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WE KNOW WHAT MEDIA DID THIS SUMMER · The Media Odyssey

• Marion Ranchet: [00:00:00] Welcome to the Media Odyssey podcast. That is Evan Shapiro. Evan Shapiro: And that is Marion Ranchet. Marion Ranchet: We were on a break this summer. It felt amazing, but we're back for season three. This is season three of TMO. We have a packed agenda for today [00:00:15] because you guys at media, we know what you did this summer. [00:00:30] Evan, I wanna get you started on the World Cup. Evan Shapiro: Okay. Marion Ranchet: 'Cause this, this was massive, I think, for you guys. It's like you've discovered football in a way. [00:00:45] Evan Shapiro: Yeah, the US really did catch World Cup fever, I would say. And despite the most boring final in sports history, one goal in 130 minutes [00:01:00] or something like that, and it wasn't even like... anyway. But it was exciting, and everybody here caught football fever. I don't know if it's gonna translate to MLS viewership. I actually don't think it will, [00:01:15] because it's the same way people don't watch track and field except for the Olympics, right? They don't really watch a lot of the sports that take place in these global contests until the global contests take place. But that said, the [00:01:30] World Cup comes back again next year for the women, and the US women actually have a really good shot, as they've won twice before, to win again. It could keep going. But I think the bigger story here, and I think the thing that, I know [00:01:45] you don't wanna talk about is France. Marion Ranchet: I don't mind. Evan Shapiro: You don't mind? Okay. That was a tough, that was a tough loss. But I think the bigger story here is the viewership across all platforms was record-breaking, [00:02:00] not just on TV — but on TV it was record-breaking, here in the US, around the world. But then in addition to that, it was also record-breaking on every other platform. CazéTV in Brazil [00:02:15] broke the world record for concurrent streams five times during the World Cup. Marion Ranchet: Yep. Evan Shapiro: Ending with 24 million concurrent streams for Brazil in Japan. At the same time, in that same country, Globo broke their own record, [00:02:30] with 70 million viewers live on the telly. And then here in the US it was massive as well. I don't know what the viewership was, let's say, in the UK or France or any other territories. Marion Ranchet: So if you look at the BBC, it was like [00:02:45] 33% of all streaming activity during the tournament went to the World Cup, right? So I think it's less a surprise for us how dominant, how predominant it's been for so many weeks for all of us. I think [00:03:00] what's been interesting is that we were worried about the fact that it was an expanded version of the tournament. Meaning that you had many more games than perhaps you would normally have in what we call in French "poulet," which is chicken. The chicken [00:03:15] phase. It's a bit weird, I know. But ultimately, I think we just, we love football, and it's the one thing that we just can't get enough of. So no surprise there. I think we've seen similar things in terms of that [00:03:30] halo effect, and I have to give it to FIFA. Whether that's working with YouTube creators, TikTok and the likes, it really felt like a very 360 World Cup. And I think we needed that, because [00:03:45] the time gap, oh my god, I was sleep deprived by the time it ended, mid-July. It was rough. Evan Shapiro: You were watching at like midnight. Marion Ranchet: Yeah, some games. We were actually lucky, most of our games were before midnight. But even at [00:04:00] 11:00 PM, when you gotta go to work the next day, et cetera, it was rough. A friend of mine actually did those crazy tricks — 3:00 AM, 6:00 AM games, et cetera. So we've seen the same thing. The one thing that I will note, though, is it because it was in the US? I don't know, but it's one of the [00:04:15] World Cups most full of stories that we really couldn't care less about. That's not what we want, right? So, the red cards. Evan Shapiro: Like, what? Oh, the red cards... Marion Ranchet: The red cards, you know, [00:04:30] Trump. Evan Shapiro: Welcome to Trump's World Cup. Marion Ranchet: Yeah, exactly. FIFA, it — Evan Shapiro: It was terrible. Yeah, it was embarrassing. Marion Ranchet: Trump hugging the, at the end. And it was so funny, I don't know if you saw, but even Gianni Infantino, who's the biggest jerk of all time, big tie [00:04:45] with Trump, actually told Trump, "No, this is the moment where you gotta get out of the picture, let the Spanish team enjoy," right? And I don't know if you saw it, but the next day they actually erased Trump from the picture. They [00:05:00] found a way to remove him. Evan Shapiro: That's awesome. Marion Ranchet: So he was gone. Evan Shapiro: Spain really hates him, don't they? They're not a big fan of him, so imagine. Marion Ranchet: Yeah. Who does? To be fair, who does? Evan Shapiro: There are people. There are apparently people. He is [00:05:15] president of the United States, but it was really the first creator World Cup, without question. FIFA leaned very hard into creators, and everybody makes a big deal, I wanna talk about this a bunch, [00:05:30] everybody makes a big deal about the viewership of the World Cup on YouTube, and there were about 2.4 billion hours of World Cup content watched on YouTube, which includes the matches on CazéTV, both in Brazil and in Portugal, [00:05:45] live-mode, we'd like you to know. But then also, clip culture has really proliferated, and sport has become a clip-culture poster child. But TikTok actually totally eclipsed YouTube's viewership. 