'Content Influences Everything': Kevin Mayer and Michael Kassan on Media's New Roadmap

content business. Handle Media co CEO Kevin Mayer is a former Disney executive who has been making waves in Hollywood as he has been out shopping with a big checkbook for content assets. Media Link CEO Michael Casson is a well known deal maker in the advertising business and a marketing consultant to many Marquis names. His company was just acquired by a United talent agency for a hundred and twenty five million dollars. The three of us had a lively conversation in front of a packed house at the

Austin Convention Center. We went deep on marketplace conditions, roth evaluations, how TikTok will be monetized, when ads will come to Netflix, and where the new normal is headed in pay TV. That's all coming up after the break. This is a really great opportunity with our two guests here, we have people that just reflect all of the cross currents of media right now. Kevin Mayer has had quite a tour in the last twelve, twelve, sixteen months of media and

all of its inflection points. Michael has made a career out of being at the intersection of media, advertising, marketing, commerce, and that is that those are all of the things that are driving the business forward right now. So it's a great opportunity for us to talk about some you know, to talk about some specifics and also some big picture things.

So we'll talk well thought we would start by talking Kevin Mayer is in the midst with your partner Tom Stags, who like you as a fellow Disney along longtime Disney executive. You have joined forces into a company called Candle Media, and you have been the buzz of Hollywood because you've been in town with a big checkbook talking to people

about buying content assets. You've been very deliberative and you and Tom have talked a little bit about the big picture of what you're going after today, I'd like to start by talking about sort of you've been at it now for probably going on about a year. Where does Candle Media stand in terms of your building a physical infrastructure around that business. Well, I think we're in pretty good shape. We actually started in earnest this summer, late

summer when we bought Hello Sunshine. That was our first purchase research. You might have heard something about that, Yeah, and UM and we partner with Blackstone and that that was an ongoing UM search that I was the time and I were on to see who's the right private equity partner Blackstone being as one of the largest private equity players and one of the companies that wants very much to put some money in media right now, Well,

black Stone is It varies from time to time. I think they're the biggest private equity firm in the world. At this point, I have the biggest fund. We're part of a twenty six billion dollar fund, which is great. They are a black Stone specifically was was a great choice because they are very they're in thematic investors and one of the one of the themes they have a lot of conviction on is content growth in content spands.

So they're investing in private equity with Tom and myself and Candle Media they're investing in the real estates either they're buying studios UM they have private public equity operations and they're buying you know, they're making their choices among public stocks in that space too. So they're high conviction and they've been a great partner. And we got we got put into orbit really with the with the hell of Sunshine by and then not not long thereafter, we

purchased a company called Moonbug. And if you have anyone out there has small kids, you'll either like me or hate mate for having for Moonbug. They have cocoa melon is their primary m asset and intellectual property, and they a blippy and they have a whole the whole bunch of kids I p that was born on YouTube and then taken from YouTube and multi platforms into Netflix, into Amazon, you know, the streaming services and also licensing and merchandizing,

and so we're pretty good shape. We do have a vision for a modern UM sort of creator economy business which has traditional film and television assets that are sold to streamers. UM. We have social media storytelling, as best evidenced by Moonbug, which again starts on YouTube and then

the stories propagate to other platforms. And then commerce. I think there's a not my time at TikTok, I really saw the ability for content and influencers to create audience dynamics that are very, very conducive to making concluding commerce transactions. Has happened in China to a large degree, this social social media commerce, and we think we have the assets to bring to bear to the same thing here in

the US and parts West. So commerce can generate the kind of numbers that people in the content business are accustomed to with, you know, big successful movies and big successful TV shows. You see that that market is that big. Yeah, it's very big. I mean, here's one example. Hella Sunshine has a has a show called The Home Edit. The Home Edit for those of you haven't seen it, UM is based on a company called the Home Edit. We

just bought. That's where I'm going. That UM that goes to people's homes and started office celebrities, but it goes to you know, anyone who hires them. They go in and they reorganize and edit your home, and they come in with products too, so you can rearrange your garage and your closets and everything else. And they do a great job, and they make the shows out of it, an unscripted show. We bought the underlying company and that

is a big commerce place. So that's the and there's a big social media component around the Home Edit to the founders of the Home Edit are very active in social media. There's a huge amount of residents there. So that's a great example of taking content and moving into commerce and then social media storytelling. So and Mike, let me ask you, Michael, you've known Kevin a long time. You know he's embarking on this big adventure with again

a nice bankroll. What what did you what? What was your advice as he as he started out on this journey in terms of what to look for and where the where the opportunities? Well? What what? What? I think Kevin said at the beginning identifying Blackstone as his partner because they had a focus, and Kevin had a focus. We've been in conversation about the strategy well before they implemented the first deal in the summer, and it was about that and he was clear and Tom equally clear

on that focus. And I think you know hard to give Kevin advice on many things that he doesn't give me advice on, but I will tell the audience why we played that song if you don't mind. As we were sitting in the green room, I looked at Kevin and I said, you know, you've got the brains, I've got the looks. Let's go make lots of money. And I asked them to thank you for agreeing with me on you know, I agree with them that there you go. And we did do a quick calculation on the copyright

in the I p ip benefits and how much. But but but truthfully, the advice I gave Kevin was advice he was actually giving himself, which was be focused on where they're going, what what What's interesting to me is being on a stage with you. In One of the earliest panel conversations I ever did was twenty two years ago with Variety with Peter Bart, a name that is you know, well known by many in our industry. Great and this was in two thousand and The topic sentence

