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- [00:00]
Evan Shapiro
Just really quickly say, this is the Media Odyssey.
- [00:03]
Mike Shields
This is the Media Odyssey podcast.
- [00:06]
Evan Shapiro
My heart's aflutter.
- [00:23]
Marianne Ranchette
Welcome to the Media Odyssey podcast.
- [00:25]
Evan Shapiro
That is Evan Shapiro and that is Marianne Ranchette.
- [00:29]
Marianne Ranchette
You could have said this with a bit more.
- [00:32]
Evan Shapiro
No, but you know what? You know what? Here's the thing. No, no, no. Here's the thing. So we have a special guest on the episode today and during the prep, you cavelled over his, which is Yiddish for you fawned over his voice in particular.
- [00:46]
Marianne Ranchette
Okay.
- [00:48]
Evan Shapiro
In a way that you've never done for me. You've never told me. I love your voice. I think you said you love his voice. Is that what you said?
- [00:54]
Marianne Ranchette
That's what I said.
- [00:54]
Evan Shapiro
She's blushing. If you're only listening to this right now, Marian, I've made Marianne blush, which is the first time ever. Almost always it's the other way around. So why don't we just get right to our address? It is upfront week, as I said, or tried to say, and we have a very special guest and I think you should introduce him since you have. You appreciate his voice so much.
- [01:16]
Marianne Ranchette
People are going to be wondering who
- [01:18]
Evan Shapiro
the hell are blushing. You are blushing. It is a big buildup. I hope he's ready to meet expectations. Right. Go ahead, Marian.
- [01:27]
Marianne Ranchette
Yes. Let me introduce Mike Shields. Hey, Mike.
- [01:32]
Mike Shields
Hi there. I'm extremely self conscious now and I'm. I'm very concerned my voice is going to start cracking.
- [01:37]
Evan Shapiro
Oh, your voice. Well, Mike is one of the best media analysts out there, other than Marin and I, of course, and we follow. Actually, Marin, why don't you say you, you read, you listen to, you consume all of his content. Next in media is the. The handle for your newsletter, your podcast. But Marin, why don't you say a few words to Mike's face about why you like his voice? I think both practically and theoretically so much.
- [02:07]
Marianne Ranchette
Okay, this is very embarrassing. And it's true, I'm not usually easily embarrassed. But having said that, two things. The reason why I started reading Mike initially was I'm not from the advertising ecosystem. I'm interested in in it because of course it's part of the wider video ecosystem and you know, we need money. But so I started reading him and what I love about how he writes, it's very easy to understand for non ad sales, ad tech people, number one. Then I started listening to his podcast and I think he has an amazing voice. You have a good voice too.
- [02:46]
Mike Shields
I think all of us sound beautiful right now. This is lovely. Thank you for that kind introduction by the way. And if I could do anything in life, hopefully I can translate ad speak to regular people. That it's not, it's not, it's not easy, but that's definitely the mission. So thanks for, thanks for having me both. Both of you.
- [03:02]
Evan Shapiro
Well, I think that is your superpower, is that you make the advertising world, which is very fast changing and seems obvious, but oftentimes isn't much more easily digestible and understandable. So let's break this down. I think there's this recurring conversation that we have every year that I'd like to retire, but I'm interested in your point of view on this topic, which is we always talk about the upfront going away or dying and yet I think this is its, I don't want to say like 70th year. I don't know what it is, but it keeps coming back. And in fact, now, one would argue it's even more invigorated than it's ever been. It starts with the new fronts in March and continue, continues all spring. Will the upfronts ever go away? Why do they still exist? And how do you see the state of the upfront as you enter? As we actually, we're in the middle of the 2026 upfront. By the time this comes out, the upfront will have been over.
- [03:56]
Mike Shields
It's. It's funny because there were a lot of years as digital advertising's ascendancy started. What do we, you know, you can, There is no. People rolled their eyes at the TV business. What are you doing? There's no calendar, there's no, you could buy ad inventory all year long. And why, why do we have these, these artificial futures markets and TVs shrinking. Right. So what are we doing here? I think it's, I don't want to. It seems unkillable now at this point because. And now you've got, you know, I thought it seemed to be a sign of where things might be headed when Paramount decided to not have a live Big Splash presentation. And they do their, they do a series of individual dinners, I thought, okay, maybe everyone's going to start doing that. But now once you have Amazon and Netflix and of course YouTube, the big tech guys coming on board, first of all, it's, it's not a, it's like pocket change for them that throw these presentations compared to other big media companies. So right, there's not, they don't have the. But there's just, there is a real, especially with sports, the reason the upfronts exist for historically is there was a finite amount of inventory. Brands wanted to lock it up or at least have good pricing and inventory coverage for much of the year. It's true that the. There is. I had a conversation with somebody last year at Cannes. There isn't. There are not a whole lot of. It's not the days of ER and Friends where you have to lock up Thursday night anymore, but with the way that everything has gone on, on demand sports and live events are even more valuable. And there they are finite. There's not an unlimited amount of inventory there. So there is a reason for. Because there's two things. There's the upfront presentations where we're talking about this, and then there's like the upfront marketplace which happens right in the coming weeks and there's a reason for that. Like that still has a reason to exist. And what's interesting about like last year I, I almost heard it as. And I think this pattern will probably continue. There's almost like two upfronts now where the, the sports and event stuff goes very fast and then, then everything else takes a little longer. But yeah, I don't, I mean, I feel like the big guys are here to stay and it's, and it's just, it's, it's unkillable.
