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Marketecture: Get Smart. Fast.
Episode 99: Too much news! Rich Greenfield from LightShed helps us understand it all.
00:52:16
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- [00:00]
Ari
This podcast is brought to you by the Current. Ever wanted to sit down to a candid conversation with the marketing leaders of the world's biggest brands? The Current podcast is your chance. On the Current podcast you'll find exclusive interviews with the experts and trendsetters who are on the front lines of digital advertising and they always leave the ad tech jargon at the door. Subscribe to the current@www.thecurrent.com or anywhere you get your podcast today. This podcast is brought to you by Adroll. Adroll is a name a lot of advertisers are probably familiar with. A leader in high performance Digital Advertising for 15 years, AdRoll is a brand you can trust to deliver strong ROI across display, native and paid social campaigns in one platform. Get in touch with an account expert or create a self service account@adroll.com arri today. That's adroll.com Ari today. Welcome to the Marketcture podcast. We have a really exciting one today with Rich Greenfield from lightshed. We're going to abandon our normal format of just an interview and then news of the week. And we're just doing news of the week because there's so much news. Eric, you must be pretty psyched for all this stuff.
- [01:24]
Eric
Oh my God. So we are going to cover TTD's launch of Ventura the Operating system, we're going to cover Comcast looking to spin off cable networks, we're going to cover MediaOcean buying Innovid and a couple more things. And I could not think of a guest to have here to talk about some of these big moves in TV and streaming than Rich, who's just so deep in this. This is going to be awesome.
- [01:48]
Ari
Yeah, Rich is. You know how some people say like I've got a guy, I got a guy who does my roo or I've got a guy who does. Who is my car guy. Where Rich is like I got a few guys. Rich is like my traditional TV guy, you know. So we have some pretty big news. This is the 99th episode of Mark Dexter, which means next Week is the 100th episode. Woohoo. Very exciting. We are publishing on Tuesday of next week before Thanksgiving and we have a special guest for our 100th episode, Michael Kassin, who is a legend in our industry and he has Eric and I just laughing our asses off in this recording. It's hysterical, right?
- [02:27]
Eric
It was so good. And apropos the Hunters episode, we have something special for everybody and we're posting on Tuesdays so you have time to listen to it before you spend time with the family.
- [02:37]
Ari
Yeah, exactly. And one other thing going on, which is on Monday of Thanksgiving week, I will be in my favorite place, which is the Virginia Federal Courthouse, where I'm going to be taking notes at the closing arguments in the Google AdTech case. So I will be posting everyone's favorite snarky newsletter on Monday evening about what I heard in the final arguments in that case. It's not a decision, it'll be the final arguments. And then based on that, the judge and her clerks will come up with a decision we expect before the end of the year. So look out for a special issue of the Monopoly Report newsletter coming out on Monday. All right, that's a lot going on. Let's dive in with Rich. And we're here with rich greenfield from LightShed. LightShed is an investment research company and early stage investors in startups. This is his second appearance on the Market podcast. So he's going to get a purple blazer out of this. Rich, thank you so much for being here.
- [03:35]
Rich Greenfield
A purple blazer? I would just settle for a T shirt maybe. A T shirt would be fine.
- [03:40]
Ari
We're working on a merch store. We'll probably have more to say about merch soon. So we're going to mess up this format. We're not going to do our usual interview and then news of the week because there's so much news. We're just going to do news, news, news and more news. So, Eric, you want to kick us off with the Trade Desk operating system?
- [03:58]
Eric
Yeah, absolutely. And part of the reason why we're doing this is all of the news that we're going to talk about this week is squarely in the sights of Rich in terms of his expertise around streaming and TV and the future of it all. So we'll start from the top. The Trade Desk announced Ventura, a revolutionary streaming TV OS. So the plan here is to partner with OEMs and aggregators to give them a new CTV operating system. The headlines from the announcement were basically two things. So first they say it's going to be a better ux. So if you've ever had that problem of trying to find something to watch because Discovery is really crappy on streaming, apparently they're going after that from a user perspective and then obviously from an ads perspective, touting a cleaner supply chain, less hops, integration with open path and UID 2.0. So let's talk about this. Rich, apparently you were very surprised that this thing happened. This was one of the worst kept.
- [05:00]
Rich Greenfield
Secrets in the Advertising or TV advertising world, it's sort of shocking. I don't know why yesterday. I mean, it's actually interesting. Why was yesterday? I heard Jeff Green named Ventura after where he was from and all that. His kids grew up again. But, like, what was yesterday? Like, was that a kid's birthday yesterday? Like, I'm not sure, like, why it was unveiled yesterday versus six months ago or even a year ago. But look, it doesn't surprise me that everyone is trying to control the TV os. When you think of sort of the, the power of the tv, the big screen device in the living room, it makes a lot of sense for everyone to want to control that, you know, the sort of center of your home media life. And we've seen big companies, right? Google and Amazon, obviously Roku in recent years. Like, lots of companies are trying to dominate the living room. The interesting thing is, like, this is not a new phenomenon, right? Like the TVOs world we've been, you know, living in with lots of TV oss for a long time now. It's, you know, I remember walking the trade floor at CES a decade ago, and you would walk around, I'm sure, Ari, you know, you probably remember this experience. You'd walk up to, like, Samsung and you'd like, vomit how bad the interface was. And you'd walk over to LG and the remote control was horrifying. And then you'd walk over to Roku and you're like, oh, this is pretty easy to use. Up, down, left, right, with a purple button. And like, the simplicity was a huge advantage, but it was like, it doesn't surprise me that someone's trying to get into the TVOS space at all. Obviously the interesting thing is why now? You waited a long, long time to get in. That's what's really interesting of the why now for Trade Desk.