of the of the panel was content meets commerce. So we're not in a conversation Asian now that hasn't been around for a long time. What I think we've found is that inflection point where content is influencing everything, but particularly commerce. As we're looking at it, and there's a whole lot behind that. But just it's funny for me to be on a stage twenty two years later really

talking about the seas, content, commerce, et cetera. UM, I mean, we've moved a level beyond Watch Friends, like Rachel's Sweater and click now now Rachel's sweater is the show. I actually asked her if she ever had a blue sweater. Answer was no, But everybody said, what how are you going to buy that blue sweater? Let me ask you a little more specifically, Kevin, So, is the idea that the Candle Media is a will be a traditional kind of roll up where you will Candle Media will provide

some back end services, administration, you know, distribution, marketing. Is that the idea? Or are you just building a holding company and you intend to house these imprints and have them run completely autonomously. It's actually neither. Um we're building. We're trying to replicate the sort of framework that we had at Disney, where Disney is an integrated company. There's

you know, there's no question about that. We bought UM brands and franchises that plugged into that that company, and they were the creative UM the creative folks and the creative teams were allowed to run very autonomously. We bought Marvel. You know, Kevin Fay, he runs the Marvel studios. He decides about to make and he decides where the cinematic universe is going. He does all that stuff. You would

never want to get in the way of that. But in terms of distributing the films, monetizing them, deciding you know, to put them into streaming service, the windowing of all that um which which the characters are going to be exploited for licensing, merchandizing opportunities. So all the monetization is done at the Walt Disney company level, and we're that's the approach that we're taking here. Candle Media isn't fully

integrated operating company. It's not a holding company, nor is it a company that just provides back in services to its component parts. Were fully operational working company UM, and we're building that through acquisition, and then once we do these acquisitions, there's gonna be a huge amount of organic build that's going to come from that. So yeah, you know, we're not pretending to be Disney or anything like that

that we don't have that much humors. But we like that organizational philosophy that works so well at Disney, keeping the creative engines going and autonomous. Everything else is truly integrated. And will you at at the Candle Media level or at the Hello Sunshine level, will you be in the business of financing your own content or do you intend to still partner with the major studios and platforms. Yeah,

that's a good question. The one of the thesis that with the thesis that we had one of them, the content, commerce and community one, that big one we just talked about. That's that's the main strategy behind the company. But if you look just at film and television, that component of it, there is a real value for two. Independence at this point and the other the only thing that the independent producers haven't had they haven't had enough scale, and they

haven't had access to capital. They've been capital starved and they've been you know, um, just not big enough to leverage the right deals with streamers. Now. On the on the other side, streamers have no option to go to the large studios anymore, by and large because those large studios have their own streaming services at their feeding. I

helped our silo walls are getting builder. And that's what Bob iron I did my last five years of Disney is that's we architected that that every single and it's the right strategy. I think every single piece of creative output that comes from any part of Disney, whether it be you know, something that's branded Disney, something Pixar, Marvel, Star Wars, that all goes in Disney. Plus if it's come something out of the ABC Television studios, twenty one

Century TV, those are basically targeted for Hulu. But everything we may ultimately comes to one of our streaming services permanently and exclusively. That means if you're Netflix, you can no longer license Disney project. If you're Amazon, you can't license Disney product. And I was running content sales in order to eliminate them and get rid of content sales. So independent independent producers are the last fashion of content that these that these streamers can go to outside of

the stuff that they make themselves. So being independent is a very substantial benefit. Independent in the face of double digit growth in demand for the kind of content that we make, and if you have capital and scale that when we're piecing these companies together, so you can go to market in a much more leveraged way, and we have capital. Some projects will take all the way from development through a finished product and go license that and own it and to create a library like studios do.

Some will do you know, EP type stuff, or where's the producer and we get paid to credit. Some will be in between. But if you have scale and you have capital, then you can start making those choices affirmatively rather than just being at the whim of the buyer.

And do you think that if you have Riese Witherspoon or all of the all of the heft that you can bring to I P you can walk into Netflix or Amazon or even Disney Plus and say no, I don't want to cost plus deal, which means they give you the budget and they give you twenty on the high end as the producer's fee, as opposed to the old game, which was a little more like the casino and the studio came in, had money in the game,

and in success, everybody made a lot of money. Now, in success, for the most part, producers know that your upside is capside is capped at and that's a very predictable game. But it's a different game. Do you think that Michael, I'm gonna let you stop, but I want to see what Kevin, as you're playing the middle of building this right to give you an example, but that seems to be the real. I mean, streamers want to own other product and pay you and buy you out

and and just pay you a premium. We as a studio want to own the product and not more and more of the product and not sell it out, and so you continue to own the i P. One example of this Moonbug, not a hell of sometime, but a

Moonbug example. We all the ipaid Moonbug, and Moonbug was a two point seven billion valuation, something that I think really which was a high valuation, but I think also really opened people's eyes to the market for this kind of really like preschoosed on the value of the i P. It wasn't a high price. I wasn't not a high price. It was just it wasn't thank you for saying, but it was a good price based on the value of the i P. People thought we were paid from Marball

and all that stuff. We want, Tom and I know the value I paid. We're pretty good, We're pretty experienced of that. So I think we did pay a very fair price. Frankly, um, But I guess time will time will prove that. But here's a here's an example of when you have the goods that streamers need or anyone needs, you have some leverage. So Cocoa Melon, that's the biggest

