Welcome to Strictly Business, Variety's weekly podcast featuring conversations with industry leaders about the business of media and entertainment. I'm Cynthia Lyttleton, co editor in chief of Variety. Today. My guest is Jeff Schultz. He's the newly appointed CEO of Radial Entertainment. Radio was formed last year when private equity firm oak Tree Capital Management brought together Film Rise with Shout Studios. Those are two indie content ventures that focus
on distinct fan niches. Schultz is a Paramount and Pluto TV veteran who has plans to rev up radio on all fronts, from fast channel streaming to original production to international licensing. Right now, he's out in the marketplace shopping for libraries to buy. Earlier this week, Radio announced the acquisition of New Dominion Pictures, which is the home of evergreen unscripted series including The New Detectives, The FBI Files,
and a Haunting. In our conversation, Schultz maps out his growth plan for Radio and why he's so bullish on the company's potential to grow in this fast changing marketplace. Jeff Schultz, CEO of Radio Entertainment, thank you so much for joining me.
Hi, Cynthia.
I got to know you during your tenure at Paramount, where you were very senior in building their streaming businesses, both Paramount Plus and working on the Pluto TV side as well. What was it about Radial Entertainment? What was it about the company and its assets and its ambition that made you want to take the reins as CEO.
Let me start by describing radio at a high level, and then I'll share how it came together, how I got involved. So I'll describe Radio in three parts. One. Radio is the largest independent catalog of film and television in the industry, So that's seventy thousand films in shows, classic TV, massive factual and reality catalogs, Deep film catalog and then major new films. And by independent, I mean we're not a studio, We're not a division of a conglomerate.
We're truly an independent player. Two with integrated distribution, So we operate a diversified distribution portfolio, distribute through AVOD s, FOD broadcast, cable, transactional, even physical, theatrical international. We operate a portfolio of hundreds of fast channels and generate directly billions of streaming hours annually. And then the third part is integrated capital. Oak Tree is a two hundred billion dollar plus alternative asset manager and is our strategic partner
in growing the business. So the way to think about Radial is the largest independent catalog of film and television in the industry, with integration distribution and integrated capital. So here's how it came together. In twenty twenty three, oak Tree acquired Shout Factory, which Garson Fuz and his team had built over a couple of decades into a super respected independent film and TV distributor, acquiring and distributing genre content,
classic TV shows, horror, anime. I remember twenty fifteen we launched the Mystery Science Theater channel with a Shout at Pluto. We actually Radio Now own that as of January of
this year. And then during the two years between the investment in Shout and the merger with film Rise, there were deals with Gravitas and Millennium, Open Road, Golden Princess, and so you can look at each of these as catalog or company acquisitions that were based on the same premise of content being fragmented and under valued and using Shout as the platform to pull it all together. And and so then in July of last summer, you have two businesses that are actually sort of roughly the same
size in terms of scott Catalogs scale. This is Shout and all of its platform roll up, and then film Rise, which was super early in fast and free streaming, one of the first players to make fixed feed bets against sort of variable upside in free streaming. Are these are deals that, to be honest, like I would have loved to do myself at Pluto, but in the early stages
we didn't have the access to capital. We were independent startup, and then as part of Icon and then Paramount, we were focused on our internal library, like you know, monetizing our proprietary library. So film Rise moved quickly to capture large catalog licenses and in some cases acquisitions. That was that was likely based on their data perform very very well in free streaming.
When did you come into the equation for being the person to lead this the combined entity.
I wasn't aware of what oak Tree was up to. I didn't understand the scale and ambition of their strategy until I read the shout in film Rise News, and then it was still a few months before oak Tree and I started talking about it, how I'm looking at at oak Tree having put these pieces together. I look at the combined platform, the pieces being sort of catalog breadth and depth, distribution infrastructure, and then the capital behind it.
And by the end of a couple of conversations in September, I saw something that I legitimately hadn't felt since the early days of Pluto, which is that this was an opportunity to build something transformative. The fact that our starting point is the largest independent catalog of film and television in the industry. The creation of Radial with these acquisitions culminating in the merger with film Rise, was just the starting point. So the integrated capital element of the business.
