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 0:22

Welcome to the Dan Rayburn Podcast. I'm Dan Rayburn, long co-host Mark Donegan back after a three-week hiatus. Mark, we are back. Yes, you'll be happy to know that people did miss us.

Speaker 3 0:34

That's good. That's good, it's good to be missed.

Speaker 2 0:37

But just, you know a couple people are like hey, idiot, why did you?

Speaker 1 0:39

stop doing your podcast, what's going on?

Speaker 2 0:41

And I was like I didn't stop, we just took a little break that you stopped doing your podcast and I was like I didn't stop. We just took a little break. That's right. I realized that we should have talked about taking the break at the beginning of the last podcast, instead of mentioning at the end.

Speaker 3 0:53

Yeah, that's right. That's right. Not everybody makes it to the end, they don't. That's cool, right?

Speaker 2 0:59

Listen to what you need to, but we're back. We're back on a regular schedule here for a bit. Myself, you know, out of town, I'm from military Our podcast producer, denny. He was as well, mark, you were on tour.

Speaker 3 1:14

I was out of the country. Yep, on your tour. How's your?

Speaker 2 1:16

band doing.

Speaker 3 1:19

You know, we're still trying to sell out those little 20-seat bars. 20 seats, yeah Well, speaking of music, we're going to do like a double album release today All right, so we're going to get through a lot today.

Speaker 1 1:32

Yeah, as much as we can Now look.

Speaker 2 1:34

I don't want to keep people too long. We all know you have a limited amount of time, but we'll get through as much news as we can both content broadcast sports related, but also some vendor news as well. So we're going to break this up, mark. Let's do the first half here, getting into all the content deals. Now. I would say some of this news is up to two weeks old.

Speaker 2 1:56

We just never got to it, so I picked just really the largest news pieces out there and the things that I think listeners should know. News pieces out there and the things that I think listeners should know. Let's start with what today came out from Netflix. We are recording on Wednesday, june 18th, so Netflix has officially entered the live TV business, which is pretty interesting, and they'll add live TV channels to its service in France in a deal with TF1.

Speaker 2 2:20

Starting next summer, all Netflix members in France will be able to watch TF1 channels, live channels and VOD content from TF1 Plus directly on Netflix, no additional cost. Pretty interesting. Now, if you break down some of the numbers that have been given out here by TF1, it's interesting how they call this out, because what we don't know here is who needs who more. Does Netflix need TF1 content, or is it the other way around? Because TF1 content is already available for free on TF1 Plus and the broadcaster reports an average of 35 million users per month. That's users, not views.

Speaker 2 3:06

It's also been reported Netflix didn't say this, but it's been reported and I have confirmed that TF1 is going to sell its own inventory for content streamed on Netflix add tier through its sales house, which is called TF1 Pub, and that viewership is going to be measured by the standard French TV measurement body. Oh boy, I can't even pronounce that in French, so I won't even try. So this is interesting, because how much does this really expand the reach of TF1 content when a bunch of it's already available for free? At the same time, I think it's kind of interesting that TF1 is thinking if people are already in Netflix, and that's where they're going to get content. Why not just put our content on their application, on their platform? So interesting We'll watch that. I do not think I've been asked a couple of times today. Does this move signal that Netflix is going to get into live broadcast linear TV business in the US? No, I don't think so.

Speaker 3 4:04

To win the streaming war. We're going to get to the wars later, mark, trust me.

Speaker 2 4:09

There's been a couple of headlines.

Speaker 3 4:10

I had to get that in there. I love talking about the streaming war. It's coming. There's a couple of those today so.

Speaker 2 4:17

I don't think this changes their live linear plans, but they're very specific in terms of where they license content and how they do it in every country. Yeah, let's go into YouTube. So at the Cannes Lions Festival, youtube CEO said that YouTube Shorts now averages over 200 billion views a day. That's a big number, but that number by itself doesn't reveal how well the videos are being monetized. Yeah, at all. Neil Mohan, their CEO, also announced that YouTube's going to integrate Google's latest and most advanced AI video generation tool, vo3, into YouTube Shorts later this summer, so we'll have to see what the impact is there. Now, mark, streaming wars. So you know really interesting that because of that 200 billion number, I saw some folks who immediately wrote headlines that YouTube has won the streaming wars.

Speaker 3 5:18

Yes, right, I saw, that too, came out again today.