I P that that Moon Bike has. It's the largest YouTube channel in the world, and they when they bought it, it was a sixty million subscribers, and that was almost hundred forty million subscribers. It's massive. And last year it was the second most streamed television show on Netflix. Of all shows, the only bigger one was Criminal Minds. It was this much bigger. Coco Milon was almost the number

one show. And that Cocoa Melon show was YouTube episodes strung together into episode into TV length episodes package in ten episo. So sold to Netflix for a license fee, non exclusively. We own it. Netflix does not own anything. They paid us a fee and they are benefiting tremendously from it. It's a huge one for them, it's a huge one for us. And it's still on YouTube with that huge audience, and we're getting a lot of advertising

revenue from YouTube. So if you have the goods and you have an finished product, you can get the deal that you want. We've already done it. Interesting, we're gonna say, Well, what I was gonna say is two things. It's not the old days of the studio knocking on your door. The producers don't have to go to the streamers. Now the streamers are coming to the producers. Because of Kevin's point, the studios are all going to have exclusive rights to

their product. So you do need the independence. So this is a time when the independence have leverage that they wouldn't have had traditionally. Number one, number two. You you have to understand that. And I know we're going to get into this, but this commerce part of this. I look at the commerce part not only as the buying of the goods and services, but the advertising side of it, the monetization through advertising. We're watching that change right now.

I mean, as as Kevin developed Disney Plus, it was clear at the beginning that there wasn't going to be an a vote alternative at the beginning, but it was clear if you looked at it, that there was going to be one ultimately. I mean, I'm throwing that question to him because where in the cycle was that decision made to ultimately do it, and you know the the

other guy, uh starts with an end. I think when that avenue revenue per user number started to go in the right direction, and I saw that the AD product was even more, even more incretive potential in your decision process at the beginning, you must have known that that was on the on the completely. I think Disney is doing the right thing with that. It is if you

look at Hulu as an example. Hulu has an AD free and an AD supported product, and that was part of our Disney family of Directics Humor services, So I know this pretty well. Um, the AD free was nine a month and the AD supported was seven nine a month.

I think that was the numbers. There's a five dollar difference and um, so maybe it's six, but that five dollars that you got for um AD free was actually worse than the r P you got for AD supported because there's an eight dollars of AD support for and maybe now it's nine. It's actually growing. You would know this too, So you're three or four dollars better off if that subscriber takes ads and if they take no ads.

And I think that there's a massive demand for in you know, in stream over the top high quality advertising. That is just because there's a flight the linear television is the exodus advertising from linear television is extreme, and they're going they'd still like high quality UM video as context, so they go over the top services like Pluto, like

Hulu and now like Disney Plus. Michael, are your clients freaking out that so much activity is going to subscriptions, so much activity is happening, so all the buzzy shows are happening, And you know absolutely, and you know the the the challenge is, traditionally and historically we looked at that inextricable link between the creation of and delivery of content supported by marketing messages of some sort. That was the That was the value exchange that happened. You know.

I always like to go back to where it started and people say, well, it used to be free for television, and I say, it never was free. The exchange you made was I'm going to give you my time and my attention and look at those commercials and you're going to give me content. That break occurred and if you're you know, back to your question, Cynthia, are the clients the brands freaking out? Of course they are because they're trying to figure out how do we play, how do

we get our message across? Is it going to be back to just you know, the Coca cola can on the table. I don't think so. I mean, sure there'll be more of that, but they are at that point where they need to figure out They the brands need to figure it out. And now with Disney making this announcement, which I presumed was on the you know, on the roadmap from the beginning. I heard and Spencer used to

work for Kevin back in the day at Disney. Spencer Newman, who's the CFO Netflix, the other day said well, we're not religious. There was a softening at Netflix, the CFO. Netflix actually softened to the the Their response for ten years has been absolutely the thought of advertising on Netflix. Five second pre roll in front of every Netflix video. How many billions of dollars is there? It's it's it's there. They don't have a choice. At some point, you're in

fact of a very smart variety. Senior media analysts. Gavin Bridge on this very stage said that Netflix, it'll be It could be five years, it could be ten years, but Netflix will have years. Alright. I want to tell you, and I can't read into this more than I asked him to do it and he's going to do it.

But ted Sarandos is going to sit with me on the stage at the can Lions this year and in the lions Den know it and into the lions Den and someone said to me, how the hell did you get him, the guy who won't accept advertising, to sit on a stage at a conference that celebrates advertising. I said, well, he's got two hats because Netflix is a pretty big advertiser in terms of what they spend on promoting their programming,

so that is advertising. The incoming is the other. I'm not suggesting that him doing that is anything other than him doing something that I asked him to do. But truthfully, it gives you an indication that that's softening and not being religious. Will will will occur. That doesn't make it easy for the advertisers because they still have to figure it out. And that's part of what keeps us busy,

you know, candidly is helping advertisers identify those opportunities. And you know, one of the reasons that we reimagined media Link at the end of last year at u t A at United talent agency was the realization that being closer to the creator economy for media Link was a smart play because our brands and our clients are saying, wtf, you know, how do we get there? And we have to start creating more of our own content, which, by the way, is a part of where Candle Media has opportunity.

And Kevin and I have certainly talked about this. Um well, I've talked and Kevin's listened. He hasn't agreed yet. But but truthfully, we've been doing this routine for twenty years, so it's act going a little bit, a little bit. We've got we've got a get going. But but but truthfully, the opportunity to get brands more active in the financing of that content is another mechanism and then it becomes brought to you by and just as just a um

Michael's company. Media Link was sold in December to the United Talent Agency, one of the Hollywood's largest talent agencies, for a million dollars. And that is another deal that's a signpost of how all these things are converging in ways that they did not. You know, new new alignments are being formed. Kevin was talking about the new sort of new world order Disney of all of the content going to different streamers, and we've seen that at not only Disney, we've seen it in a bas NBC Universal.

