← Trends with Friends
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- [00:00]
A
Foreign. Welcome to another episode of Trends with Friends. This is a special guest. We have a special topic today. You know, it's not your typical fang companies. And my prostate. We are here with my good friend, an actual friend, Farhad Masood. How do you pronounce your last name? Masoodi?
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B
Wasudi.
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A
It's like Wasabi.
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B
What kind of a friend are you? You don't know my last name?
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A
It's very, it's Iranian. I don't want to start a war by mispronouncing it the. Here we go. And Farhad is in New York and born in Iran, I think.
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B
No, Pennsylvania, Philadelphia.
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A
But his parents were born in Iran. And we travel. He is, we've traveled the world. Cycling or, or the good parts of the world. Italy. You know my routine now. You have all the secrets of my life. You've met the family. You've, you've, we've had some good, good times. But today we're, we're here to talk about streaming and particularly right now, the Netflix Paramount war, bidding war for Warner Brothers. And you have very strong opinions about this. We've, we've talked about this forever. And why is Farhad qualified to, to chat about this? Well, it doesn't matter. It's the Internet. No one needs to be qualified. But Farhad is uniquely qualified because Farhad is the founder. Was the founder or is the founder of 2B TV, which I could care less for. But, but for not knowing you. Right. I've never, I've, I, I've, I've. And he's just got some incredible, you know, I, I met him through my friend Brett Wilson, who started to mogul. Farhad was on the board. I crashed their event. I crashed one of their getaways at my friend's place in Italy. And we became fast friends. And, and so here you are, Tubi TV today. Let's just talk about two btv to give some people some reference of what Tubi TV is. It's owned by Fox, so give us some of the metrics that matter.
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B
Sure. So first of all, it's good to be here. I thought. I'm joining another podcast called Friends with Trends. I was going to talk about my sweater, but hey, good to be here.
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A
Which your sweater? Your natural sweater or your sweater?
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B
Persian carpet is what we call the babies.
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A
Love it.
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B
Yeah.
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A
So give some people some ideas around the size of Tubi and what Tubi is.
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B
Sure. So a quick history of Tubi. I started in 2011 with a company. We launched the product 2B in 2014 as sort of one of the first, if not the first, free movie TV streaming service. And we sold it to Fox for half a billion dollars. It was reported incorrectly at 440. But who's counting? You a month? Yeah, I do, because I, I was fighting for every penny. Yeah, we sold it a month into COVID lockdowns. So it was a crazy journey. And I ran to be for an extra three years as part of Fox and I stepped down two years ago. Tubi's now over 100 million MAU, over a billion dollars in annual revenue and is profitable. So my baby has grown.
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A
The baby has grown. I mean, talk about an idea that if I had ever been pitched, I would have passed on 100 times. So we can go into all that if we have time. But I think current events wise, you know, you're fascinated by this industry. You've been at, you know, you've been upstart in this industry. You've met all the players in this industry. You have you. I just want, you know, my audience and kind of discuss what's going on in the streaming space. Right. So how do you see the streaming space? And then let's talk about this Netflix deal or the, or the fight for Warner's brothers. How do you see the space today? Who's winning, who's losing?
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B
Yeah, no, I think it's important to sort of set the context of how I see the world. We had a very contrarian approach to streaming. Not just the business model that was free and that supported, but that we believe that the opportunity and growth will be in the tail of the library, not the head. So while everybody, you know, a decade ago was fighting for the top 20 originals, you know, HBO, Netflix, Amazon, we thought that that will drive the prices of those originals to unreasonable, which they did. And unprofitable. And we saw the opportunity to aggregate the bottom 99% of library and use AI to use to program that library is much more.
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A
AI was AI that we know today.
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B
It wasn't generative AI and I think it wasn't as sexy as it is today. But we, we were a data AI company that happened to be in media. And I think most people didn't understand what to be stood for. And everybody, I mean the people still joke about. There was, I think one of the. Was it. Jimmy Fallon just talked about how Tubi made an offer for Netflix. You know, it was like, I don't know, 20 bucks or something. He was making fun of us.
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A
He remember that you did that? You did that?
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B
No, it Was like a few nights ago. Okay, but, but the point is that we were proudly focusing on the tail library while the world was making fun of us. That it's crap content is cheap content, who cares for this? And that playwork worked for us. And I think that if you see, and I'll just say last point and we can move on to Netflix. But if you see the trend, and I think this is one of the most important trends that I've been following and I believe in, is that media consumption has becoming more and more fragmented. Think about news in 1970s and Walter Cronkite and think about news fragmentation today. Podcast, blogs, etc. Think about music, how much more diversified it is, how much more accessible it is. Me and you probably have very little in common in terms of music, right? Because you, you're old and you don't listen to cool music.
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A
I mean, I still listen to the same hundred songs, but keep going. You're correct.
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B
Yeah. And so I think the same is, is will and is and will happen to me entertainment. It's happening today on social media with TikTok and Instagram etc, and, and I think that is the future. And YouTube is clearly the winner of that. I mean Tubi has made a big bets on that and has, has made some progress. But the clear winner of the fragmentation of TV consumption is YouTube.
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A
Yes.
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B
So that's the trend that I, I think is really important to look at.
