Latest / The Media Odyssey / VERTICAL PREMIUM TV: THE NEXT BILLION DOLLAR IDEA?

Transcript

VERTICAL PREMIUM TV: THE NEXT BILLION DOLLAR IDEA? · The Media Odyssey

• Evan Shapiro: [00:00:00] Welcome back to the Media Odyssey podcast. That is Marion Ranchet. Marion Ranchet: And that is Evan Shapiro. Evan Shapiro: In very hot New York City. We're getting the heat wave that Paris got last week. It's really unbearable here. Marion Ranchet: I think you're the blitz, meaning that you're taking the heat wave wherever you're going. So stay put in New York. This is gonna be the second episode where we're trying to tackle what coming, what is coming next for vertical video. Evan Shapiro: Yeah. And so we had a great episode about vertical video that we shot in Lisbon with Bogdan Nesbit from Holy Water and My Drama. And then today we've got a brand new vertical premium television studio that is picking up where Bogdan left off in [00:01:00] Lisbon, which is he said the genre has to expand. He talked about that live on stage and said that the five stories in the telenovela, softcore porn microdrama industry are not sustainable in and of themselves. This company that we've got today, with the two of the founders, is taking that seriously and expanding the whole format of vertical into truly premium television genres across the whole spectrum. Shall we bring them to the stage? Marion Ranchet: Yeah, absolutely. Evan Shapiro: Let's introduce Guy Hameiri and Lior Friedman, two founders of Roseberry, a vertical premium television studio. Guy, Lior, welcome to the pod. Lior Friedman: Hi, guys. Thank you for, thank you for having us. Guy Hameiri: Thank you. I'm with you in the super hot New York. Lior Friedman: London is a bit easier. London is a bit easier these days. Evan Shapiro: I'm actually headed to Paris next week, and it's only gonna be 85 degrees, which I don't know what is Celsius. I don't do that. Lior Friedman: Hey, let's hope France stays in the World Cup so you have, so you have something to look forward to. Evan Shapiro: Hey, look, US is looking not [00:02:00] terrible right now too. Marion Ranchet: I think we're going to the end. We're going to the end. Let's not say hope, hope, hope. Have you seen the games from the French team? Evan Shapiro: Yeah. France looks very good. But Guy, and Lior, can you jump in and let us know about the origin stories of Roseberry, what the concept you have around vertical premium television? Guy, you and I discussed this at Stream TV last month. This is a completely new look at the microdrama phenomenon through the lens of the future of television. Guy, you wanna tell us how you came to this, both career-wise and theoretically. Guy Hameiri: So in a real nutshell, my career is producing television. So I've been doing this for 25 years. I've established my production company in Israel. And I was the first producer to bring huge formats into the industry in Israel. So I brought in Survivor, which became a huge hit, and right afterwards I started producing, other big formats like, The [00:03:00] Bachelor, and Amazing Grace, and X Factor, and Got Talent, and Beauty and the Geek, and many mores. And we started producing our own original formats after working on so many big formats and put them on prime time, and some of them, lucky for us, became traveling formats in multiple genres. And then created a big drama studio. Produced a couple of dozens of drama series, more on the premium side. Some of them became also rolled out as really nice tapes like Shtisel that was on Netflix for many territories, but other titles as well, both remake and tapes. And I sold my business to Fremantle, and so I became a part of a big indie and I've been doing that and was Fremantle chairman in Israel, until the end of '24. Part of my role as a chairman was to look for new investments, and I think Israel, as a place that is [00:04:00] A, big tech nation, B, a huge gaming and ad tech industry. We're one of the first territories to recognize the growth of micro drama from China. Okay, their Sensor Tower, which is like a Nielsen for the gaming app, ad tech industry. They saw the rise of microdrama, and that's how I become aware because some of these companies reached out for me. But I think Really early on, I strongly felt that most of these companies, their approach is more of an ad tech gaming approach and less of a TV content approach. And I felt that micro drama is just the first wave in many more to come. So instead of chasing microdrama, we have decided to be the first studio to chase other formats in what we call Vertical TV. So that's the origins of The Rose of Roseberry. Lior, if you want to be [00:05:00] complementary to that? Evan Shapiro: And Lior, you come from Amagi and a couple of other areas in the television digital stack. And what attracted you to this idea and this enterprise? Lior Friedman: Yeah, so I'm also a bigger screen. There's a big screen, there's a bigger screen, and now there's the screen we're all focused on. I started in the medium-sized screen, the TV, actually as, originally as a news anchor, and then in the evolution of things, got into the business development side of media, as you said, with Amagi, but really focused on how to monetize and commercialize television in a proper way. And I think one of the biggest shifts you're seeing is how eyeballs are really moving in droves into the phone. You don't need any research company for it. Just go to the subway or go to the