Reflections on Legacy and Future Projects

I have no legacy. I'll be dead and you know, that'll be that. Sir, you greenlit Titanic and Avatar. You did Hi everyone from New York Magazine and the Vox Media Podcast network. This is on with Cara Swisher and I'm Carol Swisher. The indie horror movie Backrooms is one of the big surpr ise hits of the summer. The film is directed by twenty year old YouTube creator Kaine Parsons. It's so far gross more than one hundred thirty five million dollars domestically and more than two hundred million dollars worldwide. For context, it had an opening weekend on par with the last Star Wars installment despite costing a fraction of the price to make. But behind back rooms is someone with a well established reputation for making things people want to see , Peter Churnin. He's one of the producers on the film and his production studio Churnin Entertainment co finance the film. Turnin was Rupert Murdoch's longtime second in command at News Corp, which is where I met him a long time ago . He was also the head of Fox movie and TV divisions where he greenlit major blockbusters like Titanic and Avatar. You might have heard of them. In twenty ten, he founded his own private equity firm, the Churnin Group to invest in digital media companies. He also recently sold the global content studio he founded North Road to the French entertainment giant Media Wan. I love Peter Turner. I'm not going to pretend I always used to go to him because he always told it to me straight, even if it was not in his interest. He was always very smart and very honest about the entertainment industry. Of course, I was always wary because of the Murdoch Park, but he was very different, actually very, liberal in his politics and at the same time was always focused on quality and just smarts. And I just think when he went into digital media, I thought he did it right. I think a lot of Hollywood people didn't. And he also makes the planet of the Apes movies, which I love. Anyway, he's just a really sharp person and he really is willing to try things. And I really appreciate that. All right, let's get to my conversation with Peter Churnin. Our expert question comes from Ari Shapiro, co host of the CNN culture podcast Engagement Party. Don't go anywhere . Support for the show comes from Odu. Running a business is hard enough, so why make it harder with a dozen different apps that don't talk to each other? Introducing Odu. It's the only business software you'll ever need. It's an all in one fully integrated platform that makes your work easier. CRM, accounting, inventory, e commerce, and more. And the best part, Odu replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch . So why not you? Try Odoo for free at Odoo. com That's ODO . com . Thanks Thanks again to Odu for supporting this show. Odu wants to be your ultimate all in one fully integrated platform to handle everything . 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See how AI can empower your organization without compromising what matters most, cohere dot com slash box It is Peter Churnin, thanks for coming on . It's my pleasure. How you doing? Good, let's start with what's happening now. Congrats on the success of Backrooms. It's now A twenty four's highest grossing domestic film ever. They co finance the film alongside Churn and Entertainment. And the film is directed by Kane Parsons, who was a teenager when you green let the movie. Talk a little bit about Churn and Entertainment maybe for people who don't know what you've been up to because it's been a wide range of things. And what stood out to you about this film? Because you've done lots and lots of traditional films. I mean, Planet of the Apes, things like that. So Chernon Entertainment is a fifteen year old film and television production company ranging from Plan of the Apes to Newgirl to Ford versus Ferrari, et cetera. But you know, it's interesting when I did Planet of the Apes, people came to me immediately. It was the first movie we ever produced and said, You should brand the company. You should become the next action producer. You should run the next big and I said , Yeah, that's a good idea, but I don't want to. I want to make a wide range of movies. You know, the next movie we made was a little searchlight movie called The Drop. We did a family comedy. We did some animated movies. And I've always been interested in doing a wide range of content . And Churchin Entertainment, which I guess at this point has produced I don't know thirty five movies , has done a wide range of things . You know, back rooms is , by the way, is just a continuation of a wide range of interests. And you know, I was interested, I was attracted to the idea of a really young filmmaker. I was attracted to the idea of a piece of very organic YouTube content . And it just seemed cool to me. So talk about the YouTube content because you had been, I recall, you made me go visit an anime company that was doing a bunch of stuff and then some other things. And you had been, you know, dabbling in some of the other investments you made during the most recent years after you left Fox . But initially, I don't recall you being reticent about YouTube stuff, but you were sort of watching it and putting little bets down all over the place . I recall at the time, everyone was sort of looking for that YouTube that was going to leap from YouTube to big screen. Yeah, I would say so first of all, in terms of our early investments , we were never particularly focused on the leap from YouTube to the big screen . What I have felt is that over time, YouTube, and to some degree, TikTok would serve as the incubator for a next generation of talent, you know, similar in some ways to the way Roger Coranm did forty years ago to the way MTV Music videos did, twenty five years ago , you know, you have a bunch of very smart, talented young people making stuff . You know, like any other thing in life, half will of it be garbage, half of it'll be interesting, and two percent of it will be extraordinary . And I've consistently been interested in what that two percent is going to look like. I think a lot of sometimes Hollywood is just good guessing, right? It's like making the right choice. But explain to me what appealed to about this particular project and Cain himself. I would say it's certainly good guessing, like anything else in life . But I guess you look at these things in two ways. One is just look at the size of the audience and the engagement of the audience, which was quite extraordinary . But I felt from the very beginning that there was what Cain did that in my mind was so impressive and he did it as a originally did as a fifteen year old is he took originally backrooms was a meme on Fort Chan. It was one photograph of, I believe, a furniture warehouse being deconstructed . And that was posted on Fortran. That became something people talked about. When he was fifteen years old, Cain had a vision of turning that into a science fiction storytelling mode . And I found that to be really impressive because I think that he took something which was just a meme and a meme in some ways for alienation, for , you know, alternate universes and turn that into a storytelling exercise . And I thought the ways he did that was extremely impressive, extremely extremely impressive. And he, you know, he did all those early, he started doing those early YouTube backgrounds videos when he was fifteen , you know, and we optioned it