AI transcript
0:00:02 Support for this show comes from Seven Rooms.
0:00:06 For the restaurant operators out there who want to create more regulars on the regular,
0:00:08 check out Seven Rooms.
0:00:12 Seven Rooms is an all-in-one CRM marketing and operations platform
0:00:16 that helps you make more money and more magic for your guests.
0:00:21 It gives your staff the tools to deliver service that keeps your guests coming back for more,
0:00:26 from direct reservations to smart table management to targeted text and email marketing.
0:00:31 Seven Rooms helps you grow your brand and your covers and not your workload.
0:00:33 Learn more at SevenRooms.com
0:00:37 Seven Rooms. Make magic. Make money.
0:00:41 Support for this show comes from Constant Contact.
0:00:44 If you struggle just to get your customers to notice you,
0:00:47 Constant Contact has what you need to grab their attention.
0:00:52 Constant Contact’s award-winning marketing platform offers all the automation,
0:00:57 integration and reporting tools that get your marketing running seamlessly,
0:01:00 all backed by their expert live customer support.
0:01:05 It’s time to get going and growing with Constant Contact today.
0:01:07 Ready, set, grow.
0:01:11 Go to ConstantContact.ca and start your free trial today.
0:01:15 Go to ConstantContact.ca for your free trial.
0:01:18 ConstantContact.ca
0:01:26 Amazon Q Business is the generative A.I. assistant from AWS
0:01:29 because business can be slow, like wading through the mud.
0:01:34 But Amazon Q helps streamline work,
0:01:38 so tests like summarizing monthly results can be done in no time.
0:01:44 Learn what Amazon Q Business can do for you at aws.com/learnmore.
0:01:48 That’s aws.com/learnmore.
0:01:55 I’m Sky Galloway, and this is No Mercy, No Malice.
0:02:00 Digital is the apex predator, legacy media is the prey.
0:02:03 There are still lots of sheep.
0:02:07 Media consolidation, as read by George Hahn.
0:02:16 The hottest product in tech is Blue Sky,
0:02:20 adding one million users a day since the election.
0:02:24 CEO Jay Graber says the platform will never have ads,
0:02:28 as ads are the road to “ensidification.”
0:02:30 Okay, then.
0:02:33 Ad-supported media as a whole is one of the least volatile businesses
0:02:38 over the last century, accounting for 1.5% of GDP
0:02:41 and rarely straying from that number.
0:02:46 Inside the sector, things are less tranquil, i.e., more chaotic.
0:02:51 In an attention economy, money follows eyeballs.
0:02:54 I believe we’ll see ads on Blue Sky eventually,
0:03:00 but for now, let’s talk about consolidation in the broader sector.
0:03:05 Stories about Burmese pythons litter the local news in Florida.
0:03:09 These snakes get big, really big.
0:03:12 The serpents can grow to as much as 16 feet long
0:03:15 and weigh hundreds of pounds.
0:03:20 This presents a problem, as most owners are 5’9″
0:03:25 and soon discover their roommate situation is unworkable.
0:03:27 Owners release the snakes into the Everglades,
0:03:30 where they begin taking down alligators and deer.
0:03:36 An alien species to the ecosystem of swamps, marshes, and mangrove forests,
0:03:40 they’ve established themselves as the apex predator,
0:03:44 and their population has exploded.
0:03:47 The threat to Florida’s ecosystem is so great
0:03:51 that mitigation efforts include employing full-time snake hunters
0:03:55 and organizing state-sponsored hunting competitions.
0:04:02 The winner of one competition earned $10,000 for nabbing 28 pythons.
0:04:08 A drop in the bucket against a species that lays 30+ eggs at a time
0:04:11 and can reproduce asexually.
0:04:16 After three decades, the U.S. Geological Survey concluded in 2023
0:04:19 that the python is winning.
0:04:25 Unlike the classic apex predator, which evolves alongside its prey,
0:04:30 a non-native apex predator arrives with such disruptive force
0:04:36 that instead of dominating an ecosystem, they transform it.
