Welcome to Strictly Business, Variety's weekly podcasts featuring conversations with industry leaders about the business of media and entertainment. I'm Cynthia Littleton, co editor in chief of Variety. Well, this is a very special episode of Strictly Business. Indeed, I am coming to you live on tape while hurtling through the French countryside heading north to Charles de Gaul Airport in Paris. I am just left Marseille about ten minutes ago.
Dear listeners, thanks for writing with me on a special episode of this podcast. It combines my love for trains and my love for yaking about the media business and how it's changing. I captured some thoughts while locomotoring through the French countryside after covering the MIPCOM market and conference in can during the week of October sixteenth. As always, it's so i opening to travel overseas and see how vast the media world is beyond the confines of the US.
I pick up insights just walking around the crosset and environs. I also picked up a head cold somewhere along the way, but armed with throat lozenges, I soldiered on. I was fortunate to be asked by MIPCOM organizers to conduct sit down interviews with three high profile subjects. Paramount Global CEO Bob Bakish was named mipcom's Personality of the Year. Maxim Seda, CEO of Canal Pluse, was Variety's Vanguard Award recipient, recognizing
his contributions to the global TV business. And Eva Longoria and Chris Abrego traveled to the French Riviera to announce their new production and talent development venture, Hyphenate. Also during my rounds at the Palais, I had an emotional interview with Nadav Palti, CEO of Israel's Door Media. That's all coming up after this break and we're back with observations on the global content marketplace. I would say that McComb was a busy market, if not a buoyant market. There
was lots of activity, lots of talk about deals. There were some deals that were signed there in the Palais and in the coas said, but a lot. As always with these kind of conferences, there's a lot of conversations that initiate and then a lot of paperwork and lawyer work that has to ensue. But definitely everyone all the big and small, established and relatively new. Everybody was having meetings.
There was a lot of activity and that all seemed to reflect the other cross currents, which is unmistakably the large European players sense opportunity out there. They are very much watching the turmoil in the US at the US majors, between the labor strikes that have handicapped production this year, to all of their restructuring, the streaming losses that the old Guard studios have incurred as they try to make the transition from linear to streaming. All of that is
being watched very carefully by very savvy European players. Every single person I spoke with mentioned to me, you know that there's such a lower price point for production in Europe.
You can just sense that there's going to be a push to bring more production to Europe, arguing that there is a ready talent pool that has become very skilled with the streaming boom, there is so much production all over Western Europe, Eastern Europe, and that ensues and with that comes a skilled talent pool that is looking for work. Of course, they're watching to see the great contraction if the streamers have less appetite than they have had in
the last couple of years. But the kind of europe and co production projects that are really kind of humming are the kind of lower price point things that streamers want. They may only appeal to a niche audience, but that niche audience is going to love that costume drama from Sweden or a ry satirical comedy coming out of Brazil
with subtitles. All of the producers I spoke with mentioned that the tyranny of dealing with subtitles and dubbing is over audiences in the US and other markets that had been thought to be totally resistant to either subtitles or dubbing is absolutely lifting, and certainly subtitles is winning for
many reasons. The US was a big holdout for that, but all the much evidence shows that those fears are definitely lifting, and that raises the hopes of many many producers, and especially the labor strife, which is something Hollywood hasn't had in a long time, and especially to this degree. Europe is very well aware of general strikes in the general sense of when there is a period of labor unrest, and there is definite efforts to emphasize the appeal of
working with European talent in many ways. I took a lot of meetings during my three days at Mipcom. I was very excited to meet a couple of compelling female CEOs, including Telepool CEO Yoko Haguchi Zitzman. And it's funny that I had to travel all the way to cann to learn that that company based out of Munich is owned by Will Smith's Westbrook Company. I knew it on paper, but the significance of it and the interesting parts of it didn't sink in till I was sitting talking with
them in their booth in the Palais. Yoko brought with her to Mipcom a very big swing for their company, Davos nineteen seventeen, a big, sudzy soapy limited series that has romance, espionage, intrigue. It seems like the kind of costume drama that is going to be catniped for some streamer, and it's already set up well in Europe with a couple of broadcasters, and she's excited about the potential for
that project. I could stand here and talk about the media business and watch the French countryside go by for a few more hours, but I can tell I'm wearing thin. The patients of my fellow passengers some more to come. Paramount Global CEO Bob b Akish first came to mipcom years ago as head of Viacom's International TV Channels group. Today, he's leading the entire company through a difficult period of transition, but his confidence that better days are ahead comes through
loud and clear in our conversation. As you said here today, how do you feel you articulated the Paramount had sort of taken its third way? How do you feel about the health of Paramount streaming business and that sort of that. How do you feel about Hollywood's long term decision made about five years ago to really go forward into direct to consumer? Do you think that the business maybe went a little too headlong into direct to consumer?