Speaker 2 5:21

I saw multiple ones. Yeah, came out again today. I saw multiple ones and you know, fascinating Cause somebody then wrote an article that they published on LinkedIn, and they don't even have their last name tied to their LinkedIn profile, so that's kind of odd to me. But their headline is that even Netflix is jealous of YouTube. Why would they be jealous? And when you read it, what they're basically saying here is that Netflix is is the old and their legacy and YouTube is now the top distributor of TV content. Well, if you're using the YouTube shorts number, the average shorts on YouTube is 20 seconds. It's the average. That's YouTube's own number. 20 seconds is the average. You're comparing's own number 20 seconds is the average.

Speaker 2 6:05

You're comparing a 20 second user generated mostly user generated content to Netflix. Yeah, and popularity doesn't equal profitability, because what we don't know is, of those 200 billion views every day, what percentage of that content is monetized. That's right, don't know. I have no clue, but we know almost 100% of Netflix's content is Absolutely and most of the shorts. I see it's a bunch of goofballs for lack of a better term doing dumb stuff.

Speaker 3 6:36

Nobody's buying ads. Against that, you're too polite. Yeah, exactly, I don't want to curse on a podcast, that's right. That's right.

Speaker 2 6:42

But that's not the same thing, so it just makes no sense. They also use this example that, well, because you know youtube's going out and working with um. You know amazon sorry, recruiting you know mr beast, and it just goes to show that, you know, tv actors are becoming youtubers. Yeah, they recruited mr Beast, and then he published a blog post saying he lost tens of millions of dollars, yeah, by doing that deal. Yeah, cause it didn't work out well. So this whole idea that, just because of these stats that are being thrown out by YouTube means that they've somehow won, netflix had, in the last three years, combined just over $19 billion of free cash flow. Yeah, so why would they be jealous of YouTube? They wouldn't Also, well, the person looked at Netflix's stock recently.

Speaker 3 7:36

Exactly so. So, dan, let's just do some super quick. You know, this just shows how. Just do a little research. From the moment you first started, you know talking about this, about? Oh, two minutes ago, I typed into Google this search what is the average viewing time of YouTube shorts? Okay, so, while you were giving your monologue there, I typed this in. Here's what I learned Okay, this is directly from Google. This is an AI overview. Okay, well, it's from Google. You'd assume Google's going to be accurate with their own stuff.

Speaker 2 8:14

Who knows?

Speaker 3 8:16

though, but the average session for YouTube, the average viewing time, is 18 minutes. Okay, now, that doesn't explain the shorts, but now remind me again what's the average Roku viewing time for streaming? Isn't it about two hours a day?

Speaker 2 8:36

I think it's more than that, but I'd have to look it up.

Speaker 3 8:38

Yeah, okay. So, in other words, without doing any research, just you know. So if you're going to assign value, you know it's probably good to look at how much time is actually being invested. That's how I would look at this, anyway.

Speaker 2 8:58

Yeah, it's just, it's again, it's writing a headline.

Speaker 3 9:02

Oh, it's catchy. All right, based on a number, and yet you neglected to mention that.

Speaker 2 9:07

You know Netflix's market cap is currently 520 billion. Yeah, yeah, and just in the last year, just its stock is up 78%.

Speaker 2 9:19

In the last five years it's up 171%. Why should they be jealous of you too? This whole idea about just let's write a headline and then we'll just, you know, try and pull people in to make ridiculous, you know, comments is pretty funny, you know. Here's another one, mark, that you know I commented on the other day. I've seen quite a few posts where people have posted in 2022, mckinsey was paid $55 million to advise Warner Brothers to combine with Discovery and change their name. Then, in 2025, mckinsey billed Warner Brothers Discovery an additional $63 million to determine that they should be separate and change the name again.

Speaker 2 9:58

That makes for a good headline, but it's not factual. Warner Bros did not pay McKinsey $37 million simply for them to advise the company on branding or changing the name. And how do you know that? Well, here's a novel idea. You could ask the companies involved. Yeah, branding, they said, was only one of many services that also included consolidating operations, strategically figuring out content, licensing and distribution strategically figuring out content, licensing and distribution, legal services, and you know how many of these posts.

Speaker 2 10:27

I saw, though, that, like WB, paid $37 million to change its name to another company. It's ridiculous. These headlines that we've seen just lately have been pretty nuts. All right, let's go into Disney. So folks probably already know this. It's about a week old, but Disney's agreed to pay Comcast $438.7 million to acquire Comcast stake in Hulu. So in 2023, disney said it would buy Comcast's remaining stake. Disney initially paid $8.6 billion to Comcast. The process was concluded by a third appraiser on Monday. According to an SEC filing, the final transaction is supposed to close on or before July 24th.