and made a deal with him I think when he was seventeen or eighteen . But you know, but I think the other thing which Bear is saying is, you know, like most things Hollywood , every single meeting in Hollywood over the last ten days has been Find Me My YouTuber . That's not the smartest thing on Earth. You know, it's no different than saying Find me a sequel to something else. You know, it's worth noting we spent three years on this project. You know, we spent a period of time chasing, we spent a long time working on the script. We spent another year on production . And you know, it's not just saying Ben on a YouTuber, it's not just saying Ben on somebody it's betting on a very specific piece of content and betting on a very specific piece of talent . A person, a particular person, which is a story. You use the word storytelling, which I think gets lost in a lot of it because some of this can be very trendy and very ephemeral like many memes can be, right? Yes. And I think clearly our view was we were not betting on trendiness. You know, and I look, I said very clearly you',re betting on a p iece of IP, but you're also betting on the ability to convert that into a different medium and a storyteller or a talented individual is capable of doing that. And I think in some ways, in my opinion, our most significant contribution to this film because this is not a case of we carried this guy is extraordinarily talented and I believe unmatched future ahead of him . What I think we did, which I'm very proud of, is figured out ways to support him without in any way compromising usurping his vision. So we originally got him a very talented producer and production company, Chris Ferguson, and I think Chris was meaningful . And then we brought on Osgood Perkins as a producer, as an extremely talented director . And I think Osgood was really sensitive about how to stand next to Kane without in any way imprinting his own creative vision on him. Just as there is support, there is someone who could help, you know, he was nineteen years old at the time he was making this . And I think we were immodestly sensitive in understanding how to manage that process. So when you said if everyone's like this week, all the meetings or how do we find a YouTuber? What is the problem with that? Because this YouTube's obviously been popular for a while now. I mean, my kids, my older kids use it as television. It's television to them. It's the way they consume content , even if it's, you know, a PBS frontline, you know? It's look, the analog is after a big book has been a hit, go find an novelist. You know, it means nothing. It's meaningless, you know, eighty nine, ninety five, ninety eight percent of all novels have no relevance for film. ninety eight percent of what's on YouTube. ninety nine percent, ninety nine point nine percent has no relevance . And it's just a simplistic jump on the bandwagon. Somebody else was success ful with this, find me my success. And you know, like anything in life, you need to be discerning, you need to be discriminating, you need to decide which ones are relevant underwin material, which is the relevant talent and it's going to be very rare that that happens. You know, it reminds me a little bit. I interviewed the creators of heated rivalry and a lot of people in Hollywood sort of turned it down or was sort of cheapening them. But of course people in Hollywood hadn't been aware of the , you know, the genre of romantic, the romantic fantasy book. You know, Hollywood does a number of things that are very smart. Look, it's like no other, it's like any other business. They do a lot of smart things, they do a lot of stupid things. You know, the smart people are every single thing is an individual bet, and you better be very discerning about that bet. The less smart people are people who just want to follow whatever has been previously successful and who think that because something was previously successful , the next thing will be and or who are unwilling to take chances on original visions. So backroom has been, of course, a big hit with young people, one audience survey found that during the film's first weekend in theaters, close to ninety percent of ticket buyers were under thirty five years old . Talk about that sort of bet that people don't want to stare at the screens. They want to actually physically, especially young people go out to the movies. Well, I guess I would say two things. One is clearly to the degree any of us can remember being young, the only thing you want to do is get out of the house and get away from your parents and get someplace with your friends along, with your friends, et cetera. So movie theater has always historically been a good place to do that. So it's in my mind silliness to somehow assume that five, eight years ago, young people woke up and said, I want to go home and have family dinner with my parents or you know that's never going to happen . I think what happened which made people think this is, you know, Hollywood for decades made a wide range of movies for young people. They made youth comedies, they made horror movies, they made dope action movies aimed at young people. They made movies with young stars . And I think that what has happened over the last five years is they stopped making most of those things. You see very few comedies, you see very few youth comedies . No American pie anywhere. Yeah, there's none of that stuff . And so it's self a fulfilling prophecy they're not going to come . And I think the second thing that happened is they came to believe that it is fair to say that one of the roles of movie theaters, particularly in a world of ubiquitous television, umbiqu itous screens has been an opportunity an opportunity to see big effects on a big screen. The movies you mentioned . The problem with that is most of those big effects movies have been sequels and franchise movies. And most of those original franchises are now twenty, twenty five, thirty . In the case of Star Wars, fifty years old . And it's a little bit in my mind , flacious to assume that the best product for young people are remakes and sequels to franchises that were originated before they were born . And I think that's one of the things that's really resonated with backrooms is that this feels there's a sense of ownership among people. This is our IP, this is our content. This is something that we built into success on YouTube that was made for us, was made by people our own age, et cetera . And you know, you compare it to look and I don't mean to say anything. You compare it to Star Wars, which came out the week before, which is fifty year old IP, you know? Right, which shouldn't do as well. But one of the things that I've noticed and I've mentioned this many times when people push back against movies was original harmons are having a real moment now. Last year cinners and weapons were huge box office hits . Now we have backrooms and also Obsession. That's another film held by a young director who made the leap from YouTube . Talk about the genre because it's not just comedy. You mentioned the other genres . Horror is really seeing something much stronger. And I have a feeling it's 'cause they're original stories. I don't necessarily think it's because it's horror, I think it's because they're original in some fashion. And as opposed to say something that feels like it was made by AI. There's nothing about weapons sinners or these movies that feels AI in any way. Yeah, you