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MERGING AHEAD · The Media Odyssey

• Evan Shapiro: [00:00:00] I got a lot of compliments on your old style radio, by the way. Marion Ranchet: Oh, you did? Good. Evan Shapiro: People are like, oh, I love that radio and her background. I'm like, yeah, I do too. Marion Ranchet: Actually, this week this is my son. Evan Shapiro: Okay, good. Marion Ranchet: So, I'm gonna hide the radio. This week, Evan Shapiro: that's, that's Miami, so. Marion Ranchet: Nice. Evan Shapiro: Bonjour! Welcome to the Media Odyssey. That is Marion Ranchet. Marion Ranchet: And this is Evan Shapiro. Evan Shapiro: And this week we are going to talk about a bunch of different things, specifically the Hulu, Fubo, Fulu, Hulo, whatever the heck they're calling it merger. So let's get into this next section here just inspired by the Fubo, Hulu merger, and let's talk a [00:01:00] little bit about that. We decided that we're going to talk about, you know, other M&A that's going to happen this year and what's the point of it? What's the upside of that? What's the downside of that? Now did you, did you read into the details of, of this combo? I have a little bit. I'll be honest, I've been kind of whirling around and flying back and forth from Las Vegas. So I'm, I'm, I'm curious on, on your take on why this happened and what the ripple effects of this Fubo, Hulu, Fulu, Hubo combo will be. Marion Ranchet: So you mentioned earlier that that was a way for Disney to, to go after YouTube. They could have done that years ago, right? They've had Hulu for so long. So I'm not sure that's truly what's, what's behind it. Having said that in the meantime, you know, YouTube has grown, you know, tremendously close to 8 million, you were saying and I think Hulu has been, you know, stagnant around 4. 6. Evan Shapiro: Yeah. For a while. Marion Ranchet: So it does, you know, add [00:02:00] another 1. 6 million from, from Fubo. But. They are still seeing DirecTV and the likes, you know, still, you know at, at, at the top. So my first instinct, and I think I actually commented on your post was what a nice way to stop that lawsuit. Evan Shapiro: That was clearly part of the motivation. So I'm Marion Ranchet: sure that's not the only reason. But what's interesting about this is not so much them making the decision, but actually, if you look back the fact that they decided to do that means that actually, Fubo potentially had, you know, grounds to win this thing. Evan Shapiro: Well, and, and interesting, I, I think DirecTV is, is continuing with their, with their suit now, but they're moving it over. So, I agree with you. I think that part of the motivation was to stop the lawsuit, but it was very clear now on the other side of this, that a lot of the dust has settled, that. Disney was basically, in part, doing this because Warner Bros. Discovery, or as I like to call them, Disco [00:03:00] Bros. Fucked up the handling and negotiations around the NBA and lost the NBA. So now you had a sports package in Venu that had no basketball on it basically. Well, they had the ESPN basketball, but lost a lot of the basketball that WBD was bringing to the table. And so you now have this 40, 45$ a month subscription that lost a decent amount of its value. And what's, what's interesting is at CES, I talked to a couple of the other partners. In, in Venu and I said, I think this is going to be the death of Venu and they said, no, no, no, no, no, no. Venu will still go ahead. And I'm like, I don't, I don't know. And then today we found out that part of Disney's plan was to get out of Venu and use FUBU basically as its sports packaging inside live TV. And I think it's a, I think it's a brilliant move by Disney, which is not a phrase that I utter all that often. But you know, it really leaves the [00:04:00] other partners hanging. Marion Ranchet: But how about ESPN? Right, so Venu to me made little sense when I, I I, I, I had Disney you know, saying that they would go, they would roll out, you know, ESPN as in a, a purely OTT product, standalone, et cetera. So, which they're Evan Shapiro: doing. Yeah, they're doing that. Yeah. Marion Ranchet: That, that, that didn't, that didn't track. Right. So. I think it's, it's, they're putting their ducks in a row. And I would think that the content from Fox and Warner will somehow, you know, still fold somewhere. That's the Evan Shapiro: thing is like all that, all the Fox sports, all the, whatever WBD, Disco Brothers, Warner Brothers Discovery has left in sports, that'll all be in Fubo. Right. You'll still get the final four in Fubo. You still get the NFL. And college football from Fox on Fubo. So Disney basically eliminated the need for Venu by creating this fulsome [00:05:00] VMVPD with sports heavy packaging in it. And then you'll have the add on of ESPN plus streaming and, and