0:04:42 Legacy media looks like Florida 30 years after the arrival of the Burmese python.
0:04:47 A non-native apex predator, digital, is out hunting
0:04:54 and out reproducing the previous apex predator, legacy media.
0:05:00 Digitization lowers the barrier to entry, giving everyone access to everything.
0:05:03 Initially, this looks like competition with extra protein,
0:05:08 but over time, it becomes consolidation on steroids,
0:05:12 as digital ecosystems are winner-take-most or all
0:05:17 based on who establishes leadership and access to the cheapest capital.
0:05:22 Amazon registers 37% of e-commerce in the U.S.
0:05:27 while its nine closest competitors, Walmart, Apple, Target, etc.,
0:05:31 account for 23% combined.
0:05:37 Nearly two-thirds of the world’s social media ads are sequestered to meta.
0:05:43 Since 2014, 90-plus percent of internet searches are done on Google.
0:05:47 The second most popular search engine, Microsoft’s Bing,
0:05:52 commands less than 4% of the global search market.
0:05:56 Three companies, Match Group, Bumble, and eHarmony,
0:06:00 control the entire digital dating marketplace.
0:06:03 There is also consolidation on the customer end,
0:06:10 where 10% of men get 80% to 90% of the dating opportunities.
0:06:17 In my industry, podcasting, the concentration is extreme even by digital standards.
0:06:21 Of the 600,000 podcasts that produce content each week,
0:06:25 the top 10 capture half the revenue.
0:06:31 Put another way, to build a business in podcasting that pays people well
0:06:35 and retains talent with high opportunity costs,
0:06:41 you likely need to be in the top 0.1% by listenership.
0:06:43 As a member of UCLA’s crew team,
0:06:51 I was 3.5 times more likely to be an Olympian than a successful podcast host.
0:06:57 In the late 1990s, a wave of internet startups introduced a non-native Apex predator
0:07:02 called streaming into the television media ecosystem.
0:07:05 30 years later, most of those startups are dead,
0:07:10 but their species has transformed the ecosystem such that streamers
0:07:15 are the hunters and legacy media, the prey.
0:07:18 To paraphrase what Ernest Hemingway said about bankruptcy,
0:07:24 legacy media consolidated gradually, then suddenly.
0:07:26 Here’s the gradual part.
0:07:29 Over the past four decades, we’ve gone from an ecosystem
0:07:37 where the number of companies controlling 90% of American media has gone from 50 to 6.
0:07:44 Deregulation, financialization, and lax antitrust enforcement incentivize consolidation,
0:07:49 but the shift from analog to digital made it a necessity,
0:07:54 with the legacy media companies bulking up to keep from being devoured by digital.
0:07:58 The sudden part happened last month,
0:08:02 when Comcast announced it would spin off its cable assets,
0:08:10 USA, CNBC, MSNBC, and E, along with digital properties such as Rotten Tomatoes and Fandango,
0:08:15 into a holding company called Spinco.
0:08:22 My first serious relationship in NYC was with a wonderful woman who suffered from bipolar disorder.
0:08:24 We broke up for a simple reason.
0:08:29 I did not know who I was going to wake up next to in the morning.
0:08:37 When a company has a profitable but declining business, cable, and a growth business, streaming,
0:08:40 investors don’t know who they’re living with.
0:08:43 They don’t know how to value the asset,
0:08:49 so they assign the multiple of its worst business to the entire company.
0:08:55 The divestiture of assets in different life cycle stages provides more clarity to investors
0:09:00 and ultimately creates a smaller hole that’s greater than the sum of its parts.
0:09:07 The Spinco cable assets generate about $7 billion per year in revenue.
0:09:19 Meanwhile, Peacock, Comcast’s streaming service, reduced its losses from $565 million to $436 million year over year.
0:09:29 But more important for a growth asset, its revenue increased 82% year over year to $1.5 billion.
0:09:32 I predicted Spinco a year ago.
0:09:34 I’ll make another prediction now.
0:09:39 Spinco will become a vehicle for acquiring other cable assets.
