The Media Odyssey

Evan Shapiro: [00:00:00] Welcome to the Media Odyssey Podcast live stream, our first ever live stream, and we're together and we're in London. Welcome Marion. Good to see you.

Marion Ranchet: Good to see you too.

Evan Shapiro: Great job today on your event here. We are coming to you actually, very fittingly, from Little Dot Studios.

A really amazing agency studio model who specializes in maximizing reach, community, and monetization on social video. And Marion ran one of her Streaming Made Easy Live events here, which was packed. It was standing room only.

Marion Ranchet: Yeah. Loved it. We had a chat on advertising the state of advertising, which was very fitting for the beginning of the year.

Yeah. So I'll be talking a bit more about that in an upcoming newsletter, but that was fun. And good to have you around.

Evan Shapiro: Yeah, it's good to be here. I'm here for the Royal Television Society Panel, Predictions panel for the year tonight.

But we are here right now to break down the first big earnings report of earnings season, which is always Netflix, who [00:01:00] broke their earnings yesterday at, after the bell closed, or after the market closed last night. And we can get, we can jump into it.

The numbers were way better than I had anticipated. No I thought they were gonna I thought all this mishigas and rigamarole around buying Warner Brothers Discovery meant that they were hitting some headwinds in their model. They, last year they really enjoyed all this the benefits of locking down on password sharing, and that kind of came to a close.

And so I thought they were gonna, hit substantially more bumps in fourth quarter than they did. Net income was up oh, I think 25% in fourth quarter, 26% for the year. Revenue is up 15% in fourth quarter, 16% for the year. They hit, they say anyway, they don't necessarily give it in their P and L, $1.5 billion in ad revenue.

So it was a really good report. They beat expectations. Yet, as they always do, yesterday, they decided they had to throw a big distraction on the day [00:02:00] of their earnings call, dropping the fact that they're changing their offer for Warner Brothers Discovery to all cash. And then on the earnings call, they lowered their guidance for the rest of this year, and as a result, their stock is down.

Went down about 7% overnight. I don't know what it is actually right now. Jesse, if you could look that up and let us know what it is today, but, what did you think? What was your reaction?

Marion Ranchet: So a few things, just like you, I was, I thought the numbers wouldn't be as great. I thought we would not have a subscriber count number.

That was the other thing. So that was surprising. Yeah. So 325 million. So I think that's interesting because I think that this thing about, we're not gonna share that number anymore. I. It was a good story to tell. To say that they gained well, doesn't mean that gained 23 million.

So that was a way of, putting, a good story around that. Because we'll talk a bit more about the engagement piece. That's the piece that they've, in my opinion, they've undermined and it's a bit hidden because there's no clear number, that number is growing very slowly.

If not, declining based on,

Evan Shapiro: you mean viewership?

Marion Ranchet: Yeah.

Evan Shapiro: Yeah. [00:03:00] Yeah. Yeah. They, I think they, did they say this on the call, they were 10, less than 10%.

Marion Ranchet: They said that. And so they actually had an all time high on the Gauge right around 9% of the December numbers.

Evan Shapiro: But that's because of Christmas day.

Marion Ranchet: Yeah, exactly. So they put that out they said that they grew, so that was H2 was 96. Billion hours. I think prior semester was 95. So that's not a lot of, growth. No you take a total, it's 191 million. And if, let's say you average out the subscriber counts to, we were 302. Let's say we do 313. Alright? That means that it's 1.7 hours per sub per day.

And I think a few years back

Evan Shapiro: Which tracks. Don't you think that tracks?

Marion Ranchet: Well, yeah, but that tracks, but that's lower. Last year was what, 1.8? If we take that same example. And then a couple of years ago was two, two hours.

So that was an all time high. And I think that's their biggie.

So yes you wanna flash [00:04:00] subscriber counts because you can't really say that this is growing. So they've said it's grown 2% and they've said as well, very interesting. It's grown 9% when it comes to branded originals.

So I think that's their way of packaging it in a positive way. But I have my doubts. So what do you think?

Evan Shapiro: Yeah. The, to a certain extent, this is the company that cried wolf, right? They are the least transparent C-suite in almost all of media. They sure

Marion Ranchet: They don't, I disagree with that.