- [06:50]
Ari
Yeah, I'll build on that a little bit. Which is. It does feel a little late. Probably if it was two years ago, it might have had a little more OEM excitement around it. But I think it's worth noting that if you think about on a global basis, the tvos business is actually kind of fragmented. There are a lot of little OSes out there, a lot of little manufacturers out there. I think we cover a couple weeks ago that there was this deal where Tremor, which has a new name, Nexon, I guess, has exclusive rights to data for some TVOs I'd never heard of in Eastern Europe. There's like a lot of weird stuff out there in this market.
- [07:25]
Eric
Yeah, Sonos is The one that they keep bringing up as somebody who has an os, which was somewhat surprising.
- [07:33]
Rich Greenfield
But look, when you go back in time, we were beating up on Comcast, which also had some news this week, but we were beating up on Comcast for years. Why don't you buy Roku? Why don't you get involved in this space? Like, you know, you're so powerful in broadband. Why don't you want to own the TVOs? And then finally like big lumbering company never executes quickly. Like it's just not the style of legacy media companies. Like finally a couple of years ago they announced the sort of the Zumo push and what they're doing with Zumo. So it doesn't surprise me when big legacy media companies are a decade late, it's surprising to see Trade Desk and people look at it and go, well, what is Trade Desk doing? How are they going to get any distribution? This seems silly. This seems like as silly as Comcast. But it's hard to think of Jeff Green and put him in that context of like he has to see something because I can't imagine he's okay just being a irrelevant player in this space. Like Zumo is not the market leader and there's no clear. I don't have any clarity that's going to make me believe that Sumo is going to be a market leader. It's hard to understand why Trade Desk wants to be a small player in this space.
- [08:45]
Ari
I find it unlikely that someone like a Samsung is going to switch operating systems on its devices. I think it's more about the niches. I think it's more about muscling its way in either to players like Sonos who may not have a strong investment in this area. Maybe it's trying to convince someone like Comcast to use this instead of their home grown one. Maybe it's white label TVs. With some manufacturers there's a lot of ways to kind of muscle in to get a couple percent share here and there. And also he has money to play with because if you just, you have to assume this operating system just monetizes better than other operating systems because that's why they built it. It's got UID2 in it, it's got contextual, it's got all this stuff that I'm guessing that's why they built it. So if it monetizes better than you have money, you have money.
- [09:31]
Rich Greenfield
But let's have a little debate, okay? Is he doing this to grow to be like, is this, you know, Roku has what I don't know, 50, you know, tens of millions of U.S. households have a Roku, you know, device sitting in them. Obviously some are dongles and second bedrooms, but there are tens of millions of Roku's that are sort of dominant in living rooms around this country. Is the goal to be Roku and to really compete head on or is the goal to get some first party data, have a little bit of market share, not ever be a major player, but just have a lot of have incremental first party data that informs the auction makes them that much stronger. Sort of like an applovin in terms of what they've been able to do by getting a little first party to leverage it into what they do for third parties like that. I'm sort of conflicted, like how bold is this? Is there a reason that this is there or does he actually want to take over and dominate the TVOS space?
- [10:29]
Ari
I think part of the goal is to get across the table from people who don't have an otherwise reason to get across the table from him. Fire tv. You get a meeting with the Fire TV people. We have, you know, let's just throw out the number. We have 5% market share of TVs and you want your Fire TV app on our system. Okay, great. What sort of resale rights do we get? That's a conversation they don't really have a right to have today because Amazon could just show them the hand and say nope, sorry, we're a walled garden. So that's my thinking is get leverage on the distribution channels.
- [11:00]
Rich Greenfield
Okay. How do you make a better tvos when you think about discovery and I think you mentioned the word re Discovery. I open up my Fire TV and it's got a row of Netflix series, but it doesn't have Netflix content interspersed with all the other content because Netflix doesn't allow that. Right. Like I guess the question is, is Jeff Green going to get a tvos interface that allows him to do things deal wise that nobody else can do? Because the problem with Discovery is not a. I don't think it's a technology problem. Meaning I don't think it's like Google doesn't want to do this or that. It is the programmers who are still dictating the rules.
- [11:41]
Eric
Yeah, I think that that makes sense. I wonder if the opportunity to improve Discovery X Netflix X Amazon prime creates an opening for that. Right. So it's like you take ttv, they're the champions of the premium Internet, AKA the open web. You know, is there enough on the open web of ctv. Right. The non walled garden ctv where they can just, you know, create something that is the thing that sits next to the walled gardens. I don't know. I find it difficult to you know, fully kind of say that credibly with a, with a straightforward.
- [12:15]
Rich Greenfield
It's all like, is Google going to let them literally unbundle YouTube content and put Mr. Beast right next to Squid Game, right next to, you know, Citadel, like all of these shows, like, if you can't do all of that and you're saying the top three or four CTV applications are not going to be available to unbundle and mix and match individual pieces of content is better. Better or like, I don't. It just this. That's. That seems sort of hard to imagine to me.
- [12:44]
Ari
No, this better product thing is just not even like they're. They're not better ui. Sure, Whatever. Maybe, yeah, maybe, maybe not. Who knows? It doesn't matter. What matters is money. We're at a bargaining table and they have a chip other people don't have, which is absolute dominance over the demand for ctv. And so if you're, if you're lg, I don't want to speak for lg. I'm just saying if you're OEM that has an ad business and you are in negotiations with say Amazon, all you really have is distribution. You're like your app. It'll be front and center, you'll get distribution. And we want resale rights. And we'll do our best to give you a $15 CPM. Great. Jeff Green and team comes in and says we have 10, 20 billion of liquid demand that we could point wherever we feel like it. So how about you give us a better access to your data and we won't SPO you out of the ads business. Or we will give you a certain amount of demand or we'll guarantee a certain amount of demand. It's a large amount of money that he has on the table that other people don't.