know, it's interesting if you're inside Hollywood a year and a half ago , people were really worried about horror. Harrow got through a really bad year , sort of a year and a half ago or so. How many saws can you do so that I wouldn't say that this is all of a sudden, I think your point is correct, which they feel original. You know, they are these particular movies have very young stars, young kids. Well, not backgrounds doesn't have young stars, but is a young director. But Obsession Clearly has young stars or they feel original , you know? And so but look, I think it's a mistake . Human beings are desperate to be entertained. The major forms of entertainment have been around for centuries because they are appealing horror comedy tragedy . It's not the genre is what you're saying . And that you know, people don't make comedies right now. There are so few comedies being made, both in movies and on television. I don't get that at all. It's not as if all of a sudden human beings woke up and said I don't want to laugh anymore . They become self fulfilling prophecies, which is people get nervous, they stop making them, and then all of a sudden everybody says, Well, they don't work. Just point to a comedy that works, right? Right. And a lot of the ones who made those are now older, right? They're a lot older. And they some of them seem to be going on streaming, whether and now Seth Rogan is older now, but you know, he was an early person to do a lot of those comedies that did well Sandler. But the truth is there aren't that there aren't that many comedies on streaming either. Yeah. Yeah, yeah, that's absolutely true. In a recent interview with Matt Bellini, you said the key to success is to be, quote, relentlessly focused on where the next generation is coming from. And right now that's obviously YouTube and TikTok shorts. Now, of course, as you said, there's a rush to sign young content creators , how do you think the next generation's media habits will change filmmaking and storytelling? I'm of the mind because I have two kids in this age range, that it doesn't. They like a good story. I just don't I don't see it that different. It may be slightly different and it's sort of like , I don't know, they like hip hop, right? It's just a different version of different things . Yeah, I would say that first and foremost, I'm inclined to agree with you, you know, which is people want good stories. You know, there will be some you know, if you if you were to look at the evolution of movies over the last fifty years, there's certainly been changes in the vocabulary of storytelling. But the movies that are super successful have great stories, great characters, you care deeply better, and you're moved, you're excited, you laugh, whatever those things are. They may be slightly faster cut. There's clearly different music in the background . There's way higher quality special effects, et cetera. So there are certainly different storytelling vocabulary inside of them. But fundamentally , you know, human beings, human beings, they want to want to be entertained, they want to be moved, they want to laugh, they want to be excited, et cetera. So I don't think that'll change. I do think I guess I can say this because I did step away from one of those jobs when I was getting to all. You know, the infrastructure of Hollywood was too old . You know , people are and by the way, I assume a lot of friends of mine will be unhappy to hear this, but you know, these studios are for the most part run by people who are too old, you know, and that and and And going back forever , Irving Thalberg was in his twenties when he was doing this, but people were in their thirties and forties at the peak of their careers. I ran twentieth century fox in my early forties and certain,ly I didn't feel young at the time, I felt like , but you know, to the degree that by the way, on all movies, the audience is still younger because those are the people who want to go out . To the degree you are separated from the audience by twenty thirty, forty plus years You're just not going to know. You're just not gonna know it. You're also sort of happy. So the disconnect is that, I mean, welcome to Washington, come visit Washington. It's the same thing. But no one wants to make bad movies. Is it just age or is it not using these formats or not under the executives in charge? So it's certainly not just age. You know, my very first job in Hollywood , I worked for a very well known television producer who was an incredible micromanager . And probably eighty five percent of what he did was really valuable and great , and fifteen percent of what he did was really destructive And I would watch that fifteen percent ruin things . And it was a really valuable lesson for me because it made me realize these things are so fragile . It's so remarkably difficult to make something great. There are literally millions of decisions and you can have things with a great script and the wrong director or a great script the right director and there's no chemistry in the cast or there's all sorts of reasons . You can have something that's not great. And all of a sudden the right piece of music transforms it. They are, you know , insanely complex things to put together with lots of nuances. And there's all sorts of reasons why they don't turn out. You're right, people set out to make great things , but it's really hard to make great things. So when you think about yourself, like as you said, you did this in your forties, how do you then stay connected in some way where you're clocking the stuff? Because you could easily make, you know, the basic movie. You could do this in your sleep, right? Presumably a lot of the movies since you've done so many. How do you continue to change and especially when these studios are run by people who are quite you know, it's the same thing with media. You know, I've always sort of been agitating that. I'm like, you're not understanding , especially when I was younger, what was happening here , but how do you stay cognizant of what's happening especially with this movie? Is there a moment when you would have missed backrooms? There's plenty of moments. Yeah. Yeah. Any number of moments where I'll miss any number of things. You know, it's not like I'm so wonderful or I'm somehow better or different than everybody else . I think that what I used to say when I was running Fox and I think it's still true is that ultimately those jobs as an executive ed or producer is your job is to have some weird affinity for the Zeitgeist of the world's public two years in advance . That's your job. You're supposed to guess what they're going to be interested in two years in advance from now. And I say if you were to design a job to isolate someone from the world's public, you would design the job of a studio head . You work behind gates. You generally live behind gates , you fly privately. Celential is delicious. You're so isolated from people . And I think you need to do two things, which is you need to just force yourself, both force yourself and I guess instinctively be relentlessly curious . Just you know, you got to be looking at TikTok, not as a study project, but just because you're interested. What's going on? What's this about? You got to be looking YouTube, you just have to be curious and you got to be relentlessly curious . And then you have to surround yourself with as many young people as you can. And let me be really clear, backrooms was