Evan Shapiro: They have not given us a tremendous amount of data on their ad tier until now. They stopped reporting subscribers at the beginning of last year, and they said they would never tell us again.

So to me, Netflix picks and choose. They never were gonna get into ads. Then they got into ads. They were never gonna do sports. Now they're doing sports. They were never gonna tell us their subscriber numbers. Now they're telling us their subscriber

Marion Ranchet: They're getting too theatrical, and now they're buying Warner.

Evan Shapiro: So it does to me feel like they chick cherry pick their data based on what [00:05:00] story they need to tell, not the actual story itself.

Marion Ranchet: That's the Wall Street game, though.

Evan Shapiro: It is.

Marion Ranchet: You can't blame them.

Evan Shapiro: It is but they give us substantially less information about their P&L than any other competitor in this space.

Marion Ranchet: That's true.

Evan Shapiro: Amazon doesn't tell us that much about their video business, but they tell us everything about everything else. So we know their ad number. And sort really quick side note, though, the Nielsen gauge did report that Netflix had a massive month in December, driven a good deal by by Christmas Day.

They also said that 25% of all viewing on Christmas Day was just Amazon and Netflix.

Marion Ranchet: Yeah. I think if you look at the Gauge, the entire streaming universe actually grew nicely. Not just Netflix.

Evan Shapiro: Yeah, Roku hit 3%. And there were, I even if you remember in our predictions, I said that by next summer, streaming would hit over 50% of television viewing.

It did that twice in December, two days in December. Streaming. This is during football season too. So there were two days in December where streaming hit well over 50%. I think we're gonna see streaming hit and stay at over [00:06:00] 50% this spring sometime. Yeah. But I think to, in my mind, it, so let's take the larger theoretical question.

They had a way better day than either of us thought. By the way, they had a better earnings report than all Wall Street thought. They beat expectations. But they did lower guidance for the year and they raised their, ostensibly raised their bid dramatically.

Marion Ranchet: What does that tell you?

Evan Shapiro: I think they need, I think they desperately need to deal this deal.

I think there's something going on inside that company because everything that they did, the subscriber number, all the more information than they've given us. To me, that was all about changing the narrative away from the Warner deal, because since they started bidding on the Warner deal, their stock is down nearly 30%, $140 billion in shareholder value. Gone.

And I think [00:07:00] that's really concerning them. I think their ability to borrow money to make this deal happen. Remember they're borrowing, yeah, tens and tens of billion. I think it's 50 billion, $54 billion in debt. They're taking on in addition to the money. So they're gonna have $85 billion in debt.

That's really harder. It's much easier if you're worth half a trillion dollars. Yeah, it's a lot less easy if you're worth 300 billion.

Marion Ranchet: Can you explain a bit more this all cash move, why did they do that? And will it really protect them, expedite that deal in any shape or form? I'm not sure I understand that.

Evan Shapiro: I think that is a move to counter. So what ha is happening now is paramount is going out. Collecting tender offers from shareholders to ostensibly hostilely take over Warner Brothers Discovery. And, if you're a shareholder and you've been holding onto this dog of a stock Warner Brothers for the last couple years, it was worth $20 billion over the summer. It's now worth over 70 billion, [00:08:00] but only because of this auction.

Do you want cash or do you want Netflix shares? So ostensibly it de-risks. 'cause if the deal was a mix of Netflix shares and cash Yeah. But heavily Netflix shares, six months ago that looked like an awesome deal. That was all upside.

Now, after it shed 30% in three months. You could make a lot less, you can get screwed on this deal. So it's ostensibly a guaranteed cash payout. So it doesn't, in today's dollars, it raises the deal. It ostensibly raises the offer.

Marion Ranchet: And so you don't think they need that deal. And I have a different view.

Evan Shapiro: I do think, I think they're desperate for it.

Marion Ranchet: They want it, but you don't understand.

Evan Shapiro: I think 84 billion, $82 billion. Dumb as shit.

Marion Ranchet: Okay. So you think they need it, but not at that price?

Evan Shapiro: Correct.