Speaker 2 11:09

I will just disclose two here just for listeners. Initially, when these two companies were talking to one another about the valuation of the company, I was contacted by one of the legal parties working on this case, asking if I wanted to work on helping to come up with a valuation of the company. I did not. I declined that work, but I did get to see quite a bit of documents tied to these both companies, all, of course, under NDA, so I can't talk about that, hence why I haven't been writing about it either, but somebody somehow heard about this because they asked if I worked on the case. I did not. It wasn't something I worked on.

Speaker 2 11:49

While we're talking Disney here, bob Iger came out and said he's unlikely for Disney. He sees it unlikely for Disney to follow Comcast and Warner Bros Discovery in exiting the TV channel business. He also said that Disney will quote probably follow a Netflix suit and stop reporting subscriber numbers at some point. This was during an appearance on CNBC, so I don't think that would surprise anybody. He did also say quote. Soon after I returned to Disney, I put everything on the table and asked the team to evaluate whether we should buy Hulu or whether we should sell Hulu, whether we should sell our linear television networks or whether we should hold on to them, and after a pretty lengthy process internally and really taking a long look at what these properties can mean to us long-term, we decided the best course for us to take was not only to buy Hulu entirely, but also to hold on to linear television networks. So what he's talking about is integrating them with their streaming business, and it's something we're going to see more of with the company going forward.

Speaker 2 12:56

I thought it was very interesting. He came out and said we are not going to split the services out into two different businesses. Split the services out into two different businesses. He also said, quote I think there's a lot more value in a broadcast network if it's paired very, very seamlessly with a streaming business. Could be. I don't think it's a one-size-fits-all model, depending on what your broadcast networks are, who your audience is, the type of content you have, if it's live, if it's sports. But that's Bob Iger's take on it. Let's jump into what he's talking about. Here is the news that WBD plans to split into two publicly traded entities. Now, anyone who saw how WBD was reporting financials to Wall Street, pretty breaking out their lines of the business we saw this coming.

Speaker 1 13:43

So this shouldn't surprise anybody.

Speaker 2 13:46

So there's going to be two divisions the streaming and studios division. That's going to include warner bros, television, motion picture group, dc studios, hbo, hbo, go, global networks, that's cnn, tnt, etc. Disney plus will not be included in the streaming segment. So interesting just to see in terms of what they might do there with prioritizing Disney Plus. Going forward. This separation is expected, they say, to be completed by mid-2026. And also I read that a little fast in the beginning the two entities are the streaming and then the studios division the streaming and then the studios division. So in a separate press release it's also important to note here. See, a lot of people didn't pick this up, but the company, through JPMorgan Chase, got committed to a bridge facility of $17.5 billion which they expect to refinance prior to the separation. So what that means is monetarily this isn't going to be a problem in terms of doing the deal Now where the debt is going to sit and how much in which company. I've seen conflicting reports of that and it's not clear based on the filing. I don't know that. We know that yet, so I'm not going to comment on that.

Speaker 2 15:14

A couple other things in WBD here it's going to continue to expand globally, as it's been talking about for a long time. So it's going to roll out mostly in Europe and Asia. In July, about a dozen more countries, so that'll bring it to about 90 territories globally. And they're looking to target more than that, as they've publicly talked about before, in terms of total number of locations. And then finally, in the last couple of days, max began rolling out enhanced browsing experience. So they have dynamic video previews on the homepage, which is really nice. Users are also able to toggle the video on and off from the settings and playback menu. So some tweaks is really what I'm calling it. It's not a new interface like we just saw with Apple TV, but check that out if you've got Macs.

Speaker 2 16:11

Now let's go into YouTube again. Youtube's offering a special discount on NFL Sunday ticket for $276 for the season. Now you have to be a new subscriber and you also have to have the YouTube TV base plan. I saw a lot of people did not report that as part of the news, but it's very clear in the fine print, along with when the offer ends July 31st, that you have to have a YouTube TV base plan. In some locations you can also pay $23 a month and spread the $276 out for the season, but then in other locations you can't. The pay per month plan is not available everywhere. I don't know why that would be the case, though Interesting in some states it is and others it's not.

Speaker 2 16:58

Other YouTube news on the YouTube TV front, they did post to their Reddit board recently that they are going to allow users to build a multi-view with select channels beyond live sports. But it is quote experimenting, that's their word with new multi-view combinations, so it's testing with channels including espn, bravo and usa. They do say that they plan to expand to more channels, including local channels and news, over the coming months, but we don't know when. They also plan to launch a new what they're calling always on multi-view that includes local ABC, cbs, fox and NBC channels. This is going to completely be different from the customization experience, but again, they plan to add local channels in the future.