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A
YouTube's not its own separate stock. Right. So you can't really break out what this world looks like. Right. Like T tubies inside of Fox, I guess Warner Brothers, like the ticker was the ticker, but that was a piece of shit until everybody decided that it was worth something. So you couldn't really tell much. And we still can't tell much as we'll dive in. But Netflix is the poster child for streaming. Right. It's the purest play way to look at how the streaming market's doing. And Netflix has had so many near death, I guess, moments. But for the last two, three years it's just been up and to the right. And you know, in the last few months the stock is down 30ish percent or maybe even more. And today's training around $94. So the market is truly thinking this through right now. You have strong opinions. What is your thoughts of like, should Netflix even care about Warner's brother? Obviously they do. He flew to, he had a secret meeting with Trump or what's his name? Saran. Sarandos. Yeah. Tesserandis, who I Met he, he, he, he slyly got into the White House no one even knew until recently and shook, you know, kiss the ring or whatever he had to do to, to check the vibe of the water. And I'm sure he's still wiping the orange shit off of his face, but hasn't been seen since by the way, so that's nerve wracking. But should even be in there. What are they thinking? What are they thinking? What are they thinking? Are they thinking they have to do this? And why do you think they should do it or shouldn't do it? And then we'll talk about how this goes down with Warner Brothers and Paramount.
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B
Yeah. So let me give you a headline, what I think and then maybe it's a good idea to give a little history of Warner Brothers Discovery or Warner Brothers in general, past decades especially just to refresh everyone's mind and then we can talk about the deal.
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A
Yep.
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B
So headline is I think Netflix is run by some of the smartest people in the industry. But I think this is a huge mistake and I think we're going to go through it. But let's first go through the history of Warner Brothers Discovery. So Warner Brothers in 2016 got an offer to be acquired by AT&T. If you remember, it closed in 2018 at about 85 billion. I think the enterprise value was about over 100 billion.
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A
2018. Yeah, it was about 80. Yeah. Okay. I'm looking at the stock price right now. Yep.
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B
Correct me if I'm wrong.
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A
No, but I mean the stock basically other than this crazy spike maybe from a short skis in 2021, I forget what that was. Has been around 50 to 80 billion, but really had started tanking in early 2025 down to 8 bucks. So it was probably a 15, $20 billion company.
- [10:32]
B
Was not part of Discovery back then. So Warner was a separate company. They merged with AT&T in 2018 at 85 billion value. The thesis AT&T. And this is important because I think a lot of people talk about bundling and brand the thesis. When they merged with at&t there was no Discovery in the picture at the moment, at the time. So the thesis was that HBO Bundle subscription with AT&T will reduce churn on both services and they can cross pollinate, cross promote that thesis. It was $85 billion which Don Stanke, CEO of AT&T made turned out to be completely false.
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A
Yeah.
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B
And by the way, he's still the CEO, which is interesting. Again, I don't know much about telecom, but how do you make that kind of bet. So fast forward, they realized this was an absolute mistake so they spin it out and merge it with discovery in 2022. So three years ago this is when you see the stock. Okay, well 21, they announced the deal. That's the stock pop. And 22 is when the deal closed.
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A
Oh my God. So this guy like absolutely buried investors.
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B
So that deal closed valleying WarnerMedia which was renamed basically Warner Brothers renamed WarnerMedia at about 40, what is it, 3, 43 billion dollars. So half of a couple of years prior to that.
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A
Yeah.
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B
And that merged with Discovery and the Stock went down 50% until a few months ago before this whole M and A activity started.
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A
Okay.
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B
And the, the thesis behind the merger of Discovery and HBO was oh, we're going to put all the IP together, we're going to cross promote, we're going to put the content and Discovery into hbo, we're going to reduce Churn. And that didn't work.
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A
Okay.
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B
And I mean so this idea of we're going to bundle, you know, amazing content that people love and we'll, we'll. I, I want to go through the list. I have a bunch of items that I want to cover of why this is a bad deal. But this is not the first time people have made these bets on Warner alone.
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A
Yeah.
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B
And, and it's failed. So now fast forward. Netflix arguably struggling because they've saturated the market. I think they've increased the price to a point where they can increase it more. They introduced a free tier and ad supported. Now they need to find a way to grow. Gaming hasn't been extremely successful for them so they need to find a way to grow again. Headline I think their number one competitor isn't Disney or, or Paramount or, or Warner. It's YouTube in terms of engagement. And this deal does not help them to, to close the gap because they're betting on legacy media in traditional content as opposed to future forward looking creator economy and creator content. But they're paying 180 premium to the few months price of Warner if they win it. Because if they want it and now that's another big gift.
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A
Right?
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B
What will happen? But the biggest, let's say the biggest reason for them to do this is actually a defensive move. Why? Because if Paramount with David Ellison comes and scoops up WarnerMedia or Warner Warner Brothers together they will have you know, pretty impressive library of content, significant subscriber base. So they become a threat to Netflix. While right now you could argue no one can really compete with Netflix and.
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A
If they win Truly no one can compete. Pretty much, yes.
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B
So that is the good reason to do it. Yeah, but, but let's go through this. Why this is going to be such a big distraction. Okay, so first of all, what's, what are the arguments? Right, so I've heard that and I kind of wrote them down here so I can go through them together with you. But I've heard that. Okay, so we're going to take this content, amazing library, deep catalog of Warner and we're going to move it over to Netflix.
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A
Netflix, Right.
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B
You can't do that. It's like it's, it's a one on one of media. So first of all, most of the library is licensed out. Tubi has licenses to Warner Library in years into the future. And Tubi has a small licensing deal. So they are exclusive deals. They're, they're protected. They're not. You can't just move them over. And the good stuff, the more recent originals are all in HBO Max. Well, if you move them over to Netflix, the subscriber will tank and that's 100 million subs. You lose that revenue.