Yeah, So I'd say a couple things.
First, I'd reiterate what you said, which is two years ago we said twenty twenty three was our peak investment year in streaming. Today we're still saying that it's our peak investment year in streaming. And we've also said publicly that twenty twenty four will be a year of significant earnings growth for the company, driven by significant reduction in
streaming losses. So we said that two years ago, we had a plan that reflected that, and we continue to believe that today point one point two is really zooming out a little. Yes, there has been a continued discussion about streaming and the robustness of that business and profitability and all of that. And at the same time, I would say, sitting here today, it's more true than even two years ago that it's going to be important that you have a significant exposure, exposure in a positive way
to streaming because consumers continue to move that direction. The linear ecosystem remains, but it is you know, continues to be in a gradual decline and streaming continues to get bigger. You only have to look at the numbers to know that. So it's vitally important that we build a streaming business.
The other point I'd make, and it really goes back to the licensing one, is you know, people like simple answers, and what was in vogue as a simple answer was the way to be in streaming was one hundred percent owned and operated D two C in every market around
the world. And I think the reality is, frankly, I know the reality is not that simple that we believe and are beginning to demonstrate that a more multifaceted approach to streaming, which among other things, embraces partnerships, is the more fiscally responsible and ultimately more financially powerful way to unlock the if you will, streaming tam total addressable market. So, yeah, there's a lot of discussion about streaming, and certainly call it.
The street's view on valuation of streaming has moved adversely in the last two years. But the importance of having a scale streaming asset again in a multifaceted way, it's never been more important. And again I think once again we are leading, as we did in ADS supported streaming with Pluto. We're the first major media company to get
into that. People said what is that? And they turned around three years later and we took a seventy million dollar business and took it over a billion, and people are like, oh, you're right, that's the real business.
Just like Paramount Plus.
When we launched it, we said lower priced tier with ads, higher priced tier without ads, because we want to give consumer optionality.
People question that.
Now fast forward today, pretty much the whole marketplace is there. This is another one where streaming is a multifaceted business. Sure, we're going to be O and O, D two C in major markets in the world, we're in others. But there's going to be an additional part of that business that's going to have different models, and that's okay. In fact, that is more attractive, and what we need is the
street to really understand that. And I do think the earnings turn, if you will, from twenty three to twenty four, which is really the macro headwind people are looking for, call it clarity on Once they see that and then start to see these things are incrementally valuable, I think the evaluation picture gets much better. So, yeah, we're in the trough, so be it. We play through.
Kennell Blue CEO maxim Seta was remarkably candid during our conversation after he received the Variety Vanguard Award. I certainly didn't expect him to start by detailing the number of times the company almost died. He certainly grabbed the audience's attention.
If you want to talk about the last seven or eight years, you have to think about the history of Kennel Plus, because it has driven a lot of our actions and one of the key elements regarding an Lplus is that it's a company that has almost died several times,
disappeared right after it was launched in eighty four. It was the first believed it was a hit, but then a gigantic failure, and for a while it was on the brink of disaster, and then it happened several times over its history, and I joined in two thousand and four and two thousand and two, two thousand and three again can Lplus was on the brink of disaster, and then we had a very difficult time when I was
appointed CEO as well. So you start to develop, first of all, a survivors syndrome like should should this company be existing? Is there is there a sense to us continuing in this environment? And then you once you think that yes, you should be existing, you developed some kind of survivors instincts, and so a lot of our actions have been driven by and my actions have been driven
by my obsession for the company to survive. Actually, it's a very different state of mind than when you're on the offensive and you want to be a global player that Netflix and you have the resources, the financial resources to do that.
And totally different from the history of European broadcasting being you know, state run and a few small independents that still had that state support can help plue. You are in the you are in the marketplace, you rise and fall.