- [13:46]
Rich Greenfield
And could piece of it be, hey, Amazon prime doesn't use Trade Desk today.
- [13:50]
Ari
Right.
- [13:50]
Rich Greenfield
He doesn't have the ability. It's a walled, you know, the walled gardens that Jeff hates. You know, if you can build up enough TVOs market share where Prime Video actually needs your access to your tvos, does that open a larger conversation where you can no longer avoid us?
- [14:09]
Ari
Yeah. There's also the financial advantage. It's built in SPO as well. So let's say Sonos uses his OS instead of buying the Sonos inventory through Magnite he's buying it himself and he has better data, so it monetizes even better. And it's part of what the Trade Desk has been doing over the last four or five years is sort of a federated walled garden. Like brick by brick, he's building the wall. He doesn't have the O and O that the other people do. But what he's doing is he brings in data like Walmart that's exclusive, so you can only really get it through Trade Desk. And then he does open path, so he has inventory that's not exclusive, but better and more and more retail data. CTV deals, things like that. And it sort of, it becomes like a half walled garden or a partial walled garden and you have to use them.
- [14:55]
Rich Greenfield
I think we can sort of all agree, the three of us, that scaling this Ventura initiative has real long term benefits to Trade Desk.
- [15:05]
Ari
Yes.
- [15:05]
Rich Greenfield
Okay, so we're all, all three of us agree on that. Now the question is, that's all nice and fine and good. Sonos is not getting you market share.
- [15:14]
Eric
No.
- [15:14]
Rich Greenfield
How do you do it?
- [15:15]
Ari
Right.
- [15:16]
Rich Greenfield
Like the question is I can do it over a decade, right? You know, x number of TVs sign up TCL, you know, Hisense and you know, fight and be aggressive in retail and try to get onto end caps and all of that. But like, it is a very slow, cumbersome, brutal process that has, you know, I mean, you're fighting Roku, Amazon, Google, Samsung, you know, at these retail stores. How do you do it? How do you actually get mean? I'm saying, how do you get 5 million, let alone 10 or 15 million devices in the next few years?
- [15:52]
Ari
And also, what's the effect on the stock price when you start investing large amounts of money in either marketing or distribution or whatever it is in advance of revenue, which is not a pattern. That's been the case for that stock previously.
- [16:06]
Eric
Data Point, you asked about Rich, the roku households, it's 85.5 million as of.
- [16:12]
Rich Greenfield
Right.
- [16:12]
Eric
As of.
- [16:13]
Rich Greenfield
That's a global number. That's a global number and that includes dongles.
- [16:17]
Eric
It's actually us and it does include dongles. So it's a, it's a big market. And I think, Ari, you answered the question with respect to how do they get distribution. It's wielding their number one asset, which is all of the CTV demand that they have. And you know, barring contracts with OEMs and platforms that just have penalties or kind of long term agreements that we don't know, this could just be about using the demand to help Accelerate their path to distribution. I could see a straight line path to it.
- [16:47]
Ari
Yeah. It could also be a global strategy. You know, there could be a more. We don't know what's going on inside the company or inside Jeff's head, but this could be the real money for Jeff India.
- [16:56]
Rich Greenfield
The real money for Jeff has to be US ad dollars.
- [16:59]
Ari
You would think so, yeah.
- [17:00]
Rich Greenfield
I mean at least US Europe, I mean at least developed Europe. Like, yeah, I know, I just. Is there anyone they could partner with? Like, does LG really want to be in the tvos business? Like, you know, I know Samsung's built an inter, like are there players that go like why are we actually in this business? Like are we actually good at this? Is this in good use or is there a better way? And look, it is interesting how much Jeff has focused on throughout his whole business model on being conflict free. And there's no doubt when you open up any of these devices they always preference their own content. I mean Netflix certainly preferences, the content it owns right in the Hero image. When you open up the Netflix app, you know, when you look across any of the platforms, Roku channels obviously, you know, promoted pretty aggressively in the Roku Sports hub or whatever it may be. They promote all of these things and use up home screen real estate and menu real estate. It'll be interesting when trade desk says they're going to be fully neutral and just serve the customer. What does it end up looking like and does it actually lead to. Because I think this will be the interesting. Does it lead to better and different engagement than what you're seeing today?
- [18:16]
Ari
Right?
- [18:17]
Eric
I don't know.
- [18:17]
Ari
Well, let's thought experiment once again. Let's say you're an OEM with an ad business, you're lg. Let's say the trade desk BD people come to you and say swap out your OS for ours. We give you the os, it's customizable, you can change the colors, you can change the priorities, you could promote your own apps. It's an os, you could do whatever you want with it. So it's like the Android model and it will monetize better throughout. We guarantee you every single channel on that app is going to monetize better than it did previously. And we're going to pay you $10 per device as a royalty for using our app. Instead of you paying a dev team to build your OS, we're going to pay you $10 per device you sell and maybe also guarantee you a certain amount of media spend on your media business.
- [19:03]
Rich Greenfield
My Initial knee jerk reaction is you violated in the first sentence the first principle that Jeff's trying to get at, which is they don't want to prioritize content. Right. Like the whole premise, his seems to be, we're going to be. We're doing this to be neutral. And so I don't know if he would do a deal. I think it would be more of, hey, lg, we'll give you a cut of revenue, meaningful cut of revenue. But you can't get out of the fast business. Get out of that business, because you're creating a supply chain conflict. Get out of that business and let us run it and we'll just cut you a check because we're going to monetize better than anyone else.
- [19:45]
Ari
I don't know about that strategy. I don't know if anyone cares about this supposed conflict of interest. There's a conflict of interest on the ad side, but I think in the content side, I have no problem with having a Samsung TV try to get me to install the Samsung channel. It seems like a perfectly fine use of the system.
