Who Won (and Lost) TV’s Annual Billion-Dollar Cash Grab

13:42Rich Greenfield:Like every single one of the late night hosts perform. Why does late night exist? It loses money. Like there is no mathematical model why late night television exists. You see their news divisions get up and talk about news. The news business loses money. The national news business loses money.

13:57Matt Belloni:Well, because of powers, the morning, the morning shows do not lose money. And they do have federal licenses that require them to do news programming.

14:05Rich Greenfield:They have to do news locally. They do not have to do news programs. They don't have there is no reason why late night television you saw paramount look paramount killed it now maybe they killed it for other reasons we could certainly have that debate yeah they're cheap okay but why do you want to lose money on late night television like what is the the rationale for having late night television if it loses money yeah and inflamed the president to me the reality is all of these companies cord cutting it's not going to get better right like there there's no doubt in And, you know, like, has it, is it, is the pace of decline slowing?

14:43Rich Greenfield:Sure. But they are losing subscribers. This business is under pressure. They need to think about how they bring down the cost of content. Hopefully AI will help. I don't think it is yet, but I mean, hopefully over time, but they need to figure out how they make the content that's on television cheaper.

15:02Matt Belloni:The funny thing is, is like part of the value of having Jimmy Kimmel is the ad buyers like him and they can trot him out every year. and he does his shtick and it helps them.

15:12Rich Greenfield:I don't know. I think that's a stretch.

15:16Matt Belloni:I know, that's not a justification, but I hear that's a separate topic. This episode is brought to you by Holiday Inn by IHG. Whenever I'm traveling for work, Holiday Inn has always been my go-to. And now even more so than ever, it has a whole new energy, especially for business travelers. Spaces that feel like your living room and dining done right, from breakfast to dinner and drinks. Whether you're traveling for work or getting away for a minute, it's comfort that hits different. Holiday Inn. It's a new day and a new stay. Book your next day at HolidayInn.com. This episode is brought to you by Netflix, presenting The Diplomat.

15:52Matt Belloni:The drama series returns with tested alliances, new characters, and potentially catastrophic consequences. Starring Actor Award winner Kerry Russell, Allison Janney, Rufus Sewell, and Bradley Whitford. AFI raves, the diplomat ascends to the highest office in television in its third term and praises it as TV program of the year. With outstanding writing from Deborah Kahn, Decider calls it a masterclass in storytelling. The diplomat for your Emmy Awards consideration. All right, my next one is NFL mania. Basically, the NFL turned into Oprah Winfrey. And all of a sudden, it was you get a game, you get a game, you get three games.

16:32Matt Belloni:Netflix announced they have three more games per season, five total. NBC, Fox, ESPN all got additional games. And this comes amid the whole battle between Rupert Murdoch and the NFL over the shift of games to streaming. First of all, there's two questions here for you. How many more times can the NFL just do this and create new windows and new games before we all become so overwhelmed by football that it starts to hurt the ratings? That's the first question. And secondly, do you think that this notion of a shift to streaming for football is pro-consumer or anti-consumer?

17:22Rich Greenfield:It's massively pro-consumer, Matt, because... Oh, you're going number two reverse. All right. Because you don't have to take a huge bundle.

17:28Matt Belloni:I know. But that's not how people think about this. All they do is they have their bundle, the 50 million people that are left in the bundle. They have their bundle. And then when they want to watch the Thanksgiving Eve game, they got to go to Netflix. If you want to watch Thursday Night Football, you got to go to Amazon. And then there's a Peacock exclusive. And it's just it feels to consumers like they have to get in, you know, they have to get out their guide to look, to find their games. And it's just, it's, it's, there's friction there.

18:01Rich Greenfield:Matt, you sound like a politician because you're wrong. I mean, in my mind, like this is just bullshit.

18:06Matt Belloni:No, you sound like a media analyst who is very close to this and is not the average football watcher.

18:12Rich Greenfield:Okay. So let's step back. Okay. Let's, let's exactly do what you're just saying. So one, let's just say if you're a real football fan, you've had to have a multi-channel bundle for years, right? You couldn't not have ESPN, right? Like you had to have ESPN. You weren't giving up Monday Night Football for the last decade. So you needed Monday Night Football, correct? Yeah. Okay, fine. So there are now more people in this country, more people with Netflix and with Prime Video than ESPN. More people have those two services. So this idea that you're paying extra to go watch the games on Netflix or on Amazon Prime is crazy.