Speaker 2 17:47

Let's go into some stats here. Amazon said over 13 million viewers turned into Prime Video's initial season of the UEFA Champions League in the UK and Ireland. I did reach out to Amazon and ask what they're classifying as a viewer. I appreciate them getting back to me and letting me know that outside the US and for this particular streaming event. They do not use Nielsen, so they're using their own data. That's how they came up with the 13 million viewers. This is news that came out today, mark, that I saw, but it was announced about a week ago. Verizon announced it's going to stop allowing enrollments for what they call their Plus Play platform in July. So for those that don't know, plus Play was this, I guess it's not really a platform. It's a website that allows you to centralize your purchases, billing and manage your digital subscriptions.

Speaker 3 18:48

Sort of like channels right. But it's really a management portal. Yeah, that's a good way to describe it, kind of like channels, but they also have Peloton up there.

Speaker 2 18:59

non-video services as well. Again, digital services. Now, verizon's never disclosed the percentage of Verizon users who are using Plusplay, but folks I talked to internally off the record said adoption was extremely low. I'm talking the single digits, so not surprising that they're doing away with it. Also, it was extremely confusing because you were buying credits against your bill and if you just Google how to use plus play or anything similar to that, all the results are people saying, okay, I don't really understand. I got this credit but I can't apply it. But this month I can. It has to work on my bill Far too complicated.

Speaker 2 19:41

Yeah, so I'm not surprised they're doing away with this Now. That said, verizon customers this is very important. They can still get streaming discounts and subscription discounts through Verizon's MyPlan and MyHome services. So it's not as if the bundles that they've been offering are going away. They obviously change over time, but it's just the way it's going to be managed, and how you're going to do it is going to be different. Also, those using Plus Play can still manage active subscriptions. You just they're not allowing anyone new to sign up after July 9th.

Speaker 2 20:17

Some have suggested that this may reflect a shift in how Verizon's core telecom offerings are being offered, because, if you do think about it, I can't imagine verizon's making any money off the bundling of the digital subscriptions alone, and they want you to be tied to home internet or mobile. Yeah, so it would make sense that they're going to discount that more tied to you already have. To be a Verizon customer for other services could be part of their strategy of doing this. It could also just be that they don't have any adoption. They haven't said either way. Let's go into some more stats showing how small the TV viewing audience is for F1 racing in the US. The Formula One, monaco Grand Prix and ABC averaged 2.3 million viewers. Espn says this is the largest live US television audience ever for the event 2.3 million.

Speaker 2 21:20

Wow, not that much. Wow. As we know, espn holds the rights to F1 in the US until the end of the 20.5 season. Yeah, it's rumored to be $90 million a year. In terms of licensing, espn's period of exclusivity to renegotiate has expired. Apparently, they're no longer interested in select in the whole season, but they did say that they would like select races.

Speaker 3 21:44

Interesting.

Speaker 2 21:45

Yeah, now little background here on F1 for those that don't know liberty media acquired in 2017. The rumors are they're requesting 150 million dollars to 180 million dollars per year for us rights. Apple was previously rumored to be discussing a bid, but that was never confirmed. Also, apple has made it clear they like deals like mls, where it's global rights and no blackout restrictions. But sky sports holds f1 media rights for the uk, germany, italy until at least 2029, so that could be complicated for apple yeah, the number could be off.

Speaker 2 22:25

And then, finally, you know, netflix has been rumored to be in discussions about the rights as well, but there's no indication that they've actually bid on them. You could also see the rights go to multiple platforms if multiple different services want a couple different races, a piece or part of the season.

Speaker 2 22:45

Now, that said, if a company outside of ESPN wins exclusive or partial rights to the US market, I think it would be smart if they changed the viewing experience. Mm-hmm. For those that don't know, espn uses Sky Sports feed so US viewers get the same coverage as fans in the UK. Yeah, okay, well, that might tie into why you have lower viewership in the US, mm-hmm. So a new distributor could develop its own coverage. It can make it more US focused. That could be beneficial, potentially. So we'll keep an eye out on F1.

Speaker 2 23:17

Next, fubo and DAZN. They announced a partnership. Both companies are going to distribute their own and operated linear channels on each other's platforms in the US. So DAZN is launching a new channel in Fubo called DAZN1. Customers can purchase as a standalone subscription or as an add-on. You can also, as a customer of Fubo, you can pay to have DAZN's pay-per-view events. And then finally, on top of that, dazn is launching a free, fast channel called F fubo sports. So they'll have a bunch of content on there for free. So you're getting everything here subscription, pay-per-view, uh, and fast, really sort of any. Any way, you want to consume select pieces of content? Yeah, yeah, let's go into stars. Mark stars was one of the latest put out q4 earnings. Yeah, yeah, sott subscribers including Canada. The number was 19.6 million. They had an operating loss of 136 million in the quarter. So a little bit of growth, but just not a lot. The end of the quarter was 715 million in senior unsecured notes, 17.8 million cash and total net debt of 615.5 million. Wow.