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A
Oh, so the, so they're not really buying like yeah, those, they're not getting the extra benefit.
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B
Some people will cancel HBO enterprise value of the company.
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A
Huh?
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B
Right.
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A
What they're paying for disappears because they already have that customer.
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B
Yeah. Okay, so, so now you could argue they could do a better job of monetizing the IP or, or building new content, but is it 180% better? I mean, that's right. So it's, that's tough. And, and the second issue is you look at international markets, HBO doesn't have a big present international markets. So for example, in the uk, the whole library of HBO is licensed to Sky. They represent. There's no HBO Max. There's a Sky subscription.
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A
Got it.
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B
So you can't touch it. You can't call when sky has a multi year deal. So you have, you can't go and untangle that. And if you do, you're going to lose billions of licensing deals, which is like straight up cash, you know, straight to the bottom line.
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A
Yeah.
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B
So you can't do that. So what will they have to do is to create a bundle. So they say you've got hbo, you got Netflix. We're going to create a bundle and the bundle we discount the price. And over years, which is probably by the way the same strategy as Disney plus and Hulu, over years, the bundle becomes the real offering because over years.
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A
They cancel the sky contract, they go to they go to Tubi eventually and say, we're not renewing it. We're only going to be available. So they got to go clean up all those past deal distribution deals to have one super bundle that you can only get on Netflix.
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B
Correct.
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A
Got it. And the stock was. Here's my thing. If you're a WDBD, W40 shareholder, Werner's brother, Discovery, soon to be whatever the hell, get the hell out at 30. Like if you're getting 29 and a half today and you could get $8 the other day, what are you waiting for? Like, get, get out. There's. And you're saying all you're buying here is another decline. Like, you know, the stock was telling you that this is a terrible standalone business. I guess everybody, like you're saying, thinks they can bundle it. So now people are paying for that bundle. And the other thing you're saying is it doesn't really deal with YouTube, which is the ultimate winner anyways, which I agree with, because one more stat which.
- [18:08]
B
Is, I think, interesting is that, and I don't know the exact number, but if you were to go knock on the door of Warner Brothers tomorrow and say, I'd like to license 99% of your library, except the originals are exclusive to HBO. Max, like 10, 20 shows, let's say 50 shows, everything else, thousands of shows and movies, it would cost you a few billion dollars a year, much cheaper to do that. So. And now you could say they're not doing a good job of monetizing the IP, but I mean, you're paying $83 billion for this. And I'm sorry, the movie that was gen, like 2003 movie is not going to drive that much viewership. It's not going to drive any subscription. So, so what are you getting? And, and then also, you're losing the war to YouTube. That's the war you need to be go for phone and fighting, not traditional media.
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A
So again, so that's why the stock's selling. I think, like, again, this is just short term. The stock's $94 from 150 for a reason. People see and I see it. I've talked to you about Netflix. It's like the, It's. It used to be the first place I go when I sit down to relax at night, and now YouTube TV is the first place I go because I trust that I'm going to get what, what I like served up, you know, from the algo, how I like serving it versus Netflix. They're not even trying right now. Let's be honest. So, I mean, it's working for them. But me as a customer, they're not even trying. They're. They're, you know, the NFL's, they're actually getting paid to put content that wasn't even made by them, which makes sense as a business, right? Like, don't make a show. Because everybody used to make fun of Netflix saying, oh, they're spending too much money on shows. It won't work. Now with everything's flipped, you've got the sports teams and the companies making documentaries for them, so eating the cost, making it. And Netflix just as a distributor and didn't even have to pay for it. And it's exclusive content. So I get why they're doing that. That's a differentiator to YouTube, I guess. But the same point is it's crap content to me because I'm a core subscriber who wanted to go there first. So they've lost me as a place to go first. First, which is, I think, not the end of the world.
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B
But I want to actually make a little comment on that because, look, most of these originals that HBO are making, these producers are pitching to Netflix too. So they could have actually outbid HBO and get some of these shows.
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A
They should say yes to every deal and they'd save $80 billion.
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B
Yeah, they could have. They. They chose not to. Now, you could say it's bad because you're not loving Netflix content, or you could argue that you and the affluent viewers are a minority and the average.
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A
I don't take it personal. I'm just saying, like, it's.
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B
The average Netflix viewer wants more reality content, etc.
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A
No, they're doing what they have to do, and that's probably working.
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B
But then if that's what's working, why would you buy hbo?
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A
I agree. I don't. I just look at the stock price and go. And then I see the other side of the bid and the corruption on the other side. Like what? You know, it's like Trump immediately, of course, even though he's immediately inserted into this and maybe he's supposed to, but with all the other nonsense that he does, why would I trust the. You know, of course, the minute he threat, then you've got Qatar on the par on. On the other side, you've got Qatar, Saudi Arabia and Jared Kushner. Like, what we just. We're gonna let Qatar, who already owns our unit, again, this is me being unfortunately just political for a minute. We're gonna let Qatar is already. We know has Infiltrated the universities, now own a library. Like, where did this come in? Like, we're tripling down on the TikTok problem. So there's no winner here where everybody's losing. Well, the winner is YouTube, because YouTube has technology. They have, they have their own cloud, they have the data, they have the ease of posting, they have the creator economy. My thought for Netflix, and I don't have Ted's ear, but I have your ear, is the, is live. Right? Like, I still think if Netflix just went in all in on live, they have all these emails, they, they kind of know what people want. They already know who's successful on YouTube, so they could just go and maybe they're already doing this with like Mr. Beast, but like it's going to be hard for them to go live. But I still think sports and finance, I just don't know if it's big enough. So like, so great deal for the shareholders of wbd. They get an exit, bunch of people get back to break even. And people that bought the stock maybe on the inside, who knew this for the last six months. Kudos. Did it ever cross your mind that this would eventually happen because you're an insider? Like, not an insider insider, but like, did you ever look at the stock the last six months and go, wait a minute, list eight bucks, someone's gonna buy this? Or is it just not something you thought about?