these other sports. So, you know, I think, I think Bob Iger who had some, you know, weak moments in the last couple of years. Is really taking this last year as CEO and proving himself as the consummate dealmaker and mover and shaker in Hollywood. Hopefully he'll learn how to drop the mic and get the fuck out this time. Instead of operating behind the scenes of his chosen successor and cutting them off at the knees. But we'll, I guess we'll see. So let's, let's take this and move this. Oh, one last thing actually on that. Fubo's, I don't, you, have you ever used Fubo? You probably haven't. Marion Ranchet: So, no, cause it's a US only product. Yeah. But so one thing that I wanted to, to add, and I actually posted about it earlier today was the international angle to, to this deal. I don't think this was done for this, but three years ago, Fubo acquired a virtual MVPD called Molotov, [00:06:00] a French company. Which has 4 million MAUs less than half a million of paid subs. It's, it's the only virtual MVPD on the French market that is dominated by, by four telcos. Right. Orange, Bouygues, Free and, and SFR. And what happened was that in December actually Disney lost a distribution deal with Canal Plus, and they had. A big multifaceted deal with Canal. Canal has, you know, close to 10 million pay TV subs, so it's a major partner on the French market. It's not a virtual, it's, it's. a MVPD. And so it means that Canal Plus no longer has Disney Plus, but you know, the same goes for Disney Plus. Disney used to sell the first pay TV window movies to Canal Plus. You know, those movies are going to be nowhere to be seen. And then they had some linear channels that were exclusive to, to, to Canal. And so actually a few of [00:07:00] them have been taken to other pay TV platform in France. So they managed to save the couple. But I've been thinking about whether, you know, Molotov could be that mini playground where, you know, Disney could actually build. I think that's really, really smart. Hulu, I don't know. You know, so Disney Evan Shapiro: uses Molotov through FUBU to kind of create leverage in the marketplace against the, the French carriers. Like Yeah, if it's Marion Ranchet: small, it means that they have their own playground. Well, but they Evan Shapiro: have, they can threaten, they can say, well, we'll just take our content and take it. There gonna be, yeah. And they're gonna be with the others Marion Ranchet: as well. And, and I'll be on well, it's not a prediction necessarily for 2025, although. But, you know, Disney and Canal Plus are gonna patch things up. This happened actually a year and a half ago between Warner and Canal. They spent a year apart. But then, you know Warner had to launch HBO Max and, you know, they needed Canal so, and they managed to patch things up. So Evan Shapiro: yeah. So I think, I think at the end of the day, you know, Venue was basically a pawn, a negotiating pawn in, in [00:08:00] this larger game and it feels like Molotov may wind up playing the same role there. Okay. Let's take a quick side note here. Cause I have, I was doing the, I dropped my new map a couple of days ago or just before CES. And I had to separate Canal Plus from Vivendi and can you explain what happened there? So Canal Plus got spun off as its own public company outside of Vivendi and now Vivendi is much smaller as a, as a consequence of that. Why did that happen? And, and this is kind of like a reverse M&A; A, like it's a, it's a, it's an R&A removal. Marion Ranchet: Yeah. Yeah. Yeah. Yeah. So. Actually, so Vivendi has so much, right, they have Ubisoft, so gaming they had Dailymotion, which is a French YouTube, Universal Music there's a publishing business, there's Canal there's Havas, which is advertising, there's so much under this thing. And so they've decided to essentially, you know parse things [00:09:00] out and each company is becoming its own standalone public company. I think they're a bit disappointed, so the Canal Plus, I think, joined the London Stock Exchange. Another company went Amsterdam, et cetera. And yeah, they're, they're trading you know, lower than expected. For Canal I think it's a way to give them the, the margin to go do things, right? Because it's, it's not just a French company. It's a French company, but it, it is across international markets. So as I said, you know, 10 million in France but they're in Africa, very strong. They are actually about to take over Multi choice. They have a stake in Viaplay around 29 percent in the Nordics. They have, they bought M7 a few years ago, so they actually have business in the Netherlands, Central Eastern Europe. They've invested in Viu. Not another Venu, Viu, which is an Asian service. [00:10:00] So I think they have, you know, more space to go do, you know, whatever they need to do to become a global pay TV player. Evan