Tube here in London and see that people were reading a book or opening a Kindle, and now, or maybe looking at their phones horizontally, and now they're only looking at it like that. And I think that shift is very clear. You can see it happen everywhere. [00:06:00] And I think right now consumers, Evan, you say it, have an itch to scratch. They're getting, they're getting a, I think, a very high calorie, low taste, experience from the vertical landscape. And nothing against it. Sometimes our, we all want some gummy bears or a fast food burger, right? That's fine. So you either have user-generated content on one side or this new upcoming, again, trailblazing genre called microdrama that is providing you with that dopamine hit that has really proven that people are willing to pay for consuming content on vertical. You're getting both ends of the spectrum, but the middle class is missing an outlet for them to actually consume content, and I think that's where, that's the white space that we saw as an opportunity by actually providing a long-term, sustainable entertainment experience to those consumers. They want a TV-like behavior [00:07:00] outside of the sofa or the living room. And that's exactly the mission statement that we had when we did this. And I think in terms of like when you look at a business from a business development mindset, there's a big market out there right now that I think a lot of people are missing because of that specific user behavior when you're only looking at that specific angle of only watching user-generated content, only watching microdramas. There's so much more in between when we're on the Tube or commuting to work, when we're waiting in line for the doctor, when we're on the toilet. Again, you're, I'm not the first one to bring that into the conversation. But yeah, that's the type of Evan Shapiro: You are today. Lior Friedman: Yeah, today, that's true. That's true. Guy Hameiri: I think another important issue with bringing other genres into what we, again, what we call vertical television, is to be very distinguished. Because today, other genres on TV like, even reality shows and obviously scripted drama of any genre, and even documentary, they use social media or they use the mobile [00:08:00] to do promotional content. And not long form content, okay? And I think the big shift is who is the first one to bring any genre of entertainment content into fully be watched on mobile. And that's our mission, and I think micro drama helped prove that it's a possibility. It helped prove that you can watch a 90-minute series. But I think two years, two years and a half into that, we see the limitations as well, okay? And we see that the limitations are around mainly behavior. There is less retention. Leaning into the freemium model has its prices, which is mainly retention and engagement. Going to the weekly subscriber also has its prices. And I think what we are, our mission is to work on different behaviors in vertical mobile, [00:09:00] and I think there is no, we can't argue that people will consume entertainment in their mobile. It will happen. I think it's all about who's going to do it in its best shape. And what we're mainly offering is to be a start-to-end studio that offers solution how to bring other genres into vertical television. Marion Ranchet: And so this takes the shape of a platform. That platform is an app, a mobile app called EPIS. Is that coming from episodes? Where is this coming from? Guy Hameiri: Yeah. It's short for episodes. The beginning of our journey was really all about producing. We all understand that, again, microdrama is one specific genres. You talked about this with Bogdan, and I think he, he described it in a brilliant way, what is working for micro drama. I think, again, the proof was can other genres work in this vertical format? So the first thing we've [00:10:00] done is produced originals actually. So we produced true crime, and we've produced dating reality, and we've produced other genres of scripted in vertical. So we needed to do it in a good price point. We shot it in the US, so it's fully Americanized, and we saw the outcome, and the outcome was really good actually. And we did, and we A/B tested that, and we saw that people are reacting, and people are spending time, and people are willing to pay. And after gaining the confidence, basically what we wanted to achieve is volume, and we took these products and this finished, let's call it finished tape for a second, if we're in the TV language, and took it to the big indies. So we started with Fremantle, Banijay, All3Media, A&E in the US, and showed them the outcome, and they were really thrilled because they felt now it's a way for them to participate in the vertical game because they did see the rows of microdrama. And then what we [00:11:00] did is basically found a methodology of how to take a horizontal long form and turn it into vertical short form. And, again, in the technology world of today, it's amazing how you can do things vice versa than you used to do. So we manually edited, these products that these companies gave us in order to get it back to them in its best shape. Again, we come from the craft of television, so we've done it with our best editors until we've reached an outcome that we felt that it's in its best shape. Showed it to these indies, and they really liked the outcome, and then started doing it in scale. Only after doing it in scale, we started automizing