Yeah, I think I can really clearly states that we have no support, no support than your viewers. Well, we have support from the talent and the environment, and we have a lot of support from the actors in the industry. But from the regulatory standpoint, it's a very complicated market. Fronds and Europe in general is a very highly regulated
market and so very complicated to survive. Again, but based on what I said and the fact that the company was in a tough situation and was losing a lot of money in France, your home market, so you're trying to think about how do we expand, but maybe the first thing to do is to you know, solve your French domestic situation. We it was a very tough times for can Helplus when I was appointed, because we had to do very significant cost reductions close to twenty percent
of our cost base. We did something that you never recommend in business school to do, which is to lower the price. So we lowered the price to find some growth again, and and generally at the same time we decided to expand overseas, so again very risky, but when again, when you have survival, the instinct you think your really best one year at the you know, in the toughest situation. And I think that's and distribute and thank you again for Distribute and the can words. And I really appreciate
what what Michelle and Lucy said. This for me is a tribute to the teams, to the canaplus teams. And I'm not you know, being it's not it's it's it's true. I mean, the teams at ken Helplus are super committed and they're never better, never stronger than when the situation is is very tough. So when you look at Kennel, it was a very French company, very dependent on a few rights. One of them is actually happening today. There's the tender for the French soccer domestic rights today and
I announced publicly that we were not participating. And in twenty eighteen we lost that right. And at the time, our studies were telling us that half of our subscribers would probably leave if we do not have that right. We're so dependent on that right that and you know, it's a fixed caust base, so if you lose half of your subscribers again, you're dead. So again, the obsession of the team and my personal obsession was to reduce all our dependencies. We were too dependent on the French market.
How do we go overseas and reduce that dependency. We're too dependent on French domestic soccer, you know, So we expanding it to motorsports, you know, FROMULA one, Motor GP, Rugby Champions League, and then how do you expand from that? And we signed output deals with all Hollywood majors, and then we signed a very significant, the most significant deal with French cinema. And then you say, okay, how do we use again dependency? And that's when I went to
see readerstings in Los Ghettos. I think it was now maybe five years ago or six year I think I'm the only European who actually went to Lose Ghettos and
claimed that. And I went to see Read and I had a very long conversation with him and tried to convince him that we were not necessarily competitors, that he was on the same side as can help us, because he was trying to convince people to actually pay for content, and we started integrating the platforms into our offers Netflix and then Disney Plus and then Lionsgate and then Paramoun Plus and finally Apple TV Plus.
And would you say, I mean, it seems like the timing of and I appreciate your candor about where you were at that time. It seems like the timing of what I said about Netflix and the focus of the idea that content companies can be more than just their geographical boundaries is like a perfect timing for what you needed to do for your own business.
I think what you said is completely true on Netflix, and we owe so much to Netflix, to be honest, we owe so much because they showed the way they showed it was possible to have shows and movies travel to build scale like they did. And then you know, before the launch in Friends, they were already very strong
in the US, so I had a head start. And just one example is I went, we had we were co producing a show with Ski at that time called Tunnel, and I thought, we need to launch Binge because if we don't, then they'll launch in Friends and say, Canalplus is the old television. We're the new player, and we're launching Binge. So I wanted to launch Binch before they did. I had the head start, but they need to convince Sky. So I came to London. I went to London and
convinced our partners from Sky to launch Binge. So we were able to take advantage of the fact that we had some kind of time before the launch in Friends and so we could appreciate the extent to which really they made, you know, a number of new innovations that we could some of them we could launch before them.
Don't go anywhere. We'll be right back with Eva Longoria and Chris Abrego and Doriy Media's Nadov Palti. And we're back with observations on the international marketplace from Eva Longoria, Chris Abrego and Dori Media's Nadov Palti. Chris Abrego and Eva Longoria came to can with big news of their new partnership backed by one of Europe's most dynamic media companies, Banajet. What's more, Chris gets to keep his day job as
Banajet's Chairman of the Americas. Here the partners explain the meaning behind the hyphenate Moniker.