10 [00:06:00] times: 24 billion hours of World Cup content watched on TikTok, and there weren't full matches on TikTok, right? So you've got Goalhanger and The Overlap and all these other folks posting clips and [00:06:15] talking about the World Cup. So clip culture and the conversation around the World Cup matches really eclipsed the total amount of content watched in the match itself. And I think that's something — [00:06:30] I'm wearing a Philadelphia Sixers jersey here, Tyrese Maxey, and we got LeBron James over the summer, but the NBA has become a clip-culture sport. People watch the games, and actually last [00:06:45] season the NBA had a record year on TV, but the clip-culture content is eclipsing the television. Marion Ranchet: Which is exactly what Scott Melvin, we had him on in June, [00:07:00] the day we kicked off the World Cup — he was there with us from The Overlap. He's the executive director of The Overlap, and he said, "It's gonna be around the clips, it's gonna be that conversation around..." If you remember, they actually took a different stance versus [00:07:15] Goalhanger, in that these guys had a daily show. The Overlap — Gary Neville, he was on ITV pretty much every day, so he had that covered already. But instead of trying to do that daily thing and playing catch-up [00:07:30] all the time, it was like, "We're gonna build a conversation around it, and it's gonna be a couple of episodes here and there, and we're gonna focus on, again, clips and everything." And you mentioned something on TikTok. I think aside from the creators themselves, and those who [00:07:45] were perhaps approved creators and those who were not, it's also any user on the platform who had something to say. And I think you gave us a lot of things to say as well. So we've mentioned the red card, we've mentioned that final image with Trump. We [00:08:00] had the advertising breaks. Those, yeah, we hated. Oh, can we talk about the half break, oh my god, of the final? Evan Shapiro: In the finals? Oh, that was awful. Marion Ranchet: Oh my god. Evan Shapiro: That was embarrassing. Marion Ranchet: We hate you for this. Evan Shapiro: That was awful. I was embarrassed. We were doing okay, [00:08:15] America was doing fine up until that point, and then Madonna came out, and Bieber — what the hell? Was Bieber in some, he wasn't even at the, he's singing this sad song. That was embarrassing, actually. Marion Ranchet: And so, I don't watch [00:08:30] the NFL, but it's the one thing that I watch — the halftime show — so I get it. But there's a moment in time where you need to respect, especially because you're cutting the match for half an hour. This could be [00:08:45] decisive, any other way. Honestly, I was worried that perhaps the Spanish would lose their concentration and Argentina would win. Yes, I was for Spain, not Argentina. Evan Shapiro: I don't know. I don't, [00:09:00] I think the halftime show was a good concept, meaning, first of all, it was very hot here, and so to give them a break, I think was not a terrible thing. And second of all, I think it was a good idea to have a halftime show like the Super Bowl, but [00:09:15] do a better job. That was the most embarrassing, have Bieber perform, but have him do what he did at Coachella, which is perform his hits — not this, I don't know, he was doing Jim Croce all of a sudden, which is a reference no one will get other than me. Marion Ranchet: It was half-baked. It was, if you [00:09:30] do it well... Evan Shapiro: It was very half-baked. Marion Ranchet: Yeah, the only thing, with the water breaks, it's an interesting one, right? We haven't seen numbers, but it's said that it generated perhaps, I've seen 250 billion for Fox. That was an [00:09:45] estimation, we haven't seen anything. But what I'm sad about is that the French broadcaster managed to sell pretty much all of those. So every time I was watching a game, I saw these breaks, et cetera. [00:10:00] And we know how much they need that linear ad money. So this is gonna keep happening now, regardless of where it is. I have a feeling. Evan Shapiro: Yeah, and it's really strange — that's kind of one of those great cultural differences between the US and the rest of the world: [00:10:15] we watch a football match, an NFL football match, or "game," as we call it here — it's only 60 minutes of play, right? But it takes three hours to watch. And so we're [00:10:30] inured to the ad breaks here, and in fact they were small and insignificant compared to NBA and NFL games. You're gonna have to go through the bullshit that we have to go through. Now, here [00:10:45] in the US, in the Super Bowl, the ads are actually the best part very often. The game, unless the Eagles are beating the Kansas City Chiefs, as they did two years ago, the game is not really the best part. The ads, people make ads specifically for the Super Bowl. So I [00:11:00] could see that becoming a norm for the World Cup going forward. But get ready, 'cause you're finally catching up to what we have to go through. Marion Ranchet: No. I'm an old fart, so I wanna go back to the good [00:11:15] old days, I don't want your newish stuff. Evan Shapiro: Ah, the good old days.Make football great again. Marion Ranchet: Yeah, exactly. You're ruining everything for us. Anyway, the good thing out of everything, of course you had the World Cup, and of course Gianni Infantino, in his infinite wisdom, decided that he [00:11:30] would potentially privatize FIFA and enable the Kushners to buy some stake in it, et cetera. This did not happen. Evan Shapiro: He's the only person in the world more corrupt than our president, it's [00:11:45] very clear. He gave Trump a peace prize, all these things. And FIFA — if you haven't ever seen John Oliver's takedown of FIFA, it is the most spectacular thing. It's 20 [00:12:00] minutes of just bile and facts, and it is a glorious thing. It's on YouTube, you can go look at it now. But we should move on to the next topic, yeah? Marion Ranchet: So, one topic, I'm gonna be honest here. I've tuned [00:12:15] out. I'm tired, and I think you can guess which topic that is. It's the Paramount–Warner Bros mess. If you had to give