Shapiro: It also seems to be, there, there seems to be this movement to de complicate these companies so that the markets know how to treat them a little bit more. So, in a way, it's Marion Ranchet: similar to what the guys want to do on your side of the ocean with the, you know, splitting the cable business. Evan Shapiro: Yeah, yeah, yeah. Marion Ranchet: We're ahead of you guys, huh? On this side of the first time. Evan Shapiro: Yeah, yeah, yeah. Marion Ranchet: Yeah, for once. Give it, give it to us. Evan Shapiro: No, no, no. I, I was fascinated by it cause I, I, and I knew it was happening, but then I went to Vivendi's market capitalization and it was half of what it was. I'm like, what happened? Oh, right. Oh, they spat out the most valuable parts of that company. All right. So let's talk about what this means to the rest of M&A; and, and, you know, frankly, what, what these mergers & acquisitions and repositioning is really due to the marketplace. There's this interesting stat that I often quote from The Harvard Business Review which is that 75 percent of major mergers and acquisitions of these type fail. And that's a big [00:11:00] number. It is. And, and I think most of the reason for that is cultural. You know, the idea that when you combine very different companies even if they kind of do the same business the cultures are very different. And, and I think, you know, the Warner Brothers Discovery, Disco Brothers combo, I think has demonstrated that very well, that it still hasn't necessarily melded together the way that they, that they had wanted to but let's look at Skydance and Paramount as a, as a really good example, that, that merger, that merger. Should consummate very soon. We'll see. There's still people fighting it, oddly. But there was this huge piece in Forbes last week written about the turmoil internally at Paramount in the lead up to this merger. And I'm just curious as to whether or not this, A, does this merger work? B, where are the big pain points from merging Skydance and Paramount? And you know, frankly, at the end of the day, is there an actual point to it? Or is it [00:12:00] just Sherry Redstone? I'm really curious as to what you think about that, you know, from your distance over there. Marion Ranchet: So I think another reason why mergers sometimes fail, and I think AT&T and WBD was another good example of one that didn't work was sometimes it's a stretch because it's folks thinking that, you know, some sort of vertical integration is going to, is going to work. And in the end, you know the businesses, the mindsets are to your point, two different. Paramount Skydance. I mean, on the content side I, I see value in that and I think it's great for the creative community to still have this, this outlet versus having, you know, Paramount merge with, you know, a Warner or Sony. So I think this one I see going through quite nicely. I wonder about Pluto, Paramount Plus, you know, all that business that feels like, you know, further away for Skydance and Ellison, but, you know, I could be wrong. [00:13:00] Evan Shapiro: Well, I think the one thing that that Ellison brings to the table is his dad. And Oracle in particular and a tech point of view that Paramount really has not had. So if you look at Paramount's tech stack, it's. It's not good. It's not a great tech stack. And, and the various platforms don't really integrate as well as they, as they potentially should have. And by the way, they're not alone. Most of big media you know, Disney bought ML BAM tech a couple of years ago and just fucked it up. I mean, they just, it just doesn't even really exist anymore. Fubo makes a lot of sense for Hulu is their interface is substantially better. Even though they have far fewer resources than Hulu lives interface is so so I do think you know, there's a good tech point of view that baby Ellison brings to the table that no one in internally at Paramount has really [00:14:00] had which brings me to the, the, the other big merger that, that, that is happening, or it was announced just around. The end of the year, which is this IPG/OMG merger. And look, I think, you know, fewer holdcos swimming around the world is probably best for everyone. I don't know that we need these, these massive holdco complicated things. So now there's going to be one less of them, but you have all these sub brands, sub agencies inside both of these ecosystems. What the heck do you, I mean, I don't know how well you, you, you swim in the advertising agency world, but. You know, what do you think is going to happen when these two massive whole codes come together? What, what, what won't work there? What will work there? What is the net result of this company? And what was the point of this? I mean, why, why go through it? Cause this is going to be very painful. Lots of people are going to