- [20:02]
Rich Greenfield
I'm not disagreeing with you, but I'm saying listening to Jeff, that seemed to be a very key piece of this.
- [20:08]
Ari
Yeah. And also on the Ad Tech God podcast, which was really good, he did like a little emergency podcast yesterday, the LG guy, I forget his name, but the guy was on the podcast from lg. He was like, jeff, stop with this neutrality talk. It doesn't make any sense. That was the thing that really got up his ass. He was like, this neutrality thing, it makes no sense. Stop talking about it. But that makes sense. He would say that.
- [20:28]
Eric
I could see this being an attractive proposition also to take the other side.
- [20:32]
Rich Greenfield
Of this attractive to the TV or to be class.
- [20:39]
Eric
Because how do you truly scale an advertising business? You have to scale it with people, you have to scale it with operations. So if they can have the best of an ads business in terms of the profit, in terms of all the things that TTD can bring to them and kind of keep a core team that does high level direct sales and account service, not only will you have probably a larger advertising business, but it'll be even more profitable.
- [21:08]
Ari
It's a good point. Okay, I think we still go back into connection.
- [21:11]
Rich Greenfield
You still have to get to millions of devices.
- [21:14]
Ari
Yeah, you do. All right, let's move on. Let's talk Comcast. We've beaten trade desk to death, right?
- [21:20]
Eric
Yes. So Comcast plans to spin off cable networks. So some of the cable networks that were once the Entertainment giant star performers like usa, Oxygen, E. Sci Fi, CNBC and msnbc. The plan is to spin them off. This is about $7 billion in total revenue. So it's not small. And this is clearly a move that reflects the general conversation we're having here, which is the future is streaming and CTV. What'd you. What'd you think of this one?
- [21:49]
Rich Greenfield
$7 billion of revenue. But let's just be very clear, in secular decline.
- [21:54]
Eric
Yeah, a melting. A melting ice cube.
- [21:56]
Rich Greenfield
Yeah, really important, right? A melting ice cube probably accelerating in terms of the temperature on the ice cube is being turned up. I'm open to debate on this, but I would assume there aren't many people on planet Earth anymore, truly believe there's a way you could grow revenue out of those assets. Meaning you're not going to get more viewers, you're not going to get more advertising dollars, you're going to lose subscribers who are cutting the cord. There is no obvious way to grow those businesses. And this is not a Comcast specific challenge. This is whether we could be talking Paramount, we could be talking, you know, Disney's cable networks. Like, the one common theme over the last 18 months is everybody's trying to get out of cable networks. Like, sure, Jeff Bucus sold his to att. He was really smart. Rupert Murdoch sold the vast majority of his to Disney. One of the worst transactions in probably in corporate history. One of, you know, really one of those terrible transactions was Fox. But from the standpoint of everybody else, everyone's now waking up going, we gotta get out. Like, this is. There's no way. We're probably running out of cost cutting, like how much cost we can cut and the revenue keeps going down. And so you run into the sort of historic strategy of, hey, let's spin off this stuff we can't fix. And hopefully we can do enough M and A as a standalone to keep enough opportunity in the cost structure to create cash as this thing dies a slow, long, painful death.
- [23:34]
Ari
Well, the exciting thing is that the spinoff then could become a sinkhole for everybody else's cable networks. So we could basically clean up the balance sheet of all the major media companies by just take Disney's channels and take, I guess Paramount, like Viacom or whatever it's called now. I can't even keep track of that. You know, put MTV in this thing, put VH1 in this thing, just like keep pouring all these channels that no one under the age of 40 has ever watched into one giant company. And maybe there's some synergy, maybe there's some increased carriage fees you can get if you own every single channel on the dial. Could be creative entrepreneurship to make this thing melt slower.
- [24:15]
Rich Greenfield
It's hard because at the end of the day, you know, if you think about things like fx, it's hard when FX is so tightly integrated into Hulu. It's the reason why Bravo wasn't in that list, Eric, that you mentioned is because Bravo is intimately tied into Peacock ESPN. They're launching D2C and bundling it in with, you know, ABC or with, with Disney plus and Hulu and creating sort of tiles inside of it. And so separating out these assets is difficult. Like Warner Brothers Discovery. Everyone who has invested in Warner Brothers would love them to be just Max, HBO and the studio. It's nice in theory, but billions upon billions of cash flow comes out of the cable networks and very little cash flow comes out of studio and Max. And so separating these assets is not as easy as it looks. It's you, I would say Comcast. What I think people haven't focused on. Comcast is uniquely advantaged because the core of Comcast has nothing to do with basic cable networks.
- [25:25]
Eric
Right?
- [25:26]
Rich Greenfield
Comcast's balance sheet is all about broadband, increasingly wireless connectivity. Like even video distribution isn't even, you know, a core component of Comcast anymore. And so sure, they have theme parks and they have studios like the basic cable. That 7 billion that you mentioned, Eric, call it a 30% margin, a couple billion dollars of cash flow. Like it's so insignificant in the Comcast story that spinning out that cash flow makes no difference to Comcast. And so it's very easy for them. Whether it creates a good stock or not, they don't care. At the end of the day, it's an easy thing for them to separate out. Maybe there's some M and A, maybe not. Maybe it just dies on its own. I don't, you know, like, we'll see. My guess is there will be some assets to pick up over time. Maybe not companies to buy, but maybe individual networks that people, you know, Paramount's talked about selling. Bet. Could WBD sell something like Food Network or hgtv? Like, I think there'll be one offs that they, that they accumulate. But creating a standalone company, just to be clear, is not a save to this business. It's just a. I'm tired of looking at this being a disaster.