- [06:06]
Marianne Ranchette
Can I ask you something? On. You said something very interesting on, you know, who's still, you know, investing in, you know, that particular formats and so historically mostly, you know, more the networks, et cetera. What you're saying is that, you know, it's tech right now and Netflix, which considers itself as a tech company.
- [06:26]
Mike Shields
Right.
- [06:27]
Marianne Ranchette
These guys are kind of taking over and so some of the others are still doing it for the sake of still being in that game. What does that say about, you know, the advertising ecosystem as, as a whole?
- [06:40]
Mike Shields
Yeah, I mean you guys have chronicled, chronicled this very well, but it's, it's the, the, the old titans are now, you know, they're not secondary but they are chasing bigger, well capitalized companies that where in some like I always like, for Amazon, advertising is like the, the world's greatest side hustle. Like it's not their main business, but they've made it. You know, it's, you know, it's obviously their commerce and cloud, but they've made it, it's absolutely massive and now they're, they've dug in and now they're going for it. Like, it's like once they decide they're going for it, they really go for it. So it's, it's like a Real shift in power over the last few years with.
- [07:16]
Evan Shapiro
Yeah, I, I think, I think you're. I think you're being kind of on purpose to people that, you know. But I do think that the trad media, trad tv, especially, trad TV in particular, is very much secondary to overall television.
- [07:30]
Mike Shields
They gotta get in line. It's true.
- [07:32]
Evan Shapiro
And then, yeah, they're behind. You're closing your Amazon deal before. You close your NBC deal now. And oftentimes when you're closing your NBC deal, Amazon is a part of that deal. That's the other major component to this as well. Amazon kicked off the upfront. The only place Oprah appeared during the upfront is on Amazon's stage for a podcast. So, but, but for a podcast. For a podcast, not for a television show. And so I think, you know, there's two major things. I think big tech overtook the center of gravity and media years ago, the year I dropped my first map in 2020. But more importantly, this is more than a television upfront now. It starts with the new fronts. Amazon's up there selling all of their inventory. Yes, TV advertising is secondary or a side hustle to them, but their advertising business is now going to be a $60 billion business this year in retail media. One of your favorite topics, the upfront started with big tech with Oprah on stage and Amazon. It's going to end with big tech with YouTube and Netflix at the end of the week and YouTube, you know, being one of the bigger things. So I think people. Big tech has overtaken the upfront itself and we're selling more than television, which is why it's never gonna die. We are now selling. Google isn't just selling YouTube this week, they are selling their football package, to your point, but they're selling the whole Mishvocha. They're selling the whole Flywheel. Amazon, same thing.
- [08:59]
Mike Shields
Yeah. And, yeah, and, and you see them. I'm sure we'll get into this. The flywheel thing is, is a, is something that the big, the old, the trad media guys haven't really been able to pull off because they don't have all these different pieces. And that just increasingly makes it a challenging fight for those folks to try and participate or try and compete.
- [09:18]
Marianne Ranchette
Yeah. Fascinating to hear that. For Amazon, it's a hobby and they're crushing it. And those who are mainly doing this are struggling. Can we talk numbers a bit? We've had numbers coming out from work about the uk. I'm sure you have number about the US we're talking about the growth. But when we look at that growth, only again, the same three, four companies are eating everything. What have we seen for 2025 and what are we seeing in the coming years? Is it. Are they still just gonna grow and there's nothing everyone else can do?
- [09:57]
Mike Shields
Yeah, I mean, if you look at. It's. It's funny because I try and I try. I talk to people all the time. Like, it's hard not to be. There's a lot going on in the world. There's. You see, you see things like consumers are really pissed off, right. And they can't buy a home, they can't get jobs. Everyone's getting laid off. Surely this is going to hit the ad. And meanwhile the ad industry is robust and. But it's very Tale of Two Cities, like, and you look at Madison at Wall talks about the, the, the last number I saw is the ad economy is growing faster than gdp, which is very unusual. Usually they're kind of in step and. But it is, it is absolutely being driven by the tech giants crushing their earnings constantly. Where you see the traditional media companies are. They're all growing on their streaming business, either subscriptions or ad revenue. But, you know, like, cable TV is almost like an albatross and traditional TV sales are down. It is a, it is a weird time. And I know I'm kind of jumping around here, but the. You hear from advertisers have like, no, they, they have. No, it's hard for them to have foresight beyond, you know, a quarter or so where they, they used to want to have ability to plan a lot more. And they, it's really, it's like, it's almost like they learned how to live that way in Covid and they've never stopped. And now there's. The economy's always had this like, you know, stability, but this, this uncertainty that's like attached to it. So it's going to be, it's going to be an interesting year because I think the tech guys are going to continue to pull share and the, the traditional media companies are going to, they're going to, they're going to succeed when they have sports and things like that, and it's going to be a struggle for the, for the rest of the remainder.