18:49Matt Belloni:No. Okay. But, but the, my point is now you have to have them all,

18:55Rich Greenfield:but you already had it. It would be one thing if you didn't have it, there's no extra cost to a consumer. And thanks to streaming, especially YouTube TV, which everyone, every consumer in America should be thanking YouTube TV now has a$65 bundle for sports that has all of the games and you don't have to pay for all the channels that you don't want. And so the cost of YouTube TV, plus a few months of Netflix and having everyone has prime video. So like, and you can actually, the prime video games, just to be clear, if you get Twitch, the Twitch, you can actually watch on Twitch every Thursday night football game at zero cost.

19:33Rich Greenfield:It's literally free streams on Twitch. So like there's just a mismatch between it's gotten more expensive. Is it getting a little harder to find the games? I will grant you, Matt. They're not all in one place. It is definitely a bit more complicated, but the cost is actually coming down.

19:49Matt Belloni:Yes. For the 70-year-old Kansas City Chiefs fan in the Midwest, they're not on Twitch. They don't even know what Twitch is. You know what Twitch is. This is why the ratings for Thursday Night Football took a few years to get to normal because nobody knew where to find the game. It just adds friction. And I agree with you. I don't think this will ultimately amount to anything. I don't think that Rupert whispering in Donald Trump's ear is going to get the federal government to intervene on behalf of these very rich media owners and pressure the NFL. The NFL has levers to pull as well. But I do think there is something to be said for the friction.

20:26Rich Greenfield:The first part was, can they keep doing this? And I think the answer is absolutely. And I think if you look at, you know, the most interesting thing, you know, sort of call this three or attached to yours, but like this idea of they extended Netflix out. The games that got sold, the incremental game sold to NBC and the incremental game sold to Fox are one year deals. They struck a deal through 2029 with Netflix. Well, that's really interesting because the option for all of the deals. So CBS, Fox, NBC, and Amazon, all four of those media rights deals, the NFL has an opt-out after the 29 season.

21:06Rich Greenfield:With Disney, ESPN, it's after the 2030 season. That seems very intentional to put it at 2029. So I think what the NFL is basically saying is, hey, Netflix's ambitions in sports and the NFL, to your point, everybody wants to be at the NFL dinner table. the you know netflix while they talk down wanting a bigger package if you don't basically buy out the option and extend your deal through 2033 now all bets are off in 2029 when this option kicks in who knows if netflix is going to be an aggressive bidder but they are there's no way 2029 for

21:45Matt Belloni:netflix was not intentional by the league yeah okay but does this impact the nfl's ability to extract more money now, because that's what they're on. They're putting on the table is renegotiate your deal. Now, give us more money because the NBA got so much more money. And then we will maybe extend you through 2034.

22:05Rich Greenfield:You're taking a risk.

22:07Matt Belloni:So they're using Netflix as the, as a leverage point.

22:10Rich Greenfield:For sure. I think that's my whole point. They're using Netflix. And the question is how much risk are they willing to take in 2030 and beyond? Yeah, that's really the question. And my guess is, Matt, just playing sort of prisoner's dilemma, someone's going to cave and renegotiate and start the process now or this summer because they're going to want to lock in that security. And it's probably Paramount, but we'll see. I mean, I think Paramount has a lot of reasons given the leverage and the financial structure of this transaction that they're doing with Warner Brothers. They want as much runway as possible for the NFL.

22:45Matt Belloni:And they're out there selling debt and bonds and stuff associated with the new company. they want security people to know that they have this asset.

22:54Rich Greenfield:Correct. And there is a change of control clause. There's a lot of reasons why this probably starts a process.

23:01Matt Belloni:All right. Next one. Do you want to go or do you want me to go? I can still go. Okay.

23:04Rich Greenfield:Look, the other one, and it's the obvious, but it plays off of yours. Who is missing from the NFL game this year? YouTube.

23:11Matt Belloni:Oh, interesting. I was going to say Warner Discovery, but we haven't got to them yet.