- [26:35]
Ari
Maybe YouTube will buy it. They already are one of the largest distributors of these through YouTube TV. They get all the old archives. One of the funnier subplots of this is that the MSNBC network, which is by the way, just like absolutely cratering after the election, they now have a name made up of two different companies. They have nothing to do with Microsoft and NBC. And there was some reporting that they may be forced to change the name of the whole channel.
- [27:03]
Rich Greenfield
At the end of the day, these are not assets. I saw the Nielsen chart yesterday or two days ago. The latest Nielsen gauge came out and the overall cable TV piece had fallen to like 23 or 24% of total TV time spent from 36 just a few years ago. And remember, we're in an election year, so if anything like cable news is, you know, has a really unnatural benefit in that October month like you think about, like we're probably now in the low 20s. Organic. I don't know if it's 21 or 22 organically, but like this is a really dramatic drop in just a few years. And it's obvious why, right? Like less people have cable tv, but all the best programming is now on streaming. People are getting more and more comfortable. We just talked about TV oss, right? There's more and more content that I can watch these. You know, we can debate how good or bad discovery is on these platforms, but there is a lot of content to watch that doesn't require going into an MVPD or to your traditional MVPD to watch content.
- [28:09]
Ari
And these channels, other than the Golf Channel really just don't have a lot of sports on them. And sports is what's keeping a lot of traditional media alive, we're going to.
- [28:19]
Rich Greenfield
Find out is a little bit of EPL is smack, WWE Smackdown and some news. Is that enough to keep you alive? And the honest answer, I'll be honest, Cont certainly believes it is. And I'm sure Mark Lazarus, who's going from NBC Universal over to run this new company, I guarantee he believes it. And certainly there is no short term deals coming up that is problematic. Like they've done most of their deals and so the timing of this is clearly timed for major deals are done. They don't have like 50% of their distribution up next year, but you know, over the next five years. Is this enough to stay alive? I don't know.
- [29:01]
Ari
This podcast is brought to you by sabio, a leading CTV advertising platform purpose built to help brands effectively reach, engage and validate streaming audiences. For over a decade, SAO's platform has combined deep industry expertise with innovative technology to meet the needs of an evolving media landscape ready to unlock the power of CTV advertising. Learn more at SAO WS/podcast. That's SAO.WS/podcast. Okay, I want to jump to a new a topic that is a little out of order, which is, you know, boxing on Netflix. Do you guys watch it? The Jake Paul night of boxing.
- [29:42]
Rich Greenfield
It was. It was. It was painful. Not because my stream was technically challenged. It was painful because it was boring.
- [29:48]
Ari
It was very boring.
- [29:49]
Eric
As you know, Ari, combat sports are my thing. So you know that this was a big weekend both in terms of Netflix and then UFC 309 the next day.
- [29:57]
Rich Greenfield
I was at 309. It was amazing.
- [29:59]
Ari
Did we learn anything on the business side about the Netflix event? It being live? I don't know what the budget was. $80 million or something was paid to the boxers. Rich, what's your take on it?
- [30:13]
Rich Greenfield
60 million is global. I'm saying if you look at the US peak was 38 million global, peak was 65. Let's just say similar discount from peak to average. If you believe like 35 million households turned on Netflix on Friday night between 11 and midnight. Let's even say it was 20 million households. Let's just say the data's wrong. It's like less than that. What do you think the last time 20 million people turned on a television at 11:30 at night on a Friday? Like, my guess is that like never happens. A point of view ever.
- [30:52]
Eric
Never.
- [30:52]
Rich Greenfield
So the ability to. If I was sitting there at a league or any content platform and going and just looking at my social media feed the next day, everybody was talking about it, like either hating on it. We're talking about taking pictures of their team. Right? We're talking like, everybody was talking about it. I think that's sort of the wake up call to every content owner of like, holy shit. The reach, engagement and distribution creates an incredible opportunity to take advantage of. And it wasn't just doing the live event on Friday night. If you notice, they had a three episode, like, hype up, get excited, like the build up episode series. Yep. Like, they did a really good job of getting you excited and getting you into it. Putting the actual way in on YouTube, like there was definitely a really good strategy. But I think everyone, not just sports league should be thinking about, like, how do you take advantage of this massive reach?
- [31:52]
Ari
You know, if I was on the Netflix advertising team, I would been saying, why the fuck aren't we putting ads in this thing? I don't care about our tiering. It's a live event. Put some ads in it. I think Netflix will move away from the black or white. You know, it's either tier or it's not. You get ads on the ad tier, you don't on the other. I think live will be the area where they, where they cross the streams and start putting some ads.
- [32:16]
Rich Greenfield
Obviously, you're going to see that for, for football in a few weeks. But I would say the reason why you didn't see ads, and again, I don't know anything, but. But I presume the actual reason you didn't see ads, Ari, is that ads adds another layer of complexity. This was by far the biggest streaming event they've ever done. And why add even more complexity in terms of ad serving?
- [32:38]
Ari
It's true. It's true. They build their own ad server and live streaming is the hardest problem in advertising. I could guarantee you that. Over at the Town podcast, which I listened to religiously, they're just hyping up the Netflix Christmas game like crazy. So they have a football game on Christmas. I think it's two good teams, maybe Kansas City and somebody. And they have Beyonce doing the halftime show. And it's just like, if I was at a competitor, I'd be like, why the hell aren't we doing this? What, do we not have enough money? Do we not have enough capabilities? Why are we letting Netflix just run the table here?