Speaker 2 24:52

so read the numbers yeah uh, okay, now let's go into, before we go into, some vendor news. We've got a bunch of advertising deals that have been announced. Uh, combinations. So dis, disney and Amazon have created a deal to expand advertising in a partnership they already had. So Amazon's demand side platform will now be able to reach consumers watching Hulu, disney and ESPN content and look, you know, that's cool, but the problem is we really have no insight into how much that expands what they're doing. We just we don't really have any indication from the two companies of what that means, but it's just expanding on a partnership.

Speaker 2 25:41

The next one is that Amazon MGM came out and said that, quote we are heavily invested in theatrical and we're not holding any content back. So they're saying they're bringing a $1 billion slate worth of content to market in 2026. And they're not holding it back in terms of keeping it out of theaters. In 2026, they say they're going to be releasing 20 movies, 10 which will be theatrical, and the budget for that whole slate in 2026 will be $1 billion. So they're making it very clear that the movie theater is really what they're investing in in this particular case. Clear that the movie theater is really what they're investing in in this particular case. Now, how quickly some of that comes to amazon would be super interesting to to see. We don't know that right now, but uh, they're, you know they're. They're putting numbers out there, which I think is is a good way to look at it. Uh, paramount let's go into Paramount real quickly. Paramount is going to cut 3% of the US workforce. They announced this on June 10th just over a week ago. 3.5% Not too surprising here being they're still working on their merger with Skydance Media. What we have from Paramount here is that it's several hundred employees total and that it's several hundred employees total and that it's across many different divisions within the company. We're still waiting for any update. As far as the merger with Skydance Originally I believe they said it was going to be. They were hoping it would be end of this month, so we'll see if they're still on track for that. I've not seen an updated regulatory filing as of yet, so we'll wait to get on that.

Speaker 2 27:31

We also had a deal, mark, with I'm trying to remember who it was. Oh, it was Roku. Roku has also done an ad deal with Amazon as well, so this one is Amazon and Roku are creating what they're calling the largest not sure how they're defining that authenticated CTV footprint and it's exclusive through Amazon's DSP. So they're saying that it'll deliver an estimated 80 million US connected TV households, based on some com score data that they're looking at. So it's an exclusive partnership. So that's another ad deal there in the space. In addition, we also had another ad deal here with Netflix. They expanded their programmatic ad access with Yahoo and their DSP side. So, interesting, within about a week of each other we had three deals. That's right.

Speaker 3 28:36

Yeah.

Speaker 2 28:37

Some other numbers here. Geohotstar they say they now have 280 million subscribers since their launch in February. So that's an updated number from them. Some interesting numbers here from TikTok Mark and for all the talk of shopping and whatnot, tiktok has published some numbers. This is on June 13th, so five days ago. Problem is the numbers don't really help us because they say things like in the US TikTok shop sales have increased 120%. We don't have a baseline number so we really don't know. They also give out some additional 70% of users have discovered a new brand. That doesn't mean they've bought anything.

Speaker 2 29:20

So very long blog post here from TikTok which I'll put on LinkedIn. I haven't yet. Some interesting insights into what they're thinking, but unfortunately it's still not anything tied to revenue or average sale or how much the average person is making. So we don't have too many other details there. So we don't have too many other details there. Let's go to Apple TV. Their tvOS 26 is getting what they're calling liquid glass treatment, also some profile switching features. So you can read more about that on Apple's site. You know, I think it's pretty funny that some of the large media companies out there that cover you know, gadgets are talking about you know this exceptional feature. It's going to allow users to quickly jump into their own user profile. Okay, thanks, I can switch user profiles easier.

Speaker 2 30:15

That's not revolutionary to me. Yeah, uh, it will. The new revamp will include new post art and the main screen. You're going to be able to see more shows displayed. So you know that's good. Just in terms of tweaks. I didn't see when it was actually rolling out. I honestly didn't look at that, but that's something we'll see from Apple soon. Let's see what else we got. Mark IPL final watch by record 169 million TV viewers in India. That is TV viewing only. That is. That is not including digital in any way. So this is a new one that they've secured rights for. So they're going to stream the Canelo Crawford fight from Vegas on Saturday, september 13th. As always, it's included in the Netflix subscription and all plans Did see some people saying you can't get it if it's just the ad blend. Yes, you can Netflix made that very clear.

