Amy Poehler (4:01)

Yeah, thank you for having me on again.

Matt Bellany (4:03)

Out of all the media analysts, the brains behind the analyst reports that I read on a daily basis. You have the most tattoos, right?

Amy Poehler (4:13)

I think that's true. I haven't confirmed that, but I'm pretty sure I don't know.

Matt Bellany (4:18)

Michael Nathanson, I think has some sleeves that we just don't know about.

Amy Poehler (4:22)

You never know. You never know. But yes.

Matt Bellany (4:24)

All right, well, welcome back. Thanks for coming on the show. You wrote a pretty interesting note to your clients last week that I wrote about in my Puck newsletter and I wanted to have you on to discuss. And the thesis, as I understand it, and we'll get into it, is essentially that Netflix has a big opportunity here to go after short form content and essentially could really benefit from pillaging YouTube just doing what they did to the broadcast networks seven, eight years ago to YouTube and TikTok and identify the top 10 creators and just throw money at them, bring them over to the Netflix platform. Am I getting that right?

Amy Poehler (5:11)

Mostly. In fact, the only bit I would disagree with is while I think Netflix is focused on YouTube, given how big and broad its engagement is, and focused on the creator community as a piece of that.

Matt Bellany (5:23)

So not TikTok.

Amy Poehler (5:24)

I don't think so much TikTok. I just, you know, as, as you put in your newsletter or something. We wrote not everything that works on YouTube is going to work on Netflix and definitely not, not most of what's on TikTok is going to work on Netflix. But there are these really high content value creators that, that maybe could be in, in either spot. The only bit of what you said that I disagree with is I don't think it would even at its greatest scope, be the same sort of pillage because YouTube's viewership and content base is just so massive. If you add up all the top creators on YouTube, there's still like a pebble on the beach of YouTube's engagement.

Matt Bellany (5:59)

Right? It wouldn't hurt as much is what you're saying. There's just so much tonnage on YouTube that picking off the equivalent of the Shonda Rhimes or Ryan Murphy or Kenya Barris. While it was pretty devastating for Disney, ABC at the time, this would not be as devastating for YouTube if, if it hurt it at all.

Amy Poehler (6:18)

I think that's right, because one of the questions we received since the report is, you know, is this kind of poking the bear and starting an arms race, you know, much like we saw during, you know, those, those so called streaming wars and, and does Netflix want to engage that with YouTube? But you know, I think there's been some analysis of YouTube's engagement and it really is, you know, the long tail in every sort of infinite direction of content. You know, whether it's home repair or car maintenance or creator community or a million other things I'm not mentioning. So these, these big creators do represent, I think, a much smaller piece of that puzzle.

Matt Bellany (6:50)

Yeah. And we've had Neil Mohan on the show and he's not a programmer. I mean, he will admit that right away. He's, you know, we are an open tent. We want to be the partner for the creators. We are not curating, we are just putting stuff on the platform and then what performs. What performs. That's sort of the basis for this like quasi feud between Netflix and YouTube where Ted Sarandos calls it killing time and he says Netflix is spending time. And Neil Mohan, when we had him on the show, basically responded like, the audience decides. We don't decide how you spend your time, the audience does. And if you look at the cost for the Netflix content, according to your report, you guys estimated that in 2024, Netflix had 188 billion hours of viewing time and they spent about 15 billion in content spend.

Amy Poehler (7:41)

Yep, that's right.

Matt Bellany (7:42)

So that would translate to $81 per 1,000 hours of viewing. If you look at YouTube, you guys estimated that their cost is about $60 per 1,000 hours of content. So that is a $21 discount if you go after creators, then if you split spend on the traditional programmers that Netflix has spent on.

Amy Poehler (8:10)

Yes, and I think one of the things you find with Netflix is because it is, you know, a broad array of content and I think this is something they would, they would confirm is they have really expensive content. And those are all the things that, that we talk about and that you see at the top of the engagement report, you know, Bridgerton, the Electric State, Russo Brothers, et cetera. You know, they also have a lot of documentaries which are really, really cheap per hour.