- [33:10]
Rich Greenfield
Well, remember, if you're the league, if you're the NFL, or if you're any of these sports leagues you're recognizing. I mean, we just had. We just came from a company. You said out of order. It's actually a perfect order. We were talking about linear cable television dying. Like, right? If you're a league, you have to figure out a plan for the future. Right? Like, and there aren't, unfortunately, there are not that many obvious choices. Right. Like, in terms of true reach and engagement, yes, they do Sunday Ticket. But Google has not been a buyer of traditional sports rights of any substance. I mean, they've dabbled. Apple certainly isn't. You know, they dabble with MLS and a little baseball, but you really have Amazon and Netflix. Like, you really have two core platforms. And so I think the reality is leaning hard into Amazon, which they've done, and now trying to whet the appetite of Netflix. Every league needs a Netflix strategy because they need Netflix to be a buyer. Not today, not tomorrow, but over the next decade. They need Netflix to be a buyer because if they don't have more buyers than there are packages, they're in deep trouble.
- [34:20]
Ari
I don't know the answer to this question, but is part of this that Disney and ESPN has had a convoluted streaming strategy and hasn't really figured it out.
- [34:29]
Rich Greenfield
Keep going.
- [34:29]
Ari
Well, ESPN isn't streaming. ESPN is still in the old world where you need a cable subscription. And there's. They keep talking about how it's going to be part of the bundle, but it's not yet. So Disney is not in a position to, you know, spend 75, 80 million dollars of sports rights in digital environment. That's my take on it, but I'm speaking just totally speculatively.
- [34:48]
Rich Greenfield
ESPN plus is a streaming only product and they spend hundreds of millions of dollars buying UFC rights. And if you wanted to watch 309, you were certainly, unless you were going live, you were watching it on a pay per view basis through ESPN plus. So they are there. I just think it's a matter of all of the companies, the traditional buyers of sports rights are all balancing the past and the future. And what they all really are missing is that their streaming platforms, not only do they not have a lot of reach, Right. Like you're talking about, most of these platforms top out at 30, 40 million homes. And remember, even that is sort of. Can I say bullshit on your podcast?
- [35:34]
Ari
Like, yeah, we've been cursing a lot on this one.
- [35:36]
Rich Greenfield
Okay, good. Okay, so it's sort of bullshit, right? Because like, just as an example, Disney plus has 10 million charter subscribers. Only 8 or 9 million of them have activated their account. So like a sub who doesn't even. Hasn't even activated their account, you know, certainly isn't getting engagement with the content. You're not selling advertising. And so the idea of I almost want to move away from subscribers to active users, which nobody reports. But, like, there is definitely a difference between subscribers and active users. But even if you had active users, one of the big problems with all these other platforms is they don't have a lot of time spent. A lot of times you are going to watch Max to watch the Penguin on Sunday night and then you're going back a week later to watch the next episode. You're not living and breathing there every single day. And I think that's part of the problem that all of the leagues have. You know, it's, it's why the NBA wanted to be on Amazon prime and not on Max.
- [36:35]
Ari
Right?
- [36:36]
Rich Greenfield
Like, where would you rather be if you wanted to put live games? I mean, I, I've actually been, you know, I think one of the biggest surprises of this season is that Amazon Prime's numbers for Thursday Night Football look like television. I mean, they're consistently doing 14, 15 million viewers on Prime. That's like TV, like what TV did. Like, it is not a meaningful. If you go back a couple of years, like that's what Fox was doing for those games and maybe a little bit higher, but like it wasn't like season one where you were in the nine to ten. You've now built up to a pretty healthy number. It's really impressive. Now you're adding in the NBA, you're building that flywheel of people getting more and more comfortable with watching sports on Amazon. That's a major change. And you think about how you're trying to seed the market. To answer your long winded answer to your question, Ari, like that's what you're trying to do is you're trying to build up so that Netflix gets that same muscle building into live events and sports over the next five years.
- [37:32]
Ari
My ritual every Thursday is to go to watch the game and then spend a couple minutes saying, where the hell is this? Where is this game? Like, what channel is this on? And I'm like, oh, Thursday, that's Amazon. Right? Okay, there's a discovery problem. All right, so we've got more news. Should we do. What's next, Eric? Mediaocean or Chrome?
- [37:51]
Eric
We gotta do Mediaocean. This is an ad tech podcast. So Mediaocean to buy Innovid for $500 million. This is so Innovate is a public company. Mediaocean is private company.
- [38:03]
Rich Greenfield
When you say public, like with air.
- [38:06]
Eric
Quotes, they're publicly traded.
- [38:08]
Ari
Come on, man, you can buy the shares. I own the shares. It's.
- [38:11]
Rich Greenfield
What I mean is. Well, look, spac. They were part of the SPAC wave.
- [38:15]
Eric
Yes, they were. Spac.
- [38:17]
Ari
It's been a disappointing public stock. Let's just say that.
- [38:19]
Rich Greenfield
Correct. And I think the reality is. No, I'll be really honest because I think this is important for your listeners. When startups go public and they don't attract attention as a public company, it does the reverse of being like. The reason you go public is to create liquidity, create excitement, create a public currency, not only to reward your employees with liquidity, but to create a currency to go out and buy things when your stock doesn't work and you're a tiny public company. I actually think, and I think Visio had the exact same problem it has. There were the exact opposite effect. It actually makes it hard to recruit people. Like, who wants to come to a place with a crappy public stock that nobody cares about, that isn't working, where everybody's underwater on their options? Like, that doesn't work. And so being private is actually better than being public. And you have Visio going private to Walmart. You have the Media Ocean transaction. I think the concept is similar. This wasn't working as a public company, you might as well be private.
- [39:16]
Eric
Sure. Previous life, I was doing some IR for a publicly traded company that acquired my business Undertone. So Perion and I got to know some of the public market investors and a lot of them couldn't buy the stock because it wasn't.
- [39:30]
Ari
Yeah.
- [39:30]
Eric
A certain market cap. And they were like, look, if you can get to a certain market cap, this thing's going to fly because all of a sudden people can buy things.
