Speaker 1 0:02

Welcome to this week's edition of the Dan Rayburn Podcast, the show that curates the streaming media industry news that matters most, unvarnished, unscripted and providing you with the factual data you need to know, without any of the hype, the pulse of the streaming media industry.

Speaker 2 0:23

Welcome to the Dan Rayburn Podcast. I am Dan Rayburn, along with co-host Mark Donegan, recording Friday, April 16th, 4.08 pm Eastern Time. We'll jump right in, Mark. So we've got breaking news here.

Speaker 2 0:35

Breaking news yes, About 30 minutes ago that the US District Judge overseeing the venue sports case has granted a temporary injunction against venue sports. So I'm not going to say I'm surprised or not surprised, because I don't know the side of it. Yeah, but disney fox and warner burroughs discovery have all come out and said in a statement that they quote respectfully disagree with court's ruling and are appealing it. So that's all the information we have right now. The the ruling is not out publicly. I checked with the companies involved and they don't have the ruling yet. Even so, I put something up on LinkedIn very quickly and I will add to that with a link to the ruling by the time this drops a couple of days from now.

Speaker 3 1:23

I don't the ruling will certainly be out. It'll be out there, yeah.

Speaker 2 1:26

It'll be interesting to see what exactly it says.

Speaker 3 1:31

Yeah, for sure, and I assume that there was reference Mark.

Speaker 2 1:35

I saw somebody got. Not sure how they got the quote or if they got it out of the ruling somehow, but there was a reference that the judge made that something to the effect of this would basically bankrupt Fubo and they saw that as a problem, so maybe that was part of the ruling. But the ruling is going to be very interesting to read.

Speaker 3 1:58

Well, and what did Fubo stock do in after hours?

Speaker 2 2:02

Yeah, what's the final?

Speaker 3 2:04

here it's up 18, 18 yeah yeah, well, and that's because it it dipped back down a little bit. So, yeah, it looks like it was up 20, 21 percent or so.

Speaker 2 2:16

Yeah yeah, and let's see what it does just over the next, you know even the weekend yeah, yeah, just trading after hours uh now keep in mind it's still under $2, but I'm sure that increases our market cap as well.

Speaker 2 2:30

Now, what is the course of action here? Well, you could have Disney, fox, wbd appeal it and win the appeal. You could have the injunction stayed stayed. But then you could also, potentially, would the companies go back and then just work out a deal with fubo where they're no longer contesting it. If that happened, would another company step forth and say wait a minute, we want to contest it. Now, I don't know, yeah, but there's, there's gonna have to be something done. Because I don't know, yeah, but there's, there's going to have to be something done. Because I don't see personally the companies then just saying okay, we'll forget it, we just won't launch it.

Speaker 3 3:11

Yeah, they're still going to launch it, somehow it's just a matter of when.

Speaker 2 3:15

What's it going to look like and and what? How does the ruling impact that? So we'll have to watch that, but that's. That's the latest there in venue. Fasc. We'll have to watch that, but that's the latest there in venue Fascinating. Let's jump into Disney here. So Disney has a new CTO. They've hired Adam Smith, who is the chief product and technology officer for entertainment. Sorry, he will be the new chief product and technology officer for entertainment and ESPN, but he's got a great background, mark. He recently oversaw the YouTube music and youtube premium subscription services. So that's, that's definitely good. They've got a very experienced person there in adam. I don't I don't know him personally, but they've got they've got an experienced person taking that over, so I'm sure that the dss team over there espn is super happy about that yeah, that's great now, I didn't see a start date, though.

Speaker 3 4:04

Did he replace somebody, or is this sort of a they've? They've restructured a lot of yeah well, that's why I asked the question, disney and in dss.

Speaker 2 4:16

Yeah, uh, so it did say who, who he was reporting to in the press release here. So it's a global product and technology role as well. Yeah, this is high profile. Yeah, he will report to Disney Entertainment co-chairman Alan Bergman and Dana Walden, and also ESPN chairman Jimmy Patero.

Speaker 3 4:49

So three bosses reporting to three bosses, poor guy.

Speaker 2 4:54

But a good background. 20 years, more than 20 years at Google and YouTube. Yeah, across a whole different portions of the division, also outside the US as well, which I think is interesting. Also some of those services in APAC. He was in the Google Fiber Group.