It's been inside of three years. The literally the profit centers, all of the business models have literally just been re engineered. It is such a shift from literally decades of what I think we're looking in hindsight and recognizing, you know, incredible profit margins, incredible momentum. But do you do you feel like that the pay TV moment that built ESPN, that is that business? Is that going to be a

moment or are we going to see it more? Because I think we've seen a lot of these digital m v p d s and that that business seems to have. The digital m v p d s to who lose the YouTube lives, they seem to have the same problems as the traditional because there's the same product, there's delivered a different way. There's there they're called over the top, they're just pay TV services. I mean, we when we

decided to launch a Hulu, we wanted to. We thought there was an opportunity to do maybe do a little better, a little different on new devices, on connected TV, so the interface would be a more pleasant experience, which I think it has been. Um, you could dynamically insert ads, which would be great, But I will say it is linear television, that the seven streaming channel is linear television with how it was delivered on a satellite box, on a cable box, or on over the top on the Internet.

It is the same product, so it is experiencing the same problems. We thought that it hopefully offset some of the downward trajectory of subscribers. It really has not. I think that paid that the pay TV subscriber universe is in free fall. Actually do you think like it doesn't settle. Here's what's kind of happen. My prediction is this soon the the only people well served by by pay TV bundle or sports fans because that's where you find sports.

Putting on your hat as chairman of the Zone, a streaming service that is mostly focused in Europe and Asia, but a player in the sports game, a big I think, a pretty big player in the sports game. If you're in Europe, you would know it well. And we have boxing in the US and around the world. But this

is putting on my ESPN hat. You know, I've launched the ESPN Plus and as a Disney and so I know kind of the thinking behind that, And my fear is that the it will continue to decline and decline and decline until basically you have sports fans, because it's only only thing that really has to be delivered on a time basis is sports and news, and that's the only thing. Other than that, all entertainment programming can be delivered on a you know, on demand basis through streaming services.

There's no fundamental reason to have a linear channel experience for for entertainment. In fact, people don't prefer it. There's some spectacle lidents, you know, yeah, it's okay, you put the IS in there too, so you have the oscars and you have some other live events. So the live programming is the only universe that has to be served live almost by definition. So what happens then is can continue to decline until there's just basically mostly sports fans.

And still let are a lot of sports fans in the US and around the world, but that's the value proposition. In the US and pay television, you think something maybe fifty even, but then you have to look if you're ESPN,

if you're the other providers of sports. Are you better off wholesaling into this audience that is purely sports fans, or are you better off retailing to that audience the same same calculus who went through a Disney to launch Disney Plus all be better off wholesaling our content Netflix and the other streamers or being a streamer. So ESPN and other providers will have to go through that same calculus. Okay, pay TV is small enough now that wow, why should

be be a wholesaler? Shouldn't it be a retailer can make more money? And that's when you'll see ESPN and others pull themselves out of the bundle, go direct to consumers and then there is no more bundle there pay TVs O And that's that's the trajectory that is. You need quite a stomach to be able to do that, because you have to make that decision to cut that

income stream off to make the bet. So those are you know, those are rooms you want to kind of understand the dynamic of the decision to say we're not going to take these billions of dollars over here because we're making the bet over here, and generally speaking, in corporate America at least. Those decisions are tough because the short term versus the long term decision is really tough to make. There's a certain tone of voice in this and they always in the earnings calls, they always make

the CFO deliver the news appropriately. But there's a certain tone of voice that the CFO gets when they're starting, when they're going to announce, okay, and in this quarter, we're going to take this level of a hit. I mean, the things have been so upside down that for a while there last year the companies were announcing how much they were going to lose and the stock, the stock wouldn't go out. It's been do you get a sense from you both in the market that there's been a

leveling off? Certainly we saw that in the Q four earning cycle, there was a leveling off of Wall streets enthusiasm. Don't go anywhere. We'll be right back with more insights from Kevin Mayer and Michael Casson after this break. Thanks for helping us pay the bills. Now we're back with more from the South By Southwest conference. What I was going to say about the calendar, you know, we certainly all understand was a tough year for of the people

in the world, companies and and and civilians alike. One was a banner year for everybody that you can find economically. And I think the prognosis that is going to continue that momentum is absolutely correct the question for most and I look at it through the lens of marketing and advertising, but the but the you know, that point of twenty three is going to be okay, Now we're in a real world. We've had this momentum, the build up from twenty all the left, all the pent up savings, all

of that rising tide. You know, everybody's floating above the surface. Now what happens in twenty three, I think is going to really be the question from a macroeconomic perspective as to will that momentum continue save geopolitical you know conversations which hard to save right now because we're right in

the midst of it. But as we become it is truly as we become more globally, as the business becomes more globally connected, it's like they say, you know, a butterfly flaps its wings in one country and creates as that's that's only going to increase in the world of global and you know, if you look at it through

the lens of talent um. You know, I used to get around and say, if you had a show in on linear television that hit a hundred episodes, you guys know this, well, that was the magic number for syndication in the old days. And the joke used to be, if you had a hundred episodes, geographically in Los Angeles, you could afford a house north of Sunset and and that would be you know, a hundred episodes entitled you to a house in a good neighborhood. You know that

doesn't exist anymore. Maybe a hundred episodes will exist, but the ancillary rights in the ancillary economics, So this is turning a different model upside down, which is talent. Just from that perspective and now being inside the halls at U t A, I see, you know, even the impact on talent that's happening because to your point, there's a there's a ceiling now and where you know, we're Kevin

and you all are investing. I mean, I know there were some snickers about Hello Sunshine being valued at nine on the on the surface within the industry that felt like wow, what is there? Because they don't have a big library. They don't have they have incredible promise and they're clearly very industrious, incredibly impressed by CEO Sarah Harden.