Marion Ranchet: Okay. I don't wanna comment on price, but I think they need it. And one of the reasons, what I've noticed is, so we don't have, that breakdown of subscriber accounts per market, per region.

We only have per we, we have only the revenue [00:09:00] breakdown.

Evan Shapiro: Yeah. But call it 90 million in the US.

Marion Ranchet: Yeah. So what I'm always looking at Europe and when I look at EMEA out of the four regions, so you had LATAM, APAC, US and EMEA in terms of double both. All of them double digit, but LATAM, APAC always from a smaller base.

I think APAC is 12% of their overall business. So those are, maybe less penetrated markets. So it's not surprising, I was surprised to see that growth in the US but I'm thinking is it net new subs? Is it a mix of price increases, et cetera.

But in Europe, so only 15 out of all of those, and I've been thinking, I think they need maybe more than in the US in EMEA, I think they need Warner Bros. And so we spoke to that in

Evan Shapiro: yeah.

Marion Ranchet: Our episode. It's coming out tomorrow,

Evan Shapiro: right. Tomorrow.

Marion Ranchet: We're talking about HBO Max launching in a region.

Evan Shapiro: I forgot when we talked.

Marion Ranchet: Yeah, there was, we did it last week. Yeah. But it's coming out tomorrow. And so we spoke about, how actually a lot of the assets that HBO has in Europe could be valuable for [00:10:00] Netflix and particularly live.

Evan Shapiro: Why though?

Marion Ranchet: I'm thinking

Evan Shapiro: big sports package, big, the Olympics in a lot markets.

Marion Ranchet: The Olympics, tour de France, Australian Open, a lot of great live rights and, Ted and team they doubled on how life is important. They were saying in the earnings shareholder letter.

No, it's not the biggest viewing numbers, which was interesting, but it is creating momentum. It's creating a co, creating a conversation. It is driving signups. So I think, in the region that is potentially what's been missing. And it's a great way for them to compete with MVPD and the Sky and Canal plus of the world.

On top of that, we'll talk about that a bit more, but there's that Sony Play one deal. In terms of TV series, I'm not sure, but I think so. I think Netflix needs more library and that's what we've seen in the earnings as well.

Evan Shapiro: And crucially. Yeah. And for engagement.

Marion Ranchet: And IP.

Evan Shapiro: Yeah. And IP. But there was a point that you, that we brought up on, on the podcast that comes up tomorrow that you can listen to again tomorrow. But that the [00:11:00] HBO Warner content, the HBO content

Marion Ranchet: Yeah.

Evan Shapiro: In Europe, has been trapped behind the Sky paywall. For years, right?

For a very long time. Not that many people have Sky. Yeah. So a lot of that programming, Game of Thrones, Succession, those are all shows that a lot of viewers in Europe have never seen.

Marion Ranchet: Yeah. From an engagement perspective, that's an amazing, it could really give them a shock. Yeah, absolutely.

So yeah, what do you think about, is it, I'm thinking about theatrical and all of that.

Do you see additional value from that deal for Netflix that's gonna, improve their business beyond, I'm not thinking 2026, that's not gonna happen in 2026. So from 27 onwards, and not just looking at Europe, globally, what else are you seeing that you think this deal, let's put the money aside for a minute, still makes sense.

Evan Shapiro: I think the, for the particular reasons that we just discussed, there's a tremendous amount of unlocked value because HBO has been shitty at distributing, streaming [00:12:00] around the world. They have not, they're not in the UK. They're not

Marion Ranchet: they're not.

Evan Shapiro: They're just now coming to Europe.

Marion Ranchet: Yeah, I know, but that's because for a long time they chose to have that Sky partnership. They were in the output deal world. They're moving away from that. But yeah,

Evan Shapiro: but so there's upside from an engagement. Yeah, there's a tremendous amount of upscale upside and a 350 million in a human region here in Europe. So that to me is the greatest upside for them.

The DC Universe, which, I'm gonna, I love the Batman, the last Batman movies. Some of those movies are some of my favorite of all time. But DC has done, when you compare it to Marvel, done a shitty job of maximizing. There is no universe the way that Marvel is.

And Marvel has eight of the top 10 theatrical films of all time.