the process into an AI 12-step, machine that we call Red Snapper. Evan Shapiro: 12 step. Guy Hameiri: 12 step, exactly. Lior Friedman: 12 step. Guy Hameiri: 12 step. Evan Shapiro: Getting over an addiction to one format over another. Guy Hameiri: The addiction is how to make money in a vertical for you. [00:12:00] How to gain more profits from the same IP. Evan Shapiro: From addiction, yeah. But let's zoom out here for one second 'cause, you're getting into some of the sausage making here to a certain extent. First of all, Marion, do you remember when Jordan Schwarzenberger was on the pod? He's the Sidemen manager, and he said all this usage of video on social platforms, and most of it's terrible. Marion Ranchet: Yeah. Evan Shapiro: He said there's all this consumption happening, and still there's all this white space for good premium quality content. Tremendous amount of white space. And that's really where I think this theory comes from. You marry that with the data that we released recently, ESHAP did, that shows that in America at least, two to one people use their phones 60% over 30%, phone to TV for video consumption, not just mobile, not media consumption, all consumption. And then we've released [00:13:00] other data that shows that TikTok is actually crushing it and driving new consumption behavior. So vertical is now a premium video experience, but there's not enough premium content to get there. Guy and Lior, what you've built here is a new age, multi-dimensional, multi- platform syndication model for premium content in vertical. You made deals already. You launched with deals with All3, Banijay, Fremantle, A&E, to syndicate their existing massive format libraries of true crime and dating reality and all this other kind of stuff into vertical, starting with EPIS, testing it out, see how it did there, improving as you went, and now you're expanding the release of EPIS. That's the news that we're here to discuss today. EPIS is growing its own platform, but then the partners rev share on EPIS, and then turn around and have that content to syndicate anywhere else [00:14:00] they want, and you're also developing a major global flywheel for syndication in vertical as well. Am I assessing what we just discussed correctly in an encapsulated form? Lior Friedman: Yeah, I think that's the fun part about mobile, right? Because, the ability to experiment and immediately extract data from users and understand what behavior looks like, I think is the key thing that in the old traditional TV world was such a long, cycle until you actually get user data, if you get any data at all. Not to mention, those black boxes that you just distribute into, and all you get is a check at the end. Here, you have the ability to reach a user-level granularity of data that I think is what this industry really is after. There's clearly revenue that's to be made here, but I think on top of that is the ability to perfect the craft, as Guy said before, by actually bringing that user behavior and the data to finally know what really people are looking for. So yeah, it's not the around the sofa family [00:15:00] viewing that maybe gets the top CPMs that you get from a proper awareness brand out there, but you're getting a one-to-one intimate relationship, very similar to this podcast-like relationship with the consumer, most of the time with their headphones in, they're invested in the screen. We're bringing all the right tools as part of the storytelling to manifest or to bring all those stories directly in the eyes of the consumer in the most compelling way, in the way that CTV storytelling can provide true storytelling true to the medium. Evan Shapiro: And you have data that shows that consumers will follow narrative story arcs from traditional television, very traditional television, in the mobile format, in micro episodes- Guy Hameiri: Yeah Evan Shapiro: the way that they have microdramas, and they do vlogs to a certain extent. We actually have a good case study of this to share with the audience here today. Y ou have taken, and Guy, I don't wanna sleep on this. It's not just a pure AI-driven process here. Guy Hameiri: Yeah. Evan Shapiro: Your television experience, your television expertise is really [00:16:00] educating the editing and reformatting of these series. In this case, we're talking about a classic long-run, television drama called Neighbors from Australia that launched two major careers that I'm aware of, Margot Robbie and Kylie Minogue. We actually have a clip of an episode from Neighbors that you have reformatted for Fremantle, for syndication in vertical. Is that correct? Guy Hameiri: True. Yeah. Yeah, I think we can watch the clip and discuss it. Evan Shapiro: Yeah, let's take a look at it. Guy Hameiri: Yeah. Speaker 5: Thanks for walking me home Speaker 6: Thanks for walking me. Speaker 5: How cute was Zeke and Sunny? Speaker 6: World's longest kiss. Speaker 5: Yeah, took them long enough. Wait, wait, um. Speaker 6: What? Speaker 5: If we want this- Speaker 6: I do want this. Do you? Speaker 5: Yes, [00:17:00] but this time we do it right. Take it slow, okay? Remember when I wanted to jump you and you needed time? Speaker 6: Yeah, okay. Okay. Speaker 5: Right. Slow. Speaker 6: Slow. Speaker 5: Good night. Evan Shapiro: For those of you who are on audio only, we just played a clip of Neighbors that runs in vertical. However, for those of you who wanna see the comparison between the vertical syndicated product