0:09:43 Warner Brothers Discovery and Paramount are likely sellers,
0:09:48 as both have profitable streaming units that are weighed down by legacy assets.
0:09:56 When Max swung from a loss of $1.6 billion to a profit of $103 million year over year,
0:10:01 Warner Brothers Discovery saw its stock fall 12%.
0:10:12 Paramount Plus turned a $49 million profit in Q3, but Paramount’s market cap is down 19% this year.
0:10:19 Disney, the only legacy player to see its stock increase after its streamer reached profitability,
0:10:24 says it’s not selling its linear assets, ABC, FX, ESPN, etc.,
0:10:29 as those networks are deeply integrated into Disney Plus.
0:10:33 Interestingly, all three companies are betting on bundling strategies,
0:10:40 i.e. consolidating cable content in one app without the cable infrastructure.
0:10:47 Netflix, the non-native Apex predator, says it’s strong enough to hunt solo.
0:10:53 I think Bob Iger is either wrong or he’s playing poker and holding out for a better price.
0:11:00 If Disney sold its cable assets for $1, I believe it would be worth more within a year,
0:11:05 as it would offer a cleaner story regarding streaming, movies, and the parks,
0:11:13 versus Bob apologizing every quarter for ABC and ESPN’s lackluster performance.
0:11:18 The second best investment I ever made was in a Yellow Pages company.
0:11:23 At the time, these assets were declining at 7% to 12% per year,
0:11:27 but they were still throwing off a lot of cash flow.
0:11:34 We acquired one Yellow Pages company after another on this basic thesis.
0:11:37 Together, we can survive, even prosper.
0:11:40 Alone, we’re all dead.
0:11:42 Our strategy was simple.
0:11:48 Cut costs faster than revenue declined by retaining the top 10% of salespeople,
0:11:53 closing headquarters, and laying off nearly everyone at HQ.
0:12:01 That we were able to pick up these assets on the cheap meant that every year we increased cash flow.
0:12:08 Coda, ultimately, the company returned to growth as a customer relationship management firm.
0:12:14 Distressed assets can be great businesses, as they can be bought on sale,
0:12:19 and typically don’t go away as quickly as people believe they will.
0:12:23 The median age of an MTV viewer is 50 years old.
0:12:28 The median age of an MSNBC viewer is 70 years old.
0:12:32 These aren’t attractive demos for advertisers,
0:12:37 but those audiences are likely to continue tuning in for the rest of their lives.
0:12:44 As long as ownership stops trying to inject Botox and filler into a senior to make it look young again,
0:12:54 they can generate increasing cash flows with linear assets by cutting costs faster than the rate of decline via consolidation.
0:12:59 In television, the platform has always been bigger than the talent.
0:13:05 In podcasting and the creator economy, it’s the converse.
0:13:09 Net neutrality protects the little guy from getting muscled out on distribution,
0:13:14 as the distribution is accessible and free to everyone.
0:13:16 The means of production are relatively cheap.
0:13:19 My podcasting kit costs around $1,000.
0:13:24 A decent TV studio can run over $400,000.
0:13:28 There is little sustainable enterprise value in a podcast company.
0:13:33 What matters isn’t CAPEX or infrastructure, it’s talent.
0:13:37 That’s why a small number of individual podcasters are getting rich,
0:13:41 but not a lot of podcast company shareholders.
0:13:44 Podcasters command a greater share of revenue,
0:13:48 and their orders of magnitude more efficient than TV studios,
0:13:52 resulting in better pricing for advertisers.
0:14:02 A cable news anchor recently told me he expected his compensation to decrease 80% with his next contract.
0:14:11 He isn’t Rachel Maddow, though her new contract at MSNBC reportedly will pay her $5 million less per year.
0:14:16 Puck calls this “the great TV news comp depression.”
0:14:19 But it isn’t just cable news.
0:14:23 I recently had lunch with an Oscar-nominated movie star, Flex,
0:14:30 who told me he’d worked for scale, i.e. the guild minimum, on his last few films.