me the lay of the land in two minutes, and why am I asking [00:12:30] this? Because I took a bit of a break from LinkedIn, but when I was back I was like, "Oh man, how many videos did you post about this?" Evan Shapiro: There's two things I would say about that. First of all, I've become kind of the commentator of the moment on [00:12:45] this topic. But two, about 90 days ago I decided to post every day on Instagram as an experiment, and it's worked really well. I've grown my Instagram following. I canceled Instagram about five years ago, 'cause Mark Zuckerberg is the devil, [00:13:00] and we can talk about that in a minute. But then, because of my daughter Jamie, she forced me to get back on Instagram for business. And so I just crossed 7,000 followers, please follow me on Instagram. But since I [00:13:15] started posting every day, I've grown my follower count by 55%, so that actually works really well. I know you're not on Instagram, you should be, at least just for this podcast. You should be on Instagram, and you would do very well. Marion Ranchet: I'm sure, [00:13:30] and you know who's tried to do that to me too? Your daughter Jamie. Evan Shapiro: She's messaging you all the time. Marion Ranchet: Yeah, "within a week, you would have X thousand." It was like, "oh my god, I don't know if I can do that." Evan Shapiro: Yeah, and it's good for biz. But anyway, so that's a [00:13:45] side note. That is a good tip, though, for those folks out there — if you don't wanna be on there for personal reasons, that's fine, I don't post anything personal on there. I only post stuff about business, and it's been very good for me here. Anyway, so I decided to [00:14:00] track this drama, because people seem to not really understand what's actually happening, and a lot of people get very confused because they don't understand the laws that are at play here. So the corrupt Justice Department of the United [00:14:15] States of America has decided, because Larry Ellison and Donald Trump are friends, to approve this merger without any kind of investigation. As a consequence, 12 state attorneys general — and "attorneys general" is the plural of "attorney general," [00:14:30] not "attorney generals" — including New York, California, Arizona, Oregon, Washington, and a whole bunch of other states representing over a third of the population of the United States, decided to sue to block this under what's called [00:14:45] Section 7 of the Clayton Act, which is an antitrust law here in the United States. And they are blocking because, by their terms, this represents a potential monopoly — more than 30% [00:15:00] of the cable television universe, and more than 27% of the film ecosystem, either by audience or box office, here in the United States. So they've decided to sue. And at several points, the judge in this case [00:15:15] has denied the Ellisons' motions to dismiss. The Ellisons tried to petition for a $1.8 billion bond by the states in case they lose — that was denied. The trial was set for next March. [00:15:30] Crucially, on October 1st, because David Ellison has too much belief in himself — Marion Ranchet: Yeah. Evan Shapiro: They agreed, Paramount agreed at the outset of this deal, to pay a [00:15:45] $7 million-per-day ticking fee starting on October 1st. $7 million a day for every day the deal doesn't close, whether or not the deal closes. So by the time the trial comes, if [00:16:00] there's no settlement, Paramount will have paid close to $1.3 billion in ticking fees. And remember, if the deal doesn't go through for any reason, Paramount owes Warner Bros [00:16:15] $7 billion in a breakup fee, on top of the ticking fee. So it's all additive. Now, they were supposed to get together, and this is where people get really confused. A couple of weeks ago they were supposed to get [00:16:30] together to have settlement talks — not because Rob Bonta, who's leading the charge, he's the state attorney general for the state of California — he's leading the charge not because he wants to settle, but because the judge in this case has [00:16:45] mandated that they at least make some kind of good-faith indication or effort to settle the case before it goes to trial, 'cause the trial will cost the government and the people of the United States a lot of money. So this is kinda standard. [00:17:00] And that Monday, the two parties were supposed to gather and compare notes on a mediator for arbitration, in a mandated magistrate settlement hearing. [00:17:15] That was the reason for that. It was court-appointed negotiations, not because the AGs are prepared to settle. And then Paramount, they don't admit to this, but Paramount obviously leaked this, saying that "oh, there's settlement [00:17:30] talks in the offing," and they did that to basically quiet down their investors, who are backing this deal because they're afraid of the ticking fee kicking in, and they wanted to create political pressure on Bonta to come to the table and settle. The states [00:17:45] attorneys general have mandated that the only thing they're gonna settle for is structural, foundational remedies. Which means selling parts of the cable assets. And it would mean selling a [00:18:00] third or more of the cable TV assets, and selling a piece of the film studio. And I've said the best description of this would be: selling all of the Turner networks [00:18:15] except CNN, plus BET, would satisfy what the AGs are looking for. And selling New Line Cinema — which is the home of the Lord of the Rings movies, would solve what the AGs are looking [00:18:30] for on the film side. I don't believe Ellison has ever considered doing either of these things. People have said, Lucas Shaw at Bloomberg said that Ellison floated this idea. I have never seen Ellison float anything close to these [00:18:45] types of structural remedies. They need the cash flow from Turner to pay off the $80 billion in debt that this deal would