Marion Ranchet: Yeah.

Evan Shapiro: The, I think there is upside in IP, the Harry Potter franchise is also there. That's massive. And not, is that, not only is that just a massive IP for TV and film, it's also a massive theme park business.

They are one of the [00:13:00] largest beneficiaries of licensing from NBC Universal Comcast for Universal, their Universal. Parks.

Marion Ranchet: They have a gaming division Warner as well, right?

Evan Shapiro: Yeah. Yeah. And a pretty successful one. Harry Potter was a massive hit. And the new Batman game is also doing quite well.

So there is tremendous, and Netflix has just epically failed at gaming at $2 billion just set on fire to play Pictionary. Has anybody out there played Pictionary on Netflix? Has anyone? I'm willing to bet no one has.

But. At 85. Luckily we have a direct comp.

Marion Ranchet: Yeah.

Evan Shapiro: So Disney and Fox, six years ago, 2019, 7 years ago that deal was about the same price, $72 billion in actual cost, and then some assumption of debt.

It was exactly the same reason. IP, not distribution for the most part, that deal has been terrible. That's been a terrible deal. Yes, the IP is interesting. I loved Deadpool and Wolverine, but they're still 60 billion, six [00:14:00] years, seven years later, there's still $60 billion in the hole on that deal, and I don't think they're ever gonna be able to dig themselves out.

60 billion. There's no, you can't. You can't turn IP into long-term value immediately. And it's, I think it's harder there. There's a value at which it makes sense, and then at some point it doesn't. And it's like buying the most expensive house on the block. You're the only way you have to go is down.

There's no way for you, everybody else is gonna catch up to you or your value's gonna go down. It's not, yeah.

Marion Ranchet: But I think the difference being, at the time, there was like pre COVID, pre Disney plus launch. I think right now the difference is that you have that market leader with 325 million subscribers and they mention it every time they say that, aside from the viewing, the viewership, they're saying there's still so much room to, to grow.

And actually what's interesting is that they say that every time, but they don't say how they're gonna do that. And so I think that's a good segue [00:15:00] into the advertising piece, right? Because that is one way of attracting new subs in regions where, we don't wanna spend 10, $20 a month. So what did you think about the ad business?

Evan Shapiro: I wanna ask you that. What did you think? This is more you, I think, we both have a lot of knowledge in the ad game, you just did a whole day on advertising. They said that they only had 2% of the ad viewing in the US right?

Isn't that what they said?

Marion Ranchet: So the 2%, to me it's the market share from a revenue perspective. So they say that they want

Evan Shapiro: but not viewership on it.

Marion Ranchet: No, I think it's. So we know so little about we don't even really know how many, what's the, we have estimation, right? So I think digital eye put out data saying that 40% in Q3 of last year of Netflix subs were on that ad tier.

What's that?

Evan Shapiro: What percent?

Marion Ranchet: 40%.

Evan Shapiro: Yeah, that's right.

Marion Ranchet: Yeah. But then we know very little about that. The only numbers we got,

Evan Shapiro: which is actually impressive. It they considering, how shitty they got off on that whole thing compared to the way Amazon handled it.

Marion Ranchet: The reason why it's good is that I [00:16:00] think it says a lot, it came with a lot of price increases.

But I will say, so the numbers we have, it's more money wise. So 1.5 billion. Thinking to triple by next year. So

Evan Shapiro: no double next year. I think triple by.

Marion Ranchet: Okay, so double then triple. And so I think that's 3% of total revenue. That's, that's tiny. They've been at this for a few years.

I'm sure a lot of company would like to see a business grow. I don't want to say that big, that fast, but, it's still a tiny player in that space. And they are very vague when they say anything. Yes, this is how much we made, this is how much it has grown since last year. This is how we wanna grow.

But then we don't know how ad supported consumers are behaving. We don't know the impact on ARPU, though, my thinking is that, they were hoping that it would increase ARPU. It did not would be my guess. And that's a biggie, right? Because of course you wanna have more and more people, but you want everyone to be spending more and more with you.

Evan Shapiro: Yeah. And so [00:17:00] I think that's where, not to bring it back to IP again, but that's where the IP actually makes sense. Because when you get Friends. 300 episodes.