not found by me at the company. It was found by a young executive named Corey Adelson, a term who brought it to me. And I said yes to it, but she deserves the credit for it. What did she say that convinced you? She said, It's really cool to read this . And you know, I she has real credibility with me and I'm interested in those opinions . And you know, I think the key is to both have young people, trust them and be interested in what they have to say. I think it's the job of young people to force you to pay attention . You know, I used to say, again, I've always said to the people who work for me, if I pass on something that's good , that's your fault not mine. And it's your fault for not convincing me. And you need to do whatever it takes to force me to pay attention, to convince me and I used to say, you know, go burn down my car in the parking lot if that's what it takes , but you have to do whatever it takes to convince me that this is right because I'm by definition obtuse, out of touch, all those things and you know, you want to create that environment where you have aggressive, opinionated , passionate young people , and somehow you don't put up enough stupid barriers so that you're not capable of listening to them. We'll be back in a minute . Support for this show comes from Delete Me. Have you ever thought I should really be doing something to protect myself from stalkers, scammers, and hackers, but you're not sure what. Here's what to do. Go join delete me dot com slash care and enter the code Kara. You get twenty percent offle Dete. Me Delete Me removes your personal information that's being sold online. In the age of AI, we're all especially vulnerable to scammers using your personal data that's floating around on the internet against you. Pevert looked at yourself online and found your home address, phone numbers and the name of your family members? It's unsettling. I have done this. It is very unsettling, especially when a lot of it is inaccurate, but it's grouped together in such a way that seems vaguely threatening and also very troubling in terms of your own safety and your own privacy. Take control of your data and keep your private life private by signing up for Delete Me. Now at a special discount for our listeners. Get twenty percent off your delete me plan when you go to www . join delete me dot com slash care and use the promo code Care at checkout. The only way to get twenty percent off is to go to join delete me dot com slash Care and enter the code care at checkout. That's joinedeletmeat. com slash care code care . Support for this show comes from Odo . Running a business is hard enough, so why make it hard er with a dozen different apps that don't talk to each other? Introducing Odu. It's the only business software you'll ever need. It's an all in one fully integrated platform that makes your work easier. CRM, accounting, inventory, e commerce, and more. And the best part, Odu replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch. So why not you ? Try Odoo for free at Odoo. com That's ODO . com . Support for this show comes from teleport. In the AI era, one of the biggest questions is how to contain agent behavior in your production infrastructure. In teleport's survey of more than two hundred infrastructure leaders, the company found that those confident in their AI deployments have more than twice the incident rate of those that aren't seventy two percent versus thirty three percent. Let's talk security basics. The most frequent causes of data breaches are human error and compromised credentials, but in the AI era, the challenge is that agents with broad privileges can find these credentials and gain access to sensitive data. Teleport establishes a unified identity layer for humans, machines, and agents that is cryptographically backed, which enables agents to be controlled and contained with the same rigor that you apply to other actors in your infrastructure. Security is complicated, but with teleport it doesn't have to be. Download a free report at go teleport com slash on with Cara . Let's talk about the state of Hollywood broadly then because as you and I know since covering this, the slowness of the penny dropping about digital has been glacial, you know, and everything else. So every episode we get an expert question from an outsider, here's yours. Hey, Peter Turnin, I'm Areshapiro. I'm one of the hosts of the CNN podcast Engagement Party. And here's my question for you. I know Hollywood is going to try to do everything it can to replicate the success of obsession and back rooms. These two horror movies that have brought people back into the theater, blown expectations out of the water and just dominated the movie going experience so far this summer. My question is, what do you think are the wrong lessons that Hollywood will reach? What do you think are the mistakes that Hollywood will make as it tries to chase the tale of these two movies that have been such runaway hits. Thanks. Thank you, Auri. Look, the lesson is what I just said, which is go find the next YouTuber. Go buy something YouTube. It's you know, it has no relevance Your job every day is to find something great, exciting, new, innovative, etc . You know, look , I would say and you can understand this car .ag Mingan innovation is an extraordinarily complicated thing, equally complicated for people in the tech world . Yeah. You know, everybody, you know, it's very easy to come up and say Hollywood's old fashioned out t ofouchch the te world. I don't know, you know, how many tech companies can you point to that have innovated repeatedly over a twenty, twenty five year period? They are most of them built off of one extraordinary innovation . And then they go and it's no accident that there are very few companies in the world that stay among the top ten companies in the world for more than twenty years. Managing innovation is extraordinarily difficult. And it's difficult in Hollywood and you lose , you know, you reach the wrong lessons. I would also say that , you know, one of the challenges for tech is that , you know, on the one hand, data is an extraordinary gift and an extraordinary tool . It doesn't necessarily lead to innovation. It leads to extraordinary knowledge about how your audience , how your users are currently behaving. But if you just say this is the way they're currently behaving, this is the way they're going to behave forever , you'll fail. Somebody else who does something brand new out of the blue will come up with something new and better and right innovation is a very, very challenging thing to manage. And managing content is essentially managing a form of innovation. They have very different kinds of elements involved in them, but it is managing innovation. And innovation and creativity are largely the same thing. There's some very different buttons and levers to push on both of them , but ultimately you are trying to get something new and exciting and fresh and original. So one of the things that let me just click on something you said earlier about even though a lot of these original films are doing really well, most of the movies are franchises, right? In which you've been relying on existing AIP, I'll say that way. How do you get people studios to be innovative and swing for their fences on a risky pitch when they can at least bank on some success with a safe known quantity? You have management that thinks long term , because by definition, these franchises, certainly