She is really an impressive person. Um. But clearly you are betting on what we talked about, the social commerce and the ability of Reese and the footprint of her and like minded creators to bring audiences to them in that direct to consumer way. Is it really? This? Is

it so? Should that drives all of that social is a big is a kind of at the center of everything, I think, um, And yes, I think we are counting on the fact that we can, you know, drive a lot of traffic and fandom around her social media presence.

She has a book club, she has a lot of a lot of the intellectual property that she made that Reese makes into you know, filmed entertainment, whether the series or movies, comes from that, you know, access to incredible thinking from these her book authors, in her in her universe, so that there's some advantage to access to ideas from that perspective. And I just do think that we are

going to build a library. We didn't buy a library, but we're building one, um, because we're going to achieve ownership and shows that we really care about achieving ownership. And so we're gonna have a very a very full spectrum model, if you will, from producer fees, which is great. You know, make a lot of money doing that to full ownership and it's gonna end library and then between him partial ownership, a lot of co co productions and

stuff like that. We've already done some hellas Sunshine. So that's another model. I don't own the whole thing, but now we have a capital that allows us to make take those bets, and we're gonna make those bets and adds risk to the equation, but it also adds upside. And as for a high price, I think, um, when we talked about Moonbug being I think a pretty low price, people snicker. I mean, honestly, if you go back to our days when we bought Pixar and the bays about Marvel,

we were roundly criticized for overpaying dramatically Marvel especially. I remember people thinking what that's worth? You name it sixty dollars and it was a good bet. Now, not every bet turns out great. I'm not saying that every bet I make is always great, but I will say if you we were very um disciplined and careful, and we have a roadmap that gets us to a value well in advance of above what we paid. So we'll see.

I mean, the proof is in the pudding, but I think we'll come out looking pretty good on that one. It is I mean, if you step back and look at the business as it is now, I mean, it is kind of fascinating the talent of the scale of reefs. And you know something that they have this lever, these levers that they can push that they never did. I imagine, Michael, now with your deeper connection with U t A. As we talked about, opportunity is the theme of this this discussion.

The opportunity for people to move literally move people to the markets that they want to establish is pretty incredible. With social well, the commerce piece of this is the thing that gets really sexy because talent today understands that

their association with brands is more than just being a spokesperson. Yeah, it's it's not that and and and not everybody can influence it, but we certainly have enough examples of people like Ryan Reynolds, or people like Kim Kardashian, or people you know down the line Paris Hilton, who we were just at a conference with and she stood up and she was introduced as one of the you know, o

g of of that world, and she really is. You know when you look at that and you say, the association of brands, of celebrity and brands is no different than product placement on steroids. Right. The idea of product placement was to borrow celebrity. If you're holding an Apple computer or working on an Apple computer in a movie, you want to be cool because you've got an Apple computer. So you're using the celebrity of the brand along with the celebrity of the of the talent, if you will.

We're seeing that commerce and celebrity come together in a very meaningful way, and it's working. I mean, we've got a couple of you know, newly hatched billionaires, and Rihanna and Kim Kardashian and and and you know down the list of people who are cashing in, but not in a negative way. There's never anything negative about cashing in legitimately, but we're seeing that that cash register ring loud and clear. So talent is really getting moving up the food change.

And I would imagine that there's also, like, you know, just as just as talent, well, you don't want to be in you know, you don't want to be in too many movies in one year. There's a certain that you've got to have some boundaries, Like you know, you don't want to put your name on everything. You want to make sure Like I would imagine that there's a whole new discipline for talent management in how do you determine opportunities and how do you know what's what's right

with you? I would imagine that those conversations, we actually do it scientifically. And one of the great things that I inherited with Media Link at U T A was something called U T i i Q, and U T A i Q really develops the basis for those kinds of decisions. So it's not just random. When somebody sits down and negotiates Kevin Hart's next movie, you can actually show up with data that indicates why Kevin Hart should

earn X amount of dollars for this movie. And by the way, you can apply that same thing to brands in a traditional sense. And it comes back to what at least at the intersection that Media Link lives out which I've said and you said a bit ago, marketing, media, advertising, entertainment and technology. At that intersection, data is driving all the right to say, visioning. So data should be driving the same kind of decision NG that you make around content,

around the endorsement opportunities, the product opportunities. You use the same data that brands have used forever. Well, Tommy talking about talking about vehicles right now there is nothing. Let's talk a little bit about your TikTok and sort of where it stands right now. UM. I saw you quoted, i think last year saying that that TikTok you had

a brief association with them as CEO in UM. I know it was it was a combination of geopolitical situation that was happening at that time with the Trump administration, but it was a short tenure for you about three months. Um. But in the big picture about about TikTok, you've said that that that their algorithm, that their recommendation, their ability to put content in front of people, that they actually

do want to see the success of the algorithm. Have you now, now that you're on the entrepreneurial side, do you see a way to turn that into a growth