that Roseberry created next to the original horizontal [00:18:00] version on television, go to our YouTube channel right now and take a look at it, 'cause it's pretty interesting. Lior, you were describing how these two compare. You've basically taken out a plot line from an an episode of Neighbors featuring Margot Robbie smartly. Lior Friedman: That helps. Evan Shapiro: That helps, for sure. And talk about the art and science mixture of pulling out that for a vertical format. Lior Friedman: So let's talk about, first of all, the verticalizing or what we call repurposing for a second, and then we'll talk about how we present this in the programming part, which I think is also interesting, right? So you saw here, of course, there's a cropping of the frame from horizontal into vertical. There's technology that does that today to a very high degree, but it still requires, I will say, still human craft as part of this. There is focusing on the right subject matters, within a specific episode. I think there's probably five or six storylines at every, at any given point in any type of soap opera. Not all of them are maybe fit for the vertical viewer because some of them are just there to paint a nice picture for the [00:19:00] TV consumer, right? You wanna give the right stories that actually drive the plot and drive the story, right? So we're gonna be focusing on that. Sometimes you also don't wanna have frames with too many participants or too many characters in them because that's not something that will fly necessarily with the vertical consumer because you can't really tell the details within a big frame. So all of that's happening as part of this, call it, AI first, human creative powered workflow. But on top of that, there's also 5,000 of what we just saw, and if you need 5,000 of it, there's no way to condense it into one, I don't know, 5,000 microepisode long, micro... That's not the plan here, right? So the idea is really to create and start building on this habit, that we mentioned before of getting those vertical consumers acclimated to actually consuming content on their mobile devices on a day-by-day basis. So if the daytime soap actually helped build or create the infrastructure for what we know today as television, I think there's also an opportunity to do this with the vertical TV, [00:20:00] landscape, and I think doing this with known IP that people already know to some degree and love and have feelings and fandom towards, but also new audiences that have never been exposed to it, but still can relate to the storytelling and can actually follow along different storylines. Evan Shapiro: The Gilmore Girls found a whole new audience on Netflix, right? Yeah. Suits found a whole new audience on Netflix. This is a different way to find all-new audiences who are not necessarily spending a tremendous amount of time in front of the television set. But even when they are, they're finding the content in vertical first. You also introduced a paywall at a critical moment in the plot there. And, Guy, this gets to another aspect of this, which is you're testing these things in real time and then going back to the editing process- Guy Hameiri: Yeah ... Evan Shapiro: and adapting the syndication and editing of the series based on real-time behavior of the consumers that you're testing, correct? Guy Hameiri: Y^eah, I think, I think, again, what is encouraging about Neighbors is to see [00:21:00] and what we saw is 18 years old. And I think to see something that is 18 years old, and I think we all saw the outcome, and I think the outcome is compelling, and we know that it's working. So I think it, for me, it's an optimistic statement to see that, and I think this IP, as you say, Evan, can find new audiences through mobile, and, I think it helps the IP. It revives the IP. It gives the IP more legacy life, and I think this is an important thing that, again, vertical television can do, for IP. In regarding to that, I think this is the role of EPIS, okay? Because as a studio, as a vertical television studio, our mission was, again, to prove that other genres can work in vertical television, and in order to do so, we needed our own service, because part of what we are providing is brand-safe, content-safe to part of this IP, and I think we needed an environment to prove a different behavior because [00:22:00] we're chasing a different behavior. We're chasing retention, and we're chasing engagement, so the metrics that we're working are a bit different, and this is why I think EPIS is a super important tool for us as a way of distribution. It's not going to be our only mean of distribution, but it's a critical mean of distribution because this is our way to prove the data, and to see other behaviors of consumers in vertical television. Marion Ranchet: And you've actually mentioned, we've been speaking a lot about licensed content, and clearly there's a lot of content that is fit for vertical TV. It is TV. It just needs to be fit for vertical TV. But you've mentioned at the top that you were looking into producing your own content, and you actually have an exclusive look at, a trailer that you're doing for a piece of content you're putting out there. Are we talking factual? What are we talking about? Guy Hameiri: So we have produced, [00:23:00] up to now in, in four different genres. So the first one was true crime, actually, but like true crime in the way you see it on every streamer or HBO in the US. We went