over the last ten or fifteen years have been much safer . However, by definition, you're going to run out of them , you know , and to the degree you are running one of these places, you should be thinking long term, which is I should be both maximizing my ability to monetize the existing IP that I own and I ought to be creating new IP that 's vital and vibrant that will have the same kind of economic success over a long term. And that you can't do it to the degree all you're doing is just making sequels. And you noted to CNBC that risk is ultimately the lifeblood of success. So how do you get Hollywood to take more risk? Given we'll talk a little bit about the sort of economic situation in these mergers, which will, you know, to me, the more mergery they get, the less risk taking they get given all the huge debt, et cetera, and worries about taking risks . What needs to change? Because Hollywood has gone through periods where they're very safe and then they're very risky, right? I think the seventies was more risky . How do you get them to think if it's the lifeblood of successes, you know? I think it's a couple of things. First of all, you know, I think the danger thing is to equate risk with recklessness . And there are a lot of people who think risk is reckless. Risk isn't reckless. You know, the wrong risk is certainly reckless, but your job is to figure out your job to ul istimately make a series of bets all day long . And clearly, you know, you want to revitalize , you know, these things are nothing if not repositories of valuable libraries there are two things. They're repositories, valuable libraries and lots of IP, and they're a manufacturing system that is allowing you to make creative choices fifteen, twenty times a year . You can certainly take risk inside of that portfolio without being reckless . A, the first thing is to do think about is a portfolio , which is I ought to be doing x number of these things that feel big and safe. I ought to be doing x number of things in the middle that are less risky. Some bonds, some stocks, some cash . Yeah. I ought to be also taking some risk. That's number one. Number two is budgets. By definition, there's an inverse relationship between the size of a budget and risk taking . And the creative community ought to understand that to degree the creative community wants to take risk, make things at lower budgets. And by the way, I think in my opinion , that 's the really interesting question around AI . And then I think it's look, it's also the job of leadership . The job of leadership is to really talented people that you support taking risks. I believe the best thing you can do is find really talented young people , figure out the good ones and support them during failure . Because it's a really weird thing because you are basically trying to run a manufacturing process that is managing creativity . And creativity is very closely associated with failure . Very, very closely. You know, you think about in lots of ways. One is it's the scariest thing on Earth. Think about what it is to be an actor. You know, to put yourself out there and get judged by people and saying, I don't like that. I don't like her nose or she's, you know, he's getting fat or you know, those are real or look, he looks like an idiot with that choice. That's terrifying. Being a writer, you've been locked in a room for nine months, you bring your script and say that sucks. And you want to create an environment that makes people feel safe being creative and you want to do the same thing with the people picking those things. You want to have bold people who both understand enough about the business , who learn the lessons from when they failed , but who also take risks. Safety is also starting to prove a little risky. We keep seeing these big movies underperformed. The big one now is Star Wars, the Mandalorian and Grogu , which is interesting. Back to the point you asked earlier, the second thing that'll bring back risk is big failures. You know, you mentioned the seventies . The reason the seventies, Hollywood innovated so much is all these big bloated spectacles that were playing at safe. Big musicals, probably the biggest of them was Hello Dali, which virtually bankrupted twentieth century Fox at the time. All those movies started failing. All the things that they were doing, holly spectacle musicals, big westerns, blah, started failing, and they were forced to take risk. Right. That's a really good point. Although now Hodel Dali is seen all the time, like later, they have different lives, which is interesting. One of the things, of course, is the center of Los Angeles being that there's been a big decline, as you know, in the number of projects being sh. There areut a lot there of productions have moved out of state and overseas. As content becomes more global, is Los Angeles still the capital of the entertainment industry ? Yeah, I would say two things . So jobs in Hollywood have declined by about thirty five forty percent . Some of that is tax credit related. Some of that is global production related. Some of that, in my opinion, is about vertical integration. And by the way, I'm far more concerned with vertical integration than I am with mergers . And that's let's think, you know , in essence, Hollywood has always been the center of global production . They have always it has been the center of looking for filmmakers in France and Italy and Korea and bringing them here . And it's just been a nexus for ultimately the financial underpinnings of that, you know, movies have always been made all over the world in Canada and England, you know and other places . And so probably, I don't think Hollywood has become less central. I do think that the world has become more global . And one of the things, you know, I mentioned earlier that I had sold my production company, which I have sold to a French company called Media Wan . And one of the reasons I did that was that I believe that if you look at the platforms , Netflix, Amazon, Disney, Apple, have all become global. They are a global platform serving the global community. The production companies have not. The production companies have never been global. You know , the big European companies were never successful in the US. The US companies never cared about the rest of the world. They were just like, we'll sell our stuff there. We won't make it. And I think there's a big opportunity for a global production company that is beginning to unite the highest quality talent all over the world . We'll be back in a minute Support for this show comes from Fetch Pet Insurance. Cats are special little creatures, so are dogs. I have both. I love my cats and dogs. And my cat's name right now is lovely and she means a lot to me and she's really quite narcissistic , but I enjoy it. She's been pretty healthy throughout her life, but I've had other cats who have gotten sick at the end and I do think about what's going to happen in the next years ahead because she could get sick, have a health issue, and with previous pets I've had, the bills racked up were enormous and I never got pet insurance . 