00:00I want to start off with what a company like Fox, which has been sort of steeped in, I guess,
00:05the traditional media side of this business, buying into Roku, a streaming service, more or
00:11less, oversimplifies. Does that say something about the state of the industry, or is this more
00:16just a commentary on Fox? Well, thanks for having me here. I really appreciate it. Look, I would say
00:23it's a little bit of both now that you frame it that way. Look, the industry is obviously
00:28consolidating around a new business model, and that new business model is on-demand delivery of
00:33content, and that happens through any number of applications and studios. So think about it.
00:41Fox didn't have much of a streaming service. They have Fox 1, but it's not intended to displace
00:48pay TV customers. They have Tubi, which is a very substantial ad-supported streamer already,
00:53and adding Roku to the mix is a very substantial move for them. And I think it consolidates the
00:59position that they're glad to be in. Like, there's always been this notion that streaming
01:04is, you know, you have to pay a subscription fee. It's, you know, Netflix started it. There was no
01:10ad support back then. Hulu had, you know, a dual model for a long time. You pay a subscription,
01:15and there's ad support. But you know what stuck up on the industry was this pure ad-supported
01:20model. And it happened in a couple of ways. Roku is a great example of it. It is a, it's
01:26an
01:26operating system for television. It is right in the center of delivering targeted ads to free viewers
01:33of Roku content and licensed content and therapy content. It's a big, big deal. Fox, their business
01:40model is ad support. That's what they do. And if you think about combining those two entities,
01:45the degree of ad support, ad-supported activity, and the degree to which their ad team can deliver
01:52upon a much broader array of ad inventory is actually quite a step change. And it takes advantage
01:59of this consolidation by consumers around this mode of accessing television. It really comports
02:06for that. Yeah. And we've seen kind of this big inflection point, certainly with regards to the
02:10distribution and obviously the ad tiers and really just the financial model that's going to
02:15support that, whether it's ads or subscriptions. I do want to get your thoughts though on the content
02:19side of the business too, because that's involving. And obviously, you know, you're seeing
02:23that front and center with candle media with a much more of a focus on a content created by
02:27individual creators rather than more of the traditional, I guess, what we would know at Disney
02:32or Warner Brothers, those big studios have done. Are these two worlds going to coexist or do you see us
02:38kind of moving towards a much more individual creator-centric content ecosystem?
02:44I think they're going to collide and they already are colliding, frankly. Look, YouTube snuck up on
02:49everyone. When people thought streaming and time spent with television, Netflix was always top of
02:55mind. That's the gold standard to go after. But if you look at the time spent on connected TVs
03:00with streaming content on your television, again, television, YouTube dominates that space. And
03:07they look a lot more like Roku than Netflix. So you're seeing these two spheres kind of that had
03:15evolved separately. This free ad-supported streaming had always been considered part of the quote-unquote
03:20long tail. It was lower quality user-generated content that existed on places like YouTube and TikTok
03:27and others. And then there was the long-form storytelling that was the purview of Hollywood.