Matt Bellany (8:36)

Oh, I watched the poop cruise thing last night. It's, it's very disparate and they get a lot of bang for their buck out of this cheaper documentary style content. And if you look at the top 10, they're on there almost every week now.

Amy Poehler (8:51)

And so the point, right, is that it's a portfolio. The library, the cheap stuff, the super expensive, you know, shots that they take. And so they're always looking at the portfolio. And you know, a question that they're now getting, as you know, in spades is what, what is sports going to mean for Netflix? And no matter what analysis you do of any sports rights, you will come down to the conclusion that per hour of engagement it is extremely expensive. Now that doesn't mean it's not good value, that doesn't mean it's not strategic or important. But you know, an hour of Monday Night Football is egregiously expensive compared to just about anything else anyone will, will ever watch. So if you, if you assume that Netflix is going to pursue some really expensive content to be additive to the.

Matt Bellany (9:32)

Portfolio, they have to be there. If they want to be a diversified, everything for everyone service, they have to have some of that.

Amy Poehler (9:41)

That's right. And what YouTube offers them is really high value content built in audience, probably more skewing to the ad supported side at reasonably priced content costs, even if they're doing sort of big deals with prominent creators. So the money ball to it to me looks like it works pretty well.

Matt Bellany (10:02)

Yeah, it's the workhorse stuff. It's the stuff that they don't put out there as the premium Netflix content, but it does the job. It's a middle, it's the equivalent in baseball of A middle reliever. It will just eat up innings, it will just eat up hours and get people to stay on the platform. And if Netflix really is competing with YouTube for domination of the streaming wars, which increasingly it does look like a two horse race, this makes a lot of sense to get into this business in a way that makes sense for Netflix. So I want to talk about that. How would YouTube creators on Netflix need to be different in order to keep the Netflix brand? Because this is a branding issue. Netflix is premium. YouTube is user generated and not premium. How would YouTube on Netflix work?

Amy Poehler (10:53)

Yeah, so I think one thing that you're increasingly seeing with a lot of streaming platforms is this idea of hubs for discovery. I think the place that probably you and I have talked about it the most is where Disney is going. They have kids and family, they have FX and Hulu, they have sports. And there is some segmentation within the apps to go discover that, you know, Netflix is going through, I think, a user interface update and innovation as we speak. And I think one of the things that they think about is discovery. So we all hear about shows which we go seek out, but if you're not sure what you want to watch, you know, how do you discover content?

Matt Bellany (11:30)

And they've resisted that. I've said for years that they should put a denotation on certain types of content to say to the audience, this is quality, this is award worthy, this is fun for a night out. Disney has that segmentation based on its brands that it owns. Netflix is one brand for the most part. And yes, they direct you to certain types of content via descriptors, but they don't have hubs on the interface like Disney does. And I say, I think what you're saying is maybe there's a separate tab for short form or for the cream of the crop creators or something that denotes this is YouTube style content, but in a Netflix branded environment.

Amy Poehler (12:18)

Yeah, and so that's what I'm saying is I do think that that's going to change. So for instance, video games is a different type of engagement and it does occupy a slightly different place in the user interface. Sports. And the more they get into live is certainly going to as well. And they've indicated that they're heading into live. And so short form is a natural, another version of that which can be recommended or can sit with a slight amount of segmentation. I mean, even the Criterion Collection, which I'm a fan of, you know, has a hub right now for Chinese film noir. So you can take, right your, your library Your vast resources and just sort of direct people. Hey, if you're looking for this type of thing, you know, here it is. As long as you've got enough titles under, under each area, right?

Matt Bellany (13:02)

And it could be a, a place that brings in an entirely new cohort of audience, people that are not interested in YouTube. If my kid has no attention span and doesn't watch shows, quote unquote, maybe he becomes a Netflix devotee because of this short form stuff.