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It takes about two minutes. That's fetchpet com slash save . Fetch , love longer . With ShareMight trip from Uber, you can send your live trip location to the ones who matter most, like Dan and Hannah who always wait up to make sure their daughter gets back to her college dorm room or Tiffany who's running late as usual, and her friends are tracking her trip to make sure she's actually on her way. Look, she's right there. She's three minutes away. Or Sam who never goes anywhere without her roommate knowing exactly where she is . Some journeys are meant to be shared. Share your ride in real time with Share My Trip on Uber. One more way Uber is putting safety at every turn, learn more on the Uber app. When you finally find her thing, you want the whole world to know about that thing. So you use a thing called Canva to make it an even bigger and better thing . Whether you want to create fiers for that thing, make presentations for that thing, or design merch for that thing, you can do anything so people can see your thing , feel your thing , love your thing. The next thing you know , it's a thing . Canva, the thing that makes anything a thing So one of the obvious biggest trends that it's impossible not to talk about is AI in Hollywood. You've also said you have an obligation to be relentlessly interested in new technology. And it's something I liked about you because you weren't there like three executives who weren't terrified of tech, you, Barry Diller, and Bob Eiger, I would say, not terrified of tech , essentially, or dismissive, one or the other. Obviously, AI is the latest, and there's been many over the many years, and your production company was one of the lead investors in an AI studio promised. Their goal was to actually make shows and movies using AI. Of course, it scares a lot of people in the industry. You know, is there a real loss of jobs? I think there is in certain areas and certain areas not . But talk about the worries that go on given you've got to be thinking of costs too. Yeah. Let me be clear. I said two minutes ago that jobs in Hollywood are down thirty five forty percent. Right. I don't think there's a single job in Hollywood that hasn't lost AI yet, not one . So what's going on in Hollywood right now which is devastating and I'm deeply deeply concerned about, I'd be happy to talk more about has nothing to do with AI. So this and by the way, it's typical, which is people are afraid of the wrong thing . Which is already in big trouble and has nothing to do with AI . Can I guarantee by the way, you know, there's widespread terror about job loss everywhere because of AI. And certainly if you look at the economy today , inflation's a problem, jobs aren't. So we have yet to see that good. It's always good to be paranoid, it's always good to be worried, but we haven't seen that. Look, what I would say my instinct is the following, which is nobody knows . We should all be super interested in what it is . You know, there's certainly an easy analog in the transition from hand drawn cell animation to computer animation. That's an absolute analogue, which is it replaced humans with machin es Artistically it was fantastic and by the way, it was fantastic for jobs. There are more jobs in computer animation than there ever were in cell animation . And that's pretty a close analogy is that it was if the guilds and people like that said you got to protect humans at all costs. We never would have had Toy Story and all of those wonderful sieging animated movies. And so by the way, the same thing is true with special effects. Special effects all used to be analog . Every single one of them is digital right now and there are more jobs in special effects than there have ever been, and there are higher quality of special effects than there have ever been. So this sort of knee jerk paranoia about technology is bad. It's going to kill humans. It's going to be kill jobs, et cetera, I think is not smart. Right. Well, I think people are worried about the valu ations these companies are getting , you know, that these all like, for instance, you know, anthropic, open AI but that's not that's not a question about Hollywood. That's right. That's a completely different question about AI. Right, right. But you think it's that they're worried about. I want to ask what you're most worried about in a second, but there are you are seeing some jobs from real actors, for example . There's business insider wrote, for example, about so called micro dramas and verticals that are using them, short form series designed to be watched on the phone. Viewers are mixed on the results. This is it a sign to come or not. I've always found them to be not good yet. But whenever I see something in Internet that's not good, I just recall seeing early Yahoo. It wasn't very good. And I kept thinking it's going to get better, right? And the New York Times just did an interview with AI actor Tilly Norwood, which was strange. I thought. It was very strange. At one point, the importer asked Tilly, what's to stop her from taking other people's jobs or alienating humanity? One of the responses she gave was, quote, whether the people building me are willing to say no to profitable but corrosive uses . So you think it's just over hyped this idea of that this will be what kills these companies or hurts them? I think it's completely overhyped. By the way , you know, if you look at what most technology has done extended the power of storytelling. And so to the degree micro dramas and I tend to agree with you that most of them aren't very good now. We'll see if they become good . But they're not killing Netflix or YouTube or anything else or movies. They are a new form . And to the degree they are a valuable new form, you'll start seeing more actors in the reason they have AI actors in them is they are done incredibly cheaply and it doesn't matter that they're not high quality to the degree that they become all of a sudden super valuable . Pe startople casting act ors in them. Yeah . You know, my simplistic view of AI is use it as a tool agreement. No, that tool, it may be just a tool. It may be a way to streamline the cost of pre production. It may be a way to it may be a way to obviously it has huge implications for special effects. I think it was Scarsese with the storyboarding. Correct. He was in that Ovidz company. By the way, it may also give you tools to actually create new art forms with . We'll see. And it's interesting to embrace all those things to the degree you're interested in telling stories to human beings you should be interested in . The other side of it is rather than trying to restrict Hollywood from using it because to the degree it's meaningful , you know, all you're going to do is make Hollywood smaller and smaller and smaller as these other things coming. Hollywood has generally been a place that is really good at, as I said earlier, the manufacturing process of storytelling. It should be extended to new art forms. Absolutely stupid not to do that, so it should be. At the same time, I think it's important to say you should be rel entlessly focused on copyright . You should be focused on you can't steal you can't steal from these works to train large language models. You can't steal actors likenesses. You can't do those things. Those are very val id in my point, in my view. Copyright is copyright and it should be sacrosync. And I do believe that by the way, I think Hollywood should be more aggressive about copyright. Right. Much more aggressive about copyright . And I think it's going to be real the copyright questions around AI are going to be fascinating over the next five to ten years . But restricting AI, I don't get it. I don't think it makes any sense. And I think that to the