Speaker 1 5:16

Oh, wow.

Speaker 2 5:17

He's been there a long time. Okay, 20 years at any company in any industry is a long time.

Speaker 3 5:23

Yeah, that's a long time yeah Well good, yeah, that's a long time.

Speaker 2 5:25

Yeah, well, good, yeah, that's so, we'll see what we'll see what comes of that. Um, interested to hear what his approach is going to be go forward when, at some point, I'm sure he'll present kind of here's, here's the approach in terms of the tech entertainment division and, you know, laying the groundwork of here's what the product roadmap looks like. So that'll all be interesting to see at some point.

Speaker 3 5:45

Yeah yeah, I pulled out a couple interesting tidbits from the Hollywood Reporter article, which I haven't read all the coverage, so I don't know if this is just basically a rewrite of the press release or what, but it says that he has cited Netflix as the benchmark. That's referring to Bob Iger, but then Smith. The next sentence is Smith will be tasked not only with developing and advancing the technologies for Disney Plus and Hulu, but also helping develop the upcoming ESPN flagship streaming product. So I wonder how aggressive you know he's going to get and then Disney is going to get, and really you know rebuilding the architecture and you know it's one thing to cite Netflix as the benchmark. It's another thing to actually build something that could compete technically.

Speaker 2 6:42

Sure, Well, they're working on bringing everything into one platform Hulu, Disney.

Speaker 1 6:47

Plus ESPN.

Speaker 2 6:48

They've been working on that for a long time yeah that's been. Then you also have a new, yet announced, whatever this ESPN thing is, plus you still what's going on with Venue? Yeah, exactly, it's a lot of work.

Speaker 3 7:01

Yeah, it is, it is, it is, let's jump into some other content news here, mark.

Speaker 2 7:09

In June, it was reported that Gerb Rothman Jr and Bain Capital were considering making a bid for National Amusements, which is the controlling shareholder of Paramount Global. Well, yesterday, the Wall Street Journal said that an official bid is coming, potentially by the 21st, and the reason the 21st is important is that's the deadline for the 45-day go shop window that was agreed upon by Paramount and Skydance when they agreed upon the deal. I see Now the article says, though, that Fortress Investment Group and Roku could be potential financial backers of this deal, and one of the things I was hearing was that I think somebody else already reported on this was that the amount of hash they're going to offer is not as large as a skydance deal, but that they're going to offer in the deal for paramount shareholders to have more ownership.

Speaker 2 8:03

I see so sounds like that's what they're hoping gets their deal done. But here's, here's an another deal. It's kind of just in limbo now because if this official deal comes through, then Paramount is going to legally have to spend whatever time they feel is needed to actually look at the deal. Yeah See, which might be better for shareholders? Does that kick off a whole bunch of shareholder lawsuits? Who knows? That's right, it's, it's just on unknown. All this while paramount is doing layoffs yeah so there was.

Speaker 2 8:38

There was a lot of layoffs this week at paramount. I've heard from from quite a few already. Paramount television studios also ceased operations at the end of this week. I've heard from quite a few already, paramount Television Studios also ceased operations at the end of this week. So there's a lot of changes coming at Paramount. There's going to be additional rounds of layoffs in September as well. This isn't they did all the layoffs in one day. So there's a couple waves of layoffs coming and which we knew. But then how does that impact the business if you don't know who's acquiring or who it's going to be merged with? It's just such a turbulent time right now for Paramount in particular. Shame for anybody who just you know you have to work there and wonder what's going on.

Speaker 3 9:26

Yeah, wonder what's going on.

Speaker 2 9:28

It's reality, though. Right, that's business. Let's jump into Sling TV. Mark, I'm calling this out only because it's interesting how we talk about bundling a lot, and it's just bundling looks so different. It's fascinating.

Speaker 2 9:42

Just price points, right? Netflix will not give you the ability to pay for a year in advance and save money. They just don't offer it. Why? Because they don't feel that benefits their business. And yet Sling TV is offering a limited time deal where new customers only prepay for four months and get a $72 discount. And what's interesting is and smarter Sling TV here. Now they only have two million subs at the end of q2, but what they're really pitching here is hey, with the upcoming nfl season, pay for september, october, november, december, right, almost on the entire season of football almost, and you're going to save 72 dollars. Yeah, uh, they do have nfl games cross fox, nbc, espn, nfl network but it doesn't mean they have them in every local market. So just a heads up on that Check where you live and what's available. Talking about NFL, let's jump into the news. At the price of YouTube's NFL Sunday ticket went up by $30. More price increases Yesterday.