back to a cold case in Texas, for example, which we reopened, and I think we came into an amazing result. We shot a dating reality format, and which is the clip that we're going to see soon. We've also shot different genres of scripted. Okay, so our attempt for premium scripted, and also our attempt for soap, that doesn't fall for microdrama, different type of soap operas, but in a soapy storytelling. So I think that is the four genres that we've tried, and we're going into different spaces of unscripted really soon. The way we produce original is either again, as a studio, either by ourself or we go into co-production with [00:24:00] partners, where our role is to serve as the studio, as a studio that helps anyone that wants to go into vertical, we give them the tools and the guidance of how to do So we've already done it with several partners, and we're negotiating other several partners. so I think, again, this is another unique thing that we do as a studio. Evan Shapiro: So if you look at the soap opera genre with Neighbors, this one is a dating reality show. What's it called? Guy Hameiri: Don't Fall for Beautiful Liars. It's a good recommendation for anyone, by the way. Evan Shapiro: Yeah, and it works really well as a compelling piece of vertical TV while you're on a bus or on the toilet, as opposed to sitting on your couch or in your bed. Speaker 7: I am fucking- One bachelorette, three smoking hot, perfect men, one wild weekend- Oh ... to find her perfect match. Speaker 8: I just wanna let you know that I'm here for love. Speaker 7: But there's a catch. Speaker 8: I'm here for love. I'm here for love. Speaker 7: Only one of them is here for true love. I [00:25:00] Speaker 8: I wanna win her heart. Speaker 7: Two are liars- Speaker 9: Y'all are playing a game. You're doing a really good job ... Speaker 7: With one goal, to win the cash prize. Speaker 9: I hope the person I pick does not swindle me. Speaker 5: They'll say anything. Speaker 7: You are absolutely divine. Speaker 7: Do everything. Speaker 9: Let's go. He's like all the things that a girl could ever want. Speaker 7: To win her heart. Speaker 9: I honestly think they're both liars. Speaker 7: If she chooses wrong- Speaker 9: You just scare me. Are you lying to me? Speaker 7: She'll lose the money- Speaker 9: I don't know who I trust right now ... Speaker 7: And be left with a broken heart. Speaker 9: I think I just picked two liars. Speaker 7: Will she fall for beautiful liars? Marion Ranchet: Okay, I have no way of knowing who were the two liars and who was the true love, so we're gonna have to watch and find out. All right, guys, when I listen to you guys, what I think is fascinating, number one, clearly you wanna steer clear of microdramas. You wanna build, you believe [00:26:00] that it is about building, vertical TV, not just, again, those five editorial arcs. You just wanna bring TV to a vertical ecosystem. There's that B2C play. I wanna spend a second on EPIS, because I've played with the app, right? And so at the top you mentioned that Israel is a technology and a gaming ecosystem. Part of your leadership team actually is coming from that space. When I use the app, when you sign up, you get some sort of tokens, like 70 tokens, so you can get started watching content using those. That gamified element, is it really needed? You could have just gone ad supported or just SVOD, right? So why that gamified element to it? Guy Hameiri: Look, so I think, by the way, it's a great point. I think, as you say, part of our leadership team comes from mobile, comes from gaming, comes from ad tech. A lot of our investors are coming from the [00:27:00] biggest companies in that field, which gives us a lot of advantage, a lot of data, a lot of resources. But I think it's an interesting question, and to be really honest with you, I'm not sure it's going to stay. I think part of the, of the maturity of this industry, let's call it again vertical television industry, will be getting rid of these tokens in a way. I think it's easy to go into that direction because that's where gaming is coming from, right? It's coming from the freemium model. I think for us, to play with that model was crucial because we wanted to compare ourself to a different behavior, right? So we know there is a microdrama behavior. We wanted to reach other metrics and other KPIs, again, leaning a lot more towards retention, engagement, how much time do you spend? Do you go from show to show? Do you watch a true crime series and then you go into a dating reality? Do you watch [00:28:00] Neighbors and you go into an original? like an SVOD play, and I think we're chasing different metrics, but we needed to start with something that looks like the other so we can compare. Okay? Yeah. And we're still in the A/B testing phase. Evan Shapiro: Yeah. there's a maturation that comes to any new platform, and this is basically, I've been calling it the cablization of vertical. And so another piece of research we did was we asked people where their favorite places to watch video were, their top places to watch video. Bed was number one, living room was number two. Number three was a mixture of at work, online, as Lior mentioned, or on the toilet, as Lior mentioned first. And for Gen Z, on the toilet is number three, by the way. But there is this kind of, in the next couple of years, you've already got Netflix going vertical, Disney going vertical, Paramount going vertical. Peacock just ordered