driver a profit generator for candle media related businesses. Well, I think you know, TikTok is one of several social media platforms, and I think that's really social entertainment if you think look at TikTok specifically, that really is about capturing people's time and attention that otherwise would probably be spent watching a Netflix or something, because it's truly immersive video and it's not a lot of communication that happens

on TikTok. It is mostly you know, people create and then you get your feed and you're passively watching a whole bunch of stuff that is super interesting to you. Because the AI technology that that byte Dance has is second to none. It's incredible. Um and and so being in the social media space generally speaking with TikTok, with Instagram, with YouTube, I think that's where opportunities are are going to lie. And I do think that you can attack

it from a bunch of different angles. Again, you know, getting back to Moonbug that was ip born on YouTube. Mom and pop creates, it creates something that's fun, it explodes virally, we buy it, I mean animal platform and make a lot more to monetize a lot better than they ever could. So it's a win win. They get they get bought out, We own it, and then we

can monetize it. And I think there's it goes both ways though, a lot of stuff that we make can actually end up storytelling on on social media, and I think we're going to be pursuing some social media storytelling assets that hopefully will being out soon that are gonna be fun um. But I do think you monetize that and just purely through advertising on social Yeah, well, I think when we're on social we're gonna monetize it a few ways. You can do third party advertising, for sure.

You can. You can be a U, a marketer for the right brand, have grandchildren. Thank god, there's some opportunity you can do that. You can create your own brands if you're if you're a celebrity with enough resonance with with your followers, and you can authentically. The thing about social media, the connection has to be utterly authentic. If you try, If you sell yourself and you and you um create messages that clearly don't fit what your followers expect to you know, to to present to them, you

have a real problem. You can't just force marketing. You can't fake your life to actually use it. Paris Holton uses certain products so you can authentically talk about it and boom. Then then it works the other thing again, if you're big enough, you can create your own brands, and that's what Rihanna has done, and that's what the Kardashians have done. Um Paris Hulton has done that. That's at the top of the very top of the food chain.

But it is a way for celebrities since they're capped a little bit and what they can make now on film and television, it's a way for them to very much capitalize on their on the degree of which people hang on their every word on social media, some of these people have hundred plus million followers. It's right report last week that the Kardashian family collectively has more social media followers than Netflix has global subscribers and fix up

to about the last time. It's quite extraordinary. And at the core of it, Kevin just said it, but I'll put a word on it is authenticity, because if you're not authentic in this environment, you're dead. It's not actually your kitchen. Things that drive marketing today in an interesting way, One is purpose and it's not just tick the box purpose.

You have to demonstrate it and authenticity because if the brand doesn't, whether that's a celebrity or a consumer package goods product, if if if it's not authentic, the bullshit detectors out there are too high right now. People just know can't work. So individual celebrities obviously you can gather. But what do you see other sort of sectors that are right for kind of DTC type disruption, like sports leagues.

I've been hearing a lot of chatter that regional sports networks, cable channels that are devoted to showing regional games of local teams, that those are you know that that those are very much likely to go to go into a DTC for this of the reasons, and that the hardcore fans that want to pay that four dollars a month, here's their opportunity. I think very much. Look anything that you can be talking about time and entertainment here and you know we can all sorts of package goods are

directed consumer and others. Thousands of new director consumer brands, I will say that are out there. But with respect to what to our ecosystem, if it can be on a TV screen, it can be delivered over the top. There's nothing, There is no and I can have a direct consumer business model. There's nothing that prevents that. Everything is digital, of course, and has been for quite some time, and it's just a matter of which protocol you use

to get it from the you know. The origination point to the viewing point is that i P is an Internet protocol? Is it some you know the technology that you know q am that that that that satellite and cable companies use. It doesn't matter, but it does matter is the business model. And I think that people are getting used to paying for what they want and not paying for what they don't want more and more and more, and I think that is driving the unbundling of of

the cable net of the cable system. It is driving people to buy more. Precisely, regional sports networks have been a rip off for a long time because they're very high priced and there then they get package with their local cable companies. And if you buy a big local cable package and then separately on top of that by a local sports it's just not fair. It's not fair to those their cross subsidizing a lot of people that aren't really sports fans and I can't go on forever,

especially at those prices. And if you think about the impact on marketing for direct to consumer. We we coined a phrase at media Link a couple of years ago, and what we looked at was the traditional brand marketing thinking and what we would always call performance marketing or what you might have known originally as direct marketing, but

performance marketing. And the artificial distinction between brand marketing and performance marketing was the performance marketing go back to data, required more data, and there was a return loop because you could see what was happening, and it was a

call to action. And I really coined it coming out of work with American Express, where the chief marketing officer at American Express, Elizabeth Ruttledge, challenged us to bring together her brand marketers don't leave home without it and her performance marketers, which is to make sure not only should you have the card in your pocket, but you should be using it because if you don't use it, they

don't make any money. And so that idea came together and the light bulb went off for me and I said, so what you're really talking about is brand foremance marketing. You want to have the same data infused into your traditional brand marketing that you do in your performance marketing. That's where I came up with the word, but where I really saw it play out was with Disney Plus and others, the other streamers. We were tasked with helping

the marketing mentality at Disney Plus. And this is something Kevin and I worked on together because traditionally the Walt Disney Company would market to put AUSS and seats on Friday, Saturday, and Sunday when they opened movies, and all of a sudden, they had to be thinking and subscriber acquisition mode with Disney Plus, and you want to avoid churn and all

the things you needed to do. And it took an entirely different marketing muscle, and we had to not only retrain the internal team, but we had to find the

right agency partners that could that could understand that. And I still and I still, I think it's pretty clear that like I don't think any other company, only Disney with that goodwill and built in you know, Warner Brothers, as established as it is, people don't have that feeling for that brand that they do that that the we were tracking that the awareness of Disney Plus was shockingly. It spread so fast that the hardcore consumer was was aware that Disney Plus was coming. One thing we did

in an incredible way, We set out a target. Let me did this together of coverage of people in a monthly basis getting at least three exposures to Disney Plus advertising at the top three. That means the average getting something like fifty. That's just the way the math works. We carpet bombed this country with UM Disney Plus advertising and it worked really really well, and we got ten million stubs in the first day. Now we have built in a brand equity, as you said, because it was