Speaker 2 10:42

August 15th. Yeah, more price increases Now. We knew this was coming. Youtube had announced this at least more than a month ago. What's confusing here, mark, is it makes the minimum cost of NFL Sunday ticket $379 a season. That's if you're a YouTube TV subscriber. If you're not, it's $479 for the season.

Speaker 2 11:07

Now. Eligible students and members of the US military can still get the NFL Sunday package for $200 a season, but Red Zone, which was part of the package last year for free, now costs extra, so you can add NFL Red Zone to Sport Plus Add-On for $11 a month, I see. So that by itself seems pretty straightforward. You have three prices, yeah. However, here's the problem. If you look at the Reddit boards and Facebook and some other places, you've got many subscribers who had the service last year and reported that when they canceled it, they got offers to sign back up for a discounted price of $249 without red zone or 289 with it, and that was a couple of weeks ago. Then some who contacted support this week reported that they got NFL Sunday ticket and red zone for $219. Oh, wow, the year.

Speaker 3 12:04

This, this, this reminds me, dan, way back in the day with the cable companies, it worked the exact same way. You know, all you had to do was call up, and, and, and, and cancel. You know, threaten to cancel, and next thing you knew they were throwing. I mean, just what? What do you? Want we can do this and we can do that.

Speaker 2 12:23

want we can do this and we can do that, and I did that more than once. Because, they don't care about pay TV.

Speaker 3 12:34

Yeah, yeah, no, no. That's why I said back in the day and I mean like like 15, 20 years ago, but I did this strategy more than once when my cable bill got to a point and I went this is stupid, call them up. Sure enough, I ended up saving 50 bucks or something every month.

Speaker 2 12:45

But what I can't figure out and maybe there is no rhyme or reason is the discounts seem to be all over the place. So how YouTube decides who gets the offer is unknown. Some have reported hey, I canceled and I got no offer to sign back up at a discount. So I asked YouTube. I reached out. I haven't gotten a reply back as of yet. I only asked them yesterday. But I asked do customer support personnel when you call in have the flexibility depending on?

Speaker 2 13:14

the customer just to say, hey, I can offer you some sort of discount, but maybe you can't go. They can't go below threshold or maybe they'll need a certain amount per day. Yeah, I have no idea how this works, but looking online, I'm seeing that there's almost 10 variations of pricing that people have reported. Yeah, so that's a lot of skews. That's a lot. If you just think what's the ARPU of a user when you're going anywhere from 219 all the way up to 479? Yeah, that's a lot. If you just think what's the ARPU of a user when you're going anywhere from 219 all the way up to 479?

Speaker 2 13:50

Yeah, that's a big gap and I get if it's like 10 bucks cut off 20 bucks, yeah, yeah yeah, I'm also wondering if, okay, you're a YouTube TV subscriber, are they going and saying, okay, because you've added NFL Pack, but you've been a YouTube TV subscriber for more than three years, you get a 30 discount, right? So it's so unknown. Yeah, now just tying in here too verizon's offering promotion currently that gives free access to nfl sunday ticket for select wireless and home internet customers. If you want to know more about that, just hit up just google verizon nfl sunday ticket. I go through what the deal is, but there's far too many caveats of the type of phone that you add, or line or second or speed at home. It's far too much to break out. But verizon's verizon site has all that jumping into.

Speaker 2 14:41

Some more sports news. Mark olympics are over. Mbc sports says the team usa men's gold medal basketball win. That was the most streamed event of the paris olympics across mbcu digital platforms, with an average minute audience of 2.7 million viewers. Now, keep in mind I said most streamed event, not largest streamed day. Yeah, because that's different. Yeah, across TV and streaming. The game peaked at 22.7 million viewers, so 2.7 is streaming out of 22.7. So what does that tell you? The vast majority of people were watching the Olympics this year on TV. That said, the amount of total hours that was consumed was, you know, the multi-billions.