0:14:35 On the scripted television side, where salaries historically increased with each new season,
0:14:39 networks are cutting pay to keep shows afloat.
0:14:45 CBS reportedly cut pay for the cast of Blue Bloods by 25%.
0:14:54 Industry-wide, actors have seen their median hourly wage decline by 56% since 2013.
0:15:01 Television writers, who went on strike with zero leverage just as their employers were scaling back content budgets
0:15:04 and shifting production overseas,
0:15:13 are 1.5 times more likely to work for the guild minimum than they were a decade ago.
0:15:18 An apex predator released into the wild has reproduced asexually,
0:15:24 doesn’t need distribution partners, and is devouring the ecosystem.
0:15:28 Since launching its original content business in 2012,
0:15:37 Netflix’s market cap has increased 7,337%.
0:15:42 This means the industry is booming for all involved, no?
0:15:46 The dominant means of production for scripted television is Netflix,
0:15:51 which has flexed this muscle to reshape the flows of value.
0:15:58 Specifically, it has reduced production costs while massively investing to create an explosion
0:16:03 in the amount of content transferring value from all parts of the ecosystem
0:16:06 to the company’s shareholders and subscribers.
0:16:14 If you live in LA, you’ve likely given four stars to a former producer of a reality TV series.
0:16:20 There are 180,000 members of SAG-AFTRA and last year,
0:16:28 86% of them didn’t qualify for health insurance as they made less than $26,000.
0:16:36 Constant reminders from CNBC regarding the market touching new highs masks a deeper issue.
0:16:44 As in the future described by William Gibson, the future/prosperity of media is here.
0:16:47 Just not evenly distributed.
0:16:56 AI, Netflix, and the big tech platforms are eating everything and they have few, if any, predators.
0:17:01 The dear and alligators, industry workers, have no means of defense
0:17:06 because they’ve never encountered this species or technology before.
0:17:10 The result is an atmosphere of anxiety and fear.
0:17:16 These emotions are common sense.
0:17:18 Life is so rich.
0:17:29 [Music]
0:00:06 For the restaurant operators out there who want to create more regulars on the regular,
0:00:08 check out Seven Rooms.
0:00:12 Seven Rooms is an all-in-one CRM marketing and operations platform
0:00:16 that helps you make more money and more magic for your guests.
0:00:21 It gives your staff the tools to deliver service that keeps your guests coming back for more,
0:00:26 from direct reservations to smart table management to targeted text and email marketing.
0:00:31 Seven Rooms helps you grow your brand and your covers and not your workload.
0:00:33 Learn more at SevenRooms.com
0:00:37 Seven Rooms. Make magic. Make money.
0:00:41 Support for this show comes from Constant Contact.
0:00:44 If you struggle just to get your customers to notice you,
0:00:47 Constant Contact has what you need to grab their attention.
0:00:52 Constant Contact’s award-winning marketing platform offers all the automation,
0:00:57 integration and reporting tools that get your marketing running seamlessly,
0:01:00 all backed by their expert live customer support.
0:01:05 It’s time to get going and growing with Constant Contact today.
0:01:07 Ready, set, grow.
0:01:11 Go to ConstantContact.ca and start your free trial today.
0:01:15 Go to ConstantContact.ca for your free trial.
0:01:18 ConstantContact.ca
0:01:26 Amazon Q Business is the generative A.I. assistant from AWS
0:01:29 because business can be slow, like wading through the mud.
0:01:34 But Amazon Q helps streamline work,
0:01:38 so tests like summarizing monthly results can be done in no time.
0:01:44 Learn what Amazon Q Business can do for you at aws.com/learnmore.
0:01:48 That’s aws.com/learnmore.
0:01:55 I’m Sky Galloway, and this is No Mercy, No Malice.
0:02:00 Digital is the apex predator, legacy media is the prey.
0:02:03 There are still lots of sheep.
0:02:07 Media consolidation, as read by George Hahn.
0:02:16 The hottest product in tech is Blue Sky,
0:02:20 adding one million users a day since the election.