- [39:37]
Ari
Yeah. Someone explained this to me, like, if you're like Blackstone and you want to have even, even weighting of the s and P500, let's say you, you would have to put so much money into Innovate, you'd be buying the company or you'd actually have to put in more money than their entire market cap in order to invest.
- [39:55]
Rich Greenfield
You also don't like having things that don't have a lot of liquidity are hard to get in and out of.
- [39:59]
Ari
You can't get out of it. You can't get out of it. Right, right.
- [40:02]
Rich Greenfield
And that doesn't work for a lot of investors.
- [40:04]
Ari
Exactly.
- [40:05]
Eric
Okay. All right, so we'll go back to talking about the deal. But good, good, good. Detour. Mediaocean, they have, you know, basically the industry sewed up when it comes to workflow. They have Flash talking, which is ad serving and dco. Innovid had measurement, ad serving and creative for ctv. So you can take a step back and look at this as they now have a really interesting end to end offering on ctv.
- [40:33]
Ari
Yeah. And Bill Wise has been on this show. He's a friend of the pod, but he was also just on the Monopoly report just last week. So you could listen to the last Monopoly report podcast and hear him talk about this specific market. And he says, I was a little skeptical about his numbers, but he was saying that Google's ad server, GCN is so much larger than number two player, Innovid. And Flash Talking is the number three player. So he's putting together two and three, but he thinks two and three combined is only 10, 15% of the market. GCN is that much bigger. I don't really agree with those numbers. I used to be the product manager for GCN. I just don't think it's that big. I think DV360 is where all the action is DV360 is a billion dollar net business at least. But GCN's not. GCN is like a couple hundred million SaaS business in my opinion.
- [41:22]
Rich Greenfield
Why do you think Innovid hasn't worked as a public company?
- [41:25]
Ari
I think Innovid has. First of all, it's competitive.
- [41:30]
Rich Greenfield
That's your point.
- [41:31]
Ari
They're going into accounts and saying you have to get off gcn, you have to get off flash, you have to get off whatever your audience with. To us. So every, every single account is a knife fight. Secondly, the things that Innovate is really good at are niches. So they have a really, I've seen the product. They have like really cool product for like building dynamic CTV ads where you can put a QR code in it and get response and that edit demos really well. It's really cool. And it's like a fraction of the demand out there for that sort of thing. Like it's just not an overwhelming demand. And lastly, like, I think that if you look at the big public, they transact like trade desk applovin. The way to make a lot of money in advertising is to be a part of the transactions, not to sell pix and shovels.
- [42:18]
Eric
Yeah. So let's talk about that because the thing that might be interesting about this is the direct insertion to pubs that MediaOcean has. Can this skip a bunch of people in the middle? Even people like TTD and Magnite and PubMatic are folks at said companies looking at this and starting to feel a little bit of heat?
- [42:40]
Ari
Well, Project Harmony was Innovative's somewhat innovative new product that Zika came on this pod and talked about. Or wasn't Zika? I think it was Dave. But anyway, and I was at the launch event and effectively what they're doing is they're pushing orders from the buy side ad server to the publisher ad server without any DSPs or SSPs involved. Correct. And they're doing a lot of new product development in that area. And with MediaOcean owning the buy side planning, you could connect these dots pretty well.
- [43:12]
Eric
I think that's interesting.
- [43:13]
Ari
I think so too. I've said this publicly a bunch of times, which is the trade desk should have looked at Innovator buying it. It would be a really great synergy for the trade desk to be able to say to marketers, we track all of your CTV including places we can't buy, like YouTube. We just track it. We help you understand the whole picture.
- [43:32]
Rich Greenfield
But do you think that's why they didn't Buy it. They don't want to track things that they can't sell against.
- [43:38]
Ari
Maybe. Or maybe they worried that they'd be shut off from other angles because they'd be seen as competitors. But 500 million, Jeff sneezes that amount.
- [43:47]
Rich Greenfield
Well, look, going round, tripping, that's what's interesting about venture to begin with. You have a incredibly well capitalized company in trade desk. An incredibly ambitious multibillionaire CEO or founder who wants to disrupt the marketplace clearly sees an opportunity. You know, I don't know why tvos versus what you're talking about in terms of why he could have bought in. And then my guess is he just sees this as there's something about the size of this opportunity, that this is where he wants to devote capital. Which is what has me so intrigued about Ventura, is he's clearly picked this category, which surprises me, but also makes me believe that there's something we're missing in terms of how big his plan is.
- [44:32]
Ari
Yeah, I think. I think the theory that Jeff is a genius and well capitalized and aggressive is, you know, okay, I'll watch. You know, you got me. You got me hooked. I don't think that's a theory.
- [44:44]
Eric
Yeah, I don't think that's a theory. I think Rich makes a very good argument.
- [44:48]
Ari
I'm sorry, I should have had a disclaimer earlier, which is actually, this podcast is sponsored by the trade desk. There's a pre roll. I should have said it earlier. I forgot. So we're being very honest.
- [45:01]
Rich Greenfield
But, Ari, do you have any theories on why it was a secret for three years? I know a secret with air quotes for sure. But what was the reason for being so secretive? That's not clear to me. What was he scared of unveiling?
- [45:15]
Ari
Yeah, it is a little weird. I mean, I have to guess it's just to not distract the shareholders. Their investor relations are top, top tier and they probably just didn't want to confuse anyone with the story that. That they felt was off target.
- [45:29]
Eric
Yeah, And I think it's a sequencing thing. Right. Like, you know, they were talking about very intentionally, the premium web and UID and the importance now of the next generation CTV audio platforms. I think it makes sense if you think about the narrative from a sequencing perspective.
- [45:43]
Ari
Right. And they were sort of forced to talk about it because it was leaked. You know, a blogger newsletter I'd never even heard of broke the story like two months, three months ago.