Disney that helps for sure. I'm not Hoizon, you know. Hans Vestberg and I did a really good deal UM with Verizon, which broy the way, worked out really really well better than people think. It was a four month deal both for both of us, and a lot of those people that were getting Disney Plus for free for a year actually did convert over to be Disney Plus debscriber. So I was a big, big win. You're right. But then we took that learning that we created, We created

what I called to my troops a consumer frenzy. There was a frenzy around Disney Plus, and we took that same exact philosophy and did the same thing in Europe before I left Europe and India. We took that same consumer frenzy and our team executed it really well during a pandemic. But it's all about extreme reach and frequency

of our advertising message beyond which Disney normally do. It was good Disney Plus launched November, I mean, three months before a pandemic or plus or minus, you know, three or four months, and and the story has been obviously extraordinary.

But you think of the timing of it and I think back, it's kind of special to be on this stage because I was supposed to be on this stage in on you know, I think literally two years ago today and here we are, which, by the way, I just want to give a shout out to the south By Southwest teams because there is that special moment of being back together and being in person, and I r L has has attraction has been so nice and Austin couldn't be a more welcoming, just fun place to be.

It's really it's been nice. Yeah, thank you. I appreciate you mentioning the south By Southwest people. They have worked hard and put on a very good event in in tough circumstances working up. We're gonna open it up to questions in our last few minutes here, but I wanted to ask Michael um part of media links business is not as not as well known as the as the as the marketing and the consultancy is that you do some head hunting. That you do do executive search, high

level executive search for media firms. What I know, I know you can't talk dish specifics, but can you talk about some of the like what what are the what are the jobs of the future, what are what are the skills that people are looking for? And what kind of placements are people looking for? The Yeah, obviously I can't be specific, but I can be generic. The Great

Resignation is real. The Great Resignation has really created a circumstance where talent is impossible to find right now across industries. But what we're really understanding is, and I'll take this from a TV show, there was a period in the marketing, advertising, media business that m mad men were the people you

were looking for, and today it's math men, but math people. Today, you're looking for people who can actually understand the data, data, analysis, and analysis, not just it's not just about the creative, it's about understanding the type of creative. And look, our industries,

respectively pivot on five words right now. And it's funny that I just kind of landed on this and realized all the words started with the letter T. And those words are trust, transparency, technology, transformation, and finally, to your question, talent. And coincidentally, they all start with the letter T. And in every aspect of our industries where we come together again at that intersection of marketing, media, advertising, entertainment, and technology.

If you find me a conversation that doesn't pivot on one of those five words, I would be surprised, because that's really to your question, talent is at the core, and it's really hard to find right now. The talent representation business is undergoing so much change as expected. You know, bear in mind now the media links at U T A. I have to use talent with a small T and talent with a large T. U T A is in

the business of representing talent. We're in the business of identifying talent through right head hunting, you know, practice, it's a little different. So we do have to use a capital to this multi occasion um hogging the questions again? Okay, how about this is a good one. The lines between brand funded content and advertising continue to blur. What potential

does candle mediacy in this space? I would, I would venture, I guess a whole lot would I would agree that is it's a question that answers itself almost I think, um, and that's right. And by the way, lines are blurring all over the place between content and advertising, between performance advertising and brand advertising, I would almost say there is no difference here brandformance thing or every all advertisers performance and one subset of performing this brand. Another subset might

be product placement. Another subset might be true performance digital digital call to action advertising. So I think, um, we're very focused on that. We think that having having an audience and having a connected audience where you can actually speak and have a two way conversation with your audience opens up these types of opportunities for modernization that just

weren't there ten years ago. Do you think that we're obviously the time in media entertainment, there's a lot of consolidation to your point of the need for a strong independent idea factory more than ever. But do you think that that that consolidation, that is there a danger of the industry literally getting into you know, three or four gigantic conglomerates that control everything. I think a lot will be determined by what the Justice Department does with Amazon

and MGM right now. That's going to have a lot to do with where this plays out. If the Justice Department stops that deal, which I don't think they will, I think that deal will go through. I think it's a lot of noise, but the deal should go through. There's no base is for it not to go through. I'll put on my lawyer's heat. I don't wear it

very often, but I have it. Um. I think that deal goes through, and if it does, I think that bodes I don't know if you'd say this is bodes well, Maybe it doesn't, but it bodes well for others in the tech space to be making acquisition in the pure content space. Do I think you end up with three big players? No? Do I think you end up with consolidation. Yes, you've made it clear that you're looking for you know,

very creator grouping companies. But is there you know, is there a world where you would look at a more traditional You know, there's some companies out there with a few cable networks the studio. Is there any would you play in those waters at all? I don't think so. I don't think. I definitely don't want to play in the cable network waters. I just don't think that's a viable model for UM, and we're not. We don't. I don't like distribution brands as I like content brands, brands