23:15Rich Greenfield:No. I mean, YouTube bowing out. I mean, YouTube was going to get five games. That was what everyone thought. It was reported. And supposedly they were at the goal line, pun intended. Yet they still have Sunday Ticket, which is a premium product. But the idea that YouTube walked away from linear games after what appeared to be a very successful game in Brazil last season, that was a big surprise from this year's upfront season that I don't think anybody saw coming a few weeks ago.

23:45Matt Belloni:Does that mean it's over, meaning YouTube will not have a game this year, or could there be some other game that they're going to get?

23:51Rich Greenfield:Look, the NFL is a master at slicing and dicing. I mean, I think the schedule comes out today, so I don't believe the NFL is going to have any game on YouTube this season. Now, it doesn't mean next season that couldn't change. Again, I just told you two of the games were one-year deals with Fox and NBC, so this could certainly change for the 27-28 season. But it certainly looks like for this season after, you know, again, it was one game. It was the first this was the first ever game free to the world, like truly free on YouTube, no paywall, free around the world on any device that you could access YouTube on.

24:28Rich Greenfield:So it was a really big deal in expanding the reach, in my mind, of the league. And so I'm just surprised that they walked away.

24:35Matt Belloni:Why do you think that happened? Do you think Netflix just outbid them for those games? Or do you think that YouTube saw some numbers that we are not seeing? Outbidding. I know. They have more money than anyone. I mean, you can't even say that with a straight face. I get it. No, that seems insane. Correct. So was it that the league really wanted Netflix because they really want to scare the other

24:57Rich Greenfield:broadcasters into renegotiating? Was it because YouTube got nervous about sort of the, didn't want to deal with the whole Trump administration and what's going on with sort of this, you know, games moving to streaming, even though this is free streaming. I honestly don't know. I have no good. I can't figure this out. I'm hoping someone listening to the town helps us understand why YouTube would bow out. Yeah.

25:22Matt Belloni:Well, Neil Mohan is a listener. Maybe he can call and tell us. He did take some shots at regular TV during their presentation. It was kind of funny. I mean, he said that they don't focus group their content. He said, we built the stage and empowered anyone with a story to find an audience. And I was like, okay, yeah, more like we built the stage and attached it to Google, the world's largest search engine and let our unregulated monopoly do the rest, but whatever. They were pretty confident. That was one of my takeaways is that the confidence of YouTube is pretty overwhelming at this point. They had this whole campaign to teach everybody that they They are the new TV, the Nielsen Gage numbers, all of it really, I think, puts them in the driver's seat.

26:06Matt Belloni:I know you love Amazon, but it's hard. That YouTube presentation, it's hard to resist.

26:13Rich Greenfield:It's funny how they occupy what used to be, if you remember, the old CBS slot. That's where Les used to get up on stage on Wednesday evening or late Wednesday afternoon. That's where he would get up, and that's now a YouTube slot. And I think, you know, look, there is no doubt YouTube is TV now. They are, you know, forget about it. It's not even a younger, you know, we used to talk about, oh, it was young people. It's everybody is watching YouTube on their TV.

26:40Matt Belloni:The problem is, is that nobody really cares about the content outside of the people who are consuming it. Like they could have put up any of these shows or any of these people. And it doesn't really matter because for YouTube, it's all about the scale. You're buying across shows, although they are trying to sell packages associated with particular shows now. And if there's an audience, YouTube will find them. It's just hard to care about in the same way that these curated services are pitching a curated slate. I know you don't care about that.

27:13Rich Greenfield:Well, you know, I think it's a funny observation. The algorithm is curating. I get it. No, no, no. I was actually not going to say that. But the irony of your comment is earlier in the show, you made a comment of how nobody's watching the shows on linear television. Well, on linear.

27:30Matt Belloni:But a lot of them do find audiences. That High Society show, that is a pretty big audience. If you look at the most watched shows that come out via Nielsen, a lot of them are the broadcast shows that combine a small, linear audience with decent streaming numbers. And all of a sudden you're getting up to eight, nine, 10 million viewers for these episodes, which is larger than many Netflix shows.