Marion Ranchet: Yeah.

Evan Shapiro: One of the most, still one of the most streamed shows in the history of streaming. That's a lot of ad in between.

Marion Ranchet: Yeah.

Evan Shapiro: That, that they don't currently have.

'cause they're not necessarily allowed to stick ads inside their acquired content. Some they can, but not a lot.

Marion Ranchet: Yeah. And they decided to have a light ad load. Because it's not like it's free. It's it's not free with ads. It's you pay, you have ads. So I think they've been going, I dunno how many is it four, six minutes?

I think its four

Evan Shapiro: is four or six. Yeah.

Marion Ranchet: Yeah.

Evan Shapiro: But I don't know that they're sold out. That's the thing

Marion Ranchet: is who is, I think right now you are seeing, a lot of there it feels like when you talk to people,

Evan Shapiro: Hulu is. It feels at least from my perspective, it feels like Hulu is, and by the way, when you look at. So compared that to Netflix, Hulu is about 80% add tier.

And they have one of the highest ARPUs [00:18:00] in all of in all of an all of tv. The other thing is that the Disney machine has a really good logon and fulfill for as small and medium sized businesses.

Marion Ranchet: They were in the ad game before, correct?

Evan Shapiro: They're very good at selling ads. They're good at that.

They're terrific at selling advertising, who's terrible at it? Warner Brothers discovery is just fucking awful at selling ads. They're just bad at it.

Marion Ranchet: Yeah.

Evan Shapiro: People hate dealing with them. And they're just not good at, and they're particularly bad at selling streaming ads.

And so again, there's a lot upside there. You look at how much inventory they're about to get and you think how badly Warner Brothers has been selling up until this point. So there's a lot of headroom there.

That said, I don't think Netflix is all that good at selling ads.

Marion Ranchet: They're playing catch up on, they've said it on the call. They're improving the tech stack. They wanna launch new products, et cetera. But yeah, I think little by little they're making an effort.

I'm gonna, pause for a second because we're doing this live and what's cool. Is that we can actually take questions. Oh, okay. So if, yeah, if you [00:19:00] guys go there's a chat room somewhere on Riverside for you guys.

If you wanna ask question, get started. We have Jesse it's gonna look nice because we're actually gonna see the questions on screen.

Evan Shapiro: Oh

Marion Ranchet: yeah. Oh, wow.

Evan Shapiro: We don't have to do anything.

Marion Ranchet: Yeah, we're very high tech.

Evan Shapiro: Jesse is our producer and our editor, by the way.

Marion Ranchet: Hi, Jesse.

Evan Shapiro: And if you go to YouTube if you're on YouTube watching this, you can put in the comments there, Jesse will read them and then spit them back at us. Yeah it's been really interesting. The, I think the larger thing that people don't.

So you have the Disney model which still hasn't paid off. And had all of the same attributes to it.

Marion Ranchet: But different time in the grand scheme of things.

Evan Shapiro: Sure.

Marion Ranchet: Pre 2020.

Evan Shapiro: Sure. Right. I would argue that the odds of that deal paying back were better back then than they are now.

Marion Ranchet: Interesting. Okay.

Evan Shapiro: Because it's more competition. FAST was not what it is today. No. So you have more comp, you have more competitors today than you did back then, which is one of the reasons why Netflix is trying to take one of their competitors outta the market.

But I think, [00:20:00] what the cost to this internally at these companies, by the way, the cost to the industry is now frozen in place until this deal

Marion Ranchet: Yeah.

Evan Shapiro: Takes place. Or doesn't, there's just gonna be stasis. People are gonna stop, they're already not buying.

Ampere did this really good report about streaming hitting a certain number, I'm sorry, streaming, hitting a hundred billion dollars in total content spent.

Marion Ranchet: Yeah.

Evan Shapiro: Last year. But the whole increase was in sports. All of it, it didn't go to scripted. No, it didn't go to unscripted.

The cost that is gonna take place here is just monster metal to the industry itself. The question did just pop up.

Marion Ranchet: Yeah. It's gonna be back. It's our friends. Emily, Oregon.