lose their jobs. It's going to take a lot of work and bandwidth and attention for this company [00:15:00] to focus on merging these two massive portfolios. That's, that can be incredibly, incredibly distracting. Not just expensive, it's expensive, but it's also, from a bandwidth standpoint and a time and attention standpoint, really, really distracting. I'm curious as to your point of view on that. Marion Ranchet: Well, actually, you're asking all the questions I wanted to ask you because I'm not so familiar with the agency worlds. So yeah, I'm going to send it back to you. Evan Shapiro: Yeah. I think, look, someone very smart said to me from a competing agency That this was all about the media and getting leverage on media so that they had now have even more power out there in the media buying world to create good deals for themselves and for their clients. But then on the flip side. If you look at what's been happening in the advertising world in the last decade first of all, clients are just, there's no loyalty at all anymore. Zero. They, you know, used to be with an agency for decades and decades and [00:16:00] decades and now, you know, the average lifespan of a CMO at a company is now 18 months. And every time a CMO changes, there's usually an agency review. And so, you know, agency review after agency review after agency review. And I think part of the motivation here for OMG in particular was to create such leverage in the marketplace where they could create deals and prices and, and, and pressure on the, the sales side to create opportunity for their clients that was exclusive to OMG just because of the scale that they bring to the table. So I think that's the main point of it, if, if I had to take a, take a guess. And I don't know, I mean, A, I, I, I think that's not unsmart. It's not unwise. But in an era where Google and Meta and Amazon control so much of the ad inventory out there and [00:17:00] these walled gardens are so powerful, you know, I don't know that an agency could possibly ever get big enough. to create the leverage that's necessary. And so it does feel like a lot of sturm and drang you know, that I don't know, know that it's going to ultimately pay off. Marion Ranchet: Yeah. Is it going to pay off? Yeah. Cause in the meantime, they'll be busy with getting this approved or restructuring. Others will be focused on, you know, innovating, of course, bringing AI, of course, being, you know, a better measurement, et cetera. So, yeah. Evan Shapiro: Yeah, I, I, I went through, so years and years ago on a much smaller scale, I was running IFC at what is now called AMC networks. And then I was charged with helping purchase Sundance channel and bring that into the, into the fold. And then the integration of those two independent channels. Until one operation stole my year. Yeah. You know what I mean? I, I, I couldn't concentrate on anything else [00:18:00] for a year. Was just this acquisition and the integration and who do we fire and who do we keep and how do we differentiate and all that kind of stuff. I mean, it, it, I mean, I learned a lot. I'm really glad to have gone through it, but I literally did nothing else for a year, but focus on that thing. And that was a much teenier. Circumstance than, than what's going on here, you know, fathom what, what the, the leadership and then the workforce at these two agencies are going to have to do just to integrate these two companies. I just, it's just really kind of confounding as to why someone would choose to basically take that bite at the apple. It's, it's a lot of work and it doesn't always, most times it does not pay off. And that's, you know, that gets to, I think, another topic that, you know, there's going to be a lot, and I'm going to drop an article on Monday about, you know, a game of risk, who's going to buy whom. I'm going to kind of tail off of this in the coming year.[00:19:00] And I'm always wrong. I thought Apple was going to buy Marion Ranchet: I got, I got wrong a few times, so I've actually started to stay clear of the topic in my prediction. I think that was two years ago, I had Apple buying Roku, but I think that was wishful thinking on my part. Evan Shapiro: Yeah, yeah, I think that, I understand where you're coming from, and I think actually Roku will sell in the next 12 to 18 months because I just, again, a scale issue on, on their behalf. They are 50 percent of the U. S. market from an OS standpoint, but on the other hand, globally, they're still, you know, 5, 6, 7%. And so, you know, how do you compete against Amazon and Google and Samsung? Like Samsung's the smallest of those three monsters, right? So, you know, I, I do think Roku, and I, I honestly believe that it's, that it's Microsoft. Yeah. You know's, get it where Roku best fits. They complement each other. They, they, there's zero