Amy Poehler (13:21)

It's certainly an interesting thing to test right now. I've used YouTube for a lot of car repair videos. I don't think those belong on Netflix. I don't think those, I don't think Netflix thinks those things belong on Netflix. But you know, Mr. Beast and Ms. Rachel have shows on Amazon and Netflix respectively. So there is clearly some overlap.

Matt Bellany (13:39)

Non exclusive though. And that gets to the, the question of why would these top creators do this? I mean, when Neil was on the show, he pointed out that yes, Mr. Beast has an Amazon show, but in an interviews he always says, YouTube first, YouTube first. The business is built on YouTube and his entire enterprise with the Chocolate Factory and all the other things he sells are YouTube businesses. So other than just gobs of money, why would these top creators come over to Netflix and give that up? Because I do think it would need to probably be exclusive if they wanted to make a splash here.

Amy Poehler (14:17)

I agree. And certainly, you know, Netflix's entire history is exclusivity, global exclusivity, typically, including in many cases, I think, as it relates to YouTube creators library exclusivities. But if we think about what they may do in the future, I think it would be looking at bringing creators over on a as exclusive as possible basis. So first is gobs of money does make a difference. But if you put it in the context of Netflix's $17 billion of cash content spend, if they put $1 billion to work towards these type of creators, that's finding the biggest ones and paying them huge premiums to what they pay today. It gives those creators a business model in which they're a little less reliant on the advertising market. So de risk them a little bit, gives them a little bit of creative appetite to maybe think broader about what they're doing. So I imagine that for some of those creators that is very attractive. And then the last thing I think that is super important is that for the most part they're not giving up reach. If you think about the penetration of Netflix in the markets where most of.

Matt Bellany (15:19)

These creators operate, it's 300 million households worldwide and counting.

Amy Poehler (15:24)

Yep. I imagine that Venn diagram of people who use YouTube and people who have Netflix is pretty close to a full circle in a lot of developed markets.

Matt Bellany (15:32)

But it's not free. There is a barrier to watching and you know Netflix does not have a fast service, at least not yet. Maybe they will at some point, but the ad tier is pretty cheap. But it's not free.

Amy Poehler (15:44)

That's right. Though again, you know, YouTube on television is 10 plus percent share of TV time 12.5 now. Yep, that's right. Netflix is 8. Right. And if you then think about what that implies for how many YouTube users on television there are in the U.S. again, the penetration rate, it's probably higher than Netflix's, but it's not meaningfully higher. And if that's a proxy for some of the developed global market, a lot of these creators audiences already pay for Netflix, most likely the vast majority of them.

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Amy Poehler (16:31)

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Matt Bellany (16:32)

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Amy Poehler (16:39)

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Stephen Cahall (16:55)

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Matt Bellany (17:42)

Sometimes analysts, by the way, you write these things as suggestions, but you've been tipped sometimes that this is in the works. Is this happening and you just can't say it?

Amy Poehler (17:53)

Absolutely not. But hopefully what we're doing here is we're putting together some pieces of a puzzle and looking at what may happen and we'll see if we're correct. Now, Ted Sarandos was asked, I think in April at a conference about this and it came up on the last earnings call and they have said a couple of times that they think that Netflix is a very native platform for creators.

Matt Bellany (18:15)

What does that mean?

Amy Poehler (18:16)

Well, there's what they've said and then what we could guess it means.

Matt Bellany (18:18)

So I think what they said, I tend not to quote the earnings call stuff because A, it's. Some of it is just puffery and B, like they have reversed course so many times off of what they have said on earnings call. It's kind of hilarious.

Amy Poehler (18:31)

If nothing else, it says that they are open to talking to these folks and seeing what can be figured out. Right. And so I think the deal with Ms. Rachel is a good piece of evidence that there is some discussion going on there.

Matt Bellany (18:42)

Well, and they were very pissed they didn't get the MrBeast show. I know that.

Amy Poehler (18:46)

So there you go. Right. The conversations are clearly happening. And then it's just a matter of, you know, making the magic that you need contractually to turn those conversations into growth. And then I would, as an analyst say that, you know, they're thinking about ways to grow and expand. They have the TF1 deal.