- [11:41]
Evan Shapiro
Well, why don't we talk about the trends for the year because you keep touching on a number of them. I think at the top of the funnel for the upfront is sports. Everybody. Well, everybody says a lot of the same things over and over again, which to me creates a sameness that's dangerous for the smallest players in the ecosystem. But crucially, no matter what anybody said about anything, sports was at the center of every single presentation this week. A that creates even more sameness. How do you distinguish when Roger Goodell is on every single fucking upfront stage? How do you create distinction? And then secondarily I wrote about this this week. These sports rights as a cost is quadrupling or quintupling the rate of growth of television revenue is and big tech is bidding it up because they don't need to show a profit. Is this a sustainable thing? Is big tech going to chase trad media out of sports? Is this an arms race that's winnable? And is the return on investment actually that great?
- [12:46]
Mike Shields
I, I, I would be I'm worried. It's funny because I don't know you could see a world where if you know Netflix has dabbled in the NFL if they get serious they're getting big,
- [12:57]
Evan Shapiro
they're going to go bigger in it
- [12:58]
Mike Shields
this year same they, they could start you know taking locking things up and shutting now it is somewhat in the, it's in the interest of the leagues to the NFL loves to just like partner with every like you said they're going to make a deal with everybody. They liked being diversified. You know there were, there would be money always talks there, there would be some hesitancy on their end I think to let someone let, let like big tech completely lock it up. Like they like being on broadcast still to a degree they want to have the ability to reach the whole country.
- [13:27]
Evan Shapiro
Right. But in the, in the next five years sports rights amongst just eight companies is going to go up 34 billion dollars. 30 billion of that is Netflix, Amazon, Google and Apple.
- [13:38]
Mike Shields
Yeah.
- [13:38]
Evan Shapiro
So the big tech they have other than Netflix who's desperately needs to hold on to sports. Apple, Amazon and Google can hide their sports rights inside this massive flywheel. Never report a return on investment. It's not about a specific return on investment. It's about the stickiness of the ecosystem and the data it produces and the tie ins. Amazon's AI retail ad business as a way to advertise inside the NFL on Thursday nights is massive. And their and their NBA rights the same thing. But is the is, is can, is trad media. Paramount paid $7 billion for UFC. There's a new, there are new renewals coming up for the NFL. Can trad media return as much money as necessary from advertising to actually pay that example?
- [14:26]
Mike Shields
I don't think so. Like I, I don't, I mean you see, I mean Paramount, the math already on that, on Paramount just doesn't make a lot of sense. And it's, they've got, they've already, they've got it. They've got so much, they're taking on so much debt with the Warner Discovery deal, whenever that closes.
- [14:40]
Evan Shapiro
$80 billion in debt.
- [14:43]
Mike Shields
I, I, I don't, it's like they're coming together to have to create more scale and clout theoretically. But then it's like they're saddled with more problems as they come together. I don't know. I don't know how competitive they can be on some of these deals. Like if the NFL rips off its contracts or the NBA coming up, there might be a time when big Tech, because it's all I'm, I'm contradicting myself a little bit. It's also in the interest of the leagues to go to streaming more because they get younger, there's more money.
- [15:10]
Evan Shapiro
Yeah, yeah, yeah.
- [15:11]
Mike Shields
And like yeah.
- [15:11]
Evan Shapiro
And they get younger.
- [15:12]
Mike Shields
Talks about, you know, the age of the end of the Thursday Night Football in the NBA is lower, which is good for the sport long term. So yeah, there's a world, I mean the, you're going to have only a few players that can actually bid on sports and that's.
- [15:27]
Evan Shapiro
What do you think? There's another story that sits alongside of this. Unusually, our president is suddenly interested in antitrust laws right when it with regards to the NFL because his billionaire buddies, who. Yes, his billionaire buddies, specifically the Ellisons, are complaining about the cost of the NFL. Do you think there's a world in which the administration gets involved and caps the amount that the NFL can charge their platform partners?
- [15:55]
Mike Shields
I mean.
- [15:56]
Evan Shapiro
Marion's shaking her head. Mary, I'd be interested in you go ahead.
- [16:00]
Mike Shields
Not being an antitrust expert, I would, I feel like that would be thrown out of court. But I mean never say never would this, this administration will get involved in anything they so choose at any moment
- [16:14]
Evan Shapiro
as long as they can benefit. Marian, what are your thoughts on that?
- [16:18]
Marianne Ranchette
Well, like Mike says, never say never with your administration. But I feel like feel it's a tad too far. We do have something in Europe that perhaps you guys don't have that is, you know, actually protecting traditional media, which is in every country there's a list of events where you need to have a free to air broadcaster in the mix. The reason being that pay TV is very much not available to everyone. And especially right now with all of the trad and big tech and those sports rights going up as A fan, you end up having to have multiple subscription if you want to have the entirety of the sport or sports you're a fan of. So in Europe, we have that protection. They're called crown jewels in the UK and every year that list goes a bit longer again to protect the consumer, because we haven't spoken about that. But, you know, those sports rights going up through the roof.
- [17:23]
Evan Shapiro
Netflix costs more. It's why Amazon costs more. It's why all these subscriptions cost and
- [17:30]
Marianne Ranchette
why this World cup is going to be interesting as well. Because there's the fact that it's in three countries, you know, there's the time zone, etc. There's a lot of things. There's the fact that, you know, to make more money on advertising, you guys are actually changing the rules of the game and pushing for breaks where there shouldn't be any breaks in, you know, football, soccer, there's a lot of that. But it's going to be an interesting test because we're going to see whether what is worth more, is it the broadcasts or the streaming of the full games? Or is it the highlights or the.