incorporate. So it is unlikely to settle in the very near future. Now, [00:19:00] Ellison could come to the table and offer that kind of structural remedy, and then the AGs would settle — they don't really wanna go to trial here, because again, it will cost the states a lot of money. Paramount leaked the news of this settlement talk, and then Bonta canceled — Marion Ranchet: Yeah, [00:19:15] I saw that. Evan Shapiro: — the meeting, very publicly. And then a couple of days ago, because they're in the pocket of the tangerine toddler in the White House, two other state attorneys general, from Montana and Iowa, which represent [00:19:30] 1% of the US population and have no standing in this case, they had filed with the Supreme Court to block the 12-state attorneys general suit to block the merger. That is very, very, very unlikely [00:19:45] to be taken up by the Supreme Court for numerous constitutional reasons, even with this very right-leaning Supreme Court. So here we are. There is no sign of a settlement in any form right now. [00:20:00] And if things continue, this will go to trial next March, which means the state attorneys general get to dig into the iPhones, emails, text messages, WhatsApp messages of Larry Ellison and David Ellison. I don't think they wanna [00:20:15] go through that search. So I don't think this deal closes. There's one more thing that I'll talk about. Larry Ellison has personally backed $40 billion of this $111 [00:20:30] billion deal. His fortune is entirely locked up in Oracle stock. He has used that as collateral against massive loans that he personally has taken, and Oracle's debt [00:20:45] itself is just an inch above being declared junk. If Oracle's debt gets declared junk, then Larry Ellison's fortune gets put in a collateral freeze — he can't access his stock, which means he [00:21:00] can't back this deal. That's a very likely outcome. And if he can't put up the $40 billion, this deal falls apart, and then they owe the $7 billion breakup fee, [00:21:15] and I think it winds up back in court, with Warner Bros suing Paramount. So that's the fastest summary I can give you on this case. Marion Ranchet: Good — you didn't do two minutes, but that's crystal clear. I have to be honest, I'd rather listen to that for 10 minutes than just be overflooded with [00:21:30] that topic, which I feel like has been super prevalent — and I get it, it is massive — but I love the recap. One thing, I'd be surprised if this doesn't get settled somehow, but let's see. Talking about settlements, something [00:21:45] happened again this summer. August is supposed to be boring, but apparently there's no rest for the wicked. Meta actually settled with the state of California, is it California, or just— Evan Shapiro: It was a bunch of state attorneys general, California [00:22:00] leading that. Do you know the facts of this case? Marion Ranchet: Yes, absolutely. I was very disappointed to see the amount of money, 'cause I think it's what, 18 billion, which is kind of pocket money, and I know the AGs wanted to go as high [00:22:15] as 200 billion, which is what Meta made last year. So how do you see this — is this a win? Are we talking smoke screen? 'Cause it feels like they're very content at Meta with this settlement. Evan Shapiro: I don't know if they're [00:22:30] content, but the state attorneys general were not in it for the money. There was a chance that Meta would owe as much as a trillion dollars in this case, 'cause this is about harming teens. [00:22:45] The facts in the case are, and it's obvious, because Meta admitted it, that they knowingly created an algorithm that fed teenagers and children harmful, [00:23:00] addictive content. In one piece of evidence, they determined that a young girl had anorexia, and they fed her content about [00:23:15] vomiting. It's just, it's like giving kids not cigarettes, but crack cocaine. Marion Ranchet: Yeah. Evan Shapiro: And the attorneys general, the money was not the point here. The point — Marion Ranchet: No, I [00:23:30] know, but — Evan Shapiro: The point was to change the platform. And Meta has agreed to limit scrolling for children to two or [00:23:45] three hours a day. They're turning off notifications during school hours. Marion Ranchet: At night. You're not allowed, if you're underage, to get on the app between midnight and 6:00 AM. So these are very structural changes, and Meta is now bound to help convince YouTube and Snap [00:24:00] and TikTok to change their policies similarly. In fact, Meta started advertising to the other parties, saying, "join us in helping kids," which is the most ironic, crazy, nuts thing in the whole world. So I think this is really gonna harm Meta's [00:24:15] innate business, it's gonna cut back on usage. And I think it's better that the settlement helps kids than getting money, 'cause this would've... Marion Ranchet: No, I agree. But what I will say Evan Shapiro: [00:24:30] Even if the state attorneys general won the case, Meta would appeal it. It would take years and years and years. So I think this is a better outcome, actually. Marion Ranchet: I will say that to me, that's hush money, because we needed to see exactly. We [00:24:45] know what they've done, right? There's been whistleblowers, it's not the first case that's come out these past year, two years on that topic. So I think I would have liked for the [00:25:00] public to see underneath, because a lot of people are still gonna downplay it, et cetera, et cetera. So where I'm not happy with the settlement is that all of those things won't be out in the open, and I think we needed that. That [00:25:15] was like almost the thing that we needed the most. That's how you change people's view of things, right? By exposing information, data, et cetera. So that's where I'm saying it's hush money. The reason I'm disappointed by the amount is that we also know [00:25:30] that those companies only think like this. Why are