Speaker 2 15:32

Max put out some figures and I would love to use them and talk to them here, but the problem is they only gave out percentages. It was up X percent over previous years. They said they signed up more new subscribers than they had previously, but they wouldn't say how many. So I reached out to them and they said they couldn't give any other details. So I won't go through the numbers because unfortunately, it's just, it's all percentages. I do find it also interesting that it seems everybody's comparing the viewership of this Olympics to the last Olympics. But I don't see how that's comparable. When the last Olympics you had the whole issue with COVID yeah, exactly so. To me that's comparable. When the last Olympics you had the whole issue with COVID yeah, exactly so. To me that's just that's not apples to apples, it's really say this Olympics and then the next Olympics. That I think should be compared.

Speaker 2 16:18

Yeah, a couple of things in the media here, mark, let's go through real quickly. So some things you're talking about disney and profits and whatnot. So bloomberg had an article. Found it very odd, that said, with the latest quote, with the latest price increases, it's all but inevitable disney will report a profit from streaming going forward. Warner bro's discovery is already a break even, but it's direct to consumer business includes linear hbo. So it's hard to know the real HBO. So it's hard to know the real numbers. Yeah, agreed, it's hard to know the real numbers. But here's the thing Just because Disney or WBD reports a profit in one quarter, that doesn't guarantee that they're going to continue that profitability going forward, mm-hmm.

Speaker 2 17:07

So reporting a profit for one quarter is not the goal, it's. It's sustained profitability that Wall Street is looking for. Yeah, and they're not looking for break even, they're looking for free cashflow and they're looking for growth at the same time Now, not the kind of growth we were seeing or affected three to four years ago. But I thought it was odd the wording. It's all but inevitable. Disney will report a profit from streaming going forward. Well, what if they lose subs? Was it last quarter? So there's this idea that these services will just always continue to grow and as long as they cut costs, there's profitability. But also look at the cost cutting they've done in terms of employees, cutting back on content, raising prices. You can't do that every year. So I thought that was kind of just an odd way to talk about it. And then there was also an article where a Bank of America analyst said quote we see a path to profitability for Comcast under the new agreement.

Speaker 2 18:12

The NBA is a must have for the sports fame. They also noted that Comcast and cable may also benefit from the NBA by driving broadband usage, by shifting more people to Peacock. Well, I thought it was interesting, mark, and the reason I put this in here to discuss was I find it interesting when people say sports fans because there's a vast, there's a, I should say there's a large population of people like myself and others who don't classify themselves as sports fans. Yeah, we classify ourselves as we like a particular team or a particular sport. If I like football, I could care less. Who has the NBA? Yeah, I don't watch it yeah, so it's always interesting, I find how they're always talking about sports fans. And yes, of course there are fans who will watch anything that is on TV tied to sports. Sure, sure, yeah, but that's not the majority.

Speaker 3 19:15

Yeah, yeah.

Speaker 2 19:16

So I also thought you know this is going to help potentially drive broadband. Well, who today doesn't have broadband in America? Yeah, yeah, now you have some rural areas, no doubt, right, I get that. But if you're already a sports fan and you're already streaming sports, you already have broadband. That's right. I don't see how the NBA, being tied to Peacock and Comcast, now all of a sudden says someone says okay, I'm now going to have to get broadband to watch NBA.

Speaker 3 19:45

Yeah.

Speaker 2 19:46

So to me that is just makes no sense. Now, bank of America already came up with estimates Of course.

Speaker 2 19:51

Which and I don't know where this methodology comes from and I can't argue with it because I just don't know where these numbers are. So they estimate company Peacock will see $192 million in incremental revenue yeah, attributed to new subscribers in the deal's first year. So they're saying because of the NBA, peacock is going to make $191 million of money they would not have made otherwise. How do you come up with that? How many subs is that? Over what period of time? For how many months? I don't know. And then they said it's increasing to 420 million by year four. Then on top of that they give a one other point which they say year one advertising revenue alone for Peacock is going to be $160 million.

Speaker 3 20:46

Okay, but no methodology. So yeah, there's there. There's something else here that I see as problematic, but it's such a general statement, you know, I can just point it out. I can't debunk it completely. Um, but comcast cable may also benefit from the MBA by driving broadband usage by. You know, and you already said this, by shifting more people to Peacock. The problem is is that these aren't metered plants. Correct, right, they're not metered plants.