Matt Bellany (19:03)

That's the French television that where they're going to air the French feed of a television network, which is an interesting one because it suggests that maybe the future of Netflix could be airing the traditional linear feeds of the networks that they have disrupted, which is a whole separate episode of the show.

Amy Poehler (19:20)

Yes. I think that'll be more selective than. Than a strategy overall.

Matt Bellany (19:25)

Oh, you don't think they're just going to have a tab for watch live TV and it's just going to be all the feeds of the networks from around the world.

Amy Poehler (19:32)

I don't. I think there are markets where a network has a huge amount of share in local language. And TF1. Is that in France with its sports rights? I think it's a bit of a special situation. But clearly shows that Netflix is looking that. I mean, in America you have Peacock, you have Paramount, plus you have ESPN and Fox going into streaming. So I'm just not sure that's replicable, at least in. In the US market. But so when they think about ways to grow, they have a lot of these different pieces. I just don't know how creator content isn't one of the most attractive ones.

Matt Bellany (20:03)

Yeah, they downplay it, though. Like, this came up in the podcast conversation as to whether Netflix is going to go after podcasts to adapt for TV, which is a big category of YouTube content and would sort of make sense for them to do a Pat McAfee style show that can eat up hours and bring people back to their live content every day on the platform. They've sort of downplayed that and suggested that, yeah, we're looking at all kinds of content and podcasters may be part of that. And maybe there's YouTubers that would make sense for Netflix, but they've never suggested it's an initiative or a category like you are suggesting.

Amy Poehler (20:45)

Yeah, I guess the shorter answer is we'll, we'll have to see. But the growth for them out of film and original series is much more limited at this point.

Matt Bellany (20:55)

Yeah, they're slowing. The engagement is still going up, but they are slowing in their growth rates, which is concerning, I know, to people at the company.

Amy Poehler (21:03)

And they want to grow and they have scope to grow. Right. They have capital to grow. They have a tech platform and a reach that allows them to grow. But in three years, there's just not that much they can pick up from a content spend standpoint.

Matt Bellany (21:18)

Well, they've got big competitors there too. I mean, they're not winning every package. Now, these filmmakers want theaters, which Netflix doesn't offer, and Amazon is offering theaters. So Amazon is getting a bunch of these big packages. They've lost to Warner Brothers on some of these things. And Apple will spend what it takes to get packages for film and top shows. Netflix gets a lot of that stuff too, but they're not the only game in town. And if they were all of a sudden throwing a couple hundred million dollars at Dude, Perfect and Rhett and Link and all these other big YouTube creators, maybe they could carve out a category there that would be not exclusive, but something that the others are not doing.

Amy Poehler (22:03)

I think that's right. And would continue to separate them from some of their more traditional peers, you know, as well as giving them a new area of growth. And on the other end of the spectrum, one thing we haven't talked about is just age cohort within this, you know, so they are a TV platform. They're sort of in the middle from a generational perspective, maybe somewhere between linear TV and YouTube. But if you look at any metric of TV consumption by age, younger folks are not watching it as much and older folks are maintaining it. So this is also a type of content that gives them a bit of sort of generational shift. De risking.

Matt Bellany (22:40)

It gives Junior a reason to watch.

Amy Poehler (22:43)

Exactly.

Matt Bellany (22:43)

You know, when mom and dad have Netflix, it brings Junior into the tent, and then maybe he or she becomes a lifelong Netflix subscriber and can age out of the creator content and start watching more professional content. Or maybe they don't. Maybe they just spend their life watching games, guys jumping off the Empire State Building.

Amy Poehler (23:03)

We can only hope or not hope.