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B
Look, I think that the David Ellison's entry into this space is what triggered this whole war, bidding war. I'm pretty sure Netflix started considering this because they're afraid of a Paramount merger with Warner Brothers becoming a serious competitor. Right. Given that they're very well financed, as you mentioned. And I think that's probably the starting point of what caused Netflix to make this offer. Otherwise, I think that Paramount was in serious financial trouble. They're, they kept going down.
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A
You've been telling me. I mean, yeah, they have the one Taylor, Sharon or Tyler shared. They have the one guy who's their franchise.
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B
Yes, Tyler Perry. Yes.
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A
Tyler Sheridan, isn't it?
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B
Yeah, yeah, but, but look, I, I, I think what you said is absolutely right, which is that the winner of this whole thing is YouTube.
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A
Yeah.
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B
And basically this means Netflix will be distracted with legacy content and won't be entering the creator economy, the crater, basically content. And I think that's a shame.
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A
Yeah, it's a shame. And they'll get there eventually. But the stock, I mean, I think the stock. So would you buy the stock today at $94, you know, knowing that it's down from 150.
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B
I think I would have to look at the financials to make that's a no. But from a strategy perspective, I'm not a fan of what Netflix is doing right now. I think that's how I would characterize it. Yeah, look, I, I think and you know, I'm. I'm a little biased, but I do believe the next decade would. Would generate of AI. There's going to be AI create, not create a condom. But the price of content creation will drop dramatically every day.
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A
We're at peak.
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B
So there's going to be a lot more content created and there will be platforms and the most obvious One today is YouTube that will benefit from this ocean, as Paramount called a mountain of content. And I would think that Netflix want to position themselves to benefit from that. But I think this move is. Is gonna put YouTube as the. The most obvious winner of.
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A
Also, they don't have competition. YouTube doesn't have competition. Because my habit is my habit. I trust my. I trust the algo for what I need, whether it's, you know, news or, you know, the little bit that I want to watch a podcast. You know, I just. It works for me. And it's not getting worse, it's getting better because they can constantly serve me things because they know so much about me, whereas Netflix can only serve so much. And I've already kind of seceded Netflix to be like Bravo in many ways, right? Like, Netflix is going Bravo at many levels.
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B
And.
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A
And I know Bravo is important because Comcast is spinning out all their channels and leaving and holding Bravo, right? Like, because Bravo's cord or whatever they think. I don't even know how that. What that means. You're spitting out everything but holding Bravo and you're like a. You know, so Netflix is Moving to Bravo. YouTube becomes a bigger ocean and a bunch of rich people could everybody fighting over an asset for ego. Like, you can't make your money back of biding $100 billion for this stuff, right? You're only. So how. What are they thinking? So they're bidding. So what is Paramount thinking even if they win? So what is Paramount thinking even if they win this. How do they make this work?
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B
Well, look, Paramount is in a tough situation. If Paramount loses the Warner Brothers deal, like their bet is we're gonna, you know, capitalize this business and we're gonna go buy everyone find a greater fool.
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A
To do the debt and get this thing done. They found the greater fool, which isn't a fool. Qatar and Saudi Arabia money comes out of the ground it costs and it goes into a venture, you know, goes to venture capitalists or goes to private equity.
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B
Any VC out there is major VC is funded by the Saudi government.
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A
So. Yes. So it goes to Jared. So it's all funneling through the White House right now. But what happens when this deal gets done and let's say Paramount wins it, what does the world.
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B
So if, if they don't win it. Let's talk about that for a second. If they don't win it, they would have to sell the business, which is not their plan because there's no point being a fifth largest streaming service.
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A
Okay.
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B
No one cares about that. Your retention is going to be lower.
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A
Your massive business and you're not number one, you know. Or are you number one? I forget where to be fits in.
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B
Today Tubi is number one free streaming. So it's a different market.
- [28:32]
A
Okay, sorry, keep going.
- [28:35]
B
Or, or, you know, I, I think between Tubi and Roku, but I, I'm pretty sure to be is number one. Roku claims to be number one. But in the case of Paramount, if they don't win this, they can't buy NBC. They can't buy what? NBC can buy them because Comcast is likely going to spin out NBC. I mean they've announced it. So this is not secret news. But Comcast is not interested to lose control of NBC. So what they would be interested. NBC is also too small to win.
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A
Correct. They're holding NBC. Sorry, they're holding. Yes, correct.
- [29:14]
B
So I forget the name of the. So Versant would be a buyer but not a seller. So Versat would be interested to buy Paramount.
- [29:24]
A
Not at that price. I've looked at the financials like they're spinning it out and I just went. I mean, huge cash flow. But there's no way.
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B
This is, this is the, this is just, this is the bidding war of buying a orange 1967 Ferrari. So the price is on the eye of a holder. It's not about, you know. Yes.
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A
This is trophy hunting in the media world.
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B
Correct.