six new vertical reality TV shows. There's gonna be a demand for premium vertical, both [00:29:00] original and syndication, and it seems like Roseberry's building the flywheel to distribute to all those platforms. Understanding if someone's gonna pay for an episode also helps, I think, Netflix and Disney understand, all right, is this an additive thing to our subscription package, or is this primarily an advertising-based thing? But also look at Neighbors for a second or this, other reality show. Think about one brand owning that across TikTok and Instagram and Shorts, and how powerful that might be too. Marion, I'm interested in your thoughts around, if you reimagine vertical as the early days of cable Or pay TV and the expansion of SVOD, really, do you see a similar thing that I'm seeing, which is that there's gonna be a rush towards this new format on all these platforms? Marion Ranchet: I think the guys have mentioned it, right? Whoever is gonna be working with you guys, they're gonna have their content on EPIS, but you're giving that content [00:30:00] as well for them to syndicate somewhere else, the idea being that you need to be everywhere, you need to be on social as much as possible. And I see the appeal for streamers and others to actually have a vertical component within their ecosystem. Everyone is in the business of increasing time spent, right? And yes, in some cases you wanna spend an hour and a half watching something. In other cases, you just wanna have a lean back just chilling for a few minutes, on the go. So yeah, everyone is gonna be in on it. One thing, though, is that I'm looking at Disney, Netflix, and others, I'm not sure how much of the consumption of those platforms is actually happening on the mobile. So I think there's- Evan Shapiro: Not much right now. Not much today, but now with their new- Marion Ranchet: Could that change? Evan Shapiro: feed, and if they actually program those platforms, that's the key. You're exactly right. That's exactly the argument for it, which is Netflix is losing time to TikTok and Instagram on the toilet, on the bus, [00:31:00] in the waiting room. This, if they really do, if they premium verticalize a lot of their premium content and bring on more vertical content from companies like Roseberry, they have an opportunity to at least compete for that time. Guy Hameiri: I fully adopt Evan's approach on the cable side. I really think that mobile will replace what cable was, and I think our journey- Evan Shapiro: Wow. Guy Hameiri: I think, I think there is no reason why, you can have a movie channel, okay, on mobile, that you can see movies while you're driving on the subway to work or on a train, an hour ride to wherever you want to go, or you're waiting in a doctor's line. And plus series and plus true crime, I think it's a vision to have cable inside your mobile. And I think, if you can create scale and you, and if you can create a lot of content, then people will seek that because they can get a lot of content through you, and I think this is our mission. This is what we do, and I think in a very short period [00:32:00] of time we were able to do deals with big distributors that has big catalogs. And as I said, what we're chasing is these metrics that can prove that you want to consume a lot of different genres, and you can do it in a behavior that reminds cable. It's not cable like we remember it on TV in the living room. It's cable in mobile behavior. Evan Shapiro: It's for a different time of the day, yeah. Guy Hameiri: Yeah. Yeah, exactly. Yeah. Lior Friedman: Three months ago, I think we had a big question mark over whether or not people would want to consume other genres on mobile. I think having a first party app that gives us first party data, that we can now tell you that- Evan Shapiro: You've proven that they absolutely do, right? Lior Friedman: People are downloading, people are viewing, people are paying, people are subscribing, and people are returning to watch content on their mobile. This is an important thing for our industry to know, right? There is a world out there of users that their engagement with the entertainment industry, starts and ends with what I just described: downloading an [00:33:00] app, watching content, paying for it, subscribing, and returning. And I think that's the opportunity that we are all seeing. The data that we have right now proves that they're doing it in very high numbers. A paywall conversion, for example, in top-performing shows of over 50%, 70% of them subscribers. Subscribers spend over an hour per session on some days. So these are really important data points for future programmers, future producers, and people that want to get into a space where they see growth. They're seeing consumption. They're seeing the merchandising and commercialization opportunities of what you can do with your IP. That's an area that's ripe for kind of new entrants and people that wanna bring in IP into that type of experience. Marion Ranchet: And I think there's one thing you've mentioned. I don't like the word cable because it doesn't, it's very US, so it doesn't ring a bell. Yeah, that's true. But let me say that, where I agree, I think there's room for both, right? I think there's a moment in time where in the day, to Evan's point, or just need stage, where we're gonna [00:34:00] have, we're gonna wanna have just a cinematic, very big screen, TV experience. Yeah. There's moments where we're gonna go mobile. I