It wasn't just the capital to assemble the platform. Our plan is to aggressively deploy new capital to grow the catalog and grow the business again based on a thesis that the independent content space is fragmented and undervalued. There's hundreds of libraries sitting in disconnected companies, undermonetized and distributed, and we think we're in a position to unlock their value. And actually the acquisition of New Dominion Pictures is a perfect illustration of how.
That model works, right that's a deal you unveiled earlier this week.
We've been working on it a while. It's a business also, a business that I know very well from the Pluto days. I'll just say that when I learned that New Dominion was in the pipeline late last year, I was thrilled and pushed as quickly as we could. The New Dominion Pictures is one of the largest independent factual production catalogs in the industry. There's about eight hundred hours in the catalog, but there's three genuine franchises, New Detectives, FBI Files and
a Haunting. So by franchises, I mean shows that are known shows that have scaled on television previously but now on streaming and free streaming, and that actually have huge audiences, you know, and significant scale and streaming. So Radio already today distributes the New Detectives and FBI Files, two of those three franchises that I mentioned. So by operating the those titles in the in the ecosystem, we already have really like real performance data. We know how the content
performs and how drives data dollars hours. As a result, this was less of a bet than a sort of conviction buy based on proprietary data. It's a flywheel. So we invest in content based on proprietary data and insights. We're in a position to see the performance across the ecosystem, so we know what works, what platforms need, what might be undervalue, and then that gives us conviction that other
buyers don't have. We distribute the content through this integrated distribution engine that we already have on day one, multiple platforms, multiple territories, increasingly globally. Then we monetize it and that cash flows back into the business to fund the next investment.
Greater volume, greater speed, and then better data. Every deal creates intelligence and that feeds back into the decision making for the next deal, and so that makes us a compounding advantage, which is why I call it a flywheel.
Let me ask you sort of the really thirty thousand foot view question. Oak Tree clearly is giving you capital to work with the largest companies Disney, Warner Brothers, Paramount, NBCUniversal, The largest companies are struggling with their streaming strategies.
Here.
What is oak Tree seeing that is giving them so much confidence to put money into this and to give you that capital upfront.
The Tree is a long term investor in this business to have a long term time horizon, which is critical, which allows us to inform the investment case not just steady state where it stands today, but as we grow the business over time. Again, the platform, as big as
it is, is just the starting point. The reason why oak Tree has such confidence in the investment is that we continue to see the same sort of dislocations in the market in terms of content independent content, content not owned by a conglomerate or a studio or in cases where they are being underutilized and under monetized, and that it's undervalued, and that you know, we increasingly as we scale, will be sort of the highest value use of this content.
So we're evaluating an acquisition pipeline that's based on their criteria and rigor and acumen, as well as our content expertise and distribution data. Oak Tree isn't underwriting the value of a catalog for an investment in a vacuum. They're underwriting the value of the catalog in our hands right there.
And your primary monetization vehicle is the fast channels or do you do a lot of licensing in different territories.
The diversity of the distribution model is in my mind, one of the huge strengths. So there's a concentration in AD supported streaming engagement driven streaming. Now that's not to say in our portfolio of fast channels, that's just one piece. So licensing in content for someone like Pluto to maybe publishing their own fast channels, for someone like two B to program on an avon basis, but because of the volume of the catalog and the type of content that
it is, where it drives just incredible engagement. Free ad supported streaming is sort of a lynchpin of the distribution portfolio, but it's just one piece, So we're licensing it regardless of business model, to really every streamer. We're still licensing into network and broadcast television. We have a theatrical release business and a physical business, digital transactional business, and so all of these pieces roll up into sort of the total value of a piece of content or a catalog
in our hands. So we're leveraging the market trend in streaming and in free streaming, but we're able to diversify the business model across really all different categories.
Is it largely domestic or do you have do you also have international outlets as well.
We do operate internationally. The scale of the business is considerable. We distribute in fifty markets give or take right now, but the relative size of that business for US is small, maybe even very small, which along with every other sort of shortcoming of the business that oak Tree and I
talked about in the months between you know, September and January. First, we are just scratching the surface of the opportunity outside of the US, and that's reflected in the relatively very small percentage of our revenue and EBITDA generated outside the US.