Matt Bellany (23:05)

I mean, do you have any thoughts on the kinds of content that might work for Netflix? The kinds of YouTubers that might work? Does it need to be revamped? Do they need to say to these creators, okay, here's $300 million, come over to Netflix, but develop shows, develop something that feels premium. If you're, let's say, dude, perfect, because we've had them on the show. They do trick shots and sports videos and skydiving videos and things like that. Do they need to come up with a format of a more traditional show, or do you just say to them, do what you do, we'll put it on Netflix and we'll see how it does?

Amy Poehler (23:47)

I think the feels premium is the best point in that. And so, you know, to use another example where we've seen this, Joe Rogan had a podcast and Spotify decided for a period to make him exclusive to Spotify. And I think if you said what was premium about the Joe Rogan experience, love it or hate it, but it's the quality of guests that he has on. Right. That's what sets that podcast maybe apart from. From others. They tend to be very, very famous people oftentimes.

Matt Bellany (24:17)

Yeah. Although those people are making the rounds a lot of times on free podcasts as well. I would disagree on that one. I don't think that the popularity of Joe Rogan is the quality of the guests. I think there is something about his sensibility and the mix of comedy and politics and conspiracy and hang time that is the appeal there. But what you're saying is essentially that there are elements of these popular shows that take them beyond typical YouTubers, and you have to identify what that is, hone in on it and emphasize it on Netflix.

Amy Poehler (24:51)

Correct. That you have to. You have to at least hone in on what makes it premium. So I think you and I would agree that Joe Rogan is a premium piece of content in some broadly defined sense.

Matt Bellany (25:01)

Yeah.

Amy Poehler (25:01)

And because these YouTubers have big reach based on the views and hours, again, a lot of their hours per year are bigger than Netflix's biggest shows. So from that almost definition there, their sort of premium reach, there's probably then a mix of, you know, runtime per episode, quality of production, some things like that, which also Netflix can play a role in supporting, you know, even with a little bit of production capital to ensure that it still has some of the parameters that they find important.

Matt Bellany (25:32)

Yeah, when Mr. Beast went to Amazon, he upped the prize money on his show to make it feel premium because he didn't. He wanted it to be bigger and better than what he can do on YouTube. So you think that Netflix, if they did this, could get to $1,500 a share for their stock and a trillion dollar valuation. You think that's reasonable?

Amy Poehler (25:54)

So an unconfirmed report said that management has a 2030 target of a 1 trillion market cap. Netflix has gone out of its way to not confirm this report, but it's certainly on the mind of investors.

Matt Bellany (26:08)

They say it was not a projection, it was a goal that they throw around in meetings and not necessarily to be taken seriously by people like you.

Amy Poehler (26:19)

Yes, but of course we do take it seriously because it's quantitative and it's market cap based and that's what we do for a living. And so I've kind of taken a look at that and thought, if this is a goal, whether it's a goal for the company, whether it's a goal for investors, how do you get there? And I think the broad conclusion is it's going to take multiple areas of expansion.

Matt Bellany (26:39)

Licensing content, I think is one, the sports aspect and growing the live business and the advertising is another. And this could be the, you know, another pillar of growth.

Amy Poehler (26:52)

Correct.

Matt Bellany (26:53)

This would be pretty terrible for Hollywood and the traditional Hollywood creators. Right. I mean, if Netflix has a fixed budget and they're what, including all the sports and all that stuff, about 18 billion and all of a sudden you are taking a billion or two out of that ecosystem and putting it into creators, digital creators, that necessarily means less for the traditional professional creators now within Netflix.

Amy Poehler (27:22)

I mean, I think that's a fair conclusion and I think a good way to think about the swing in production. You could look at, for example, Disney talks about their content spend. Sports typically grows within that. And so you would pencil out that the non sports piece has come down over time and been rationalized. Now Amazon, Apple, those are kind of swing producers right now when it comes to professional Hollywood content. So whether or not the total professional production budget is coming down is a slightly different story. But Netflix, as big as they are, I think it's unlikely to think that they are going to grow in their spend in sort of Hollywood type of content.

Matt Bellany (28:00)

Interesting. All right, well, One of these YouTubers who gets a hundred million dollar 200 million deal, they need to send you a fruit basket when that happens because I think you're an influential analyst and you're nudging Netflix could make a big difference here.