Speaker 2 31:22

A couple other key headlines here and then we'll move into some vendor news. Bbc is starting a low latency sports streaming trial on iPlayer. I'll post some more information about that on LinkedIn, but be interesting to watch that in terms of any feedback they might give with that.

Speaker 3 31:37

Yeah, definitely definitely so.

Speaker 2 31:38

We've got the. Uh, we've got the movie coming out soon from apple f1, so interesting talking about what day is?

Speaker 2 31:52

that 27th, I think it's, yeah, it's yeah, june 27th, yeah, so apparently it costs 200 million dollars to produce and Apple's making it very clear that it's. You know. We're really focusing on global box office with this. Again. This is another one where I really wonder when does Apple decide? Okay, here's when it comes to Apple TV, don't know. And then, when it comes to Apple TV, is it only paid home to start? Is it the usual windowing we've seen in the past? It takes time before it comes to part of the streaming service. Don't know, but that'll be interesting to see, since apple's the distributor of that as well yeah uh, let's see if there's any other information on that.

Speaker 2 32:35

Nope, there isn't. Okay, uh, let's go into premier league. It's interesting some of the reports out there are talking about financially it's under strain, despite a record 6.3 billion euros in revenue in 2023 and 2024. And what that really just goes to show is cost of some of the sports content from a licensing standpoint, production standpoint. Just because it's popular doesn't mean it'll be profitable. Yeah, so interesting to see some of those numbers coming out about that. And then let's go into Samsung. We'll skip that. Tubi's got some new MAU numbers out. It's kind of irrelevant, since we don't know how they measure MAU. Okay, mark, let's jump into. It's a long list here, scroll down all right, let's go into vendor news.

Speaker 2 33:30

We did. We did a good job actually in the content yeah, you did good, hey, you did good.

Speaker 3 33:34

I'm I'm just cheering you on. Yeah, just jump in jump in my

Speaker 2 33:38

voice is getting tired and we'll run down today, so let's go into two pieces here. Let's do Quilt, let's do Phoenix Real-Time Solutions, so I published this on Quilt. Oh, and I also have something on Breakover Bending Spoons, so I published it on Quilt, maybe about two weeks ago. So, following a series of layoffs and previous cost-cutting measures, quilt has appointed Vito Palmero as its new CEO. So the former CEO Alon has transitioned to a board advisory role. Now, after Vito took over officially, I got to speak to him on the phone for a good amount of time. A lot of the conversation off the record asked for a lot of feedback, but what he did mention was that he's been working hard and rationalizing the cost structure for Quilt.

Speaker 2 34:24

That's a task that's been urgently needed. The company, he did say, recently secured additional funding from its existing investor, digital Alpha, so that is good. They've paid money to vendors that they've owed, so that's been great to see. So Vito's been cleaning it up. It's possible that, as they refocus here, he said they could potentially raise further capital in the near term. Quilt has been talking to companies about potential acquisitions. As of now I won't go into any further details on that, but what Vito really told me is his goals to support Quilt's existing customers. Expand the business over time, is not interested in selling. Of course you'll be smart and you'll listen to all offers, but that's not what they're trying to do.

Speaker 2 35:12

Uh, he didn't want to go into revenue, but I can put out there cause I have previously that I just know that their revenue is expected to reach 40 to 45 million this year With the resizing of the employees because there have been multiple rounds as a layoffs over call it the last year or more. They do have over 100 employees and I thought what was really important that Vito focused on was and he agreed with me on that Quilt can't survive as a standalone company if they're only focusing on the delivery of video and large objects Just can't. We know what that business is. So over time he agrees it has to evolve into some sort of other platform, edge compute, other applications beyond video, and that's a very crowded, complicated market.

Speaker 3 35:56

Yes, it's also capital intensive, it is.

Speaker 2 36:00

So we'll see if that happens. There's a lot of work to be done here for sure, do you?

Speaker 3 36:05

think they would go towards the edge. You know, is that like an edge compute type platform, define the edge.

Speaker 2 36:12

I don't know what the edge is anymore, because aren't they already in the edge if they're deployed inside ISP networks?

Speaker 3 36:18

You would assume so, but I mean in terms of a product. You know, that's not what they have today.

Speaker 2 36:23

Yeah, compute is very, you know edge. Compute is a product, Edge is a location in a network.

Speaker 3 36:27

Yeah, but they don't have an edge compute product.