overlap, right? So there's gonna be very little pain in combining those two things together. [00:20:00] But there's this other element of the M&A game. You know, we like to play these, these parlor games playing who's gonna buy and whom and who's gonna marry whom. But at the end of the day, it means people are gonna lose their jobs. Yeah, true. There were 15,000 jobs lost in median entertainment last year. I think, you know, the M& A mania is gonna, you know, facilitate an even larger loss of jobs in the next 12 months. Is that your takeaway? Marion Ranchet: Yeah. A hundred percent. Absolutely. I couldn't find, I was looking for, I saw this number for the U. S. and I, I couldn't find a number for Europe. So, you know, to listener, you know, if anyone has, you know, insights on maybe EU5 markets the impact of of layoffs in the region you know, I'm, I'm game. Yeah. But yeah, I absolutely agree. Just on Roku, one thing that you should not, you know forget is this is one of the few companies that is still founder led and anyone who [00:21:00] knows, you know, Anthony Wood is, is, I think he's struggling to let go of, of his baby. So I think it's going to take more time than we think. And in between Microsoft, I'd put Apple there because again, sorry, I'm doing it again, I said, I wouldn't, but I'm putting it again. Evan Shapiro: Yeah, Marion Ranchet: but between the two, because my concern with Microsoft is that yes, there's zero overlap, but there's zero overlap. And so they're not in the TV business. Well, they are, they are Evan Shapiro: and they're not. So they bought Zander a couple of years ago and they had that. What now turns out to be a terrible deal for them with Netflix in the Yeah, they got dropped, Marion Ranchet: right? They're going to get dropped. So, I think it's Evan Shapiro: over, yeah. I think it ended at the Yeah. So, So, Marion Ranchet: Whereas Apple, to me, there's that missing piece in their device ecosystem, like they're not doing anything with the Apple TV devices anymore. They've never made their own TV. I mean, I don't get it, right? I really [00:22:00] don't get it. So I know they love devices that you can put in your pockets and yes, you can't put a TV in your pocket. But, I think there's something missing here. Apple, Evan Shapiro: Apple, Apple traditionally doesn't buy things though, so I, you know, I, I, I, I've, I've said that Apple should have bought Paramount. Yeah. I do believe they're going to wind up getting into the bidding wars for at least the pieces, if not the whole thing of Warner Brothers Discovery, or as I call them, Disco Brothers. Marion Ranchet: Okay. Evan Shapiro: Mostly for the library. You know, look, you look at the Warner Brothers Discovery Library app after Disney. It's the greatest collection of video intellectual property on the planet. You've got all of Discovery, all of HGTV, and they own that content outright and they have a really great global footprint. Then DC universe you have Hanna Barbera, you have all that Cartoon Network content that they own. And I just think, you know, there's just too good a collection of intellectual property there. And that's the one thing that Apple really, like, they make [00:23:00] great TV shows. I think Apple has a better batting average on TV shows than any other service out there. Yeah, but no one's watching or Marion Ranchet: not enough. Yeah. Evan Shapiro: Right. Not nearly enough to, to really truly compete out there in the marketplace. So, you know, think of, they just announced that they're tripling down on their news product, right? Think about CNN inside you know, as the operating system of Apple News. You know, think of the Batman and Superman and Wonder Woman and Aquaman and Green Lantern and all of that IP swirling around the arcade ecosystem for Apple and all the rest of their television operations. You know, I, I think here's the thing you need to know about Apple, despite the fact that they're currently the most valuable company in the history of humankind they're having a rough patch. iPhone sales are flat or down. None of their other hardware is growing at all. It's actually shrinking. They're about to get whacked in [00:24:00] court with the payment system in the app store, which is a big part of their services revenue. And their services revenue is the only segment of Apple that is growing. And, and you and I just discussed this. What are they missing? Content. And I think, I think that's where Warner Bros. Discovery comes in, it comes into play there. But when it comes back to Roku, I just don't think, you know, as, as much as Anthony is in love with his own product, as you said about Roku, Apple, boy, no one's ever loved their own products more than Apple loves their products. And for good reason. We all, you know, we are all fans as well. But I just feel like a hardware purchase is