Amy Poehler (28:13)

They can pay for my next tattoo.

Matt Bellany (28:15)

Exactly. Pay for your next tattoo. You gotta have more than Michael. NASA. Rich Greenfield also 10 tatted up all over.

Amy Poehler (28:22)

We'll have a contest when you go to a video version.

Matt Bellany (28:26)

Yes, I know. That's coming soon. We got to get that sweet Netflix Money on our YouTube videos. Thank you very much, Stephen Cahall.

Amy Poehler (28:32)

Thank you.

Matt Bellany (28:34)

We are back with the call sheet. Producer Jesse in for producer Craig today. Craig is in Italy for the week. Wouldn't tell us exactly where he's going, but sources have told me that he will be at the Jeff Bezos Lauren Sanchez wedding. Surprising he got an invite. Jesse, are. Are you a little surprised?

Amy Poehler (28:52)

I am. I just hope he brings us back something from a gift bag, which I'm sure will be very elite.

Matt Bellany (28:58)

Yes, I'm sure it will be a gift bag for the ages if he doesn't get pelted by the protesters that are objecting to them taking over Venice for the event. But he's missing a big weekend at the box office. Another big one. We're in the middle of summer now. F1, the movie is out this weekend. This is the Big Apple. $200 million plus they're saying 200 million. I'm a little suspicious on that. I think it's more they are putting it out through Warner Brothers doing a full global release. Tracking has been kind of all over the place for this one. NRG has it at 38. I've seen some numbers that say it's going to get up to 50 for the weekend. Let's put the line at 45 and I'm going to take the under. I just don't think, even with Brad Pitt, even with the marketing blitz, that this one is going to break through in this country. I think overseas it's going to do better. But 45 seems a heavy lift for this one.

Amy Poehler (29:55)

I know some people who are super into cars and in the car racing community and even they're not super excited about this movie. Their reaction was, yeah, I guess I'll go watch it this weekend.

Matt Bellany (30:07)

Yeah. Traditionally, the racing movies have a tough time at the box office. Ford v Ferrari actually did okay and it opened to about 30 million. You know, Brad Pitt, big value add and F1, obviously the big racing brand globally. Apple did an interesting thing where they force fed all of their Apple wallet users a $10 coupon.

Stephen Cahall (30:29)

I saw that.

Matt Bellany (30:30)

I got that yesterday via Fandango. Maybe that'll be meaningful. I saw some negativity online about, you know, Apple people upset that they were being pushed the discount for a movie they didn't want to see. But maybe that'll be impactful. I mean, that's sort of what you should be doing. If you are in a billion people's pockets, you should be sending them notifications that you have a big budget movie coming out this weekend. But it's actually also not the only movie. Megan 2.0 is coming out via Universal Blumhouse. This one's even more of a shocker. The first one opened to 30 million and this one is tracking in the, like, low 20s. Like, I'm not really sure what happened here.

Amy Poehler (31:11)

Yeah, it's weird. It doesn't even feel like a sequel. I don't really feel any of the hype at all, despite how good the first one was. And the trailer made it feel like the second one was going to be very over the top.

Matt Bellany (31:22)

Well, younger women are powering this one. It's PG13. Yeah, that's basically the plot of Terminator 2 where Megan now has to become good to take on an even more evil one. But yeah, I'm not. I think Universal is a little puzzled by this one as well because you'd think that the quickie sequel to a big hit would open bigger than the first one. But I'm going to put the line at 23, let's say 24. And I will take the under as well. I just don't think that the buzz is there for this one. We'll see. I'm taking the under on two big movies this weekend. A little bit of a risk. I want to say these movies are going to do better, but I'm just not optimistic. All right, that's the show for today. I want to thank my guest, Stephen Cahall, producer Craig Horlebeck, art editor Jesse Lopez, the Jeff Bezos, Lauren Sanchez gift bag. And I want to thank you. We'll see you next week.