Speaker 2 36:31

They don't currently. It's something they've been working on for some time already, so it's not this is a new idea. Yeah, sure, it's not something that they've rolled out across their customer base or footprint. Vito did say also, just as Quilt evolves, they plan to share more metrics on its revenue QOE key metrics Because, believe it or not, quilt started 15 years ago as a transparent caching company. Yeah, that's right, they've been around a long time, so you really have to start to explain your business more when you've been around that long and people aren't exactly sure what you focus on, what your core is.

Speaker 3 37:11

I don't think people either know or remember that Quilt started the SVA, which is now the SVTA.

Speaker 2 37:18

Technically not accurate Mark.

Speaker 3 37:22

Oh, they were.

Speaker 1 37:24

It was their brainchild.

Speaker 3 37:26

No, I know you were. I know you were there too.

Speaker 2 37:37

So even before me, as far as being, a original board member it really started with the CTO of HBO Go. That's who started it Gentleman's name, but back in those days he was like hey, hey, we should be sharing information with some others in the industry. That's where the SVA started originally. Let's go into bending spoons and breico bending spoons nicely sent me their product roadmap for Brightco product going forward. Oh, wow, Yep, wow, and I was super impressed. They asked for feedback. They asked for my input which I gave it all free.

Speaker 2 38:09

I cannot disclose things from the document. Sure, just handshake deal. But what I loved about the document was first, they went out and they talked to hundreds of customers. Smart, use data to make informed decisions. Next, they tied products and features set to what percentage of customers have it, need it and how will that impact our revenue. That's a smart way. That's smart. Yeah right, are we going?

Speaker 3 38:31

to make money if we build this and it sounds logical, but I can't tell you how many times.

Speaker 2 38:36

Other vendors haven't done that. Oh yeah, they also looked at. Does it make sense to build this or should we partner with somebody where that's their specialty and we just pull them in via an API? Yeah, so I gave a lot of feedback. After I got the document, I will be able to share some high-level thoughts from it. I'll work on a blog post in the next few days.

Speaker 2 38:57

But very detailed, very to the point. Here's the size of customer we're targeting. And then these things that we're going to sunset features, functionality, certain products. Here's why we're sunsetting them. The largest percent of our customers don't use them. They no longer need them. The code is outdated. They're also looking at you know, bending Spoons is a software development shop, that's what they are and so they're looking at also updating the players, the UI, ux, which, as much as I like Brightcove as a platform, they have been behind others and just in terms of the player build over the last few years it has not been refreshed. So super impressed with the document. I don't know it was 15, 16 pages, really detailed, tied to revenue, tied to number of customers.

Speaker 2 39:43

Super good to see that's great, I'll put up a little bit of information on that in terms of what I'm allowed to, but I expect over time we'll hear more on that. That's great.

Speaker 3 39:53

Good to hear.

Speaker 2 39:53

Let's close out here with Phoenix. So Phoenix, otherwise known as Phoenix Real Time Solutions. Their assets have been put up for sale for bidding by their VC firm, kb Partners. Phoenix has been trying to sell the company for some time. Over the last month I've had calls from a couple CEOs that I've talked to who have looked at the assets, asking what I thought of them, and it's just there's not enough revenue there.

Speaker 2 40:21

Phoenix has never come out and talked about the revenue publicly, but I've already disclosed they did approximately $5 million in 2024 revenue. It was not profitable at all. So you know, when you're spending $8 million or $7 million to get $5 million in revenue, that's a problem. By my last count, everything I looked up, it looked like they had 21 patents. Also, their largest customer, sis, which is Sports Information Services, a betting company. They passed on the technology as well. So for a company that's been around a long time, you're getting $5 million in revenue. I think I looked it up, mark, it was 12 years. I think they've been around If you're in the business 12 years and your revenue is $5 million.

Speaker 2 41:08

I don't care what anybody in the industry wants to say about ultra low or low latency being a standalone product. You can sell and survive. You can't. It has to be part of a larger platform, as we see with Dolby and some of the others out there. Yeah, so for all the talk and hype around low and ultra latency, there's just not enough demand in the market. There's lack of application use cases that can benefit from it. Yes, are there some very specific ones tied to betting and and some other real-time communications? Yes, but again, that has to be part of a bigger video stack. That's right.

Speaker 2 41:44

People still want to argue in terms of the demand for this in the market. Numbers don't lie. Here's the revenue of a vendor, and their assets are being sold. What was the minimum bid mark? $7.5 million $7.8 million.

Speaker 3 41:59

Okay, yeah.

Speaker 2 42:00

So it's never good to see, However. I mean, I was leaving comments four or five years ago about Phoenix and some of the others saying you can't sell this as a standalone product and survive you can't. It does not work. Profit and loss doesn't lie.