- [18:05]
Evan Shapiro
Or, yeah, the highlights. That's exactly right. Yeah, good point. And so, and that's, that's what a lot of this conversation in, in the upfront and new front, the conversation moving from basically south by southwest to the new to or actually CES to south by southwest to the new front to the upfront is. Which actually is more valuable. And I would argue that the whole sports consumer, the clip consumer and the couch consumer, you know, the television consumer and the toilet consumer, I think they're equally important. And I think there's a huge movement to bring these things together. Josh tomorrow, in his first earnings call and then again on stage at the upfront, talked about vertical on Disney plus. Right. Netflix is really pushing vertical right now. Who just NBC is pushing a. Putting a tremendous amount of effort, at least I don't know how much money into vertical premium serialized reality television shows. They're going to kind of like verticalize Bravo to a certain extent. That's a huge trend that I'm seeing kind of more for the rest of this year throwing flowing through into next year. Mike, what are some other trends that you've noticed through this, the course of the. The first and second quarter of this year during the conversations. Big, big trends that are taking hold here in the upfront and that you think will play out through can and the rest of the year?
- [19:27]
Mike Shields
Sure. Well, I mean, I'm not breaking any huge news here. Like the, the, the ad industry broadly has, it's been, it's always had a bent towards performance advertising and it's just like it's gone, it's gone towards addiction. Where, like the. Every, every. Because of things like you mentioned Amazon's retail media business, where they can show you an ad on Amazon, you will go and buy the thing there and they can connect, connect those things in
- [19:53]
Evan Shapiro
the ecosystem, in the environment.
- [19:54]
Mike Shields
They want everything to work that way or that looks so good on the spreadsheet to the cfo. And it's, and it's so, it's just, it's pushing the, the ad industry is obsessed with. Everything has to be about outcomes improvable, which is perfectly reasonable. It's just, it's so TV is trying to play in that game and there's a lot of pressure on television. Like we talked about. It's just TV by nature is. Historically it's been about brand building and you, you don't, you know, you can't click on something about to, to a large extent you can't shop on your tv yet. There is, there, there are a lot of experimentation there, but it's the, the actions you take from seeing a TV ad are not necessarily immediate and easy to track. So. But they're trying, everyone is trying to compete there. It's not easy.
- [20:41]
Evan Shapiro
But I do, I do think if you look at. So there's another, you know, around the shoppable end of things, there's another trend that kind of sits right alongside of that, which is the AI of it all. Everybody seems to be in, in the performance conversation. They're now adding the word AI very often. These are just talking points manufactured. The full funnel. Television is a catchphrase that everybody is using now. But you've got Amazon in particular and I think YouTube as well doing some very interesting things with regards to, on the, on the Amazon side of things, using AI to dynamically insert creative based on the home that is watching that show at that time. So you're talking about infinite pieces of creative targeted around certain products for certain consumers who are watching certain shows in certain regions, especially certain times. And then YouTube has this peak moment technology which is. It's looking for the kind of emotionally high points of television and inserting ads that match directly at that point. Don't you think that with, you know, things like that happening, we're kind of on the short path to shoppable advertising in television? It does that. The dynamic ad insertion on Amazon allows you to add to your cart on your television as long as you have Amazon installed on your television, which let's be honest, most consumer homes in the US do.
- [22:11]
Mike Shields
I am, I'm a little torn on this because I've sat and watched a Thursday night football game and seen all the add to card ads come up and.
- [22:19]
Evan Shapiro
Right.
- [22:20]
Mike Shields
If I'm, if I'm like really into the game, it's almost like I don't want to deal with this right now and because.
- [22:26]
Evan Shapiro
Yeah.
- [22:26]
Mike Shields
But, but I'm also not, you know, I'm not Gen Z and I'm not, I'm a different kind of consumer. I'm used to. And I know I look that way. Yeah. Like I'm used to the lean back, sit there and hang out where that's just like a different, there's a different level of attention and participation. I'm generalizing about younger consumers who've grown up with, with digital media in different way. So. And there's a lot of debate about whether it's going to first of all to get you. I think you're right. There's all these, everyone's trying to get the shoppable TV thing right and whether it's, there's a debate about whether you're going to interact with your phone, with the remote, with some kind of voice activation. It's got to be something that everyone has. It's simple. So it's got to be, it's somebody like Amazon can make it happen or maybe a Walmart if they make the right number of deals. But it's, it's not the nature TV is like often either escapism or you're focused on sports. It's, it's a little, you're asking, you got to, you got to train consumers to expect this. And it's going to take a little time. But I do think if someone could figure out it's probably, I think it's probably going to be the phone. That is the way, the way that people send a phone and either deal with this ad later or send me an email or whatever, that kind of thing might work. But I still think the jury's out on whether shoppable TV is going to be mass.
- [23:47]
Marianne Ranchette
Yeah, it's been a trend that we've been waiting for to pan out for many years. We haven't seen it coming. But the phone thing, I would tend to agree with you because we, we had data Right. A few weeks back, Evan, on the number. It's like over 80% of people actually watch TV and use their phone at the same time. We're no longer doing this one thing at any one time.
- [24:13]
Evan Shapiro
Yeah, it's just under 80%, but yeah.