0:02:24 CEO Jay Graber says the platform will never have ads,
0:02:28 as ads are the road to “ensidification.”
0:02:30 Okay, then.
0:02:33 Ad-supported media as a whole is one of the least volatile businesses
0:02:38 over the last century, accounting for 1.5% of GDP
0:02:41 and rarely straying from that number.
0:02:46 Inside the sector, things are less tranquil, i.e., more chaotic.
0:02:51 In an attention economy, money follows eyeballs.
0:02:54 I believe we’ll see ads on Blue Sky eventually,
0:03:00 but for now, let’s talk about consolidation in the broader sector.
0:03:05 Stories about Burmese pythons litter the local news in Florida.
0:03:09 These snakes get big, really big.
0:03:12 The serpents can grow to as much as 16 feet long
0:03:15 and weigh hundreds of pounds.
0:03:20 This presents a problem, as most owners are 5’9″
0:03:25 and soon discover their roommate situation is unworkable.
0:03:27 Owners release the snakes into the Everglades,
0:03:30 where they begin taking down alligators and deer.
0:03:36 An alien species to the ecosystem of swamps, marshes, and mangrove forests,
0:03:40 they’ve established themselves as the apex predator,
0:03:44 and their population has exploded.
0:03:47 The threat to Florida’s ecosystem is so great
0:03:51 that mitigation efforts include employing full-time snake hunters
0:03:55 and organizing state-sponsored hunting competitions.
0:04:02 The winner of one competition earned $10,000 for nabbing 28 pythons.
0:04:08 A drop in the bucket against a species that lays 30+ eggs at a time
0:04:11 and can reproduce asexually.
0:04:16 After three decades, the U.S. Geological Survey concluded in 2023
0:04:19 that the python is winning.
0:04:25 Unlike the classic apex predator, which evolves alongside its prey,
0:04:30 a non-native apex predator arrives with such disruptive force
0:04:36 that instead of dominating an ecosystem, they transform it.
0:04:42 Legacy media looks like Florida 30 years after the arrival of the Burmese python.
0:04:47 A non-native apex predator, digital, is out hunting
0:04:54 and out reproducing the previous apex predator, legacy media.
0:05:00 Digitization lowers the barrier to entry, giving everyone access to everything.
0:05:03 Initially, this looks like competition with extra protein,
0:05:08 but over time, it becomes consolidation on steroids,
0:05:12 as digital ecosystems are winner-take-most or all
0:05:17 based on who establishes leadership and access to the cheapest capital.
0:05:22 Amazon registers 37% of e-commerce in the U.S.
0:05:27 while its nine closest competitors, Walmart, Apple, Target, etc.,
0:05:31 account for 23% combined.
0:05:37 Nearly two-thirds of the world’s social media ads are sequestered to meta.
0:05:43 Since 2014, 90-plus percent of internet searches are done on Google.
0:05:47 The second most popular search engine, Microsoft’s Bing,
0:05:52 commands less than 4% of the global search market.
0:05:56 Three companies, Match Group, Bumble, and eHarmony,
0:06:00 control the entire digital dating marketplace.
0:06:03 There is also consolidation on the customer end,
0:06:10 where 10% of men get 80% to 90% of the dating opportunities.
0:06:17 In my industry, podcasting, the concentration is extreme even by digital standards.
0:06:21 Of the 600,000 podcasts that produce content each week,
0:06:25 the top 10 capture half the revenue.
0:06:31 Put another way, to build a business in podcasting that pays people well
0:06:35 and retains talent with high opportunity costs,
0:06:41 you likely need to be in the top 0.1% by listenership.
0:06:43 As a member of UCLA’s crew team,
0:06:51 I was 3.5 times more likely to be an Olympian than a successful podcast host.
0:06:57 In the late 1990s, a wave of internet startups introduced a non-native Apex predator
0:07:02 called streaming into the television media ecosystem.
0:07:05 30 years later, most of those startups are dead,
0:07:10 but their species has transformed the ecosystem such that streamers
0:07:15 are the hunters and legacy media, the prey.