03:31And I think that those two ecosystems are overlapping now to a large degree. People watch both. Look at
03:38what happened a couple weekends ago with the movies that came out. Back Rooms, which was a YouTube-driven
03:43property, dominated the box office against a movie that I thought was great, you know, Mandalorian and
03:49Grogu. So the intersection is becoming more and more clear. And I do think that the focus of
03:57culture, the people that make the cultural moments, the things that people look towards and engage with
04:01to define, to see where culture is going, to define that in a very big way, really has moved away
04:07from
04:07long-form storytelling to a large degree and into this social media storytelling, if you'd call it
04:13that. The short-form vertical video on TikTok and Instagram and YouTube, by the way. YouTube shorts is big
04:19and on YouTube itself. And I think that if you look at where that intersection is most apparent,
04:24it's Roku itself. Yeah, absolutely. And it's a great point, the blurring of the lines there. I do
04:31want to talk a little bit more about Netflix, though, because you think about Roku, there was
04:36reporting out that Netflix apparently was in the running for that. Now, apparently, they're taking
04:40a look at Lionsgate as well. It just seems like Netflix has some appetite to be acquisitive here. But
04:48it seems like the reaction from at least the people that we've been speaking to is that any deal for
04:53Netflix would be a nice to have at this point, that when it comes to streaming, they are so dominant,
04:58they don't necessarily need an acquisition here. And when you take a look at the competitive
05:03landscape, I wonder if that's your read as well. Well, they showed their hand a little bit with
05:08their bid for Warner Brothers, obviously. So if you're looking objectively at Netflix, like they're
05:13spending $18 billion plus, I think it's growing 10% a year of their content budget. They have an enormous
05:18array of content that's on their service. I'd be hard pressed to find one consumer segment that
05:24they don't have an enormous amount of content to serve. So they're everything to everyone. And they
05:28have carved out that strategy in a very brilliant way. But even Netflix, with that big footprint and
05:34that broad tent, if you will, for subscriber acquisition and retention, even they are facing
05:39what seems to be a bit of maturity, especially in the US. It's hard for them to add subscribers
05:45meaningfully in the United States. And in parts West, I guess overseas, in the East and other
05:50places, there are still potential areas for them to grow. But they've clearly been searching for new
05:55growth avenues. They did it with the games, with vertical video, and part of the Roku rumors that
06:02they're trying to acquire that, and what they did with Warner Brothers. So look, they are clearly
06:06feeling like they're incomplete in some way. And everyone is. I mean, there's no company has the
06:13perfect asset mix, especially in the entertainment industry. So you've really got to look at what
06:19they're doing and see, well, there's reasons they're doing that. And I do believe that they
06:24are going to become more acquisitive over time. And they're going to consolidate their position as
06:28the leading streamer. There's no question that for long form content, storytelling, they are still
06:33the leading streamer in the space. But look, they got into advertising, they got into games,
06:38vertical video. They are searching for new growth avenues. And they wouldn't be doing that unless
06:42they felt they needed it. Right. Absolutely. It's a good point there. Showing their hand a little bit.
06:48I do want to talk about where all of this leaves Disney, given your long tenure at the company there,
06:53because I was taking a look at some research from Moffitt-Nafidson. And they point out that,
06:58you know, this Fox transaction with Roku, that would combine at the third highest share of total
07:03streaming viewership in the first quarter of 2026. That would actually narrowly edge out Disney's
07:09offering of Disney Plus, Hulu and ESPN. So it feels like the board is shifting a little bit. And I
07:15wonder, you know, how a Disney responds to this landscape. You know, if I'm Disney looking at this
07:22specific transaction, I'm not very worried about it at all. I don't think this affects their
07:26positioning in a substantial way. They're in a different model. They're doing subscription-based
07:31video on demand for their streaming service. They have ESPN just launched that. Like, I don't
07:37think that this particular deal would make me nervous if I were Disney. Disney does still hold
07:42the best cards by far of anyone in the traditional entertainment ecosystem. There's no one that has
07:48those brands, those franchises, the power with consumers that they have. You could say Netflix does,
07:54but, you know, I'm talking about a studio-related, you know, competitor. So not looking to, I don't
07:59think I'd be too nervous about that. But if I'm Disney, I'm going to say, look, writing is on the
08:03wall. I have to be more involved in what we talked about at the beginning of this segment. We have
08:08to
08:09be more, if I'm Disney, in short form video, in vertical video. We have to find a way for our
08:15characters, our IP, to bridge from purely long form into more short form. And I know they're doing
08:20that. They're focused on it. I think that is their number one priority. Only I think that's just a
08:25little bit more confirmed now that the Fox deal happened with Roku. And it's confirming, I think,
08:30strategy that they've always been thinking about in any event. So just maybe push the pedal to the
08:34metal a little harder than they were otherwise.
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