- [24:16]
Marianne Ranchette
So Mike, one thing. If I can take you just a quick second back to Outcomes. Do you think that tv, because there's a lot of, there's a lot of discussion on the fact that the big guys, big tech is taking all of that new advertising money, especially from SMEs, because they're performance based, etc. And so if TV want to have a piece of that action, then they need to be more performance based, more outcome based. Do you think there's a path forward? Can it change itself that way? Have you seen any players? I'm thinking folks like Vibe, etc. Were trying to deliver just on that promise.
- [24:58]
Mike Shields
So here's the, here's the, I do think there is potential. Here's the problem is that they're all doing it their own way right now where you have NBCU has their performance platform and Disney has their coppice platform and they all have their own like, you know, proprietary identifier and proprietary audience graph data. And that's, that's all great, but it's, brands don't want to just optimize and look at outcomes in a Disney universe. People watch all, you know, all kinds of different content, you know, and you could, you could say the same thing about people don't just spend time on Meta, but meta is the whole, and you know, reaches billions of people a day. It's, it's a different game. So there, there is, there is some indication that maybe the TV networks will start working together through their, through. There's a partnership coming out actually being announced today through Open ap. They're, they're trying to have like a common way of tracking outcomes. And, and, and the problem is any joint, any joint venture between big rivals is always hard to manage. And there, there's, there's, you know, whether you prioritize your own stuff or not. So it's, I, I, I think perhaps AI helps over time improve the measurement and, and the, the ability to show, you know, the magic of, of Meta and Google is they're so good at showing you stuff that you don't even know you want. And that's like TV isn't really there yet with advertising is kind of a blend instrument still. If we can get to that place where I think that will improve performance and trackability. But it's just, it's hard because you're, you're also talking about advertising something you can add to your cart right now and a Lexus. Like there's a real range of the timeframes and when people consider those purchases and how they act. And it's just, it's hard to put all that together in one piece.
- [26:48]
Marianne Ranchette
Do you think there's room for. Because what I'm hearing is you have big tech on one side they have their own silo, but it's so big that, you know, it's worth spending time buying within their ecosystem. But on the other side you have Disney and we see everyone doing its own thing and there's no way to easily buy and then in a measured way, et cetera. So does that mean that there's room for, you know, a non, you know, partisan layer, whoever that is, to actually do that on behalf of the tv, the wider TV ecosystem?
- [27:25]
Mike Shields
Yeah, if someone, and I don't know if that's a vibe or a mountain or, you know, I think even like a Nielsen would like to be that player where there's a cross channel, you know, omnichannel, and that this is also something that could theoretically come out of the agency world or even brands could build it. But if somebody, if somebody could nail helping you buy and measure and optimize towards outcomes across the entire ecosystem. Easier said than done. Yeah, there's like huge potential.
- [27:54]
Evan Shapiro
I don't know. I think, I think there are a couple players that are going to wind up everyone. And you hinted at this, Marion, but everyone likes to, you know, poke at the big tech walled gardens for grading their own homework. That's your, I think, your silo reference. Right. But there's two parts to that. First of all, grading your own homework is not really accurate. They don't grade their own homework. They grade their homework with the partner proctor and Gamble grades the homework alongside Google and Meta and Amazon. At the end of the day they decide and in very often P and G Unilever, these massive companies are buying direct. They're not even going through agency or third parties. They're using third parties to measure. But the other component to this is Roku has an Amazon deal, Samsung has an Amazon deal.
- [28:39]
Mike Shields
Yes.
- [28:39]
Evan Shapiro
Google is the number one operating system for televisions on the planet Earth. It seems to me that the aggregators of that tracking data, building the audience up front, who you most want to target at the optimum moment to buy your product and then secondarily tracking them on the back end. From a behavioral and attribution standpoint, I don't see how anybody competes with Amazon and Google. But it doesn't mean you can't build your Own silo and make it the best, most powerful thing that you possibly can. Mike, two parts to this question. Do you think trad media, including the OEMs are seeding their power and their leverage to big tech by basically allowing Amazon to be the backbone of ad reading for a lot of what's going on there? And is there a way for trad media to either partner or build their own version of that to truly compete in what Marion's asking now?
- [29:37]
Mike Shields
Yeah, that's a great question because it's very telling. You see you into this. Amazon struck deals with it. I think it's Netflix, Disney, Roku you mentioned, which was kind of at the time. Whoa. Those are all. These are like blood rivals and they're working together. It's, it feels like, you know, that's short term thinking like they're going to get some fresh demand because Amazon's got this, they've got this incredible, you know, identity and the ability to track outcomes. So it's like take the money now, but what do you do in your business long term? But it may be that, that and, and to be fair, not, not every product lends itself to Amazon's date. Like not everything is bought and sold on Amazon so it won't work for everything.
- [30:21]
Evan Shapiro
But right.
- [30:23]
Mike Shields
Once they get a taste of that it might, it might dampen their appetite for trying to build something that's a rival because I just don't know they're going to have the, the enough identity data.
- [30:33]
Evan Shapiro
But then don't we wind up with the same kind of big tech oligarchy and television?