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A
And you know, little coddling. The, the. So this is trophy hunting. Netflix is the stock price to watch. I think they're, I think what people need to understand, you know, I don't own the stock. Right. Well, I own it through indexes, but I own the stock right now. It's like they're telegraphing that there's trouble now if they win the deal, which the market's kind of assuming now, they actually aren't even going to win it, it might be even worse. So you're saying they had to do the deal if they. They don't win the deal. It's actually a new competitor potentially to Netflix. So this is why Ted. But he picked a bat instead of. So this is a strategy thing where instead of focusing on Netflix the last few years they went into gaming and all the other stuff. Now they have a lot of moves they can make. They could buy Discord and improve their game. Like there's a lot of acquisitions they can make. I don't. But this is a weird one to make. They could have been making some different types of acquisitions positions. This is so at Tubi. What are they thinking about does so. So if you were running Tubi today, what are they thinking about this deal? Do they care? Do you even give a. Are you just happy they're all just distracted?
- [30:56]
B
No, I do and I'm, I'm very close with them. Look, I, I'd rather not give advice about Tubi because I think there's a new CEO and she's doing a great job. And so I'd rather. But I think, you know, they've announced a bunch of initiatives around create their content and you know, they, they are investing in the catalog of library and AI and, and curation. So strategically I think it's the same high level that they did at Tubi and I think we're aligned on that and that's the right bet. But if Tubi were to go to license Game of Thrones, you know, the next season and produce $50 million episode shows, it. It would be a matter of time.
- [31:43]
A
Before they die's got to stick to what they do. They're. You're not really the management there is not looking at this Netflix deal. They're just saying, all right, let these animals go do what they do in the jungle or in the desert or, you know, on the plains and, and we'll just keep being tuby. So. So really this is just mostly a distraction other than for the players involved, the players involved. This is just kind of the media people being media people. Paramount has to do this right, even though they should probably just take the loss on Paramount. Theoretically correct. Like someone should have said, hey guys, what are you doing? Shut this bitch down. It bleeds like, you know, this is not worth saving because you can't be the fourth or fifth person. But egos get involved and big money gets involved and this is what happens.
- [32:37]
B
Well, I, I do have a crazy thesis on why Ellisons are interested in media. I haven't read about this anywhere, so I Don't know if it's true at all. And this is my guess, but given that they've, you know, built an empire based on AI and growth of AI, you could argue that over the next decade, if the predictions are right, an AI will take over a lot of jobs and it will create a lot of inefficiency and people will have more time on their hands.
- [33:14]
A
Yes, they will. We do. I do. I have two full time roles and I watch three hours when I'm alone and left alone, even with Alan, if I'm in, you know, because we like the same things. If we're in the same room watching. Well, she's not. What? Sorry? If she's not watching Bravo and if she's not scrolling Instagram reels, meaning I have to pick the perfect content while we're in the same room, she will watch. And even if she watches, she's on reels or dreaming about Bravo. But you're saying, keep going. But you're saying if you have a.
- [33:48]
B
Huge bet on AI, how would you do the counter bit? Right. And make sure that you kind of have a balance and that would lead you to live what you said in an entertainment. Right? Because people will have more time if it's true. And there will be backlashes to AI. There will be moments where we think AI is not moving fast enough. I'm sure there will be some of that. And then so you, you kind of hedge it with media and live and entertainment. So I could see why that might be compelling. Otherwise it seems really random. If you had a hundred billion dollars and you wanted to bet, would you pick a company? The Stock is down 50% in two years. And why there's so much. Go buy real estate. I don't know, go. There's so much more to do. It's so random.
- [34:40]
A
It's so random. Okay, so that's the distraction.
- [34:43]
B
That's my guess is why they're. They're interested in media beyond, you know, the red carpet and hanging out with celebrities and all that.
- [34:50]
A
Of course that, that plays into. So. So as a trans with friends person, we usually talk about. We've been talking about AI. We've been talking about. And you obviously have. And you know, some of the. You met Michael Par, who's always on the show, and Roy Rubin, who was on last week, Magenta. I mean, there's a regular group of us who are like sub bro.
- [35:05]
B
Shout out to Roy.
- [35:07]
A
Yeah, shout out to Roy. He was. It was amazing. We're sub bro. Right? Like, no one's more like you, me, Ravi from A24. Like, we're this weird Danny punch up. We're this weird street. I mean, what's amazing about Ravi and you is you're so street level. Like, you sold your company huge, you worked inside Fox, and you can get along with a guy like me, and we're not so much punching up or punching down at these people up there. That's just at a different magnitude, right? Like 100 billion. For something that's such a headache, it can only be about ego and just there's so much capital out there that you're just willing to do dumb things because it's just ego, right? There's very few ways out. But the real way to measure this is just watching Netflix stock. And right now the market hates everything about this, right? And was sensing this and because Netflix was on the run of all time until the last six months. And, and it could just be, it could just be so many things. But what the big trend here is, let's talk about it. Because to be now profitable and massive, and I can't imagine, you know, how proud you must be because I'm, I'm just your friend and I'm proud of it because I didn't see it. And I know all the players involved, I know the struggle, which could be in another podcast, but just, just how you made it. So, I mean, it's fun for me to have friends that, that are as. That can sit back like you are right now, stroking yourself. Usually you're stroking below the waist, but you're stroking yourself in an appropriate way, like. And you have some perspective now, right? You're out of the battle a little bit. You know, you've. And you have so much domain experience, right? So it's like, how do you see the world other than AI? I see the world as like, it's never been, you know, this could be good or bad content depending on my audience and how you play the algorithms. Where, where is the content trend is just so massive, right? Everybody's in it. What are the right ways to own content or, or, or be invested in content, if at all. Like, what are you excited about in media?