Evan Shapiro: Hey, how are you? Thank you for watching.

"With the Warner acquisition and advent of K-Pop Demon Hunters, Netflix has a big opportunity to go into franchise. Do you think they will?"

I think. I'm interested to hear what you, K-Pop [00:21:00] Demon Hunters is a phenomenon that caught Netflix by surprise. So that was not a franchise they planned on.

Marion Ranchet: No, but it is one. So they need to learn how to build one.

Evan Shapiro: I think they've done a really decent job of like they released the album.

Yeah. They had, weeks after the thing blew up, they had Halloween masks in stores around the country, at least in the US. And so I think, and then I. Stranger Things had was a monster hit, pardon the pun again. For them, it's over now, but I anticipate spinoffs there much like Game of Thrones.

And then the Broadway show is a huge hit like, printing money. So I do think they understand the franchise business. Yeah. I don't think they're very good at intellectual property development.

Marion Ranchet: Yeah. But

Evan Shapiro: So that Kpop was not a, they didn't develop, they didn't develop K-pop. They basically acquired that.

Yeah. Yeah. Warner, you get the machine, you get the development.

Marion Ranchet: So you get the machine on the IP development side, but you have that, those team working on franchise, merch, et cetera. Yes. I think they will get into it. I think Netflix, that's why they [00:22:00] want this thing. Like they need more to play with.

Evan Shapiro: Yeah.

Marion Ranchet: So Emily, yes.

Evan Shapiro: And this doesn't,

Marion Ranchet: It'll get better. It's gonna be fun for you to comment 'cause she, she loves that.

Evan Shapiro: "Do you think it is, do you think this is underrepresented so far and could represent a significant uplift in their numbers if and when they get this right?"

Marion Ranchet: What are we talking about?

Evan Shapiro: I think what general is saying is is the Warner acquisition not built into the Netflix price right now? And would that, would it, I believe that's what you want. Yeah. I think it's factored in and I think that's why it's a doubt.

I think that's why their stock is falling. I think Wall Street is like, this is a bad deal. They're gonna be underwater. The cost of borrowing money is gonna go up for them every single year from this point forward. This is not smart.

And, Disney, if you look at Disney's stock performance since the day they bought Fox, since the day they closed, it's flat.

Six years not up. Little down here and there, but mostly just flat. That's bad. That's a bad story. Meanwhile, [00:23:00] Netflix has doubled, in, in value over that same time. I don't know.

Marion Ranchet: Let it pop up. So this guy in tech, let it pop up on the screen. It's gonna pop up on the screen. Does

Evan Shapiro: it pop up on the screen?

Marion Ranchet: Yeah, I wanna read that question right there.

Marion Ranchet: You are gonna be able to read it. We can give it a second. Right now it's the same questions. It's a new one. Perhaps this is it.

Evan Shapiro: Netflix had a huge opportunity strike

Marion Ranchet: by chance. Yeah. But it's just, it's it's pretty much what, Emily was saying.

Yes. They have a lot of opportunities to actually grow and gain. That's why they also wanna get in, they're gonna have to play ball with theatrical. They need that box office money. That would be silly to turn that at money to just put movies all at once,

Evan Shapiro: yeah. To not put Batman in theaters because every time you put Batman in theaters, it does a huge number.

So to not do that or Wonder Woman or Aquaman or all that and avoid that window to doesn't. You're right.

Marion Ranchet: I don't think you build IP the same way without theatrical. I think so K-Pop is, and Netflix, they've done a great job, right? So no doubt about that. But the question is the, it's the time.

How long are those [00:24:00] IP gonna live for without a theatrical, if they were to do that?

Evan Shapiro: Theatrical video. I don't, what did they say about Vertical video? Did they say they were gonna look into it? Disney is now launching vertical video on their platform. I think that vertical video is gonna be one of those things that is gonna work incredibly well outside of the apps everybody thinks they're building.

Real Short is not doing as well as everybody thinks they did. No, I don't know why everybody's convinced themselves to believe numbers coming out of that company, which is ostensibly owned by the Chinese government because they're less transparent.