that actually mean something about the content. We think Hell of Sunshine is a great content brand. Moon Bug is becoming a great content brand you want to get behind. And we have a have a significant piece of Westbrook, which Will Will Smith Company that to content brand. Will and Jada have. Actually one of the most distinctive shows to come out of Facebook is Jada's Written People, which is to all your point about authenticity, Yeah, I mean,

and it's great show. So look, we're I think the answer to that would probably be no. We We are focused on a couple of things. Creator driven companies where the creator is front and center, a brand that arises from that, because we want to transcend the individual creator and get a brand that live beyond that that creator. Obviously,

but also that really speaks to a defined audience. Something else to be Lord at Disney, know your audience and speak to that audience and as a full way and as a sort of a diverse way as you possibly can. So we have you know, Hellos and China. It's it's it's content um created and delivered by women for women audience. Of course it's an inclusive audience appeals to a lot of different people, but it's really by women for women.

Moonbug is kids um. I think, well you'll you'll can he need to see us look at the very very most premium content brands we can get or developed that speech to certain audiences and then fill out the audience map and then we'll then we think we'll be shaped is Blackstone in for more? Do you have any of the two billion left? I would imagine you probably that's two billion thing I remember all came from the when when Kevin and Tom started and started their company and

started going out there. I honestly I don't know variety was the guilty of it. But the number two billion that you guys had a billion dollar bankroll, well, let's we've already deployed were setting the record straight here well, there's been four billion dollars of assets that we pulled together. But you know, I don't know. There's all sorts of different you know, Blackstone from the fund, their own limited partners in the fund can do sidecar investments. We've had

that you have some debt people. When we buy companies, one of the things we insist on is they take a lot of equity in the new company as part of their consideration for the purchase, because we want everyone to have skin in the game for the entire company. The best way to do that equity that crossed lateralizes everything in the company. Everyone has commitments for them to

stay for a certain amount of time. Yeah, and then when when you go public or get bought, probably I think where our path is likely an I p O. Then that equity becomes you know, has some real, real monetize able value to it. But it's everyone rose in the same direction. That's why equity so important. Thank you. I would have felt bad if I hadn't asked you about the the future I p O. Do you have any kind of a timeline Do you think that that for that happening and do you think is there all

their alternatives to going to an IPO route. Yeah, look, we have We've built a company now that has the scale and the financial um contours to actually go public whenever we want to go public. At this point, I would say the moon Bugs alternative to being bought by us itself could have been a public company. And so it's a very very the financial they're very robust. So it's a matter of the markets being ready and we us being ready as an organization to really want to

be public. Has you need some infrastructure, public company accounting systems and you know, star box compliance and all that stuff, and we have to get get into that mode. And I would imagine also a couple of good hits and not hurt. So you know, I think I don't want to no specific timeframe, but it won't be many years from now. It'll be sooner than that. I don't my advices take a breather. Having gone from being public for the last four years to being private again as of December,

it's kind of nice to be private. We have investors. Well, you have to have some liquidity event of some sort, and that's one way we can get being purchased another possible outcome. It's not what we're angling towards. You don't want to build a company to be to package it to be sold. If you want to build it. We want to build a company that can stand and live and thrive in its own right. And you need the

fire in your belly to build. Yes, exactly there. Let me press you again on in terms of Candle Media, will you you you were born in a pandemic? Will you add some you have physical office space at some point? Will you have any kind of common infrastructure? Yeah? We will. Um. We have you know, the Candle Media uh corporate and we have I don't know six employees right now. We have a little office on Sunset Boulevard is nice, which sits geographic geographically in between the Moonbug offices in in

Hollywood and the Westwood offices of Hello Sunshine. So we commute between the two. But look, we have big offices in London for Moonbug. There's about the several hundred people there we have you know, Hello Sunshine has a hundred plus people. They're mostly in Westwood but in other parts too. Um. So we have we have physical offices and we at

corporate if you will, um, we're pulling everything together. We I think We have an interesting philosophy Tom Stags and I. One is that if you buy a company that can that has a capability that can be used across outside of its company and to all the other brands that we have, we're gonna use that. So here's an example. Um Moonbike has this guy, Simon Phillips. He's the head of licensing and merchandizing. He is probably the best executive in the world. He was at Disney, he was at

Marvel when we be about Marvel. He was at Disney and rand Emia for Disney when we when he was there. When I first visited Moonbug, I saw Simon pill Ups, I couldn't believe I didn't know who was there. So he is the licensing merchandizing expert without parallel. And so to the extent that we have licensing and merchandizing needs in Hello Sunshine, and we also want the studio that that that produces Fauda, that Netflix show, that bar Way Road Pictures. That was a smaller person but a great one.

Those guys are awesome and they you know, to the extent that they are less likely to have kind of licensable characters because it's pretty gritty stuff. That they do. But you know, but will Smith, I agree, it's incredible, so so some insans will will be We'll be managing all licensing and merchandising out of Moon bug Um. We have a great distribution team at Hello Sunshine, so maybe that will be the center of excellence for distribution for everyone over. So it doesn't have to sit a corporate

for it to be a shared resource. I guess it is my point. So corporate will never be massive, but we all but we're going to tightly integrate all the operations across businesses. Thank you everyone for sticking with us. Thank you for all your insights, your candor. We really appreciate it. Thank you Austin south By Southwest. This has

been a blast. Thanks for listening. Be sure to leave us a review at Apple Podcast, and please go to Variety dot com and sign up for varieties free Strictly Business newsletter covering media earnings, financial and investment news and more. And as always, be sure to tune in next week for another episode of Strictly Business. Ye