something that would be like admitting that they failed. And I don't think Tim Cook is very good at that. He's Marion Ranchet: ready to do that. Okay, cool. What else do you have? Okay. Evan Shapiro: I, I, I really do think that we're going to see some movement in the gaming industry in particular now that Activision, and that's the other thing is Microsoft does buy stuff, right? So they just swallowed for [00:25:00] 69 billion, I think, Activision and they're done with that kind of movement there. Now I do feel like they're going to concentrate on the living room. That's why I do feel like they're going to make a play at TV in particular Roku is really the only one that makes sense because you can't buy a Samsung, you can't buy an LG. These are family run businesses and it's just very doubtful that those would be approved either. Whereas Roku is, you know, exclusively American business. But I think in gaming, that's where in reaction to the Activision acquisition I think EA and Take Two, you know, a merger of those two companies. Puts them on a scale that you know, really does level them up to the next rung. Right now, they're just babies in comparison to the Sony, Microsoft, Nintendo, Tencent oligarchy in gaming. And I think you know, EA and Take Two, you know, they've had okay years, but not really that great. Not great enough to, to, to, you know, [00:26:00] give investors hope that they're going to continue to grow endlessly. Combining those two together gives you a much bigger powerhouse in console, live streaming gaming, and mobile gaming that I think both of those companies have. Really, really need. So, I, I, I would look towards gaming for some M&A. I think Sony, who's, you know, nearing their all time high valuation, I do think that they might be a buyer this year. I think Nintendo who, you know, has this pendulum swing based on when the Switch comes out. So, you know, they've had good years, they've had bad years, they've had good years, and it really does cycle up and down. I think they may be a buyer in the coming in the coming year, and there's some really good properties out there to go get, and I think they're kind of, you know, in the bargain bin right now, because gaming, like the rest of media, has not had a tremendous 23, 24. So that would be my bet is that I think there's going to be some some real movement in the M&A in gaming in particular. Marion Ranchet: I have one, I have two on [00:27:00] broadcasting, you know, linear TV, this, this old thing. Remember that? Marion Ranchet: So there's so there's chatters around, you know, some interested companies like TF1 and, and to ITV Yeah, well, ITV, there's, yeah, ITV studios, splitting so I don't know, some people say that this, this was out as, as a, as a way to, you know, test the field and there's nothing, you know, concrete about it, but, Evan Shapiro: So they're just like floating trial balloons out there in the marketplace talking about it? Marion Ranchet: Someone mentioned that, but is it a way of being like, you know, trying to find the response? You know, is there, what's the response of the market, et cetera. So I don't know whether that would happen. I think TF1 is that could be one because I'm seeing TF1 as a French company they've launched in Belgium, they are going after other French speaking markets, but, [00:28:00] you know, if I were them, I'd be, I need to expand my playground because everyone I'm competing against has a global footprint. So that would make sense to see a French company going after assets in other European, you know, territories. Evan Shapiro: Well, and as you said, you know, France media has had a really good, you know, in our Yeah, it's had a really good Marion Ranchet: year. Yeah, exactly. So that's one that I have on my list. You have MFE, which is Media for Europe. So that belongs to, that's an Italian, well, you know, in the background Italian, it has assets in Spain as well, and it's growing its share of ProSieben. Which is a German, the German commercial broadcaster. So is there a moment where, you know, they, they completely take over? You've actually send some signals saying that, you know, the ProSieben needs to speed up on you know, going back to growth, etc, etc. So there's some pressure. So those are two things. And then one that is [00:29:00] more me wishful thinking, but in Europe, it's insane, the amount of telcos that we have in each of the markets and. Too much fragmentation. And so one just got approved, Sunrise Switzerland buying Vodafone Italia. In France, when you look at it, you have, you have four, right? So I think we're going to see some more. Yeah. And that happened, that happened Evan Shapiro: here with Sprint and T Mobile combining. So yeah, I think that's probably a really, really, really good call. But those tend to Marion Ranchet: be lengthy, lengthy