Speaker 1 21:19

I didn't think of that.

Speaker 3 21:20

Now, I'm not familiar in all you know uh areas, uh, and all their markets. You know, maybe they have some really low teaser with you know and there's some sort of an overage or something. Okay, maybe, but in my experience, like I'm literally getting um, you know, dan, the last couple of weeks, you know, my neighborhood has been all torn up. Actually, that's not a fair statement. They've done a great job, but they're laying Google Fiber in my neighborhood and so guess what? Cox has been sending me direct mail, has been sending me emails, because I've had Cox Internet since I moved in here almost 10 years ago and I always had the gigablast and all this.

Speaker 3 22:04

The price has more than cut in half over the last about nine months, I think. More than cut in half. I, at the, at the top, I was paying like $119 a month, which was ridiculous. But you know, given what I do and you know everything, it's like okay, fine, you know, it's just sort of a cost of, yeah, I'll just pay for the best, um, but now it's 60 bucks, 60 bucks and there's other incentives they're throwing in. My point is is that I think that experience is somewhat unique not unique, sorry, it's. It's somewhat common. I think all of our. You know like. You can get a 250 megabit per second plan for 40 bucks right now.

Speaker 2 22:47

I've got 450 megs through Cablevision for $40. Yeah, okay, taxes, fees, everything.

Speaker 3 22:53

Yeah, yeah, there you go. So it's kind of similar. So sometimes these comments that are sort of the hand-waving, as I call it, by analysts or just you know whoever, it's kind of like you should actually understand how the business really works.

Speaker 2 23:13

They don't know the numbers Because if you go to Comcast's site, every Comcast plan for home comes with 1.2 terabits of delivery. Now what's fascinating is Comcast breaks that down on their website. To put it in terms, because most consumers don't know what the hell is. 1.2 terabytes, so it's 500 hours of streaming in HD. That's 16.6 hours of streaming every day in HD for the month. So even if it drives broadband usage to your point, no one's paying more for it.

Speaker 3 23:48

Yeah, there's, there's, there's not any extra. And the fact of the matter is and you know, we really know this Netflix and really all the streaming services have gotten so efficient in their, in their streaming bandwidths that you know that HD is also not streaming at 12 and 15 megabits, you know, which would be ridiculous, as we know it's. In some cases it's more like like like three to four, you know it's not even four to six, and so the point is it, you know these aren't bandwidth hogs like they used to be Correct.

Speaker 2 24:23

I mean it does add up. I mean it does, but analysts don't understand bit rates. Now, that said mark, I should clarify, just for accuracy here, that not all comcast subs get that amount of data because in the northeast those, those plans don't apply okay, where I live, you go connecticut, new jersey, new york, pennsylvania, there's, there's a handful of states where in the northeast that doesn't happen yeah, but let's do some math though.

Speaker 3 24:48

They'd have to have a whole lot of subscribers, right?

Speaker 2 24:51

The percentage of subscribers have to do that, all because they're watching NBA. All because they're watching NBA and, by the way, there's not enough NBA games on that you could watch in a month. That's going to drive up your usage to that large degree.

Speaker 3 25:03

Yeah, yeah. So this just you know. This points out, dan, what you know, you've been saying for years and you know we say on the podcast is you know facts like that's what matters. This, this isn't just you know opinions or you know it's, it's, it's a money manager I don't expect better.

Speaker 2 25:22

I do expect better from others, which we'll get through to in a minute. Yeah, um, let's go into the whole elon musk, donald trump thing. Um, audio only stream. I documented how I had trouble getting in, others did they started 30 minutes late more than that.

Speaker 2 25:46

It looks like the audience size was about 1.2 million concurrent. We don't have that validated. But yeah, mario, it was funny because I woke up just the next day after that thing and just quickly saw stats on the blog and I was like what happened last night? That I got 2 000 hits for one blog post after you, you know, 12 pm, yeah, well, what happened was that Trump and Elon came out and threw out a almost one billion number Wow, which they skewed, and originally it was 1 billion people, 990 million people, and like this is how popular it was, and I'm like what is a billion? Like what? So it turned out the billion number was the number of people who referenced the word Trump in a post on Twitter and how many views. I thank God, okay.