You know, days into the job, we announced the appointment of a new head of international who previously worked at Fremantle, and so that this is not a twenty seven plan, It is a front half of twenty six plan for us to put some real big levers in place to grow internationally. So another great example is the Golden Princess Library out of Hong Kong. So this is one of the largest catalogs of Hong Kong films. But the crown
jewel is the John Wu Library. And so we brought John Wu back to the market in the US for the first time in decades. We actually did four k restoration. We did a theatrical limited theatrical release that's still underway, and then began distributing this. So there is a Hong Kong Fight Club fast Channel that we're able to program with the Golden Princess Library.
Let me ask you, as you are building this and organizing the company now under a different structure, how are you thinking about AI at a time when you're doing a lot of restructuring, you have a lot of opportunity. I'm curious how you're thinking about this.
Yeah, we are thinking about it. I've sort of broken the thinking into two categories. One is how does AI enhance the business, and then the other is how does AI potentially disrupt the business. So on the first you know, AI isn't a standalone initiative that we sort of charge somebody with a radial where where in early days, but we're going to embed it in everything we do out provide some illustrations by what I mean by that, so
function by function, like imagine content valuation. It's just so much of the story we've been talking about so far is about the proprietary insights that we're able to glean from our proprietary catalog and distribution, Well, imagine what happens when AI helps us analyze the engagement patterns across tens of thousands of titles, and much as that has been a historical strength of the businesses, we're scratching the surface and so that's where it will only enhance our ability
to make high conviction investment decisions. International expansion, which is localization of content, has been just a cost and time barrier that every business that wants to grow outside the US has had to take into account. And AI driven localization is a real thing. It's moving so so fast, and so we'll be able to lower that bar in terms of investment and time horizon to globalize our business with AI much faster than we ever could on our own.
And then on the disruption side, here we're talking about primarily synthetic content. Things are going to get weird. They already are, but we need to focus on the slope of the curve which is sharp up into the right with no prospects for decelerating, which just means we kind of have to operate from a not too distant future where AI is capable of producing content that at least in its appearance, can be regarded as a direct substitute
for what we call premium content. And so that's what I mean by things getting weird is their value in fake true crime, right, fake true crime, So true crime being one of our strongest categories. Those stories are compelling because someone actually died and someone else actually.
Killed them, because the stakes were as real as they get, right, And.
So yeah, one hundred percent. And I think that that is a great illustration of the human connection with an authentic story that even if pixel by pixel, fame by frame, it can be replicated by AI and the form of synthetic content what makes those stories compelling won't actually translate
to that synthetic form. And then if through that lens, if you look at our content strengths, my point of view is that the radio catalog is extraordinarily well positioned to actually not just survive the growth and synthetic content, but maybe even grow in value. Authenticity is an asset that appreciates over time.
Jeff, my last question for you, just when you think every content library has been bought up by some combination of six companies and tech firms that are coming in, but it sounds like you are finding pockets of content. I'm thinking about the early days of cable original unscripted content, when people didn't think it was going to be worth
a nickel as soon as it aired. I'm guessing there's a lot of small and medium sized firms that might have had some traction with a couple of shows at some time, and we're able to amass those rights.
Yes, we think that there is plenty of unrealized opportunity in unscripted factual reality. Also in classic TV. I think it's fair to say that Fast uncovered value there that a lot of people didn't understand was there. The way to look at it is that some players might have money, some might have distribution, some might have an existing catalog
in the independent space. We're want with all three of those, and so for that reason, we're super optimistic and we expect to be very active in acquisitions this year and going forward.
There's a lot of people out there that will be very interested to hear that. I have no doubt that your phone is ringing quite a bit, Jeff. Anything else you want to leave us with about your vision for the company or ambition for the rest of this year, or anything else we should be looking out for from radio.
When I look at radio all that has happened and taking place, all the investment and hard work that was required to create radio as a platform and a foundation, and to look at it and realize that despite the scale, once again, we're just getting started.
I love your optimism at this moment of intense consolidation and everybody squeezing everything. Green shoots from well capitalized independence are really important signs. Jeff, thank you so much for taking the time to walk us through what's going on at radio. Thank you, Cynthia, Thanks for listening. Be sure to leave us a review at the podcast platform of
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