forward and saying he felt pressure to change his journalism in response to management. And then, two, I think there have been some chaotic and confusing moments for consumers that they're going to have to reckon with when they decide whether or not they want to continue watching. In particular, pulling that episode about Seacott down, and only to air it a few weeks later on Changed.

3:39So 60 Minutes won't go away, but I think that the trust has been burned a little bit. In terms of what could replace it moving forward, you know, on the broadcast side, they're facing such heavy cost pressures in traditional television that I'm hard pressed to believe that anything from traditional television replaced it. On the new media side, there are some bright spots where I'm very optimistic. Right now, we're seeing a lot of nice momentum at the local level, Scott. You'd be surprised about that. But we are seeing philanthropists shift a lot of their effort and energy and money into starting local news startups that are commercially nonprofit, meaning they're going to get continued backing to break news and do investigations without the pressure of necessarily minting money.

4:28And then the other area where I feel increasingly optimistic is the public definitely recognizes the need for investigative journalism. We're seeing more reader donations go into outlets that do good investigative reporting. One area where I found that's expanding that I've been happily surprised by it has been ProPublica. A lot of new donations coming in. We're seeing record reader revenue at places like The Guardian that are committed to investigative journalism. So the efforts of regular everyday people and philanthropists right now seem to be filling the void that traditional commercial models are not.

5:08Scott Galloway:There is some truth to fact-check journalism that tries to hit it straight down the middle is important to a democracy, and people realize that. With respect to 60, and I'm curious to get your thoughts here, their approach of trying to disrupt it from a position of strength doesn't make any sense. They're basically trying to perform open-heart surgery on the healthiest person, you know, in the franchise. guys. For 50 consecutive seasons, 60 has been the number one rated news program and garnering about 9 million viewers. That's up 9 % year over year in an industry that's in structural decline.

5:48Scott Galloway:And it grew 5 % in the key demo of 25 to 54. So it's growing and it's doing well. It did about 80 million in revenue, ad revenue. That's 10 million more than the Late Show that same year. So this isn't an entity that needs to be disrupted. This has become very politicized because I think an obvious way to connect the dots here is, quite frankly, that a group of billionaires who feel there's probably more profit in current favor of the current administration want CBS and specifically 60 to, I'm trying to say this as generously and as politely as possible, to be less anti-Trump. I can't figure out any strategy other than the Ellisons are either themselves very politically motivated to change the tone and tenor of CBS in 60 or they see more money incurring favor of the Trump administration, who seems to be, I've heard, was incandescently enraged by the interview with Marjorie Taylor Greene and then Barry Weiss was similarly enraged with Anderson Cooper's sign-off.

6:48Scott Galloway:I think what will be interesting, if you look at the actual data, you had a bunch of people call me from 60. I think three or four of the seven correspondents have resigned. Six of the eight senior managers have left. But none of the corpus, the 60 or 70 editors, producers, analysts have left so far. So I think it all comes down to, you know, these layoffs or firings were timed not accidentally around the end of the season. They're going on a three-month hiatus. It'll kind of be up to the product. While we all pick our corners based on, you know, politically and what makes us feel good and big, grandiose notions about journalism and Trump.

7:28Scott Galloway:At the end of the day, if the product is really good in the fall with new correspondents and some old ones, I think it'll be fine. If it doesn't, it'll die a quick death and everyone will say, I told you so. So, you know, it all comes down to this. The first five or six episodes in the fall. Any thoughts on that? Well, one thing that new management would tell you is that a lot of the success of 60 Minutes does ride on the NFL because it airs right after. And the reason that they claim that they needed to come in and modernize it, even though that they were ahead, as you mentioned, ratings were up 9 % under executive producer Tanya Simon, is because they say, you're not taking into consideration how much this show relies on the NFL.

8:06What's now happened is that even if things were to go back to status quo, there's still a trust that has been broken between CBS 60 and the audience and CBS 60 and the management and the day -to-day staff there. And that trust means that being broken means that anytime somebody does encounter an ethically challenging situation or situation where there's ambiguity in terms of what's the best path forward, the trust is what allows you to have a constructive conversation to figure out the best path forward for the audience in journalism. And with that being broken, nobody believes that any decision you make was done in good faith.

8:48That is the big challenge that they're going to face moving forward. And make no mistake, there will be a time when an episode is questioned. Does it need to be pulled from air? Do we need to make changes? And I think that's where the rubber will hit the road. And if people feel as though they can't trust the product changes or decisions being made, I think it's going to be very hard to get back to some of those, you know, the traditional ratings that they'd seen for a long time.