- [37:30]
B
I'm really actually bullish about the future of media. I think that with all the new technologies, the cost of content creation will go down. It will enable individuals who are brilliant and creative to have an audience. What's happening is over time, we're getting rid of gatekeepers. Before, I don't know, 20 years ago, this whole conversation now needed to be on a cable News network. We would have had producers and say, like, I don't know, Howard, you shouldn't say that. Or. Or we don't want to talk about this. We don't think people are interested in that. And now you get to have your own channel. I mean, that's incredible.
- [38:09]
A
But if the tree falls in the forest, but if no one listens to it, does it even exist? Of course it exists in the world of AI because someone read the transcript. But, like, other than for you and I, what is the point if no one's really watching?
- [38:23]
B
Look, the algorithms may not be fair, but I think they're more fair than individuals in charge, the gatekeepers, because every gatekeeper is biased. They have certain experiences in life.
- [38:36]
A
Sure.
- [38:36]
B
They don't understand everything. And so it's a marketplace, it's an ecosystem. And I think this goes back to our earlier points about Netflix should build that ecosystem that a movie created by three people on a low budget, if it's good enough, it should be seen. Right. If it isn't, should be buried. Right.
- [38:59]
A
And that way they're doing that. They're just getting paid for it right now. Like, the sports people have so much money and, you know, like the Alex Rodriguez thing. Right. Like, I mean, any of these documentaries, how do you. My worry is, how do you trust it? Like, it was a good documentary, Alex Rodriguez, but you, you know, and then. And he got his point across. But who paid for that to get out there? Did he pay to get that distributed? You know, so I think it's all about. I think the hard part is get more content. How do you get discovered? How do you think about that?
- [39:30]
B
But their example is actually international content like Squid Game. I mean, that was brilliant. Of Netflix before them, no one thought of bringing Korean content to American market. I mean, that was just. And it became the most watched show on Netflix.
- [39:48]
A
Sure.
- [39:49]
B
That, to me, is a trend worth betting on again.
- [39:55]
A
So there's endless. There's endless content that they can get into. They'll reinvent themselves again and again and again because they have that subscriber base.
- [40:03]
B
Right?
- [40:03]
A
Right. They have that cash flow. So they're just going through this phase where they're privatizing themselves because it's like easy money. And they're. But eventually they're going to have to please me again because they're going to need my attention, not just my dollars, I think. But maybe I'm wrong. Maybe it's just about the dollars. And once I'm paying, do they care if I'm watching? So tell Me that say I'm. Do they care if I'm actually watching, if I'm paying?
- [40:28]
B
So it's interesting, the metrics that Netflix subscription service runs are very different than an ad supported one. Because ad supported one we care about minutes.
- [40:37]
A
Yeah, you cared about minutes at Tubi.
- [40:41]
B
Correct. That was our North Star total view time. TVT was our key KPI. Even if you listen to Fox quarterly earnings, they talk about two btvt.
- [40:51]
A
Yeah.
- [40:53]
B
Now TVT is an indicator of interest, but for subscription services, they care about you wanting really bad to watch a few shows that you're hooked on. So on hbo you may not watch, you know, crazy hours a month, but when succession is on or whatever the show you love, you know, White Lotus is on, you are hooked. And so they want to look at your retention on a show by show basis, your engagement per show. So I imagine the metrics are different. But yeah, if you're not watching, you're going to turn out and they should care. And I'm pretty sure at Netflix they do care.
- [41:36]
A
Yeah, I mean they've just got all these weird ways to hack my family together and then add like it's really confusing at this point as a non technical person is like what I'm paying for. And when I get much like the phone bill, like fuck, I get every day, my every month. My Verizon bill and my kids at and T bill is different. Like I don't trust it. And I'm getting to that point with Netflix and the rest of them is like, luckily I can afford all of them and I don't know who's double paying in the family. I, I think it is, there's a lot of like stuff to clean up in that industry. But like I'm bullish on the content side. So it's great that all these, these things exist. And is there anything else around media that we're missing here that's exciting to you? What's like, we've talked a lot about Netflix, Paramount, you know, the politics of it to be what like and obviously YouTube. What else? You know, in terms of Gemini ChatGPT, like how do you see that as a content creator, as someone building again?
- [42:38]
B
Well, I look, I think that the most obvious application of gen to me is content right now. It doesn't mean, I think people make this mistake of. Doesn't mean ChatGPT will write the whole show or dialogue or podcast. It doesn't mean you click a button makes a movie. I think with today's technology, I don't see that happening at all. Who knows what will happen in 50 years? But if you can bring down the cost of production dramatically, that changes the game. That all of a sudden opens doors for individuals whose voices were suppressed by the gatekeepers to all of a sudden have their own show, have their own piece of content, and then play in the engagement viewership or. I think that's. That's really, really exciting. And I, you see, you know, Gemini with Nano Banana, you see even grok, certainly see OpenAI chat, GPT and there are so many other. I mean, that's the thing is the, the evolution of. Of these tools are.
- [43:51]
A
It's finally a true tools for careers. I think we have the written tools nailed. Beehive, you know, I have Substack. I'm an investor in Beehive. So. So there's Beehive Substack. There's only fans for certain people. There's Punch up, which were, you know, in. In comedy, which is kind of like only fans for comedians, right? Like the written word.
- [44:11]
B
My favorite is Twitter.
