Bloomberg Screentime Special | Bloomberg Technology

Bloomberg Technology Live from L.A.

• Bloomberg Technology is live from Bloomberg Screen Time in L.A., where they will be speaking with celebrities, entrepreneurs, and moguls across a changing media landscape (40s).
• Screen Time is the coverage of popular culture, a global industry that kicked off with Micro Pinot and Live Nation, a peerless company in the concert business (1m0s).
• Live Nation is the biggest concert promoter and ticket seller in the world, with the company's founder having relationships with every artist and being able to poke fun at the government, which is currently suing them (1m52s).

Live Nation's Business Model and Lawsuit

• The company is confident they will win the lawsuit, as they don't think the DOJ understands the business, and are hoping for a change in the people in charge by the time the lawsuit is done (2m33s).
• Live Nation has two parts to their business: ticketing and promotion, with the company making little money from ticket sales, as the artist keeps most of it, and instead making money from fees and merchandise (3m18s).
• Concert promotion is a low-margin business, while ticket selling is a better business, with the company making their money from marketing and the whole package working well, but being seen as unfair by some (3m42s).

Live Nation CEO's Vision for Ticketing

• The CEO of Live Nation wants retail prices to be capped, citing the tension created when fans try to buy tickets and are met with secondary tickets and high prices (4m58s).
• If the CEO had a magic wand to change ticketing, they would regulate it, cap prices at 20%, and eliminate middlemen who make money without investing in the business (5m58s).

Discussions with Industry Leaders

• The conversation with the Live Nation CEO is one of many throughout the day, including discussions with Scooter Braun on discovering talent and the CEO of Runway on video generation in the context of AI (6m13s).

Runway's AI Revolution in Hollywood

• Runway is using AI to revolutionize the entertainment industry by teaming up with Lions Gate Studios to build AI models and produce dozens of films (7m4s).
• The goal is to bridge the gap between AI and Hollywood, making the technology more accessible and helping studios understand how to use it effectively (7m57s).
• Runway's software can be used in various tasks in movie development, such as storyboarding, previz, and effects, making the process cheaper and faster (8m18s).
• The technology is not meant to create movies on its own but rather serve as a tool for directors and filmmakers to enhance their work (8m39s).
• By using Runway, filmmakers can reduce costs and achieve better results, such as spending less on making a shot or adding effects (8m59s).
• Improving the models has become more cost-effective over time, and the company aims to optimize them further to make them even cheaper and faster (9m13s).
• Runway has been working to educate people in the industry about the potential of AI, emphasizing that it's a tool for humans and not a replacement for creativity (9m57s).
• The company has had conversations with people in Hollywood to get them comfortable with the technology, highlighting its potential to enhance storytelling and filmmaking (9m43s).
• The CEO believes that AI can help filmmakers connect with their audience and deliver their message more effectively, but it's essential to focus on storytelling and people rather than the technology itself (11m39s).

Runway's Business Model and Future Plans

• Runway has strategic investors like NVIDIA and Salesforce, who are interested in the company's potential to enable storytelling and creativity through AI (12m12s).
• Storytelling is a crucial aspect of companies in Hollywood, media, and films, and helping them deliver better messages is a form of storytelling that can be valuable (12m38s).
• Runway has a singular focus on storytelling and has been growing and changing as an industry over the past seven years, with a long-term horizon for building tools for storytellers worldwide (13m11s).
• The company views NVIDIA as a stepping stone and is focused on building a collective set of tools for video, audio, 3D, and other forms of storytelling (13m46s).
• Runway will continue to raise money as needed to achieve its goals, with a focus on building and growing the business rather than planning for an IPO (13m57s).

The Impact of General AI (GENAI) on Entertainment

• General AI (GENAI) is changing the game in the entertainment industry, particularly in content storytelling companies, by opening up creative windows and allowing for new areas of creativity (15m24s).
• GENAI is expected to have a slower impact on traditional Hollywood studios due to restrictions on its use in their deals, but it will be important for the future of entertainment and hiring (15m55s).
• GENAI can help companies cut costs by up to 30% in areas where it applies, and it is expected to have a significant impact on the entertainment industry in the long term (16m37s).