27:53Rich Greenfield:There's no doubt. But you compare that to the scale of sort of the viewership of this content on YouTube, which is where we started this question or this comment. Like the numbers dwarf it. Like, you know, you've got to add digits to the type of numbers you're talking about. And so, sure, like there's obviously a very fragmented array of personalities and content. But the numbers are the numbers. I mean, again, the only thing I care about when I look at all of this is watch time. And, you know, I think the question is going to be, there's no doubt YouTube with a massive, massive amount of content is winning.

28:30Rich Greenfield:Netflix is second because they have a large amount of content.

28:33Matt Belloni:You're prepared to say YouTube is the winner of the upfront week. They're always the, they've been the winner for like multiple years in a row now.

28:41Rich Greenfield:Yeah.

28:42Matt Belloni:Although you said you were impressed by Amazon.

28:43Rich Greenfield:I am because I think Amazon is really becoming, you know, I used to think that Amazon had sort of given up on sort of content outside of like that. They were sort of leaning so hard on sports, you know, between doing the NFL, doing the NBA, getting into NASA. Like it felt like there was a real push, sort of like, oh, we can't get entertainment to work. A lot of our content, as you know, a lot of these things overspent didn't work. I mean, we could go into Citadel. We could go into things that weren't working. It really felt this time like Amazon brought its A game and has really sort of figured out a far more compelling strategy and really leaning into both movies and TV in a new way.

29:26Rich Greenfield:I don't know. I just walked away with that impression.

29:28Matt Belloni:Okay. So that leads to the loser. And that gets to my final takeaway, which was the Warner Brothers Discovery funeral that everybody witnessed at Madison Square Garden. I mean, I asked you yesterday if you went to Warner's and you said, no, they don't matter.

29:44Rich Greenfield:Thanks. Thanks for literally putting that on air. I appreciate that. It's great.

29:49Matt Belloni:I'm prepared to agree with you. I mean, they showed a Ted Turner clip. I mean, they, Zasloff wasn't even there. David Zasloff didn't even show up. They had Casey Bloys, who is the HBO head who has presented in the past. He did not present. They basically put it all on the ad people and they acknowledge what they call the Ellison in the room. And there's change coming. And this is their their their send off.

30:14Rich Greenfield:No, it's true. It was definitely sad. And look, you know, all we can hope is that as this as these brands flow into Paramount, that there's that they, you know, really invest aggressively. Because again, I come back to the crazy thing is, is when you look at all of the streaming data that's out there, how little watched all of these platforms are, you know, whether it's HBO Max, whether it's Peacock. I mean, when you see something like Tubi beating Peacock.

30:43Matt Belloni:I don't know. The Pit is the number one show, according to Nielsen, on streaming. Bigger than anything on Netflix, anything on any of the other platforms.

30:51Rich Greenfield:There is no doubt that each of these services has hit shows. hit shows is very different than absolute watch time. This goes back to your YouTube. YouTube doesn't have the pit. YouTube doesn't have a stranger things, but they have a mass amount of engagement. It's where people go to watch content. And if you're, again, this mattered to a degree in the subscription world, it certainly mattered. But in the world of advertising, it's all that matters. If you don't have watch time, you can't sell advertising. So you need more watch time. And so, look, I also felt that, you know, again, there wasn't a, you know, the amount of content did not feel like there was a step function higher.

31:31Matt Belloni:Well, Netflix revealed that they now reach 250 million users each month, which is not the same as engagement and not the same as even viewership on the service, but they reach 250, which is a big increase.

31:44Rich Greenfield:Look, their ad business is up to 3 billion. It's going to keep growing at a very rapid rate. There's no doubt. I mean, every advertiser wants to be on Netflix. It's like, how can you not be on Netflix? Like given the size and scale of where it is, you need to be there as a brand now. And so - They're going to blurb you for sure. 60 % of new subscribers are taking the ad tier. Like they need advertising and to continue to re-accelerate growth, they need advertising to really kick in and accelerate. There's no doubt. It's the fastest growing part of the company.

32:18Matt Belloni:Before we go, give me your performer rankings from the upfronts. Is it, give me a one, two, three. Chapel Rhone at YouTube, Olivia Rodrigo at Disney, or Diplo and Shabuzi at Amazon.

32:34Rich Greenfield:I mean, Matt, there is no doubt. I mean, again, I have three daughters.

32:38Matt Belloni:Don't stall. I want a ranking.