Speaker 3 42:17

And the problem, dan, is that all of these platforms have their own version, their own secret sauce of you know this, mixed into WebRTC, and everybody claims you know, oh, but that we, an operator, has to have of the end-to-end ecosystem is just too great. I don't want to use the word. It's impossible. It's not impossible to deploy, but it is not economically feasible. And so it still astounds me why everybody takes these kind of false positives. You know the market saying, oh, yes, it's a high priority to reduce latency, when, ok, maybe that's an aspirational thing, but the customer doesn't care about it and you can't deploy it. You certainly can't deploy it economically. So what's so? So what's the point? And it's bearing out, sadly, in these companies that you know good people. You know, I know a lot of the guys there, or I've known them. You know, through the years, nothing wrong necessarily with the people. It's just, you know, it's just not viable.

Speaker 2 43:38

It's not.

Speaker 3 43:39

What they were working on and building sadly.

Speaker 2 43:43

Yeah, so I'll take a different approach there. I don't think it's sad, mark. I think you have to live in a world of reality, not fantasy. If you're working on a product for 10 years I'm being polite 5 million, that's not going to work.

Speaker 3 43:54

Yeah, exactly.

Speaker 2 43:55

Exactly. The other thing is you mentioned the word scale, so you might've seen some of the comments, so leaving of you know, talking about, oh well, innovation and this and that. Look, you can innovate all you want, right, but popularity doesn't equal profitability all the time. And we keep saying that. The other thing is scale.

Speaker 1 44:13

Phoenix, from day one, talked about scale yeah, that was, but they wouldn't define it.

Speaker 2 44:18

Yeah, and then, when they finally did, it was like well, the largest we've ever scaled to is half a million concurrent viewers. Yeah, so you're suggesting and Phoenix would do this all the time that you know the Super Bowl whoever screened it that year should have used us for a better experience why you can only support 2% of the users, exactly. So you can't talk scale what about everyone else else? Without putting out numbers and I'll reinforce this again you can't talk scale without talking quality. Yeah, they go hand in hand. Yeah, one versus the other does not work. So you can have all the scale in the world. If it has no qoe, what's the point of the scale? And then finally mark to your point cost.

Speaker 2 45:01

You go and you talk to Akamai and some of the CDNs. They are so upfront and adamant with customers and even in the industry it shows on stage of oh, you want ultra low latency and wait a minute, you want it for how many simultaneous Millions? Well, you better break out your checkbook. Yeah, yeah, Pay up Because they talk about how expensive it really is. So cost, true scalability and quality, they all go together. Yeah, it's reality. All right, Mark, we're good. So we got through a lot here. Some of the stuff we talked about today I've not put up on LinkedIn yet. We'll get it up as quickly as I can, mark, and I should be back, you know, just sort of on a regular schedule here for the next probably the next four weeks, I think, mark, until I get to bounce out of town again, so we should be able to link up some good podcasts back again and, believe it or not, just for listeners that don't know. One week from yesterday, netflix has earnings because netflix does them earlier than everybody else.

Speaker 2 46:08

Yeah, but that's sort of the start when you see netflix doing earnings.

Speaker 2 46:10

I mean, that's the bellwether july 17th, followed by earnings starting again on the 21st. So I don't think next, Mark, we have too much in the way of earnings that it's going to pop out. That's really unique. But I think the quarter after that, because we're talking about some of these companies that are talking about splitting out. Obviously the linear networks we'll have more information on that and then obviously, the Paramount Skydance deal Super interesting to see what goes on there If we get some more details.

Speaker 2 46:40

That super interesting to see what goes on there, If we get some more details. That uh cause at the end of June you know it's Q2 calendar Q2. So maybe we get some more details. So that's what we've got. If anyone has any questions, reach out. Uh, also, if anyone reached out to me LinkedIn, you know I was gone for those two weeks and not really online. I believe I answered all the messages, but if I didn't, my apologies. Just ping me again. I will also just say, for people that reach out to me on LinkedIn, I much prefer email or phone. I don't always have LinkedIn with me, especially if I have no access to the web where I am, but I do have access to email on my phone, so email is always better, Dan, at DamianRubincom Questions, comments, get them out to us, Mark, and I appreciate everyone listening and and waiting for us to come back after, yeah that's right After three weeks.

Speaker 3 47:25

We aren't going anywhere, not right now. Well, not that I'm aware of.

Speaker 2 47:28

No, yeah, that's right, hopefully not, but you have any questions, reach out and we look forward'll talk to you again.

Speaker 1 47:44

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.