The Streaming Landscape: YouTube, Netflix, and Amazon

• YouTube is currently ahead in the video and entertainment space, with 10% of total streaming viewing, followed by Netflix at 7.5%, and Amazon is next in line with its growing original content and live sports offerings (17m14s).
• Amazon is making significant investments in original content, moviemaking, and live sports, and is expected to be a major player in the entertainment industry in the future (18m11s).
• The original reality program "Survivor" was initially met with negative reactions, but it eventually became popular, and similarly, YouTube is now considered premium content by many, reaching global audiences (18m14s).
• Statistics show that 85% of consumers who watch video content are on YouTube weekly, making the data compelling (18m51s).
• The concept of "job to be done" is essential in understanding consumer behavior, as people globally have different preferences for content, whether it's movies, dramas, or short-form videos like TikTok or YouTube (19m19s).
• The variety of content available gives consumers more choices and is ultimately beneficial for them (19m40s).

Investor Focus and the Psychology of Streaming

• When evaluating companies like Netflix and Disney, investors should focus on return on invested capital, including content capital, as this is what the market cares about today (19m59s).
• Netflix is currently the only company making a profit, while Disney has moved into profitability by switching on ads and lowering costs, but Disney is not a pure play due to its other businesses like parks and linear TV (20m7s).
• The psychology of consumers plays a significant role in their viewing habits, and the acceptance of ads has changed over time, with some consumers now finding it normal to watch ads on streaming services (20m42s).
• The streamers have lower ad loads compared to traditional cable TV, making it a more attractive option for consumers (21m10s).
• Innovative business models, such as showing a video ad in exchange for free content, can be effective in capturing consumers' attention (21m20s).

Regulatory Environment and the Video Game Industry

• The regulatory environment, particularly under a Democratic administration, makes it challenging for content providers to engage in mergers and acquisitions, which can limit their ability to cut costs and merge (21m49s).
• The discussion also touches on the importance of video games as a comparable and important industry, with dollar-for-dollar value (22m47s).

Amazon's Expansion and Apple TV+ Partnership

• Amazon is adding Apple TV+ to its channels in the U.S., offering exclusive content like "Ted Lasso" and "Slow Horses" (23m26s).
• Amazon Studios aims to become the first stop entertainment hub for consumers worldwide, offering a variety of sports content, including Thursday Night Football, NBA, NASCAR, and Champions League, as well as the world's largest store and 100 partner streaming services that can be subscribed to inside their app (23m44s).
• The company has seen more engagement and is able to get subscribers for partner businesses at an attractive rate, with the announcement that Apple TV+ will be added to their Prime Video channels (24m59s).
• Apple TV+ was chosen due to its great programming and good partnership with Amazon, with the companies doing business together (25m7s).

Tubi's Success in the Free Streaming Market

• Tubi, a free ad-supported platform owned by Fox, is launching across the UK this summer, after gaining incredible traction in the US where it is the most-watched free TV service (25m52s).
• Tubi's success is attributed to its formula of offering a large collection of content for free, with ads, which resonates with audiences, particularly cord cutters and cord nevers, such as Gen Alpha and Gen Z (26m22s).
• The platform has a vast selection of licensed and acquired content, as well as hundreds of originals, with 1-4 Tubi viewers in the US watching an original (27m29s).
• Tubi's originals are often produced based on what resonates on their platform and what their fans love, rather than big-budget productions (27m47s).
• The platform makes money solely through advertising, which aligns incentives and ensures that they only make money if viewers are actually watching (28m19s).
• Tubi was acquired by Fox several years ago and has a rich DNA in using tech and data to personalize and offer delightful experiences, which is a differentiator in the streaming service market (28m30s).
• The platform aims to bring its value proposition to UK audiences, after successfully doing so in Canada and Latin America, as part of its global opportunity (26m57s).

Addressing the Paradox of Choice in Streaming

• The abundance of streaming options can be overwhelming for viewers, creating a paradox of choice in the streaming ecosystem, making it difficult for them to find the content they want to watch (29m34s).
• To address this issue, one approach is to be ubiquitous and present across multiple devices, making it easier for viewers to discover and access content (29m41s).
• Having a large library of content can make a streaming service more discoverable, especially if it offers free content with minimal barriers to access (29m55s).
• A focus on being free and frictionless can be an effective strategy in the streaming market, as evidenced by a market share of 1.8% and being only behind Hulu (30m8s).