32:40Rich Greenfield:Olivia Rodrigo definitely won the week. There is no doubt, like, the crowd, the reaction was unlike anything I'd ever seen in an upfront. Like, it was, you know, it was incredible to see what the crowd did when she came on stage. Incredible.

32:59Matt Belloni:I agree. That's the right answer. And Chopper Run second, and then Diplo and Shibuzi third. Anyone who's got a new hit out right now, and you can get them on stage in an upfront, like, Chopper Run's great, but she hasn't had an album in a while.

33:11Rich Greenfield:Olivia's having a moment. I mean.

33:13Matt Belloni:All right. No one needs to hear two 50-year-old men talk about Olivia Rodrigo. All right. Thank you very much, Rich. Appreciate you coming on.

33:21Rich Greenfield:Thanks for having me, Matt.

33:24Matt Belloni:We're back with the call sheet, Craig. This weekend is pretty boring at the box office, the new releases. There's three of them. I don't think we should even discuss. There's a Guy Ritchie movie called In the Grey, which has Jake Gyllenhaal in it, but I don't think it's expected to do much. there's a religious movie called is god is and then there is a focus movie a kind of quasi horror movie called obsession sure none of these movies is expected to get into uh double digits so why

33:55Rich Greenfield:don't we talk about michael again okay i've i will say i've heard obsession is pretty good and what a weird time that we're in that's like a guy richie movie with jake jill and holland it's just like

34:04Matt Belloni:it's irrelevant i know it's so weird very weird it's a good point but the interesting thing this weekend is the michael question because in the fourth weekend of release this movie could be number one this weekend it's going to be close the tracking i've seen screen dollars has it at anywhere between 24 million and 28 million devil wears product 2 they have it anywhere between 22 million and 26 million so it's going to be close i am going to put my money on the michael jackson wackos out there. And I believe this movie will return to number one in its fourth weekend of release. That's my prediction.

34:43Matt Belloni:Sure.

34:43Rich Greenfield:His music is soaring. There's crazy numbers about his numbers on Spotify and Apple and stuff like that. My question for you about Michael is if this movie follows the Bohemian Rhapsody track, whatever, makes$800,$900,$1 billion, gets Academy Award nominations in Love, do you think Jafar Jackson is going to dance and perform at the Oscars this year?

35:05Matt Belloni:if he's nominated for sure. I don't know that he'll be nominated. I think that the movie is a shoe-in for hair and makeup and maybe some other below-the-line categories. But, you know, the critical response to this one wasn't great. And I know it wasn't great to Bohemian Rhapsody either. And the kind of stink around Michael Jackson, there might be some hesitation to nominate anyone associated with the movie. If there's any actor who's going to get nominated, It's probably going to be either Jafar Jackson or Coleman Domingo. Yeah. But we'll see. It's so early. I hate doing Oscar predictions in May because you never know what the landscape is going to be like.

35:42Matt Belloni:But I could see him being asked, even though there's not original songs in the movie, so they're not going to have a nominee for song. They will probably ask him to. Remember, the Oscars, the year of Bohemian Rhapsody, they had Queen perform. They opened the show. So they will do something if that movie is a big nominated movie.

36:01Rich Greenfield:It's funny. They would probably never do this, but because of the fervor around this movie and the craziness and how much people love the performance that Javar Jackson puts on, he could probably do live shows and lip sync Michael Jackson and dance and people would go.

36:15Matt Belloni:Maybe. Listen, they're doing a K-pop Demon Hunters tour and none of the talent associated with that movie is even involved yet. They're still figuring out what the creative is going to be. They just announced it. It's going to be like Disney on ice, but without the ice.

36:28Rich Greenfield:Oh, interesting. Yeah. Yeah, I don't know. I can see it.

36:31Matt Belloni:I can see people going to that and wanting to see it. All right. So yeah, we are at about 600 million so far for Michael. It has not opened in Japan yet. It's expected to do extremely well there. And I think it's going to get to number one this weekend with another 25 or 6 million. This movie is well on its way to beating Bohemian Rhapsody. We'll see. Not sure if it'll get there, but we'll see. All right, that's the show for today. I want to thank my guest, Rich Greenfield, producer Craig Horlbeck, art editor John Jones. and I want to thank you. We will see you next week.