- [45:52]
Rich Greenfield
Cisco's really good. Low pass is good. He's definitely good. He gets great. He has Good sources.
- [45:57]
Ari
Yeah. I mean, that was a great. That was such a scoop. Right? So. So there wasn't that much in the announcement yesterday, which makes you think they just kind of had the piece I'm.
- [46:05]
Rich Greenfield
Still confused about, though. The piece I'm still confused about is what is Sonos doing in the TV space or in the tv? Like, they can't even get their software to work for their music systems half the time. Like, it's been.
- [46:16]
Ari
Sonos app update is a different story. That's been a total disaster. That has Sonos customers just absolutely furious.
- [46:23]
Rich Greenfield
So they're not a sponsor of the podcast?
- [46:26]
Ari
They are not. They can. If you would like to sponsor the podcast, you know. Ariamarkitector tv. Yeah.
- [46:33]
Eric
If you're getting into ctv, this is a great place to generate some awareness.
- [46:36]
Ari
All right, let's talk. You want to talk Chrome?
- [46:38]
Eric
Yeah, let's end it by talking Chrome. So the DOJ is going to ask a judge to force the sale of the Chrome browser in addition to stopping payments to Apple and stopping requirements for using Google services and Android. This is a lot of asks.
- [46:57]
Ari
It's a lot of asks, and you have to kind of squint to say how this helps anybody in any way.
- [47:05]
Eric
Yeah. Most importantly, users.
- [47:07]
Ari
Yeah, users, competitors. I mean, who buys. As soon as you say it has to be sold, it's like, who buys it? And who do you trust to own the browser? You can't sell it to Microsoft, can't sell it to Amazon, can't sell it to Apple, can't sell it to Oracle. Like, it's just. It's a very hot potato. Well, it's.
- [47:24]
Rich Greenfield
It's always laughable when people say, oh, we'll just spin off YouTube into a separate company and that'll solve some of the problems. And it's like, well, YouTube is a. I don't want to. You know, there's not exactly, like, lots of competition to YouTube, whether it's part of Google or not. Maybe it works less well if it's not part of Google. But it's hard to see there being robust competition whether YouTube is part of it or not, you know, in terms of getting me to use a different browser than Chrome. Or is there more competition if Chrome is standalone? Again, hard to foresee. You know, I'm much more interested in how default search changes over time and whether perplexity or whether open. Like, can you create better search? You know, Reddit's rolling out new search next year. Like, how search evolves is really interesting. And something I'm paying a Lot of attention to. And I think if you were to say, like, what's a top investor issue right now? It's how does search evolve? Like, what. What is search? What is SEO like? How does all of this change over the course of the next few years? Because it feels like there's going to be a pretty major change and no one's really sure is it Google's to lose because they're in the like, will. Will Google Gemini, because of the branding, be good enough to keep it all, or will they lose market share because there's just such robust competition from OpenAI perplexity what meta is doing, like. And look, I will just step back because I think Eric, you know, brought up the DOJ point or the FTC and DOJ, I think it's really important. It's November 21st when we're recording this. Literally there are less. There are 58 days, I believe, until everyone that we're talking about won't have a job.
- [49:04]
Ari
Yeah, yeah, exactly. These are. These are proposals from lawyers who are on their way out.
- [49:09]
Rich Greenfield
Again, it could be maintained. Trump has certainly not been a big friend of big tech. And I saw Elon this morning attacking Jeff Bezos on X and then Jeff responding on X what the relationship is between the new administration and Google. Amazon, Apple Meta is still very much tbd.
- [49:29]
Ari
Yeah. I'll just make one final point on this because we are going quite long and I made this point on Twitter also, which is this is the right remedy in the wrong case, because as we've covered this extensively in the monopoly report, but Chrome is under quite a bit of investigation in the UK from the Competitions Markets Authority, the cma. And that process has unveiled enormous amounts of conflicts of interest between Google owning Chrome and running the sandbox process and trying to change advertising and using data for advertising. So there's quite a bit of evidence as well as just sort of a reasonable belief that the largest seller of advertising in the world shouldn't also control the largest browser in the world. Totally outside of the realm of search and search preferences. Search preferences is kind of like the least of the problem. So it's kind of interesting that this is part of this case when you can make the argument it should be a different process with different jurisdiction that should cause the same outcome. Come Any final words? Because this has gone long, but we should probably wrap it.
- [50:34]
Rich Greenfield
This was a pretty busy week. Yeah.
- [50:37]
Eric
And we didn't even get to all of it. Yeah, yeah. Everybody should make sure you're subscribed to the Market newsletter because there's like probably five or six other meaningful news items. We didn't have time for it that you'll, you'll, you'll see the links.
- [50:48]
Ari
And next week we have the DOJ closing arguments that I'll be covering from the Monopoly Report. And on Tuesday, like we said, the intro that we have our 100th episode, which is a special episode with Michael Kassen, and it's hysterical and awesome. So stay tuned and listen to that over your Thanksgiving dinner and have all of your family realize you actually have an interesting job and know interesting people and stuff like that. So anyway, let's call it there. Rich Greenfield from lightshed, thank you so much. This was a great conversation.
- [51:23]
Eric
Thank you, gentlemen. We'll see you next week. Bye Bye.
- [51:26]
Ari
Bye bye.
- [51:28]
Eric
Thank you for subscribing to Markitecture. New interviews are added every week at Markitecture TV in your favorite podcasting app.
- [51:44]
Ari
Thank you for listening to the Markitecture podcast. New episodes come out every Friday and an insightful vendor interview is published each Monday. You can subscribe to our library of hundreds of executive interviews at. You can also sign up for free for our weekly newsletter with my original strategic insights on the week's news at News Market tv. And if you're feeling social, we operate a vibrant Slack community that you can apply to join@adtechgod.com.