We are really excited about this Chris and I've known each other twenty twenty five years. I think my first producing credit was with Chris, and I remember when you Spot Talent, Yeah you can spot talent, and Chris was, you know, at a robust production company of his own, and I remember him taking the leap into an executive. Actually made fun of him the first time he wore a suit because he didn't known any suits. And what I liked most about partnering with Banajey as well was
all of them are producers at heart. They're very entrepreneurial and very producer minded, which you don't find in our industry. You have the executive you know that gives notes and you know, tells you how to do the production who's never produced before, so that's frustrating. We've voiced a lot of these frustrations. But as a hyphen it, you know, I'm an actor, producer director. People think I'm an actor
turned producer director. I've always been a producer director that fell into acting, So I've always been very interested and more curious about being behind the camera. But I kept getting into these overhead deals that could not service my ambition. And by definition a multi hyphen it is somebody who does more. You know, I want to do more, and that multi hyphen it isn't surviving in Hollywood because it's an industry that really wants you to stay in your lane.
They really want you to stay in your box, and specifically if you're a person of color or a woman. And so when Chris and I started talking about this couple of years ago, it was my frustration and his ambition that kind of met and we said, oh my gosh, you know, it's not just me that feels this way.
I know so many amazing, incomparable creators who are being suffocated by the system, and so hyphen It is going to provide an alternate model, and we really have a modern approach to how to create visionary content that is culture defining for the most diverse generation we are ever facing.
Yeah, that's perfectly thing I said about added that it's just when you think of if you think about the actual hyphen is a punctuation market that puts two words together in our world. As even said, the multi hyphen it is a world builder and they really are because both Eve and I have been outsiders in this industry, right, I mean that we met. I don't think anybody would have bet on us, you know, while over twenty years ago,
and so we have to build it ourselves. Mainly, it's always and nothing's ever been handed to us in a sense. And so now we're in this position with Hyphenite Media Group to bet on people who've been underestimated.
Or underinvested in.
We're more importantly underinvested in.
The outbreak of war between Israel and Hamas has been a dark cloud hanging over the world, and it certainly was felt at Mipcom. Nadov Palti, CEO of Israeli production distribution firm Doriy Media, made a very considered decision to stick with his plan to attend Mipcom despite all that was happening in his native country. Here, Nadov offers a profound explanation for why it was important to keep Doory Media's business plans on track, and he also offers powerful
examples of how storytelling can build vital cultural bridges. Let's start at the beginning. Obviously, you come to Mipcom with Doriy Media, busy producer, distributor. You have a lot of business going on, and less than two weeks ago war breaks out brutal cruel senseless war breaks out, how does that affect you as a business Dory Media, what do you think that the impact of this senseless violence is going to be. I know the emotional costs cannot be valued,
they are beyond valuation. But from the business sense for Dory Media, what do you think this situation in Israel is going to mean for Israeli media, which is so big and away.
For first, we have to say that it's really one of the sadnests, toughest and how period and maybe in the history of as well. And everybody in Israel is very as you describe said worry.
And.
Not only there is already even think or know how it's going to end or what's going to happen, how it's going to develop. But I want to say that I saw what I saw in Israel that we were very I would say, we have a huge debate before, like ten months before, a lot of demonstrations like very not together.
Right against I know that Yaho's policies.
And this was very said also this was very sad. Now what's happened here that we are now in one second, when it's happened, all the Israelis units get United Back and everybody is volunteer who people can go to the army, go to the army.
All the rest is volunteers.
Is doing the best I can say to support all the people around. So it's a very problematic time for as well.
It's not now.
What's happened is undescribable, okay, unspeakable, but it's it's a long period that we are not in a in a very good shape in Israela and maybe this will somehow will rebuild our society and our country again. Anyway business business wise, short term is very tough. Midterm and long term I think we will recover. It will not influence because unfortunately, also we had situations in the past, not like this, but we had a situations from time to time, and we are very organized what to do and how
to do and how to recover. Also, though Media is international and global company, so we produce in Mexico and in Argentina, and we have a team from all around the world that actually came to now to Mipico from Bonos Aires, from Madrid, from through It, from Singapore, and unfortunately there is really team a council.
But I have to come because I have to support all the team here. You are the CEO, I am also the CEO.
And also our people from Madrid Bonoscience are very sensitive and they concern so I have to speak with them.
I have to encourage them.
I have to tell them that we will continue. And it's not only that we will continue if we let our.
Enemy.
Let's call them there to dictate our life or dictate what we are doing. And I speak about personal professional business life.
So they win.
We will not let them win when it's not only in the battlefield, when is all three hundred and sixty.
Degrees operation.
So one of my toughest decisions is to come here because of this.
Okay.