0:07:18 To paraphrase what Ernest Hemingway said about bankruptcy,
0:07:24 legacy media consolidated gradually, then suddenly.
0:07:26 Here’s the gradual part.
0:07:29 Over the past four decades, we’ve gone from an ecosystem
0:07:37 where the number of companies controlling 90% of American media has gone from 50 to 6.
0:07:44 Deregulation, financialization, and lax antitrust enforcement incentivize consolidation,
0:07:49 but the shift from analog to digital made it a necessity,
0:07:54 with the legacy media companies bulking up to keep from being devoured by digital.
0:07:58 The sudden part happened last month,
0:08:02 when Comcast announced it would spin off its cable assets,
0:08:10 USA, CNBC, MSNBC, and E, along with digital properties such as Rotten Tomatoes and Fandango,
0:08:15 into a holding company called Spinco.
0:08:22 My first serious relationship in NYC was with a wonderful woman who suffered from bipolar disorder.
0:08:24 We broke up for a simple reason.
0:08:29 I did not know who I was going to wake up next to in the morning.
0:08:37 When a company has a profitable but declining business, cable, and a growth business, streaming,
0:08:40 investors don’t know who they’re living with.
0:08:43 They don’t know how to value the asset,
0:08:49 so they assign the multiple of its worst business to the entire company.
0:08:55 The divestiture of assets in different life cycle stages provides more clarity to investors
0:09:00 and ultimately creates a smaller hole that’s greater than the sum of its parts.
0:09:07 The Spinco cable assets generate about $7 billion per year in revenue.
0:09:19 Meanwhile, Peacock, Comcast’s streaming service, reduced its losses from $565 million to $436 million year over year.
0:09:29 But more important for a growth asset, its revenue increased 82% year over year to $1.5 billion.
0:09:32 I predicted Spinco a year ago.
0:09:34 I’ll make another prediction now.
0:09:39 Spinco will become a vehicle for acquiring other cable assets.
0:09:43 Warner Brothers Discovery and Paramount are likely sellers,
0:09:48 as both have profitable streaming units that are weighed down by legacy assets.
0:09:56 When Max swung from a loss of $1.6 billion to a profit of $103 million year over year,
0:10:01 Warner Brothers Discovery saw its stock fall 12%.
0:10:12 Paramount Plus turned a $49 million profit in Q3, but Paramount’s market cap is down 19% this year.
0:10:19 Disney, the only legacy player to see its stock increase after its streamer reached profitability,
0:10:24 says it’s not selling its linear assets, ABC, FX, ESPN, etc.,
0:10:29 as those networks are deeply integrated into Disney Plus.
0:10:33 Interestingly, all three companies are betting on bundling strategies,
0:10:40 i.e. consolidating cable content in one app without the cable infrastructure.
0:10:47 Netflix, the non-native Apex predator, says it’s strong enough to hunt solo.
0:10:53 I think Bob Iger is either wrong or he’s playing poker and holding out for a better price.
0:11:00 If Disney sold its cable assets for $1, I believe it would be worth more within a year,
0:11:05 as it would offer a cleaner story regarding streaming, movies, and the parks,
0:11:13 versus Bob apologizing every quarter for ABC and ESPN’s lackluster performance.
0:11:18 The second best investment I ever made was in a Yellow Pages company.
0:11:23 At the time, these assets were declining at 7% to 12% per year,
0:11:27 but they were still throwing off a lot of cash flow.
0:11:34 We acquired one Yellow Pages company after another on this basic thesis.
0:11:37 Together, we can survive, even prosper.
0:11:40 Alone, we’re all dead.
0:11:42 Our strategy was simple.
0:11:48 Cut costs faster than revenue declined by retaining the top 10% of salespeople,
0:11:53 closing headquarters, and laying off nearly everyone at HQ.
0:12:01 That we were able to pick up these assets on the cheap meant that every year we increased cash flow.
0:12:08 Coda, ultimately, the company returned to growth as a customer relationship management firm.
0:12:14 Distressed assets can be great businesses, as they can be bought on sale,
0:12:19 and typically don’t go away as quickly as people believe they will.