9:14Scott Galloway:Also, curious to get your thoughts on this. I find the media is just self-obsessed. This is the number one story in the nation. And this is an$80 million business. This is like, you know, Nike's fuel ban was a much bigger, but this is just a small business. Now, granted, I get that it does play an important role in America's dialogue. And the notion that a 60 is a diminished 60 or even goes away is a threat to our democracy. I get the notion that there's an overall chill that's suppressing free speech. I think that's a big threat, and this is another indication of that. However, having said that, I see so many small, aggressive, you know, truth-to-power startups, including Axios, including Semaphore, including Puck.

9:54Scott Galloway:I don't see journalism or truth-to-power in any way being quashed. I would argue that every time they try and do this, it's a game of whack-a-mole, and it just inspires a series of new startups backed by people. Well, you know, the bulwark, my God, are they giving Trump a hard time and they're making money doing it? I don't see the threat to journalism. And I find that I would say there are a few people, few groups, and this will piss off the everyone's favorite intellectual support animal journalists. But there are a few groups that more so than journalists or I would say writers who see themselves as more precious than they actually are.

10:35I could not agree with that more. I did this analysis once on the show Succession, how it is consumed by so few people relative to the amount of coverage that it got by journalists because journalists are obsessed with covering their own industry and obsessed with themselves. The reason that this story is important, from my point of view, is because broadcast as an asset is a public good as defined by our laws. And as such, it needs to be regulated as a public good. When there's political pressure on somebody on their journalism asset to get a deal close, the broader implications of that are are we regulating a public utility based off of political preference?

11:17That, Scott, is a pretty serious problem because you you always want public utilities to be governed by independent agencies who can do what's best for the public. To me, that's the broader existential crisis. And it's bigger than just what's happening in media and the FCC. I cover the FTC. The Supreme Court will determine and is likely to side with Trump in Trump's firing of Democratic commissioners under that agency. I cover the Copyright Office, which the music sector that I cover, you know, broadly relies heavily on. Trump, his administration tried to oust the head of the Copyright Office.

11:54So what are the political implications of agencies governing public goods no longer being independent? And that is a massive, massive story, Scott. But the problem is we're often neglecting to link some of these small incremental happenings, like these$80 million shows 60 minutes, to that broader narrative. And that's where I think the discussion has gone awry.

12:19Scott Galloway:That was great. Let's move on. Question number two is from JC Broll. Can our media ecosystem not be controlled by billionaires? It seems impossible to opt out. So just some data here. In 1983, 50 companies own 90 percent of American media. Today, that share is controlled by just six corporations, Comcast, Walt Disney, Warner Brothers Discovery, Paramount, Skydance, Sony and Amazon. And when Paramount's pending acquisition of Warner Brothers closes, it'll be just five. More than half of all U.S. online news sites visits go to news sites controlled by just seven families or corporate entities. In 2021, 23 of the world's largest corporations were in the media sector with a combined turnover of$2.8 trillion USD, nearly double the combined GDP of the world's 40 poorest countries at that same year.

13:07Scott Galloway:And media ownership, let's be honest, it does have a big impact on society, politics, and culture, not necessarily reflected in the revenues or the market cap. Nine of America's 10 richest men are media executives or owners. Of those nine, five sit on Trump's Council of Advisors of Science and Technology. According to the Free Press's media capitulation index, out of the 35 largest media companies, only two, Bloomberg and Netflix, operate independent from political pressure. So what do you think? Could that, first of all, Bloomberg refused to be covered by his own media outlet when he was running for president.

13:39So no, Bloomberg is not amused from political pressure. and Netflix has in many cases.

13:45Scott Galloway:But do you, let me just press pause there. Do you think that was an attempt to show independence and not use his own media asset to speak favorably to his presidential run or do you think it was a defensive protective move? It doesn't matter either way. Any news organization that's truly independent should never be told whether they can or cannot cover a person. And Netflix has in many cases removed episodes from its platform based on political pressure from other governments. So neither of them are immune. In terms of the billionaire impact, what we're finding is that you cannot stop the momentum of regular everyday people putting their dollar behind the news, the information that they think is non-biased and best.

14:28Take a look at what's happening in Hollywood. Sure, there's gonna be a ton of studio consolidation, but the best performing box office hits these past few weekends have been from YouTubers. and they've been supported by A24, a smaller independent studio. One thing I wanna just make a note of, we in the US, we used to be, when we were majority in newspaper country, we were mostly owned by families. And that mattered, Scott, because before the world became so globalized, families had incentive to serve their communities with solid quality local news, especially, because that helps their local businesses.