degree, look, it may not be meaningful , it may be partially meaningful, or it may be meaningful, but in any of those answers, Hollywood should be playing a part in it. What's the most interesting thing you've seen and something you've seen your bank? Oh, come on, no . With AI? Yeah, with AI. The most interesting thing is and I won't name them because it hasn't come out yet, there is a cable network that has started experimenting with some large scale documentaries a hundred percent AI . Pulling from archives, archival or just making stuff, just saying, you know, do a caveman drama or the fall of Rome . Ah , right, using AI . And I've seen ten or fifteen minute segments that they've done one hundred percent AI that are fascinating and really impressive. There's little experiments like that online in little short form. Like it's legislating around hardware or making something, but that's to me the most impressive stuff . And look, we are the company that we invested in Promise Studios, which is doing a wide range of stuff , all that interesting to me . And we invested mostly because we believed in the leaders hip and because we were really interested in learning . I would say if you ask me to judge today , television animation, good enough to make television animation today , good enough to make commercials today , good enough to make some reality show level quality stuff today , good enough to make special effects , getting closer on feature film quality animation and still pretty far away of making true narrative storytelling with actors, right? Yeah, documentary is actually a great way to do that because there's so much stuff. Why do you need someone in person to do with the fall of your own when there's just history . Nobody can say that's not what it looks like because weren't there. But what is I want to go back to what I said earlier, which is what I think Hollywood and particularly young people should be excited about is to the degree that it's a valid tool to make things . It should play a meaningful role in driving down costs. And if you can drive down costs, you can innovate more . And I think in some ways, the thing I would be most excited about is the match of twenty two year old twenty two year old genuine storytellers and AI because there are going to be people there going to be some young people with great imaginations who are going to get better at the technology than anybody else, who are going to make five hundred thousand dollars movies that are great and who are going to and there should be a hundred of them being able to be made. That's great for the art form. That's not a bad thing. That's a great thing for the art form. And anybody who's interested in the art form should be interested in any innovation that has the opportunity to drive down costs because the single most challenging thing to the art form right now is how expensive it is to make things. You know, when the average studio movie is , whatever it is today, eighty million dollars plus has another fifty million dollars of marking behind it , it's a challenge to innovate at one hundred thirty million dollars . deb Itt is. that And's how the internet got started. Those are all small companies riding off of everyone else's free stuff. Take some chances. You did say one thing that worries me more than mergers. I did want to end talking about mergers in Hollywood. And as you noted earlier this year, you sold your content studio Northroad to the French entertainment giant Media One. As you said earlier, you felt like it was time for content companies to get bigger and become global as entertainment and tech platforms consolidate. When you think about you said mergers aren't the problem, it's it's something else. Very integration, vertical integration. Explain that for people, what that means. Vertical integration just means that one company is controlling the entire process. They are making things , owning things, and distributing things . So if you look at the big platforms , they produce, own the production, own all rights in perpetuity and distributed only on their platforms. Netflix , right? Netflix by the way, and Netflix is no worse than Apple, Amazon , right , Disney , all of these people want to control everything . There are a couple of big negatives to that If you go back to the seventies, which you refer to as the seventies and eighties were really when Hollywood exploded , and you had two things that separated that. You had a consent decree which said the studios weren't allowed to own movie theaters. And so it separated movie production from movie distribution. And you had the financial interest syndication rule in the television business, which said the networks could not own the shows they made. They could only license them , right ? It led to the explosion of the movie business. Production companies created it led to every single one of those studios which were dying in nineteen seventy became the dominant television producers. Disney, Fox, Universal, Paramount, Warner's, all became the biggest television producer, and it's really what led to their growth in that twenty five year period . What you have right now is so I believe it would make the ecosystem far more vibrant. That's number one. Secondly is, this idea that things don't go from one platform to another because all rights are held in perpetuity . It's just bad for things circulating. Right. So it stays in Netflix, it stays in Apple. Yeah. And by the way, it becomes just an old piece of content on Netflix versus you look at the number of things that became hits on the second platform they were on when they got marketed again or you know look at Seinfeld which was, by the way a big, success on NBC, not in the first year, it was a big success later , has become ubiquitous in syndication. It's ubiquitous in syndication, et cetera, et cetera. That's a bad thing. The third thing is, I believe it's bad for creativity because you have every single creative decision funneling through one hierarchy . And creativity thrives where it's messy, where there are people arguing about things where if one person doesn't get it, somebody else is going to get it somewhere else and will innovate somewhere else. And so I believe it's very valuable to have creativity thriving. And then the fourth thing I would say is what's happened in this process is there's no economic hits for talent . There's also much less economic failure for talent. There's unemployment for talent and unemployment is meaningful . But once you make something, there's no failure. You're getting paid the same whether something succeeds or it fails. That's a terrible thing. So there's no incentive. There's both no incentive and there's no terror . And being terrified as a creative is a great thing. That's a really good point. Yeah. Right. Yeah, you get paid. You get paid less, but you get paid so you get you get paid. And you're also not incentivized to kill yourself to make a great. They're not an incentive to promote things as they used to be, et cetera. And so I think vertical integration is really bad for the system. I think to the degree I'm scared, you mentioned what else I'm terrified of is vertical impact of vertical inte gration on the Hollywood storytelling community because the stronger those vertically integrated companies get , they will look to squeeze talent because it's just a cost. It's a widget. It's the cost of a widget. If you're in the widget business, drive down the cost