0:12:23 The median age of an MTV viewer is 50 years old.
0:12:28 The median age of an MSNBC viewer is 70 years old.
0:12:32 These aren’t attractive demos for advertisers,
0:12:37 but those audiences are likely to continue tuning in for the rest of their lives.
0:12:44 As long as ownership stops trying to inject Botox and filler into a senior to make it look young again,
0:12:54 they can generate increasing cash flows with linear assets by cutting costs faster than the rate of decline via consolidation.
0:12:59 In television, the platform has always been bigger than the talent.
0:13:05 In podcasting and the creator economy, it’s the converse.
0:13:09 Net neutrality protects the little guy from getting muscled out on distribution,
0:13:14 as the distribution is accessible and free to everyone.
0:13:16 The means of production are relatively cheap.
0:13:19 My podcasting kit costs around $1,000.
0:13:24 A decent TV studio can run over $400,000.
0:13:28 There is little sustainable enterprise value in a podcast company.
0:13:33 What matters isn’t CAPEX or infrastructure, it’s talent.
0:13:37 That’s why a small number of individual podcasters are getting rich,
0:13:41 but not a lot of podcast company shareholders.
0:13:44 Podcasters command a greater share of revenue,
0:13:48 and their orders of magnitude more efficient than TV studios,
0:13:52 resulting in better pricing for advertisers.
0:14:02 A cable news anchor recently told me he expected his compensation to decrease 80% with his next contract.
0:14:11 He isn’t Rachel Maddow, though her new contract at MSNBC reportedly will pay her $5 million less per year.
0:14:16 Puck calls this “the great TV news comp depression.”
0:14:19 But it isn’t just cable news.
0:14:23 I recently had lunch with an Oscar-nominated movie star, Flex,
0:14:30 who told me he’d worked for scale, i.e. the guild minimum, on his last few films.
0:14:35 On the scripted television side, where salaries historically increased with each new season,
0:14:39 networks are cutting pay to keep shows afloat.
0:14:45 CBS reportedly cut pay for the cast of Blue Bloods by 25%.
0:14:54 Industry-wide, actors have seen their median hourly wage decline by 56% since 2013.
0:15:01 Television writers, who went on strike with zero leverage just as their employers were scaling back content budgets
0:15:04 and shifting production overseas,
0:15:13 are 1.5 times more likely to work for the guild minimum than they were a decade ago.
0:15:18 An apex predator released into the wild has reproduced asexually,
0:15:24 doesn’t need distribution partners, and is devouring the ecosystem.
0:15:28 Since launching its original content business in 2012,
0:15:37 Netflix’s market cap has increased 7,337%.
0:15:42 This means the industry is booming for all involved, no?
0:15:46 The dominant means of production for scripted television is Netflix,
0:15:51 which has flexed this muscle to reshape the flows of value.
0:15:58 Specifically, it has reduced production costs while massively investing to create an explosion
0:16:03 in the amount of content transferring value from all parts of the ecosystem
0:16:06 to the company’s shareholders and subscribers.
0:16:14 If you live in LA, you’ve likely given four stars to a former producer of a reality TV series.
0:16:20 There are 180,000 members of SAG-AFTRA and last year,
0:16:28 86% of them didn’t qualify for health insurance as they made less than $26,000.
0:16:36 Constant reminders from CNBC regarding the market touching new highs masks a deeper issue.
0:16:44 As in the future described by William Gibson, the future/prosperity of media is here.
0:16:47 Just not evenly distributed.
0:16:56 AI, Netflix, and the big tech platforms are eating everything and they have few, if any, predators.
0:17:01 The dear and alligators, industry workers, have no means of defense
0:17:06 because they’ve never encountered this species or technology before.
0:17:10 The result is an atmosphere of anxiety and fear.
0:17:16 These emotions are common sense.
0:17:18 Life is so rich.
0:17:29 [Music]
As read by George Hahn.
Media Consolidation
Learn more about your ad choices. Visit podcastchoices.com/adchoices