Speaker 3 26:41

I saw that same number and I just sort of like that was a number, but it just doesn't. But I thought it was.

Speaker 2 26:46

It was absolutely just comical, because the conversation started off with Trump congratulating Elon for having the largest live event ever and breaking the internet. So what people were Googling was what's the largest streaming event ever? And then my post came up of the 10 largest live streaming events ever. So that's where all the traffic, that's where the traffic was oh, that's yeah which is, which is pretty, pretty funny. Uh, so that that was that. I don't think there's anything more to cover in there yeah uh, real quickly.

Speaker 2 27:25

Amazon Web Services put up a quick blog post, and the reason I'm calling this out not because it's a vendor with a solution, but their blog post is talking about bandwidth, their bandwidth reduction filter to prioritize both bandwidth efficiency and high quality video output, they say. With this filter, you can deliver video that looks stunning while minimizing bandwidth consumption. With it enabled, you can reduce encoded video bit rates by an average of 7%, depending on the content, while maintaining the quality. So just another example for listeners do more with less. It's what everybody is asking about the days of let's pump out huge high bit rates to everybody. Why is AWS pushing this out? Because their customers are asking for it. So just another example. Two, three more things here, mark. So now I'm going to get to people that I do expect more from but continue to be disappointed at times. Maybe I shouldn't expect more from them, but an outlet like the New York Times I expect more from. So in the last week, tubi's just gotten a huge amount of play in the media. There was a big article by the New York Times, ink Anchler, that there was quite a few.

Speaker 2 28:46

Now, is Tubi popular? Yes, does it have a good service for people who like that content? Yes. Is it growing and are people consuming more time on the platform? Yes. So I know I talk a lot about Tubi and I don't have a problem against the service. It is what it is right. It's a growing service in the market that has free content and for the right audience and where they're half their audience by their own demographics is over 50. Okay, it's filling a niche in the market. I don't think there's anything wrong with that. Now, what we don't have is a revenue. We know they're not profitable, right. We don't have CPM rates. We don't have ad fill rates. We don't have any information around of all the channels they offer which are the most popular and consume how much total time. We don't know how they define monthly active user. So there's a huge amount we don't know about the business.

Speaker 2 29:40

Across these articles, the New York Times in particular, they called Tubi quote extremely successful and it is quote doing so well. It quote has surpassed platforms like Max and Apple TV Plus in popularity. Now, that's not quite exactly right as written, because what does successful mean? What does well mean? And popularity without profitability? That's not what matters to Wall Street right now. Now has it surpassed Max and Apple TV Plus in popularity. What they're referring to is the Nielsen Gage Report, but here's what we also have to just you know. None of these articles ever say this. Tubi is limited to US viewers, us only. Max is in 65. Apple TV Plus is in 100. Over 100 now.

Speaker 2 30:49

Also, the New York Times article was using estimates by third parties of what Tubi's revenue was in 2023 of over $900 million. Now why is the near times using an estimate from a third party when we have a rare comment which they obviously didn't pick up on in research? In Q3 of 2022, fox said Tubi had $165 million in revenue for that quarter and, based on the run rate, tubi's 2023 revenue would top $700 million. So why is the New York Times using an estimate of over $900 million from a third party? We have the public number, yeah. The other thing they didn't mention is for multiple quarters.

Speaker 2 31:27

Now Fox has disclosed that their costs overall have gone up because of Tubi. Quote costs rose due to investments in Tubi. We know the business isn't profitable. The other thing is, mark, the Times missed this as well In Q4 of last year. The Times missed this as well In Q4 of last year. Sorry, during Fox's Q4 calendar 24 earnings. The CEO said Tubi's revenue growth was quote slightly less or somewhat less than last year, which also means Tubi's not growing at the rate that it used to. So none of that ever seems to be included in any of these articles about it. It's just man, this thing is huge and it's growing and Hollywood loves it.

Speaker 2 32:12

And then another person wrote what Tubi's success tells us about Disney, paramount and WBD stock market woes. One has nothing to do with the other. Tubi doesn't have theme parks. Yeah, what are you comparing here? But you know I'm disappointed. New york times, you've got editors. I mean, you have people who should be checking facts of of companies with public earnings reports, and yet they're using estimates by some third party, either because they're too lazy or, I don't know, didn't seem to care to get the story right. Yeah, it's just disappointing. We've got to use numbers of companies for putting out. Yeah, I think that's just super important.