- [44:13]
A
And there's for photos. Yeah, exactly. There's endless creator tools. Well, the iPhone, camera, even video. But now we're finally getting to the tools for. For creators. You know, this is an amazing. Riverside's an amazing product out of Israel, right? Like, it just keeps getting better. So, like, this was this. This is like a. This is like a verb to me. Riverside, this is where I show up. I'm like, so. I mean, the tools are there and now the editing tools are there. So it's just. We're bound to just get incredible, endless content. And I think the real bet is how does it get watched and how does it consume? I do think people will have more time. Like, my son is only 26, and I remember back in college, even though he's supposed to be in college, he called me one day, goes, you know, I've run out of stuff to watch on Netflix, right?
- [45:08]
B
And.
- [45:09]
A
And. And I'm 60, and some days I feel I run out of stuff to watch. And that. That's scanning Brit Box. That's spanning. Fucking Hulu. That's spanning. You know what I mean? So I don't think we know how to discover stuff yet. So. So, like, as an, as someone who has been in the space, is there anything that you're looking at if you. A founder that came to you with something that. That's like, is there anything you're looking at if. If the right founder's listening? Like, what would get you excited forgetting about something? You would start, like, what kind of investment would get you excited.
- [45:39]
B
Well, so I'm going to say something I'm a big believer on, which is that I think platforms eat curation for lunch. When you do curation, you create, curate for the average user and therefore, you know what, your favorite golf show will not show up on the streaming service. Because I'm not interested. But when you use truly algorithmic solutions that are good and it takes time, it's really hard to build them.
- [46:08]
A
Yeah.
- [46:09]
B
When you build a platform like YouTube and all of a sudden we all get to see what we're interested in, Even the niche content.
- [46:17]
A
Search. Because platform and search together.
- [46:21]
B
No, because recommendation algorithms.
- [46:23]
A
Recommendation. So you still need the recommendation.
- [46:26]
B
So that's big opportunity.
- [46:28]
A
And that's honestly what we're working on at Stock Twits. Right. We're this platform, big or small, just like to be. And we relate to the. We wanted it to be real time, but in the end now with, with AI that we were laying in on top, we can do topics. Right. So people can see they don't have to go through the whole stream. They can see the specific topic of. Of the real time. Right. So you're right. Like you gotta have the platform. Which is why I've kept stocktwits.
- [46:57]
B
Right.
- [46:57]
A
We were a platform while you, you held on to Tubi because you had a platform. The hardest part is then just figuring out. So you're saying the algorithms, everything. You have to have the algorithm.
- [47:14]
B
Algorithm is, is really sits on top of data. So data is everything.
- [47:20]
A
Yeah.
- [47:21]
B
And then the algorithms are trained on that data. So. And that's hard to do because you have a chicken and egg problem. I launch a new product tomorrow, I have no data. My recommendation is going to be shit.
- [47:34]
A
So if you're curating, there's just only so big you can get.
- [47:38]
B
But I do have such a big advantage because they have so much data. Doesn't matter. Might have better algorithm. I mean, there's no such thing as necessarily better algorithm. It's just they, they sit on that data, they can train various models and they can serve you so much better than anybody else.
- [47:56]
A
So would you ever invest in a curator? I'm fascinated by curators, but you got to understand that they can't, you know, they're, that they don't have scale. They're always going to be. I just think there's never been a better time to be a curator. It's just you have to want to do it and you have to understand the type of business you're in. And you have to go get curating.
- [48:15]
B
Works for really niche categories. I. I always use the analogy of sort of, you know, are you building Ford or Ferrari? Right. If you're building Ferrari, that's curation. So to suggest that Ferrari will never. The market cap has gone up actually in the past couple years. So it's a successful business. That's like curation. Right. So it's a very specialized market. They hand deliver it. The experience is different. But if you want to appeal to the average person, you want to build a factory so it's not as sexy. And that's where platforms come into play. Right. And you need to use algorithms to figure out whatever user wants. So I think platforms are far better businesses than curation. But I'm not suggesting curation will die.
- [49:05]
A
No, curation will get bigger and even better. But this is why, I think why Fang dominates their platforms. And then you add AI as a tool for the platforms and they're acting as automated curators for 90% of people. Everything gets bigger. Curators are just important. But I think this is, this is where AI still is the greatest thing ever. And it's why Fang continues to do well is because it empowers the platforms. Right. And allows them to cut costs. And in some cases, whether we like it or not, it improves the product for many people. Like we. You still have to go in like Twitter has algorithm. If you really want to use Twitter, it'll still work. If you go put in the work and do the gardening and do the curating yourself and. And you know, because they're a platform, they can only do so much. Do you miss anything about Tubi? Like, I mean, you like it knowing what you know today, would you sell to be knowing what you noted about where tech is. And like I know what it must have felt like cause we talked about it. But like knowing what you know today, was it the right thing to do? Is a genius move by Fox. Do you like? I mean, in the end because they offloaded their content and onboarded a platform. Right. So that was pretty genius.
- [50:33]
B
You know, I. I loved running to be. Do I miss it? Sure. But I was ready to move on. You know, it was a. I ran it for 12 years. I was tired, I was beat up. I couldn't raise money. I got rejected by every, you know, name VC you can think of. I think the number is probably in the 400s.
- [50:55]
A
Yeah.
- [50:57]
B
And it was tough to raise money for it. The media companies thought that I'm crazy to go up for the tail content. And the tech companies Thought that media is a really bad sector to invest in. But not tech companies. The VCs and the tech companies couldn't acquire us because ICC was, you know, on, on their case. So we couldn't sell, we couldn't raise money. But the numbers were growing and, and Fox, you know, to their credit, they really let me run it my way for the three years I was there. And I'm really happy that the company is booming and succeeding.