So building your own, what the world doesn't want are more apps, but what the world clearly does want is vertical video. I'm addicted to it myself. So I think the idea that you would get vertical video on your mobile app. So there'd be really cool shows you could watch on the Disney Plus, Hulu, Netflix app as a part of your ongoing subscription.

Marion Ranchet: Yeah. And it doesn't have to be

Evan Shapiro: With ads,

Marion Ranchet: A [00:25:00] micro drama. A game show. Yeah. It could be anything. So I will just say I'm a bit annoyed when I hear about this topic.

Evan Shapiro: Yeah. You hate this topic.

Marion Ranchet: It's no, it's just so I, yeah I care very little about micro drama. Maybe, time will tell.

But on vertical video, like spoiler. Disney did not invent anything. I'm sorry. On the French markets, M6 plus has been doing that for the last 12 months

Evan Shapiro: with bespoke shows or recuts of their existing shows. Yeah.

Marion Ranchet: Within their app. If you look at

Evan Shapiro: Wait original, vertical content or recut?

Marion Ranchet: No not necessarily.

Or well actually. A bit of both Uhhuh, right? So there's a lot of streamers in Europe who have made that move of offering, and they're not necessarily saying it's vertical video, but they're saying they're, we wanna have a social, video component. And, indirectly it's it's vertical.

It, NBC shade and Mina et Sorry guys, but like nothing new. Yeah, it's,

Evan Shapiro: no, there are

Marion Ranchet: new ideas. It's way, oh, there's that. My, this is our answer. A lot of people have already done that, but [00:26:00] anyway. It is what

Evan Shapiro: it's, I think it's a, but I think it's a really smart way to counteract social video.

It isn't trying to steal viewers away from social video. It's keeping your viewers on platform longer and not letting them leave as opposed to trying to compete against TikTok and Instagram. You're not gonna necessarily do that, and I think advertisers will absolutely eat it up. Yeah. Yeah. They would love that.

Marion Ranchet: They can, they still need to be. On YouTube for shorts and TikTok For the rest, what would be interesting and, but I'm sure we'll have no data on that, but would be interesting to see if people are scrolling vertical within Disney Plus and then on their TV watching, so there's actually something there.

They could have a bit more community interactivity by doing those things, but, so yeah, we've been saying that they should have more social first features within this. Their streaming services and

Evan Shapiro: They really have no mobile business at all.

Marion Ranchet: People, that's what people want. Yeah. One thing that actually, all of these guys need to do more and that, that they touched upon it and the Netflix earnings was, it was interesting to hear them talk about [00:27:00] fandom and how you build it off platform.

And so Netflix with their experiences, et cetera. I think it's, they're gonna have their hands on, some parks, right? So the Harry Potter Parks, et cetera. It's gonna be interesting to see what happens with that. And I would love for streamers as a whole, not just these guys, to find a way to build a bridge.

Like I've been a Disney plus Sub for three, four years. I'm French, I'm a few hours from French. Yeah, I'm a few hours from Disneyland, Paris, and I've never had a single deal offered to me either way.

Evan Shapiro: Yeah. That's to me, that is one of the great pieces of malpractice in entertainment is the fact that you don't get park discounts as a, as for signing, they're

Marion Ranchet: missing out.

Evan Shapiro: It's a

Marion Ranchet: silo.

Evan Shapiro: Yeah. And I said it from the very beginning. By the way, let's take Gene Jean, thank you for watching. Oh, Gene, love

Marion Ranchet: you. Hey, Gene. Okay. Guys, this is live or

Evan Shapiro: Live TV? Maybe.

Marion Ranchet: Live tv. I have to say, I dunno what happened. Just like the computer

Evan Shapiro: just decided. They said we, we it's socialism.

That's the problem. Thank

Marion Ranchet: you. So we were answering Gene's question.

Evan Shapiro: Yeah. There are a lot of

Marion Ranchet: really, there's a lot of cool [00:28:00] rights.

Evan Shapiro: Yeah. I think that's where, we have to take our American hats off. We have to stop thinking only about the world through and this is,

Marion Ranchet: Jean, she's super open

Evan Shapiro: but me in particular, every time I bash this deal, I really do primarily look at it from the US 'cause it's the largest television market in the world. But as we talk about on the podcast that drops tomorrow. There's a huge opportunity around the rest of the world for Netflix inside this deal. The, $84 billion question, or $82 billion question is.