Speaker 2 32:58

Now, going to another thing here, I was going to do a blog post about this, but I'm not going to do it to create any turmoil, but I will call it out here on the podcast. So Tom Ryan, ceo of Paramount Streaming, posted on the day that they're laying off over 2,000 employees. That's a historic milestone for Paramount Streaming. Their global DTC division delivered its first quarterly profit. He says it did so with faster and less investment than any other major streaming business. Well, how do we know that? We don't have all those numbers? He said you know? Naysayers claimed it would never happen. He applauded the tenacious teams at Paramount Plus and Pluto TV for this record-breaking achievement.

Speaker 2 33:45

This is on a day when you're laying off over 2,000 people. Yeah, not cool. So I left a comment. Mark, I just said this is a tone-deaf post. Over 2,000 layoffs due to mismanaged costs. This is not the time to celebrate a quarter of $26 million from Paramount's D2C business. Celebrate a quarter of 26 million from Paramount's DTC business, which is adjusted EBITDA, which means non-gap financial measures. So it's not even EBITDA of 26 million. Domestically, the business was not profitable and Paramount Plus lost 2.8 million subs in the quarter. So you're patting yourself on the back on the same day you're laying off or announcing that you're laying off over 2000 people.

Speaker 2 34:31

He deleted my comment. It was taken off the post and it's. You know. Executives should be investing in people, not ideas. Interesting people, not ideas. And nowhere in the post did it say we were able to deliver our first quarterly profit because of the people who are the most important people here and I'm sorry to see some of them go, and we're going to do what we can to help them. And if you're looking, I mean you're the CEO of Paramount Streaming. Why isn't there a post that says unfortunately, I've had to let go some really good people from my team? If you're looking for whoever it is engineers, whatnot? Contact me. Where's the leadership? Instead, it's let's delete comments from posts, because you know, I don't want to be called out like that. Now, interesting, mark, there's like a dozen other people who left comments like, really, you're promoting this on a day, you're laying off on a day, thousands of people dude like, come on now, yeah, yeah, um. Not all those were deleted. I don't know how many, but it's just, it's disappointing you have too big of a following, dan.

Speaker 3 35:39

What's that? You have too big of a following I don't think it's that, it's not.

Speaker 2 35:44

It's not a following. I don't think it's that, it's not. It's not a following thing, right, it's. You either lead by example or you don't. You either care for your people or you don't. Right, and that's just. That's not even business. That's just being a human being.

Speaker 3 35:59

That's human. That's just human.

Speaker 2 36:00

Right Like in the military. There's a saying in US special operations are saying humans are more important than hardware. Right, the best technology in the world, the best of electronic systems and military that exist means nothing without the person who's operating.

Speaker 3 36:15

Yeah.

Speaker 2 36:16

Yeah, humans are most important asset you have, no matter what business you are in anywhere. So just at that level, you expect more from an executive, and I just thought it was really disappointing that it's like let's pat ourselves on the back for one quarter of a very small amount of profitable revenue, using a methodology that most of our other competitors don't use to discuss profitability and not even thank the people who are now leading. Yeah, so it's just that was disappointing to me, wow.

Speaker 3 36:47

What else we got, mark? Well, I think you've got some news about Netflix using some Amazon service. Right yeah for the.

Speaker 1 37:00

NFL games. On Christmas NFL games.

Speaker 2 37:02

Yeah.

Speaker 3 37:03

Yeah.

Speaker 2 37:07

Yeah, netflix is going to default to.

Speaker 3 37:09

Amazon, I guess yeah.

Speaker 2 37:11

Elemental. So, uh, I think that's really smart. I've been hearing, starting to hear more and more, just you know, through the grapevine, of just sort of what Netflix is working on. Uh, they haven't sort of what Netflix is working on. They haven't talked about it as of yet, but others are hearing about it, obviously, and they're using some services over at Amazon. They have been building I don't know over what period of time their own live encoder. Yeah yeah, but apparently for this they're not going to use it, I think that's smart, is that?