- [30:38]
Mike Shields
Yeah, that's, that's a real risk social media. And you know, that opens things up to like, I know like for example, Yahoo would like to be a player. Surprisingly like they're, they're an renaissance. Yeah. Because they've actually got some really impressive identity data that they can apply to television. Like maybe they be. They come across as more neutral or less scary than an Amazon. But I don't know if you can. And then you know, then yeah you're right. Like YouTube could get more or Google could get more in the mix here. It's funny because how often you hear the trot media guys scream about the wall gardens. Don't want to. That's not fair. Then there are other. But, but they're now trying to like mimic their, their advantage and also work with them. It's just, it's, it's a.
- [31:26]
Evan Shapiro
Well I think there's, I, I think there's a way for them. I don't Think there's a way to avoid working with Amazon, Google? I think you can avoid working with Meta if you, if you chose to. But I think Google and Amazon are unavoidable and they, they, they. I'm going to say this out loud. Google is not terrific at selling advertising. It's not their number one skill set. Right. They sell audience, but they don't, they're contextual advertising. And marrying environment with creative is not necessarily their number one skill set. Amazon's not great at that either. They do other things incredibly, incredibly well. You know, neither of them really, I mean, Amazon makes content, but you know, that's not really their specialty, either of these two. So the publishers and producers of content have a viable partnership long term with them. I don't know how much the OEMs do, but, but this, this hate love relationship that they have, I think it's just if they can make it more rational and understand that they're going to wind up making deals with all of these and get into it, especially the YouTube of it all and the aggregated sales platform that Amazon is doing, not just from an advertising standpoint, but from a services standpoint. They're becoming one of the great aggregators of streaming out there as well. Do you think that there's a generational shift afoot at some of the trad media or the big tech players where we can maybe find a relationship that isn't so contentious and is kind of almost like old school cable days where everybody peacefully coexisted and just sold more advertising for the entire ecosystem?
- [32:58]
Mike Shields
I would tend to agree with that. But then if you look at what the Ellisons are doing, they seem like they're, they're, they want to be a tech company and they want to amass their own similar advantage. I mean, again, is that realistic over time? I, I don't know, but I think you saw it. Even you mentioned the Amazon deal. Like NBC has a deal with Instacart, for example, that. Yeah, I think in the past they would, they would maybe try and do their own thing there, but it's just, they're, they're, it's, they're, they're going to need help and they're going to need a lot of string. You know, I think it's the era of like unexpected partnerships because they, they could both kind of help each other and, and their businesses are complementary and not necessarily in competition. So. Yeah, I do, I do. And then, and there is a, there has been a changing of the guard. Especially, you know, Disney's got A new boss obviously. And NBCU is going through a lot of change as well. They're going to have to have a different attitude about. And just accepting your place in the media business has not been easy. It's like losing your empire but realizing you still got to deal with the US now or something.
- [34:04]
Marianne Ranchette
Accepting your place. Let's assume people actually do that. They accept their place. What should they then focus on? What is the sweet spot? What is their edge within that ecosystem?
- [34:18]
Mike Shields
I think and it was interesting. We're probably getting to one of the other, one of the other big trends and it's, it's kind of obvious. We talked about how big sports are and events are but TV still does the mass gathering as much as the day to day ratings for you know the Wednesday and Wednesday at 8:30 are never going to be where they were. They can do you know like yesterday Disney talked up that they, they like last year NBC had or this, this past winter they had the Olympics and Super bowl and the NBA All Star Game is like their legendary February. Now Disney has the Grammys and the super bowl and like three other things I'm not thinking of but they, so they can do those event immediacy because brands still like this idea of, of I want to rack up 10 million people in one night. I've got a movie opening, I've got a sale this weekend. I'm selling my cars, whatever and TV and, and even, even with they're starting to eventize reality TV with Bravo and all these crazy, you know the, the, the, the wrap up of Summer House and all these things that are there people are obsessed with. They're still really good at that and I think that's where TV is going to lean into. As much as I said, as much as I brought the outcomes thing like they spent most of their presentations talking about these like splashy big moments right. And the emotional connection that they have with, with viewers. And it was, I was funny Evan, the, at the Disney thing last night the head of sales Rita Ferro said, said Hulu is now the number one ad supported streaming platform. I took a second, I'm like wait, what? And then oh, you're not counting YouTube. You're, you're deliberately.
- [36:01]
Evan Shapiro
She means premium.
- [36:03]
Mike Shields
Yeah, yeah. And there's definitely a t old traditional TV versus YouTube kind of undercurrent all this and YouTube. We know you guys have talked about it a ton. They're, they're, they're dominating this, the streaming share right now. Right. Like they are taking over CTV slowly but surely but they still don't have. And they, and they really are massively influential with cultures, don't get me wrong. But they don't have as many event like pieces. So much of YouTube is on demand with creators. And that's, that's great, but that's like a little bit of a contrast or a little bit of a battle going on. And does YouTube need to. They've got Coachella.
- [36:42]
Evan Shapiro
Yeah, but let me, let me dive in there. So, so Comcast had the super bowl and the Olympics back to back in first quarter. They generated $2 billion in additional ad revenue from that. And yet their net income fell in the first quarter by 36%. Their EBITDA fell by 17% in the first quarter. Now you talk about YouTube and their events. Yes, they don't have as many as a lot of these other broadcasters, but they also have 1.2 billion hours of programming, which is hundreds of X everybody else. And then on top of that they have the NFL 17 weeks every, every year now in the fall they have the Oscars coming soon.
- [37:33]
Mike Shields
Yep, that's exactly what they're doing.