Is it worth 82 billion? Is it that much upside? I, again, I can't make those maths seem to work.

Marion Ranchet: Yeah. And those deals are gonna expire. It's gonna be fascinating to those who sold to Warner Bros to then potentially sell to, to Netflix, but just. Just for folks in Europe, Warner bros has all of the Eurosport content and rights and TNT sports in the uk as well, which is the product of the BT Sports

Evan Shapiro: and Champions League.

Marion Ranchet:So there's so much. Actually, I think next Round Champions League [00:29:00] goes to Paramount interestingly in, in Europe in key. EU market, like UK and Germany. Okay. So Jesse, do we have another question?

Evan Shapiro: Or should we wrap up?

Marion Ranchet: Yeah. Or should it wrap up exactly?

Yeah, we can do a question of the week.

Evan Shapiro: I think I think the question of the week is, does Netflix get this? 'cause I still think it's a coin flip

Marion Ranchet: in terms of getting it approved? What a waste of time or beating for everyone.

Evan Shapiro: There are major shareholders tendering their shares to the Ellisons right now.

And one of the reasons they're doing is they want a bidding war. Yeah.

I don't, I think Netflix should stop acting as if this is a feta complete 'cause I think it's a bad look.

Marion Ranchet: Yeah.

Evan Shapiro: And I think it hurts their chances of getting it approved. I think if they appear more solicitous to both the shareholders and the regulators.

Yeah. They have a substantially better, what does this president love more than kissing ass? And Ted went to the White House and kissed his ass, but like I would stop spiking the [00:30:00] ball. You are not in the end zone yet. As they evidenced this week by raising their, ostensibly raising their price and going to all cash.

So what do you think they're gonna wind up with? Do you think it's just.

Marion Ranchet: Honestly, like with what's going on in your country. I dunno.

Evan Shapiro: I guess depends on how big a golden throne they buy though.

Marion Ranchet: Yeah, absolutely. I have another question of the week actually. Okay. It is for the audience.

So this was the first live episode. It just went like Netflix one day, first went live. They, I think they, it crashed. So

Evan Shapiro: yeah.

Marion Ranchet: This is what happened. Too many people were watching. That's why the computer crashed. So many people were watching this. That's how we're gonna spend this. That's how, no, but the question U for you, it there, it's twofold.

Number one, did you like this? Do you want us to do more? And we're starting earning season. There's gonna be like, 60 companies. So we won't be doing that for every single company, but we're keen to understand which ones, are most interesting to you guys. So

Evan Shapiro: I liked this. This was other than this tech glitch, which gave us both heart attacks.

Marion Ranchet: I had to [00:31:00] run and

Evan Shapiro: I know And save made. It made. I watched you. It was the first time I ever see you run. See? Yeah.

Marion Ranchet: Yeah.

Evan Shapiro: But no I,

Marion Ranchet: this was fun. We have to hard

Evan Shapiro: chiller than I thought it was gonna.

Marion Ranchet: It's nice to do it in person as

Evan Shapiro: well. It's nice to do it in person.

Marion Ranchet: Yeah. So guys that's, I think this is the end of this episode, but do, ping us comments on YouTube and let

Evan Shapiro: us know if you like this

Marion Ranchet: and if you want more of that.

Yeah, if you want more, which earnings, et cetera we'll be, so this is gonna be right away on YouTube, on demand. So push it to friends and family and moms, whoever. We're gonna drop it on audio platforms as well, because we do understand that some people don't necessarily for Apple have an hour to spend with us Right now it is 4:00 PM in the afternoon.

In the US it's 11:00 AM and 8:00 AM

Marion Ranchet: Someone is cooking breakfast or having a run. And tomorrow we're releasing an episode where we'll be breaking down the HBO max launch in key territories. And he is gonna talk about Google eating, apple.

So guys, see you next time. Podcast. Thanks for everything. We love you guys.

Evan Shapiro: Thanks so much.

Marion Ranchet: Cheers.