of widgets. So should there be regulation or maybe antitrust enforcement to force them to move away? I believe that that would be more valuable from a regulatory point of view than regulating consolidation I don't think consolidation is wonderful , but I don't I think that if you were to be able to regulate one thing, I think regulating vertical integration will be far more valuable. I hadn't thought about this. Yeah. Now you said you're supporting the pending merger of Paramount and Warner Brothers because you want to see another strong competitor. Yeah, right now the antitrust grounds are pretty weak. Absolutely. There's still twenty percent of the market in certain areas. And I think that I worry about , look, I think in the current situation , what would be the single best thing to happen is another strong competitor And whether or not it becomes that I can't tell you. It'll be a function of how smart and talented and strategic they are. But if they became another strong competitor, it would be good for the industry. It doesn't just make them a taller like Op Oaom Lpaom.ike, you know, they're not big enough for these because a lot of these are tech fueled, right? And I would not call a paramount is tech fueled now, but not exactly trust me, I know. I get that. But it may be down the road and that's what they're no , but it's not yet. No. No, look, I think that it's it is certainly a big, big challenge for Hollywood. And someone who understands something about both worlds like you should be thinking about this more is that these are small companies. They are. Larry Ellison personally is bigger than Disney, it's bigger than Comcast, bigger than it's bigger than so particularly when you look at YouTube, YouTube's part of a what, three trillion dollars company. You know, the biggest media company right now , I would call it Netflix a tech company. In that case, the biggest media company is Disney, which is twenty billion dollars company. Yeah. Yeah, I was arguing at one point a couple of years ago that when they were challenging the AT and T Warner Merger, which didn't turn out to be a good merger, but that had to do with dumb asses running it . But I was more like there I was arguing with one of the antitrust people. I go, they're too small compared to the tech people. You don't understand . I hate to say it, but consolidation is the only way they're going to surv.ived That is the only way they're going to survive right now. But I was like, I don't like it, but you've now got these tech companies in these poll positions where they control every bit of distribution. I think one of the giant questions to the degree they end up controlling these things outright is can they get good at managing creativity ? And there are huge differences, which I'm not sure they've thought about between managing technological innovation and managing creative innovation. So when you have something like a paramount one, paramount Warner one, David Ellison has promised to make thirty theatrical films a year if the deal goes through . Others will see it is all likelihood going through. But I'm looking at the math of eighty billion dollars in debt and everything else. And I watched, you know, what happened to Warner before that. It seems to me they're still small even if they seem irritating in the news area, which they are, and they're somewhat boneheaded in the news area, more than boneheaded. You can comment if you want. But I don't see that they're big enough and I see the number as matter how rich Larry Elson is, eighty billion dollars in debt is kind of a big thing to drag behind you. Look, I think I said this before. I'm not inside their books. It's very challenging . You know, it's challenging to make thirty movies. It's challenging to continue to build a streaming service. And it's doubly challenging while your core business, which is linear channels is in decline . So they've got they're the ones making the bat, not me . They've got a really hard task ahead of them. And God bless them. I hope they succeed because it'd be good for the business. But would Netflix have been a bigger owner or was that been more disastrous? Because I think Netflix is going to come in and buy it all up at the end when they fail. That's my feeling. I think that well, it depends on success. If Paramount could succeed, that's better because what the world badly needs is a competitor to Netflix primarily right now . So in that sense, Netflix wouldn't have been Netflix certainly wouldn't have been better a own iner the short term . But if it goes out of business, I guess we'd be a better owner. Yeah. That's the sense in which I said I was rooting for it to be successful because I which gets us back. You said Netflix is the one to meet, but YouTube is the one speaking YouTube is absolutely one to be. But to say, you know, I don't buy , you know, which is the Netflix argument or was the Netflix argument when they're in, I don't believe that YouTube and Netflix are direct competitors right now , right? I think everything is competitor for human for people's times, everything, but that's like saying, you know, Netflix is competing with video games or Netflix is competing with sports or going, you know, there's enormous competition for people's times. Netflix is a streaming long form video service. Netflix, YouTube right now is, I guess, largely a short form video service with a little bit of a essentially virtual cable channel, you know, virtual MSO thrown in there, although that's a small part of their business on a relative basis. So individual people who work in the business are not waking up saying should I go with YouTube or should I go with Netf lix? There's zero competition. So this idea that they're competing with each other, they're competing each other in the same way that you're competing with Netflix or that you're competing with the New York Times or you're competing with video games. It's you're competing for people's times. Yeah, yeah, that's true. That is absolutely true. So do you think this Warner thing has a change? I mean, you don't know yet, but I think it's not going to work out well, that's I just I just have watched so far. I think it's challenging. Yeah, you're nice. You're nice. They can't do it. I just I don't know. I'm not a fan of inherited wealth, so that's fine. But great movie. Top gun, Maverick, I love it. So you've just turned seventy five years old. You've been in the business a long time. Have you thought about retiring? How do you look at what you want to do next and your legacy amid these monumental changes. You've worked for through every aspect of this, including working for Murdoch and everyone else. The idea that business people have a legacy seems beyond silliness beyond silliness. Nope not being narcissistic, Peter. And it's the ultimate hubris. There are four or five business people a century who have a legacy. So that's ridiculous thing to think about. All right, so I have no legacy. I'll be dead. And you know, that'll be that. You greenlit, sir, you greenlit, Titanic and Avatar. You did . Look, I am interested in being interested in stimulating. I'm interested in spending more time with my family. You know, I have a charity that I've been involved in for a very long time no where I know more, that I'm deeply interested. I have a new charity that I just started called Billion Scale Health, where we're doing extraordinary things trying to use technology to build health scale solutions