- [51:35]
A
I mean, I think that's the most important thing. Right. Like you want your baby to succeed. You want.
- [51:40]
B
Absolutely. So, you know, no regrets. And I, I was ready to sell. Now obviously it's probably worth well over 10 times what I sold it for. Probably 20 times what I sold it for.
- [51:50]
A
Do you think it's a 8 to 10 billion dollar company today? Yeah. Yeah.
- [51:55]
B
And that would make it rich.
- [51:57]
A
You and I, you'd be paying for our trips.
- [52:02]
B
Well, that's why I have friends like you.
- [52:04]
A
No, Well, I think that it's important for founders who listen to the show on entrepreneurs. There's never, it's just, you know, I think the most important thing if you, if you are going to sell the company is who are you selling it to? Right. If you know the thing's not going to work, it doesn't matter. But if you really have built something that I, I talk about my team with this with stock twice because I came back as like, if we need to sell it, which we don't. But if we were to sell it, which we're always, you know, I'm 60 years old. Who is the like does will it end up in the hands that, that protect the core thing that it does? Because it is pretty hard to wreck unless you wreck it.
- [52:38]
B
Yeah. Look, and I think sure, the financials matter, the exit matters, but this is something I thought about day and night. I dreamt about to be. I'd wake up with like, oh, I came up with an idea for 12 years.
- [52:51]
A
Yeah.
- [52:51]
B
So of course I care about it doing well and succeeding and surviving. And so I'm very happy to see it doing. Flourishing these days. So it's great.
- [53:03]
A
All right, buddy, this is. Hopefully you become a regular. You're working on some cool stuff. We've got a great network of friends and you're loving New York.
- [53:19]
B
Loving New York, except these days a little cold. But otherwise it's great. And also it helps a lot of friends come visit New York like yourself. So, so, you know, it's, I say it's effortlessly social, so it's great. I love City living in New York.
- [53:36]
A
All right, buddy. Great to have you finally on Trends with Friends, and we'll have you back soon and have a great rest of the day. Just. Just leave this open for the. And it'll. It'll tell you when to. When to close.
- [53:49]
B
I just want to say this is the most appropriate 53 minutes I've spent.
- [53:52]
A
I mean. All right, so let's. Before we go, let's talk inappropriate stuff. When was the last time you had to shave? Like, just pull down the shirt a little bit. So you're shaving the beast.
- [54:03]
B
No, no, that's hair. The Persian carpet. No, it's down there.
- [54:06]
A
My. I. I had a hair. We can leave this, right? I had a hair. I'm hitting 60, and you're gonna have this problem. Okay. I had a hair that was. I didn't notice. It was literally 11ft long. It was this thin, gray. Okay. Like, I. I routinely manscape. How do I miss something that's 7, 8, 12ft long? So thin. It was so disgusting. It was so disgusting. Somehow I've been shamed. And this thing has been growing for probably 60 years on my chest, and I finally. I just started pulling it, and it was like a magician. It was this thin, gray hair. So wait, wait. What you're gonna have with that. With that hair? This is me, like, hairless. I had a hair that. It was. Honestly, it was like. Just kept coming like a magician.
- [54:50]
B
For us Persians, that happens every week. So we have to cut it down, mow it down the.
- [54:56]
A
And then one great story about Farhad before we go, Just. Just type of guy he is. We go to. I invite him on a cycling trip to. And people will appreciate this. So. So we'll. We'll throw this in somewhere, and, you know, he looks like he's in pretty good shape. We're in Italy at my friend's place. We invite him back the. The next year with Roy and a bunch of real cyclists and, you know. You know, assume a guy who. Who sells his company for 500 million, knows how to do a little bit of due diligence or won't sign up for something that he can. Can't participate in. Farhad shows up in. In Italy, which is very tough riding conditions in. In Tuscany with. With brand new cycling shoes that he's never used and he's never clipped into a bike. We don't know this until you have shown up that day. And what is it about? So anyways, for how it shows up, we didn't let him clip in, meaning we made him raid kitty pedals the first day.
- [55:57]
B
And.
- [55:57]
A
And to Farhad's credit, and this is kind of like why cycling and really spending time with founders is interesting. Farhad shows up in good enough shape to survive. He understands. But had to go ride the first day with the baby pedals. Right. What is it about you that was willing to take that risk and shove, forgetting the fact that you knew us? Why did you think that was a good idea?
- [56:26]
B
Well, I just thought for five days, I'm going to be the last person in our crew looking up and staring at your ass for seven hours a day. Yeah. And I wasn't going to pass on that opportunity. But joking aside, I like. I like challenge. I like to challenge myself. I like hardship. And honestly, I also love connecting with interesting people. And our. The crew that you recruited and I've now become good friends with are amazing people. So I had a blast.
- [57:07]
A
And then we're going to Israel in March.
- [57:09]
B
I hope so.
- [57:10]
A
Yes, we hope so. We shouldn't say that in jinx it, but we've canceled. Canceled. I had a few trips canceled, and we're putting this wrap back together.
- [57:17]
B
I'm looking forward to that.
- [57:18]
A
A very international trip to the country of Israel. Israel in March. All right, everybody. Trends with friends. We'll be back next week. Farhad, thanks for being a great guest. And we'll see everybody next week.
- [57:29]
B
Take care.