think where it is very interesting, and it hasn't been said, but I think it contributes to the big numbers we're seeing within your ecosystem in terms of the potential, is that if you look at Netflix and others, Netflix has over 300 million subscribers. They're talking about a TAM that is 10 times bigger than that. How are they gonna get there? They're not gonna get there with the product they have right now, which is expensive and very TV-centric, especially in Asia, Africa, countries that are mobile-centric. So what I love about the verticalization of TV, putting microdramas aside, which I don't like, and I don't believe in with the token and everything, that's where I think you guys and others are gonna make amazing moves, and you're gonna bring premium TV to places where we couldn't do that before, right? Because, again, the price was a challenge, the device was an [00:35:00] obstacle, et cetera, et cetera. So yeah, fascinating. Evan Shapiro: What's ironic is since COVID, which is when Quibi launched and failed, right? Yeah. Now, remembering, though, Quibi was primarily $100,000 per minute of content. Lior Friedman: It took us 30 minutes to say the word Quibi. I love that. Evan Shapiro: Right. Right. But since COVID, consumer behavior, because of TikTok in particular, has shifted so dramatically, and Reels has helped and Shorts has helped, but TikTok was the primary driver. It has moved so much video attention time to the phone to the point where it is most of our video attention diet And there is a tremendous amount of white space there for premium content, not vlogging, not direct-to-phone content. That has its place, right? But think about this, and this is for all the naysayers out there and all the people who think about television in a completely different way than it's actually being used by the consumer. The only way I watch Saturday Night Live is on Sunday morning, [00:36:00] I'm sorry to say this, on the fucking toilet. Sketch by sketch by sketch by sketch in three-minute increments. They even break the news into three different pieces, and I watch it all. Even if I don't like it, I watch it all 'cause I'm a consumer of that show and I wanna be able to critique it when it's not good. And so how many listeners or viewers of this podcast do that same thing? I'm gonna go with the majority, and in the same place too, by the way. So I think that most of our industry is not assessing the accurate usage of time of our consumers, and they're missing a huge... This is where the growth comes from. Anyway, that's my own point of view. Guy Hameiri: I agree. I think this is why we are here. I think we believe this is a new path for growth, okay? A new path for growth, for IP, and big libraries. Because think, I always say [00:37:00] there is, Evan, we talked about the 10,000 hour rule for 10,000 a year. That's $100 million in your revenue. So even if you make on one hour, 10,000, you monetize it for $10,000 a year, that's not a huge number, right? That's not, an impossible number to reach. And I think let, I don't think that 100% of their catalogs will be fit for what we call vertical television, okay? Evan Shapiro: Of course not. But Disney released- Guy Hameiri: We all understand that, okay? Evan Shapiro: But Disney released High School Musical in 10-minute increments on TikTok. They didn't monetize it at all. It got viewed- Guy Hameiri: Yeah. Evan Shapiro: Viewed millions and millions of times. Guy Hameiri: Yeah. And I think in order to support this behavior, you need to be a studio. You need to be a start-to-end studio in knowing how to create your own IP, knowing how to co-produce, and knowing how to be the studio for other storytellers, producers, directors, writers. I think it's important. Then thirdly, which is the scale, is what we do, what we call repurposing, [00:38:00] which is taking the catalogs. And I think for anyone that holds a huge library, that's a game they need to play. They need to play the 10,000 for 10,000 because they can get a new $100 million a year, at least in potential. Marion Ranchet: That is what Red Snapper is doing, right? This is what, because I wanted to ask you, 'cause that's the thing, the scale, the volume of content. There's a lot of amazing content out there waiting to be repurposed, re-versioned, however we wanna call it. So how does Red Snapper work, right? Because you mentioned at the top, at the beginning, when you needed to convince people to go for it, you went with a traditional video editor. Then, what made Red Snapper applicable to then do this at scale? Guy Hameiri: Yeah, so this is our tech platform. Again, we started manually when we first received content, we edited manually. We just did the craft work of editing and how it's going to be in its best shape and how it's going to perform in its best [00:39:00] shape on vertical mobile, okay? And that's what we've done. After doing a few, we've created a methodology which turned into Red Snapper. Basically, it's 12 steps for recovery, as Evan said, but I will point out the significant four. So the first one, we saw it a little bit in Neighbors, is the trimming that happens when you turn horizontal into vertical. What do you focus on, right? And then you also trim, and the pace needs to be in a different pace once we consume a vertical. Secondly, and it's part of the trimming, is graphics, okay? So when you're on your subway or waiting for the doctor, or you're in practice of your son soccer game, and