things because talk about Utilities Evan Shapiro: and the, and the government gets involved and Yeah, Marion Ranchet: exactly. Yeah, no, I Evan Shapiro: think I think that's a really good call. I think that's really smart that there's, you know, you, you fragment that. It's a good market. You know, it's a good business to be in, being a utility. It's not huge growth, but it is very steady income. But if you fragment the market too much, it's not really, it winds up actually not being in the best interest of the consumer, interestingly enough. But I have one that, that I wrote about in, [00:30:00] in my, in my top 10 list for predictions for the year. I don't think we got into it in the, in the pod prediction episode. But one that, that I really want your read on, which is, I, I think there's going to be a merging, and this is not a corporate merger, but a merging of the public broadcasters in the UK. Just as a quick piece of background, only one of the public broadcasters, one of, only one of the public service media companies in the UK, BBC, is actually funded by the BBC. You know, the government, the others you know, Channel4, ITV, Channel5 is actually owned by, by Paramount now. But they have to go out and sell advertising and, you know, generate revenue out on their own. And, you know, it just doesn't seem that having four public broadcasters in a market the size of, you know, the UK. Now that you're actually, you know, tasked with competing with Netflix and YouTube and Amazon and Warner [00:31:00] Brothers, Disney it just feels as if there's a moment here to, you know, bring all these players together and create a much better public service media, not better, let me, let me, let me amend that, much more efficient and, you know, sustainable public service media because they all make great programming. But it's just, it's really hard and you look back at the news about these companies in the last year, they've had really, really hard times in the last couple of years. Marion Ranchet: Okay, let's say something like that happened, that could be Channel 5 maybe being sold, but I don't necessarily see all of them coming together. Channel 5 out of the, the, the four broadcasters are the one who have seen their BVOD, so Broadcaster Video On Demand Service, which is essentially the streaming, you know, outlet of their TV channel. You know, it's, it's, it's a much smaller portion of their business than, than the others. When we all know that everyone needs to transition, have a [00:32:00] solid linear business, make sure that, you know, they keep it afloat, but find that next big thing that's going to keep them relevant to, you know existing and future, you know view viewers generation. So. Could Paramount and Ellison be like, you know, what will I do with it? And then have it sold. Evan Shapiro: Yeah. And it's very old school compared to the rest of the business as well. The four broadcasters combined for something called Freely you know, last year, which is this operating system level app. That is basically all four broadcasters wound in together, live TV on demand, one EPG for all four. And to me, that's admitting that that's what the public wants. They don't want four different apps. They want one app for public service, free television, and then Netflix sits next to it and Prime sits next to it. You know, I think that, I think that was a kind of, not just, it wasn't them predicting that this was going to happen, but it's, it was them admitting [00:33:00] that it probably should. All right. Marion Ranchet: Well, I don't know because Freely folks, it's the IP version of something that existed already for, you know, terrestrial TV, you know, satellite TV. So they did Freeview, they did Freesat, they've been working together for 20 years. I think that's And, and, you know, they've been going alone and together well for the last 20 years you know, do the conditions today call for, you know, having less and then some of them joining, I don't know, but really behind this, what's more important is what they're saying is folks are moving to streaming well, IP only homes. So, that's their way. Well, in fact, there's Evan Shapiro: a public mandate, there's a law that's gonna move all consumers to digital only television sets. And so, this is kind of, you know, a precursor to that happening. Marion Ranchet: Usages are changing, people are gonna be, you know, IP only homes within [00:34:00] the next X years. Although, a lot of people are saying that you still need to cater to folks who will not make that move. And let's be clear in different places across any of the European markets, you have things called white zones and it's places where it's difficult to actually have the internet. Yeah. Same here. So, you know, switching off the signal, not so great. You're actually, you know, building a bit of a