Also my son is in the army now he's in the reserve and in Gaza, and unfortunately we get into he will get into. So and I was a commander or in the idea also in your service, my service. It was years ago, okay, But so we know and we understand. So on top of all this, we have to continue. We have to.
If not, they will win.
So the easily business, I believe we have a lot of First of all, we have TV channels that they continue twenty four seven and they will continue to open we have like six TV channels.
Production. We produce a lot.
We came here with the biggest or one of the biggest slot ever around a dozen of new show part of them is now in a post production editing. Others in a pre re production that you want to start to shoot in a few months. Other in development. So you have a lot of work that you are not shooting. Shooting you cannot do it now, but all the rest you can. So we work our offices. Interview is not closed because the regulations that if you have a shelter
in the office you can continue to work. But also we're allowed other employees to work from home, no problem. And actually we are very organized for this because during the coronavirus virus, the pandemic, we work from home.
And we will so we are doing it very efficient.
They educated the Corona how to work from home and also we are doing it very efficiently. So actually the operation is not really helped. Yes, the people very emotional.
A lot of our.
Employees involved somehow with what happens. Some of them went to the army, some of them have kids in the army. Some of them the neighbor or the friends or the cousins, or everybody involved in it.
It's a very small country.
But the operation I believe maybe short have some influence, but long term and midim I think everything would come back, and I think maybe is opposite, Maybe will be stronger and more united and and and something. Unfortunately from this crisis, A lot of times, something would happen after.
I want to I want to try to be autimistic, okay, because it's a.
Very sad it's a very sad times what it was, so business wise will.
Continue and continue ongoing.
What strikes me is, just as you said, Dorian, media is working in Buenos Aires and Mexico and others all around the world. The media world is more global and more connected than ever. And the political world we are seeing the far right in mind in the US, the far right in Europe too. A scary reading. And I don't know the answer, but I do you what explains
the disconnect between politics and the entertainment. The world is more than ever watching media from other countries, understanding stories, you know, and yet we are more as people like fighting and more division.
Do you ever think about that? How does that make sense?
Okay?
It's not only immediate. Also the people, the people is the same people. The people get along, believe me great. The politics and the leader somehow leave from this separated people.
This is the power that they get out of it.
This is how they can continue to live. And unfortunately you can see every place that the leader want to separate. The leader wants to some to go to fight and go to war. And if you are sitting in every places around the world, in a restaurant or in a hotel, or every meeting with different people from all around the world, they get along very fast together because the value and the principle is the same of everybody. But leaders, politicians
built create themselves, develop themselves. If they can differentiate themselves from others, and then they get the power and then getting the voter, and then maybe they can go. So this is not only media, it's also I would give you example.
We have Stezel. You know our show.
I've heard of it. I can't say that I've seen it, but I've heard it, so you have.
To say it. This is a great choice. Was on Netflix.
Now, by the way, we are selling different t windows all around the world. But Steel is a out a family and people that live in a very orthodox neighborhood in Jerusalem called one hundred Gates.
It's one of the most orthodox neighborhood in Israel. And then we sold it to.
Turki to company called OGM and today, by the way, they reproduce it into Key Remax. It's on air on Star TV TV channel there and it's wins the rating every monday's doing a great show.
Great and they create more episodes than us. And when Unu, the owner and the.
Producers, they called me and said, well, I want to get asked him, did you watch it?
This is about the.
Most orthodox neighborhood in Israel and their life and he said, and love you don't believe. But the Islam and the Jewism is the same same principle, same value, same family value. And he said, the relationship between the father and the son in this show, this it's the same like in twalky you know our Islam culture.
And when the.
Son come to the father and said listen, I want to I met a widow with the kids.
And I want to marry the son. The father said, what's what's happening is you are you? Are you dumb?
Are you you don't have a hand, you don't have a leg, or what's wrong with you, and he said, I want to get into the head of this father when he listened.
And the same is in our culture.
And so this is what I want to tell you, that it's not the paper, it is a leader zone, that it is a politician. So he jis them Islam Christian, it's the same people, same value, same understanding.
Mercy. For listening to a fantastic episode of Strictly Business, be sure to leave us a review at Apple Podcasts or Amazon Music. We love to hear from listeners. Please go to Variety dot com and sign up for the free weekly Strictly Business newsletter, and don't forget to tune in next week for another episode of Strictly Business