15:05A lot of times these families, they made money in a constituency and news supported it. Fast forward to where we're at today. The local family ownership has died out. Obviously, you saw the Red Stones have cashed out. Now it's moving to the Ellisons. But all those newspapers, a lot of them have been gobbled up by private equity. We have a few families that still own some big conglomerates. So the new houses, you know, they own a lot over at Advanced Publications, which is a sister company to Condé. And the Hearst Empire, which is tons of local papers, some local stations, a little bit of Disney and A &E, they are that trust that is family owned will eventually expire.

15:48So I think the thing that's happened is when families exit, billionaire individuals have been coming in. But I think I feel very, very confident that billionaires are not going to control all the media. I think the public recognizes the importance of a diversified point of view, and they're putting their money where their mouth is.

16:07Scott Galloway:Yeah, a lot there. So I would argue that Hearst is arguably the best managed company you don't hear a lot about. They've essentially transitioned out of traditional media and magazines into data driven businesses, whether it's Fitch, the rating agency. They have a great business tracking flight time or engine upgrade cycles. I mean, they have figured out they have taken the cash flow from what were essentially dying media companies, including a 20 percent ownership of ESPN. And they've transitioned into data rich businesses. And that company is stronger, stronger than it's ever been. It's been outstandingly well run.

16:43And the traditional media companies, the reality is they're vanity.

16:48Scott Galloway:Most of them are vanity assets. James Murdoch just bought New York Magazine. I think it does 70 million. I think it makes a little bit of money. This is a company worth 10 to 50 million as a private company. He paid a lot more than that because owning the local newspaper or a magazine, a hot magazine or a football team makes you the sexiest person in that city. It's just a very cool rap. I own New York Magazine. I own the New York Times. I own the New York Jets. And so these assets will always trade well above their cash flows or any reasonable valuation. And therefore, the only people interested in owning these assets at these valuations are the children of rich people.

17:28Scott Galloway:So this is, you know, billionaires are kind of the only people willing to buy at these valuations. I mean, look, whether it's Redstone, whether it's David Ellison, whether it's Bronfman, it's all the children of rich people. That's just a function of economics. But again, I don't see it as an existential threat to the ecosystem. Any closing thoughts here? I agree with you. I love your sober take. There's one other group that I'm eyeing that does have a lot of vested interest in our news brands. And that is Eastern business moguls or corporations that need the authority of Western brands because they couldn't build homegrown brands with journalistic excellence due to oppressive free speech culture.

18:14So if you think about it, Nikkei buys the FT. High billionaire buys Fortune. Forbes is still owned by a Hong Kong-based private investment firm. This trend is something I've been following a lot of. And the reason it's notable is they often care about these Western business brands because they can take their logos and put it on coffee shops or upsell conferences or build up authority in their own businesses back home. And that is a trend I'm following. Televisa Univision, another great example of that. You know, the FCC was hesitant for a long time about giving Mexico's most powerful company access to the majority ownership of a U.S.

19:01broadcaster that uses our public spectrum. So the foreign investment in U.S. news media, for reasons other than just financials, is also very interesting to me. They're another group outside of billionaires that I'm watching.

19:19Scott Galloway:It's a really interesting one, and I'm generally torn here because I've never been as excised about foreign ownership. Now, when four of$14 billion of foreign money coming into U.S. universities is coming from One Nation Qatar and into generally departments called Middle East studies, I think that's reason to be alarmed. I think they want more than, you know, return. The return they're looking for on that investment might not be congruent with Americans' interests. Whereas I think if so far, I think the Gulf nation's mostly coming in and funding like a media business or a technology company. So far, I haven't seen their ability to let the tail wag the dog here.

20:05Scott Galloway:And I'm again, I said this and it was very unpopular a few years ago when Uber was getting a lot of shit for raising money out of the Gulf. My attitude was cash their check that ultimately downstream that results in our ability to have many of the programs that are progressives are fond of. I'll give you the last word here. I agree with you. I just think that we need a better mechanism as a society to determine where the line is. You know, it's that's the challenge. That's why I brought up CFIUS because CFIUS is ultimately controlled by the president and the lax DOJ enforcements of the line as it currently stands.

20:39I agree with you that we're often too precious. I talked to one big tech CEO who says, this is the ultimate vulnerability of laissez-faire economics and capitalism and democracy. And it doesn't mean that we shouldn't be getting rid of our systems, because as you know, they tend to support our society in ways that have a greater impact than maybe some of the risks we take. But it is a vulnerability that we all just have to acknowledge.

21:09Scott Galloway:All right. We'll be right back after a quick break.

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