they making an addictive product in the first place? Because the more time you spend, the more time they get advertising, the more money they get. So then, those remedies, I think, amazing start, but [00:25:45] how are they actually gonna be doing this truly? I'm asking because in Australia it's been a year in the making, they've made it illegal for teens below 16 to use social media, and the first [00:26:00] key data points we're getting from that market show there's been very few changes in the consumption. Why? Evan Shapiro: 80% of teen kids are working around it. Marion Ranchet: They're still working around it, so that's my worry, that's what's gonna happen next. What's fascinating, though, is I will say that a lot of [00:26:15] what's been decided out of court, like that settlement — it's nice to see this coming from the US, because Meta and others hate Europe, hate the European Commission, because [00:26:30] we're on their back to do things by the book. And it's fascinating to see, you had a former European Commission guy, a French guy, Thierry Breton, and he was interviewed on the day of that settlement, and it's [00:26:45] all the things he's been working to get. So the question then becomes: what happens, is it gonna be in the US, what is going to happnen in the rest of the world? How do we go about making exactly the [00:27:00] level, the same rules. Evan Shapiro: Yeah, I think this will be a worldwide shift for Meta. They don't really have a choice but to change the platform. Marion Ranchet: You think so? Evan Shapiro: This has been the case in other cases around, you know, [00:27:15] the COPPA laws, let's use them, basically became the norm, right? So I think that it's too big a market to just change one you know, 'cause then you have to build parallel products for the rest of the world, and that actually is more, more expensive. It [00:27:30] winds up being about the bottom line, as you said. But by the way, this is the largest single child-safety settlement in history. So don't poo-poo the amount of money necessarily. But on the other [00:27:45] hand, it is very similar to the tobacco case from many years ago. And as a result, cigarettes were banned for people under 18. They now have to carry these, I don't know if you've seen a cigarette [00:28:00] package recently, but they have these big signs on them saying, "this will kill you." Marion Ranchet: Yeah. Evan Shapiro: And there's pictures on them of, like, black lungs and things like that. Marion Ranchet: Yeah. Evan Shapiro: Smoking in the United States has plummeted, especially for young people. So I do think this will [00:28:15] have a follow-on effect. And I think these state attorneys general are not fucking around. I think they're gonna be on Meta's back every day, 'cause Mark Zuckerberg is a criminal. He stole the idea from [00:28:30] the Winklevi originally. He's lied to Congress. He got up in front of Congress, swore an oath to tell the truth, and then lied, 'cause he knowingly created a product that harms children. So [00:28:45] I don't think he's gonna get a pass from anyone. I hope not. Marion Ranchet: Good. Evan Shapiro: He's a terrible, terrible, terrible person. Marion Ranchet: You know how I feel. Evan Shapiro: He's a terrible person. Mark Zuckerberg is a terrible person. Marion Ranchet: Yeah, good, you know how I feel about social media anyway, for [00:29:00] me, and even more so for my kids. Evan Shapiro: You're not on Instagram. Yeah. No, good for you. I mean, one of the things I feel luckiest about is that my kids, 'cause I had kids super early, and I'm super old, my kids grew up in a world where social media really wasn't as [00:29:15] prevalent as it is today. And as a consequence, their lives weren't messed up by social media as badly as kids today's are. Marion Ranchet: I'd say screens as a whole, huh? We're about to go back to school, and I just cannot wait for a [00:29:30] regular flow where I don't have my kids asking for screen time. It's like, ugh. Evan Shapiro: Yeah, but aren't they on computers in school? Marion Ranchet: It's a good balance, I have to say, actually. The French school system is [00:29:45] pretty old-school that way, which I think is a good thing, 'cause we're starting to see the impact in places where computers are the dominant way of learning and writing, et cetera, and there's a massive impact on the way you spell, [00:30:00] the grammar, et cetera. It's a good balance. And when my kid goes to school, he has to hand over his iPhone. Evan Shapiro: Oh, yeah. Marion Ranchet: Even the watch. They have a computer managed by [00:30:15] the school. It's gonna change this year, because he's turning 14, so let's see how that goes. But yeah, I'm not fond of screens, and social media, for sure. Having said that, we've talked about YouTube, TikTok, et cetera, as part of the World Cup, as part of the settlement, [00:30:30] let's see what happens. I'd be surprised. I know TikTok already settled, like Snap, earlier this year, let's see what happens there. I wanna talk about [00:30:45] Disney kind of awakening. I feel like Disney's been quite silent these past few months, except for the change of CEO. And they've made pretty cool announcements. When we had The Overlap on, he was working on a [00:31:00] deal, he couldn't tell us what it was, but that was that deal, right? Same way Goalhanger, "The Rest Is Football," is on Netflix, and they've renewed for the Premier League season, so I'm assuming they're happy with the results they've seen. Evan Shapiro: Very happy. Marion Ranchet: As well, yeah. But Disney+ [00:31:15] is gonna have The Overlap — they've signed with TikTok. In Europe, they're making a move to become a super-aggregation app, right? So they've signed over 15 deals in the past 12 months with numerous broadcasters across the [00:31:30] region. They've bought a lot of sports rights as well. So I'm hopeful for the Micky mouse now, a bit more than I was a