you want to see something, you're not in full attention like you are sitting in cinema, so you need graphics to help you. Who did the $200 million, go to her, so we do a lot of graphics that helps the storytelling. And I think the last one that I will mention is music, okay? So music is a huge issue, right? [00:40:00] In two ways. The first one is music rights, which, can cost a fortune because you cannot just move music from one place to another without paying. So we needed to pull off the music, and we needed to do it quick. And secondly, regarding the music, is the pace because the under music helps the pace of the content. So it's one thing when you have an episode which is a minute and a half long than a series that has, it's a 45 minutes episode. So the music that we put underneath really helped the pace of the content as well. So that's a few to mention. The other side of Red Snapper is putting this content on EPIS, receiving the data, and then after receiving the data, doing the corrections that you can do in content, which is amazing because let's say, you know you have a problem in episode three and it's on a streamer. Nobody's going to reshoot the episode, okay? But if we found a problem [00:41:00] in episode five, we can go back and re-edit it. So our way to maximize and put the content in its best shape, and then ready, Lior will talk about it, how to distribute it in its best shape, this is a very powerful tool. and it's very unique for mobile. Lior Friedman: Yeah. I think the mobile side really helps us also in a way kind of rethink of the whole what we call windowing strategy, because all of a sudden you have the ability to basically re-productize or re-commercialize different types of IP for different types of audiences in multiple ways. The way we do this is we first of all learn who the audience is at any given point in time, and that's something you can only do when you have first-party data. So that's why we're-- that's why we have our app. But then on top of that allows us to then inform, secondary windows that we can then build on other platform to say, "Okay, now is, I don't know, X holiday in the specific territory, and there, there's content that could be relevant there," or there's, or there are other elements that [00:42:00] we can bring into or let's say a custom-- a user base in a specific territory is overly indexed on one particular genre. That's things that we can only learn through having our own first-party global platform. So that allows us to then inform a secondary marketplace that we're working with other vertical apps on, and that allows us to really, I think, then accelerate the growth and the types of behaviors that we're talking about, this constant repetitive routine behavior that we wanna get from consumers and from viewers when it comes to them frequenting a vertical television experience. I think no disrespect to any of the experiences that exist today. They're very much like a one-night stand. We think there's an opportunity here to have a long, to, again, hey, we, Marion Ranchet: A happy marriage. Lior Friedman: This is, yeah, no, yeah, we think there's an opportunity at least for a long-term relationship. Evan Shapiro: Or a long-term polygamy anyway. I think it's, and what you've built here is a true flywheel of syndication, of vertical premium television, both [00:43:00] originals that you're gonna create and co-produce, but also the syndication of high volume premium content from libraries that deserves to be resurfaced, remonetized, and to find new audiences. It, and you have this front end app that enables you to A/B test and continually, judge the market. It's a really smart construct. You're basically Lionsgate for the vertical premium television economy to a certain extent. And it's, I find it to be incredibly intuitive to what's actually happening there. It'll be fun to watch and track how your success grows over the next couple of years. Marion Ranchet: Thanks for coming, guys. That was awesome. For anyone listening or watching, go check out EPIS wherever you get your mobile apps. Evan Shapiro: Thanks so much to Guy and to Lior for being on the episode. Marion, thoughts on the future of the vertical premium television economy? Marion Ranchet: Yeah. When I heard the first news, I actually wrote about it and I said, damn, this one, [00:44:00] I may have to change my mind," but I'm not 100% changing my mind because I think they're coming from a very different angle from what we've seen so far. Evan Shapiro: Correct. Marion Ranchet: So to me, these are TV guys. Evan Shapiro: It isn't microdramas. Marion Ranchet: Yeah. These are not microdramas. It's TV guys doing a good mix of content and tech, with a bit of AI to spice it up. So I'm excited for them, excited to see what happens. It's interesting. Evan Shapiro: After My Drama came in and introduced some new techniques and some new ideas to the vertical drama or micro drama ecosystem, they got a major investment from Fox. So I wonder if after Roseberry gets involved with Fremantle and A&E and all these other companies, if they might be seeing investment from some strategic large media companies out there. Anyway, this has been a fascinating conversation. I could talk about it all day, as evidenced by my run-on sentences. But thank you very much for coming to the Media Odyssey podcast. That is Marion Ranchet. Marion Ranchet: And that is Evan Shapiro. Evan Shapiro: We'll see you next [00:45:00] time.