- [37:35]
Evan Shapiro
Coachella is, is another one of that. And then going back to Marion's point from earlier, when the super bowl is on, Everybody goes to YouTube before and after to watch the clips, watch the commentary, watch their favorite creator. And not just Google, YouTube obviously, but also TikTok and Instagram as well. So I think, you know, even in the event end of things. And then the other thing to consider is that digital is now getting 75% of pure play. Digital is getting about 75% of every US ad dollar. About 60% of that goes to just Amazon, Meta and Google. Does the television ecosystem really even matter? To a certain extent. Isn't it just those three against each other?
- [38:21]
Mike Shields
Wow, that's bleak. Yeah. Yeah, it matters. Well, I, there's, you're right, the economics are pretty screwy that you have the best quarter ever and you're losing and you're taking a hit. And I, you know, a lot of that has to do with legacy structure and losing money on Peacock and things like that. It matters for what it's good at. It. Whether it's sustainable long term is. Is a real question. I think the, the model is very challenged and it's only going to get harder. Like you said, we like. Once the rights get that, once the, once the rights to the stuff that they've, they're holding on to becomes untenable, then, then it's a, it's really tough. I don't Know, I mean, it's kind
- [39:05]
Evan Shapiro
of the reason why Warner Brothers Discovery is disappearing into Paramount is because they just can't compete anymore and now they're going to a billionaire, you know, Nepo King to fund the arms race. But I just don't. Anyway, I didn't mean to get that bleak. Yeah, but betting on sports as the center and only thing that you're going to hold on to just feels like a race to oblivion.
- [39:32]
Mike Shields
Yeah. And it feels like they're not trying with other stuff. Go ahead.
- [39:35]
Evan Shapiro
Sorry.
- [39:35]
Marianne Ranchette
But I don't think it's the only thing they bet on. I think you look at the programming all year long, there's more to that. But sports is, is, you know, the pretty thing that they flag to get, you know, the dollars. One thing that I have to say, you know, I'm listening to this and it's a, it's. It can be a bit depressing. Having said that, are you noticing that everyone is trying to mimic tv, Right. So when you look at the streamers, looking more and more to be like tv. So Mike, you may not have seen this, but. But on the French market, Netflix and TF1, which is the main commercial broadcasters, are going to launch together in June, July time frame. So essentially all the content and the TV channels from TF1 are going to be on Netflix France. So everyone wants some piece of that, you know, TV action. YouTube has spent a year and a half pushing that agenda. We're starting to see Insta launching their own app, etc. So what is. So what are you number one? What are you seeing from, you know, others? I'm thinking Meta beyond, Beyond Instagram, maybe TikTok approaching TV. And if TV is so sucky, then why does everyone want a piece of that?
- [40:56]
Mike Shields
Yeah, yeah, well, that, I think that, you know, that big screen in the living room is still this really compelling piece of real estate and you got the communal viewing thing. And I think you're right. Meta and TikTok are, are sitting there saying, I, I don't like that YouTube is taking over that screen in such a big way. I want a piece of that. But it's interesting, I was at an event last week in LA with a very creative centric event and TikTok and Instagram both appeared in TikTok is Kind. They have tried to be on TV. It hasn't really worked. They're kind of backing off that it's seemingly at least publicly and then, but, but Meta is both. There was a story in Digiday where they are talking about bringing their robust data to TV advertising in some fashion. They've been trying to find a way in there and then yeah, they're trying to make Instagram on TV a thing. I, I think there is just a. But it's, it's funny because we're talking. It sounds crazy. It's. What's the TV ad market? 60, 70 billion. Like there are other, these companies can find other ways to go after it. It's not, that's not the. It used to be. That was the end all like golden thing that you had to get it. Hold on. They, they found a lot of other ways to find ad dollars, but there is still something about owning that centerpiece of culture and the center. And I think brands still think that big screen is super effective place. As much as people are consumed by TikTok on their phones and everything else, they, they still like, they still like that real estate. So that's still seen as super valuable and compelling. But now I don't, I don't know if people do watch YouTube shorts on TV to a degree. I don't know if TikTok or Instagram will work on TV, but it's gonna be fascinating to see how they try and pull it off.
- [42:36]
Marianne Ranchette
I read your piece on that topic from the summit you were at and the person from TikTok I think was saying not shorts as is that it would take perhaps a bit of a transformation in going longer form, etc. To actually be able to be a player within the TV ecosystem. And that's what YouTube has done. Right. The fact that they've done all of those deals with traditional media players is because they want to bring the right content for living room experience. But if so that is the edge of traditional media. Right. That know how on that big screen, that production of content, live events, et cetera, what could they do? You see everyone, you know, launching their own streaming ecosystem. The broadcasters in Europe have been very active, you know, on that front, but they're still at that moment in time where a lot of the money is still coming from linear. It is either, you know, growing tiny bit or decreasing. And then, you know, streaming advertising is growing double digits. But, you know, it's, you know, $1 on one side, $0.01 on the other. I'm exaggerating, but it is not compensating. Yeah. On linear tv. So in your opinion, what could they do? Where should they invest their time and efforts to turn things around to some extent still by agreeing that the. This is their place in the ecosystem.