year ago. Evan Shapiro: Yeah, I think Damaro is really a digital native. [00:31:45] The TikTok deal is landmark, and really smart, well-crafted. It's not just, "hey, let's add TikToks to Disney+." They made a deal where TikTok will curate original content by creators about Disney content, Marion Ranchet: Yeah. Evan Shapiro: And then Disney gets to sell the whole footprint across Disney+ and TikTok. These aggregating deals, the deal with Animaj, through LUMI, on YouTube, they do seem to be [00:32:15] finally entering the 21st century for the first time. So yeah, I think it's really impressive, the amount of shifts that have been made since Damaro became [00:32:30] CEO. The question is, can they afford these sports rights? ESPN is going through some things here. Marion Ranchet: Yeah. Evan Shapiro: They're shifting from a cable-television enterprise. [00:32:45] Remember, in the United States, ESPN got paid, at the height, ESPN was in 110 million homes and got paid more than $7 a month per home for that, whereas only about 20 million people actually watch ESPN. [00:33:00] Now if you slim that down and turn this into a subscription product, suddenly only 20 million people are gonna pay whatever the fee is on a monthly basis. Do all these sports rights really make sense? They're paying through the nose just for the NFL, but then you add [00:33:15] F1, and the NBA, and all these other sports, all around the rest of the world too. I don't know — we were talking about sports a little earlier, and the World Cup was massive, but that's once every four years, right? NFL is on every year. [00:33:30] These are billion, billion, billion-dollar packages that they're paying. I don't know that the juice is necessarily gonna be worth the squeeze on all of these sports rights. We'll see, 'cause everybody's chasing them — Netflix is now doing [00:33:45] this too. Everybody else is doing this. So I'll be fascinated to watch. But yes, I think we're finally watching, far too late, the transformation of the mouse house into a [00:34:00] modern-day entertainment platform, as opposed to dabbling in streaming without really understanding the business practices. Marion Ranchet: I think the one thing they should be obsessed with is creating [00:34:15] a Disney World. And that seems silly to say, but they have all those pieces, and nothing talks to each other. Damaro said that he'd find a way to create bridges between the parks, [00:34:30] which is actually the one part that's still Evan Shapiro: Very profitable. Marion Ranchet: Still growing, actually, because of ticket prices more than anything else, but still growing, and everything else. And if they manage to start doing that, that's why I think in Europe it's interesting, because they were very standalone. You didn't [00:34:45] have much else, right? So yes, we had Hulu and FX and whatever those tiles were, but they mean nothing to us, I will say. But what they're doing now, in France, they've actually bought some [00:35:00] sports rights in partnership with DAZN. They're bringing in TV channels, L'Équipe and a few others, et cetera. And they're really trying to be closer to an Amazon Channels, with everything under one roof, and that's great if you can do [00:35:15] that. But the next step is to bring everything else around. The merch, the parks, everything. And I don't think it's gonna be too late. I don't think they're late, I don't think they're too late. Evan Shapiro: No, but I think the biggest problem Disney has — they have a [00:35:30] two-front problem. The first is kids: they've really lost youth. Moana was a terrible disaster. Marion Ranchet: And Toy Story 5 was so-so, honestly. I don't know about the box-office results, but I've seen [00:35:45] it, and I was like, eh, you need to find new stuff. Evan Shapiro: Yeah, and Toy Story 5, you know what I mean? So where's the original IP? And they're losing kids to YouTube. And so I think they [00:36:00] really need to reinvest in their kids' IP and find somebody who can run their kids division who understands the kids of today, not the kids of 25 years ago. The other big problem is the Marvel [00:36:15] Cinematic Universe — it's not really doing all that well. They announced some pretty exciting stuff this summer, including Ryan Gosling as Ghost Rider, and Spider-Man, which is not a Disney property, although they do own Marvel, so they get a piece of it, but it's a [00:36:30] Sony property. Marion Ranchet: Yeah. Evan Shapiro: So that's gonna wind up being probably the highest-grossing movie of all time. It's the biggest opening of all time, because Tom Holland is adorable, and he and Zendaya are the best couple on the face of the earth. But that's [00:36:45] not a Disney property. And what happens in the next, we're about to find out, 'cause we're gonna see the new Marvel movie come out, and we'll see if they can resurrect that [00:37:00] franchise. But their franchises are, and Star Wars, Mandalorian and Grogu, was not — it got destroyed at the box office. Probably may not even be profitable. So they have some IP, which is weird, 'cause they have the best IP in the history of the [00:37:15] world, right? But on the other hand, they're really getting stale with their IP. So I think they need to figure that out. Marion Ranchet: Yeah. I think it's crazy, but my kids have not seen any of the Marvel movies. Every time I suggest, "oh, should we do Iron [00:37:30] Man, Avengers, whatever," it's like, "no, I don't want it." We've done Spider-Man this summer a bit, but when you think of it, Spider-Man — it's three times the same thing. It's crazy, this recycling process. Anyway, [00:37:45] let's see what happens. But I think Disney — there's not been a week without something new, and I have to give it to them. Evan Shapiro: They're innovating. It's nice to see. Marion Ranchet: Yeah, they're pushing the boundaries of who they are, as they should, right? Because, [00:38:00] as we release