Speaker 3 37:42

yeah, exactly. So a couple of questions, maybe in comment, maybe not, but more than a year ago and you wrote something up about G-Core or G-PAC sorry, not G-Core- G-PAC that's right.

Speaker 2 37:56

Yeah, g-pac, I forgot about that.

Speaker 3 37:59

Are they still utilizing and building around that, do you know? Because that was originally the intent. That I understood was I was going to work across the VOD service as well as live?

Speaker 2 38:12

I don't recall. It's been a while since I wrote that.

Speaker 3 38:16

Yeah, so I'd have to go back More than a year ago. Was it more than a year ago, I think that news came out. Yeah, yeah, gpac, and it's a pretty good open source project.

Speaker 2 38:27

I mean, it's seems I don't know the full specs here of what they're looking to do with their live encoder. Um, I don't have that level of details. Now. They were building one specifically for these types of events. Yeah, so the fact they're not going to use their own is I don't know if that means they're not ready. They haven't tested it. I just I I'm not going to speculate, yeah, but. But I think it's an interesting point to bring up because it shows a level of let's not take a risk on something that, even if it's our own that we control.

Speaker 2 38:59

They haven't done 10 events with it, or even maybe even one, because the the tyson paul fight got delayed. Yeah, yeah, that's right. So how are you testing it? You're testing it with um non-production traffic large scale. So is that really where you want to roll out your live encoder for the first time on christmas with the nfl, on christmas exactly?

Speaker 3 39:20

no so well, the other. I think it's smart. The other thing is, you know, one would assume anyway that Amazon Prime Video for Thursday night football is using leveraging Elemental, and if that's the case, then why wouldn't you just basically say, hey, we just want to use your workflow, you guys have been doing this every week, you know. Yeah, it's proven, it works.

Speaker 2 39:46

Yeah, I think it's very smart. I just also think it points out just how the live team at Netflix is thinking. I continue to see people right, oh, netflix doesn't know live, they won't get it right. These aren't goofballs over there. It's a very good team. Look up to people where their background background is. They're hiring more people like they've got a solid team there now.

Speaker 2 40:09

Have they had some issues with live events of smaller scale? They have, they absolutely have, and they've come out and said we have, so they're going to do everything they can to mitigate anything like that in the nfl games. Now, that said, that's a lot of traffic. It'll be the largest live event ever in the U S, for sure, without a doubt. Uh, so are they prepared? Yeah, I can't comment on that. I don't, I don't have those details, but uh, it's, that's going to be. That's going to be interesting, really interesting to watch on that day. Yeah, for sure.

Speaker 2 40:42

The easy thing I think, mark, for that is just in terms of watching that day, is because it's Netflix and it's so wide scale. I don't really think that like the Super Bowl. I don't think that has to be tested across lots of different platforms. Netflix experience is already so good across any platform. It's pretty identical. And because it's Christmas, because it's NFL, because it's Netflix, if there is an issue of any kind anywhere, someone's going to report it. Yeah, but you're going to be able to track pretty clearly on social media any issues of any kind any error message.

Speaker 2 41:14

People are going to share a screenshot and you don't always get that from some of the other services. Yeah, so I expect that we'll just know the quality of service, the QoS, pretty well on that day. Yeah, and then also just I'll be hearing from ISPs that day in terms of what they're seeing going over their network. I always do on large events like that, so that'll be interesting to see as well. But yeah, I certainly I'm pulling for them. I think we all should as an industry.

Speaker 2 41:41

Yeah, absolutely it's not going to be good for anyone if it doesn't come off flawlessly, especially NFL. We know the type of content and viewership that has, for sure, for sure. So that's what we got. That's everything this week. If anyone has any questions, reach out to us. Mark and I are back on a regular weekly schedule now for at least another couple weeks before I have to travel again. But everything we talked about today is already online. I will post. Hopefully by the time you're listening to this, I will post the courts ruling from the Fubo case. I don't know how quickly that'll take to get up. I also don't know if they have to redact some stuff in it first. I don't know how that works. Yeah, but we'll post that as quickly as we can. If you have any questions, reach out to us. We appreciate everyone listening and we'll talk to you next week. Have a great week.

Speaker 1 42:26

If you enjoyed the show, send it to a friend, have questions for Dan or Mark, connect with them on LinkedIn at any time, and be sure to check out Dan's blog at streamingmediablogcom.