- [44:09]
Mike Shields
There's Not a lot of, there's not a lot of easy answers there, you know and you, you are seeing them, them being the social media companies that we're talking about toy with like, like short form vertical video. I, it's like I, I, I think it's a worthy thing to try. I just don't know if it's them and it be, you know, I applaud them. Like I like Univision trying like micro dramas and that, that might be a huge hit or might not. I don't know. It's like I, I think if with Paramount it's not. I know that Paramount and Tick Tock are not owned exactly by the same company, but they're gonna like, I would think that's gonna be, that's an asset where the other like if they can drop, they can draft on each other and maybe learn from each other. Where you can maybe learn something about the TikTok algorithm and apply it to Paramount plus or whatever, HBO Plus.
- [45:02]
Evan Shapiro
Well, the TikTok algorithm is now owned by Oracle which owns Paramount.
- [45:06]
Mike Shields
And I know they're going to keep it separate and never talk but you know, like, I mean realistically. Yeah. Like they've got to maybe can they, can they borrow pieces from these companies without trying to just do it and do a knockoff of what they do?
- [45:22]
Evan Shapiro
Well, I, I think, I think and, and Marin and I started this year off by talking about look at France of microcosm, of where the future of television is going to wind up. And if you look at the TF1 Netflix deal and the France Television Amazon deal and then both TF1 and France Television have made recent announcements about partnerships with YouTube as well, bringing programming up day and date. I do think I'm going to answer Marian's question in my own way. I think there is a way to embrace what's happening on these massive platforms and take a share of it there. I think by if you look at the top five most used video platforms in the United States, only one of them is a television service, Netflix. Everything else is either a parasocial video platform or in the case of YouTube, it's both a social media platform, it's a search engine and it is also a very viable to most popular television channel in the country. And so you know, and Netflix sucks at selling advertising, just fucking terrible at it, which is why they made the deal with Amazon. If Disney and Hulu and Fox and the, and Paramount and the rest want to climb into that top five, they have to develop the full circle, full suite of services. What's great for them though is if they take their massive libraries, their high quality professionally produced libraries and distribute them in vertical. On social. Disney did this recently with the High School Musical. They took the whole film and put it out in 10 minute increments on TikTok and it crushed. So I do think if they just agree to live in today versus longing for the period when the upfront started, they can compete. And YouTube needs, needs these publishers. Amazon and Meta desperately need these publishers to. To feed the algorithm. So I think there's a way forward. But to the point we made earlier, you have to get over hating them so much and hating the fact that they're winning and agree you're going to lean in to their specialty.
- [47:33]
Mike Shields
Do you. Do you think I'll ask you guys this? Do. Do you think that the big. The big traditional guys should make their platforms feel more social? Like should they. You know I don't. You start making everything look like YouTube and tick tock and that's dangerous. But do you start making them, you know, where they.
- [47:51]
Evan Shapiro
No, I think, I think you have your like popular culture. Things are only popular because they become popular on social media. Let's be honest. That is how things become popular. And so agreeing to all of this that, that you're actually going to drive people to a movie theater with TikTok and agreeing to program your social platforms the same way. Not. Sorry, not the same way but with the same intentionality that you program your streaming service and your television channels and agree that that's the flywheel. That part of the Flywheel is going to be owned by someone else and a huge part of the Flywheel is going to be owned by the consumer. Then you can get over this hump. I think Fox is actually doing the best job of this in the world. Actually. No, I think the Friends. The French market is really leading the way as Marion predicted would happen. But I do think in this country between to be.
- [48:40]
Mike Shields
Yeah.
- [48:41]
Evan Shapiro
And their creator verse stuff there, their deal with Holy Water, their deal with Red Sea Ventures, their deal with Whaler and their deal with Dhar Mann Studios. Oddly the Nepo run Fox I know and I wrote a piece about this is is leading the way of how to transform trad media. My standing.
- [48:58]
Mike Shields
Yeah. Well it's almost like Fox has gotten. They're smaller and they're just like we don't have to try and find crazy fights and just let's try stuff. Yeah, that's. That that is really interesting.
- [49:07]
Marianne Ranchette
I think we could stay for four hours. So the upfronts are almost done, and then in a few weeks time, we'll have the lions. Are you going to be there? Are we going to see each other?
- [49:15]
Mike Shields
I will be there, yes.
- [49:17]
Marianne Ranchette
Nice.
- [49:17]
Evan Shapiro
Great conversation. Your voice crush came on and you didn't blush the whole time. Marian, I appreciate it.
- [49:23]
Mike Shields
I can leave you a voicemail if you wanted something just to hold on to.
- [49:28]
Evan Shapiro
So there you go. You had your favorite voice in podcasting on. How do you think it went?
- [49:33]
Marianne Ranchette
It went great. I mean, he's. He's fascinating. I'm saying it. The voice is amazing. And I think we need to do more stuff with him because he's bringing a different view on things. I think he's so much into advertising, we're a bit more within the wider ecosystem, so I think that feeds, you know, nicely. So let's. Let's do that again. And it's not just because I love his voice that I want to do.
- [49:55]
Evan Shapiro
All right, all right. Just. Yeah. Don't replace me with him.
- [49:59]
Marianne Ranchette
I won't.
- [50:00]
Evan Shapiro
You're blushing again. Thank you for a great episode. That is Marian Renshett.
- [50:06]
Marianne Ranchette
And that is Ivan Shapiro.
- [50:07]
Evan Shapiro
And this has been the Media Odyssey podcast. We'll see you next time.