Strategies for Success in the Streaming Market

• Doubling down on this strategy can help to continue growing market share, especially with favorable tailwinds (30m28s).
• Live sports do not fit into the free, ad-supported model, but partnering with sports organizations to create content around the culture of sports can be a viable alternative (30m45s).
• This approach can include creating talk shows, pre-game shows, and other content that focuses on the stories and culture surrounding sports, rather than the games themselves (30m59s).
• Younger viewers, such as Gen Z, are often more interested in the stories and culture around sports than the games themselves, making this approach a good fit for this demographic (31m18s).
• The goal of content creation should be to engage viewers and produce content that they enjoy, rather than solely focusing on winning awards (31m27s).

Dreamhaven's New Game: Sunderfolk

• Mike Morhaime, co-founder of Blizzard Entertainment, is working on a new gaming project with his company Dreamhaven, which is announcing a new title (33m2s).
• The new title, Sunderfolk, is a couch co-op tactical RPG adventure game that uses two screens and is inspired by the magic of tabletop gaming (33m58s).
• The game is still in development, but the team is excited to share their progress and is aiming for a 2025 release (34m10s).
• The unique aspect of the game is its use of two screens, a personal screen and a shared screen, which aims to replicate the magic of tabletop and RPG gaming (34m28s).
• The goal is to make adventure gaming more accessible by removing barriers such as thick manuals and setup time, allowing people to have fun with their friends and experience the magic of tabletop gaming (34m34s).
• The project aims to streamline the experience, making game night accessible to more people and providing tools for passionate gamers to bring in their friends who may not have experienced tabletop gaming before (35m5s).
• The project is a four-year endeavor that has been in stealth, with the heavy lift being the trial and error process of bringing innovative games to life (35m26s).
• The design process involves iteration, testing, and evolution, with the need to make big corrections along the way (36m2s).
• The target audience is a broad one, with the goal of creating games that have depth for replay and are accessible to those who may not be familiar with the genre (36m9s).
• The team behind the project includes Mike, who was previously involved in the development of Diablo and World of Warcraft, and is now working on a new venture (36m42s).
• Running an independent game studio and publishing shop is challenging, but the team is focused on being reactive to what the games need to achieve their potential (37m6s).
• The team brings in fresh perspectives to experience the game and observe how players interact with it, in order to streamline the onboarding process (37m43s).
• The recent merger of Blizzard with Activision and the acquisition by Microsoft has left the industry uncertain, with the outcome still to be seen (38m10s).
• Mike learned lessons from his time at Blizzard, including the importance of creating high-quality experiences and focusing on what players want to see from games (38m54s).
• The team is committed to creating an environment that allows individuals to do their best work and feel in control of their destiny (39m49s).

Blizzard Entertainment's History and Lessons Learned

• Blizzard Entertainment was a household name for videogame fans, known for creating games like Overwatch and World of Warcraft, but its corporate parent Activision started cracking down on business autonomy, changing the company's landscape (40m55s).
• A new book chronicles the history of Blizzard Entertainment, from its founding in 1991 to its acquisition by Microsoft in a $69 billion deal, and explores the company's culture and business story (41m46s).
• The book's author, Jason Schreier, notes that the company's culture was complex, with some employees having positive experiences and others facing harassment and discrimination, particularly women (42m7s).
• Women at Blizzard faced issues such as lower pay and harassment, but some also found it to be a great place to work and formed lasting friendships (42m31s).
• The videogame industry is learning lessons from Blizzard's experiences, with companies like Dream Haven, founded by Mike and his wife, actively working to create a more inclusive environment, with 37% of employees identifying as women or non-binary (42m59s).
• The industry is slowly taking steps towards being more inclusive and less sexist, with more people willing to call out companies that don't treat their employees well (43m32s).
• The videogame industry is a huge and important industry, comparable to the movie industry, and is a key part of modern screen time (43m48s).