this, we're September 10th, we're gonna be at Streaming Made Easy Live. I'm gonna have TF1 and Netflix talking about their partnership. And clearly, whenever you speak to them — it's potentially a blueprint for more, [00:38:15] right? And even this summer there's been rumors about Netflix opening up to others. So all of those streamers, clearly, are at a moment in time where they're looking for the next bit of growth, and it's gonna come from being a one-stop shop. [00:38:30] Everyone needs to be, as we always like to talk about, that flywheel. Evan Shapiro: Super app. Marion Ranchet: That cross-vertical destination. It's not enough to just be one thing for people. Evan Shapiro: Crucially, I think increasingly being a super app means vertical. Netflix added a vertical feed, they're [00:38:45] doing a bunch of vertical deals. There's the Disney–TikTok collaboration and partnership. Peacock greenlit a bunch of vertical shows this summer. Vertical premium television [00:39:00] is really taking off. It's not the micro-drama bullshit that you and I both called out a year ago, but it is a new version of television on the phone, premium serialized vertical content. And [00:39:15] Owl and Company, our friend Hernan Lopez, issued a report recently on the growth of vertical content. Now, I love Hernan, he's a great guy, but very often his data kind of [00:39:30] conflates some of the true messaging, or the data underneath what's actually happening. He called the vertical market $150 billion now. Marion Ranchet: This [00:39:45] year. Yeah, I don't buy it, but — Evan Shapiro: Yeah. He's not wrong, but you have to look at how. I actually made a chart for this. So yes, the vertical market, quote-unquote, is $150 billion, but $131 billion of it is social-media [00:40:00] ads. It's Reels... Marion Ranchet: What does that mean, are we talking- Evan Shapiro: Reels, TikTok, Shorts. It's YouTube, TikTok, and Instagram. So it's not a vertical-drama thing, it's mobile video, [00:40:15] the ads that we've known about all along. Everything else combined is $19 billion by his estimate. Marion Ranchet: Which is not bad. Evan Shapiro: No, but I think that's overblown, I don't think that's real. Those aren't public companies. ReelShort is not a public company. Marion Ranchet: Yeah. Evan Shapiro: Holy Water is not a public company. None of the vertical micro-drama bullshit [00:40:30] apps are public companies, so we don't really have a way of checking. Meanwhile, TikTok is not a public company, but we know a lot about their business. Meta and YouTube, Google, are public companies, so we know [00:40:45] these are real numbers. So it's misleading, this report, because it's great clickbait, right, $150 billion market — no. No, it's not. Most of that [00:41:00] is social media, which we already knew. We knew social media was bigger than television, by a lot. This year, Meta will actually surpass all of traditional television on Earth for [00:41:15] ad dollars. So I don't think this is necessarily as big a story as Allen & Company wants to make it, but I'm gonna see him in a couple weeks in Miami at the Jupiter [00:41:30] festival, so we can talk about it on stage there. But I just think you have to understand that this vertical revolution is not gonna happen on the apps, on the ReelShort micro-drama apps. It's gonna happen on social media. Marion Ranchet: Yeah, [00:41:45] of course. Evan Shapiro: Just look at the number of premium vertical-content deals that have been made. Jamie Oliver just launched a premium vertical scripted comedy sponsored by a brand, about him seeking a new recipe for chicken. [00:42:00] That's really the model. It's not behind a paywall, it's not micro-dramas, it's a syndicated model of television on the phone. Marion Ranchet: Yeah, it's this industry, and [00:42:15] our habit of, we like to put new, cool names on stuff and make it the hot new thing. And where I don't like about that is it's damaging for a lot of companies, who then get that syndrome [00:42:30] of chasing whatever's new, that new fad, et cetera. And to me, that's just social-media video, and that's it. But you know how I feel about those. So we're gonna be at IBC, and we're actually [00:42:45] gonna be doing, during SME Live, an episode on streaming profitability, and I think that's an important topic, because as we are talking about all these companies making big bets on sports rights, bringing vertical feeds within their platform, [00:43:00] et cetera, the bill keeps going up, right? And there's only so much us, the consumer, are gonna be okay to pay, right? Churn is at an all-time high for a lot of services. So I love that we're gonna be talking with Bedrock about this streaming [00:43:15] ratio. Essentially, it is how much your tech spend should represent vis-à-vis the revenue you make. And we're gonna be sharing a lot of numbers on folks like Netflix and others, to get a feel for who's a good student and who's not. [00:43:30] Evan Shapiro: Yeah, and I think there was a recent report by PwC on the state of entertainment economics, and this is the year that advertising surpassed [00:43:45] subscription for total revenue generation. I have another chart to share there. What you can see is that this is the year. Subscription, estimated by PwC, is $512 billion for [00:44:00] subscription worldwide, and ads, $524 billion. But what you can see, and for those listening, it is a chart that compares 2025, 2026, and then projections by PwC for 2030. By 2030, subscription [00:44:15] will only grow to about $550 billion, whereas advertising will grow to $1.4 trillion. And there are tons of reasons for this. In 2025, according to Antenna, the entire premium-streaming [00:44:30] universe generated 175, 176 million new subscribers, and lost about 150 million subscribers, somewhere in there. [00:44:45] So that's a net retention of 11%. Four years ago it was 33%. So that's one of the major reasons for the "churnpocalypse" you were talking about — subscription fatigue is really becoming one of the major motivators and drivers in the ecosystem. The other aspect of this [00:45:00] is that all the streamers, and this is something we'll talk with Jonas about, who's the CEO of Bedrock, is that streamers are finding that the ARPU on ad-supported subscribers is substantially higher [00:45:15] than the ARPU on subscription-only, which, by the way, was always obvious. Marion Ranchet: Yeah. Evan Shapiro: Hulu has the highest ARPU of any of the premium streamers out there, because they've had advertising since day one. And so the ad [00:45:30] economy, and also, younger consumers are much more likely to watch something for free with ads than they are to pay up for a new subscription. So this is a major shift in the underlying economics and the [00:45:45] understand of the industry about itself, from the last couple of years. Marion Ranchet: One caveat is that the ARPU claim works, provided that streamers actually are able to fill that inventory, [00:46:00] right? Evan Shapiro: which increasingly they're not. Marion Ranchet: Yeah, exactly. And so that pie, we're seeing it's not getting bigger, there's just more people eating at it. And so on that claim about ARPU, I'm told that some tier-one streamers [00:46:15] are actually seeing a decreasing ARPU, and the reason being that they actually have more people now signing up for the lower ad tier, and they're not making up for the loss just by selling advertising [00:46:30] inventory as much as they want. I was in Denmark last week, and 80% of Nordic subscriptions are now going to ad-supported, right? So let's see what happens by 2030, but I have my doubts as to the sustainability of that [00:46:45] model. Evan Shapiro: And also, what people are doing is signing up to watch one show, then canceling — Marion Ranchet: Yeah, the serial churn. Evan Shapiro: For a different app. It's this revolving door. And by the way, just take a poll of our listeners and viewers. Who out there has signed up [00:47:00] for a service, watched that one show, and then canceled before the next billing cycle? Most people have done something like that, because there's just too much to subscribe to. By the way, Substack is going through the same thing. Marion Ranchet: Yeah. For sure. Evan Shapiro: I don't know if you've [00:47:15] noticed, but Substack is going through its own churnpocalypse right now, and everybody on the platform is recognizing that you can't ask somebody to pay for 600 different subscriptions. Yeah, it just doesn't work. Marion Ranchet: Yeah, so one subscription [00:47:30] that is actually free is signing up to the Media Odyssey podcast, wherever you get your podcasts. So just give us a like — subscribe, follow us, whether that's there on those platforms or on LinkedIn. [00:47:45] This is extremely helpful. Or on YouTube — I think we have over 2,000 subscribers on YouTube now, which isn't too shabby for a B2B podcast on the media ecosystem. Evan Shapiro: Not at all, not at all. But we're very happy to be back for season three. This [00:48:00] is season three, right? Marion Ranchet: It is, it is. Evan Shapiro: Three seasons later. Marion Ranchet: Time flies, right? Evan Shapiro: Yeah, crazy. Remember that lunch? That wine-filled lunch we had? Marion Ranchet: That was two years ago now. Evan Shapiro: Yeah. Marion Ranchet: Yes, I know. Evan Shapiro: Yeah. So just a quick plug section: I will be very active at IBC. [00:48:15] I'll be on stage on Saturday with Shira Lazar, and we will be unveiling our top 100 most powerful creators list, based on engagement and affinity. That's a partnership with [00:48:30] Foam and Whalar. You and I are actually gonna be on stage together, in addition to the podcast we're doing together, talking about career sustainability. And on Sunday night I'll actually be singing. [00:48:45] With a band. Marion Ranchet: I saw about that, where is that? I did not get the invite to this. Where is this? Evan Shapiro: I don't know that I want you to see me sing. No, I'll send you. It's actually all [00:49:00] available at my eshap.tv. If you go there, there's a link that'll take you to my entire agenda at IBC. I'll be covering Depeche Mode, Billy Joel, the Talking Heads, and the Violent Femmes. So four songs. I'm very nervous, but also a little excited for it. I will [00:49:15] be absolutely high as a kite while I'm singing, too. Marion Ranchet: Is that karaoke, or are we talking a band playing? Evan Shapiro: No, it's a live band. There's a tradition, a lot of people in the entertainment industry, especially on the tech side, are frustrated musicians. Talented but [00:49:30] frustrated musicians. So this group has been getting together. Andrew Leighton and a bunch of other guys do this every year. They have a bar, and it's gonna be band night, and I'll be singing out loud in front of people. Marion Ranchet: [00:49:45] Okay, I want my invite. And yes, to listeners of TMO, I will take pictures, mini videos, and I will not crush you, because I'm pretty sure you have a sweet voice. Someone said that you're a good singer. So actually, I will be [00:50:00] doing all of that, and perhaps I'll even enjoy it. Let's see. Evan Shapiro: Okay, look, I know you like live music, so this will be live. I don't know if it'll be music, but it will be live. If you're gonna be in Amsterdam in September, which is the greatest phrase in the history of the [00:50:15] world, and you live there, and you're gonna be around for IBC, come see us at Streaming Made Easy Live. That's on the 10th. You can find that information on Marion's LinkedIn and the rest of her profiles, and come see all my stuff at [00:50:30] IBC, you can also find that at my links as well, and we'll see you there. Marion Ranchet: So exciting to be with you guys again this week. That was Evan Shapiro. Evan Shapiro: That is Marion Ranchet. Marion Ranchet: We'll see you next [00:50:45] time.