fracture between those who can access internet, those who cannot, right? So, well, and ultimately it Evan Shapiro: winds up being, being a an economic class structure, you know, division, you know, a segment segregation by, by, by economic you know resources. And that's, you know, that's not really, that's how you get, that's how you entrench those things even, even greater is you create a wider divide. So yeah, I think people talk, when they talk about M&A, I think there, there's, This, this tendency to, to look, you know, from an, from an American point of view, you know, from the, from the ugly American point of view, we look at the commercial entities only, but I do think there's going to [00:35:00] be, and, and, you know, the UK is the most obvious for us to discuss because it's the next most important television market outside of the U. S. But I do think you're going to, you know, wind up seeing some public service broadcasters you know, really start to consider maybe we should, you know, combine forces. There's this great Alan Wolk, I'm going to quote him again this great quote he likes to put out there from Ben Franklin all the time, which is we should all hang together or surely we will hang apart and and that to me in television in particular, when you look at the big tech invasion in TV. You know, by Google and Amazon and soon to be, I think, you know, Microsoft and potential, and then you have Apple, obviously, and I think NVIDIA gets in the television business in the next couple of years, you know, how does a public service broadcaster, you know, combat that? And to me, it's, it's. You know, allyship, it's merging, it's, you know, combining of resources and [00:36:00] elimination of duplication of overhead. But, you know, I think we've seen Marion Ranchet: more of that, right? These past few months. Exactly. And that's, that's one of the prediction we spoke about in the previous pod about, you know, partnership. So. I, I, I don't know about the M&A because again, you know, a lot of public, a lot of regulation. I'm, I'm, I'm not so sure, even, even in France you know, merging all of the, the, the, the, the public companies in different ecosystems, meaning radio, TV, et cetera. It's it's been a bit of a headache, so I don't know about that, but a hundred percent on partnerships and we've seen a lot of that. ARD, ZDF in Germany, they have a technology partnership. They're trying to have a similar backend on their streaming services. I mentioned RTL and ProSieben. Those are not public. Those are commercial, but you know, on ad technology. Again in France TF1 is now carrying France Television's [00:37:00] content, Arte's content. And so. There's gonna be a lot of, you know crossover a lot of partnership. M&A, I'm not so sure, but, you know, we'll take the lead in New Year's time, and we'll see. And I Evan Shapiro: think, and, and let's wrap this up here, but I, I think you and I agree that the best way for media You know, you know, pure media to play against big tech is to collaborate, to work together and, and because otherwise there's, you know, what big tech looks at and laughs when they look at big media is our inability to work together to create a bulwark against, you know, big text power on all media. Anyway, this has been a great episode. This is proving, like, this is as much, I think, us getting together and comparing notes as it is a podcast for other people. Marion Ranchet: I've spent the whole week like thinking, ah, one of, cause I have a few cool things happening every week, but like this new, you know, meetup where we chat and then we share with folks. I love it. I love it. Yeah, [00:38:00] I'm having a great time. It doesn't feel like work. Right. Evan Shapiro: It does not feel like work. It is, it's a lot of fun. And we just blew through by the time in next to no time. So this is great. Thanks for listening out there. I am Evan Shapiro. That is Marion Ranchet. Marion, your newsletter is? Marion Ranchet: Streaming Made Easy. And I actually have some news about that. I'm taking it premium, right? So it's been two years where, you know, it's been free for all. I've been urging you to do this. Yeah, yeah, yeah. Absolutely. But it's, it's tough. It's tough. But so I've just launched last week and for, you know, listeners of the pod we'll put in the show notes a little discount code. And if you want to grab a year with a discount, you know, come over. There's going to be more content, you know, a different format, something for, for everyone. So hope you join. Evan Shapiro: Well, Mazel tov. I'm really happy for you. Marion Ranchet: Thanks. Evan Shapiro: And my newsletter is Media War and Peace. You can subscribe to it wherever you get your newsletters. This has been great. It's been great to see you, Marion. We will see you next [00:39:00] time on the Media Odyssey.