SNL Cast and Future Predictions

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P participating McDal's for un limited time while suppies last All Rrighteserve twenty six McDonald's FF Wor Cup twenty six It is Wednesday, may twentieth In the past month or so, Netflix, Disney, Paramount, along with Google and Ma. promoted their vertical video products during earnings calls Amazon, TikTok, and NBC Universal, they announced new products as well Many of these offerings are in the very early stages, but the genre of short form content conceived and produced to be watched vertically on a phone is definitely a hot trend right now By some estimates, it's a hundred billion dollars a year business, about half of which comes from ReEels, the short form video product that runs on Facebook and Instagram Reels is making as much revenue as Netflix these days and everybody is chasing that engagement time. The Holy Grail is streaming ussually with user generated content like workout videos or conspiracy theory talking heads, but also from some professionally produced original shows. And our guest today thinks it's only the beginning Hernan Lopez is an analyst and former TV executive. He's been on the show before. He believes Vvertical video is not just a new format. It's a third separate audio visual language distinct from television and film albeit with much lower budgets And the debate over vertical video is the same one we had about streaming video more than ten years ago. He's hosting a vertical media summit in L.A on june third, so I thought I'd have him back on the town to discuss this growth area The genres at work beyond soapy microdamas from China And whether people in Hollywood should be jumping on this bandwagon From the Ring and Puck, I'm Matt Bellany, and this is the toown Okay, we are here with Hernan Lopez, who is the founder of Owlland Company, the consulting and data firm, former founder of, well, you're never a former founder, but you are the founder also of Woy, which you sold to Amazon And before that, a veteran TV executive. Wlcome back. Ernin, a returning champion. Thank you for having me. I'm very happy to be a returning champion. Okay. so I wanted to have you on because wherever I go, people are talking about vertical video. And it's become this kind of catch all. It's a way I feel like it's for Hollywood people to understand what the current state of mobile video is. and Micro dramas are thrown in there and social media content is thrown in there. And when you add it all up It generated a hundred billion dollars in revenue last year. That's according to your stats. and that's not even including China. And just to put that in perspective, that would be double Netflix. Am I correct? That is correct. data point that really made me land on needing to size the total of opportunity was when Meta said that they were making fifty billion dollars run rate revenue in twenty twenty five, the third quarter. and that was up five times in two years and a quarter So in the same two years that all of streaming Grew profits and grew revenue and p to profitability, reels from from ten billion dollars to AsB as Netflix all by itself. And that's just reels. That's just the videos you see That's just reals onn the meta platforms if you go on Instagram and there's a video that pops up, it's just short form video And that does not include YouTube shorts as well, correct. That's right. When you zoom out to the vertical video category, the way I start to think of all of it as one audoificial language is when I realize an analogy, many people were conflating microdramas with vertical video or TikTok videos with vertical And the reality is all of those are part of vertical video Think of it if you had been watching a soap opera in the late forties probably would not have imagined that The same box would give you the Super Bowl, Game of Thrones, the Simsons South Park So the analogies really so popperous are microdramas And vertical is television There was film There was television and others vertical. They're truly three separate audoificial languages with their own talent systems, their own business models, their own aesthetics, and vertical is the newest. But why is this a new, what you call audiovisual language? Isn't this just a fancy way of referring to social video Cip culture. and YouTube and everything that we've been talking about for twenty years since YouTube became popular. Like why is this a whole separate category? The way I started to think about it in those ways as a separate category is when I realized God around the world for the last four years Premium streaming apps, the Netflixes, the Disneyss, the Amazons over the world, all around the world had been losing time spent on mobile just as they were still gaining subs and they were gaining time spent on television Whereas the apps that werere leaning on vertical either because they were vertical first, like TikTok. or they were incorporated more vertical video, like reels into both Instagram and Facebook gaining time spent And It really made me realize that This is not like a transition from black and white to color, from standard defition to high definition This is a new language that includes today, yes, microdamas on all those short form videos but also includes vertical news, vertical sports Vvertical comedy, vertical reality For example, when the New York Times launches through many different attempts to get into video The watch tab, which is native originally produced in vertical All of a sudden, people start to engage. There's this app called what notot D pioneer vertical live shopping. It was making a billion dollars in revenue in twenty twenty five on over eleven billion dollars in evaluation All of those are different different formats with the major category which is very comm you and that category is just getting started. He's not even twenty years old. So you're saying the mere orientation of the video is separating it from the competitors in traditional video, The fact that it is vertical is what makes it appealing. That is correct. But why? I mean, this is like, this is like saying that, you know something that has a different aspect ratio is going to be more popular. Is it just that we are so ingrained in the use of our phones? It has to conform to what we are used to on our phones in order to become popular now. Yes, the short answer, when I was at Fox, I kept telling people that just because we were able to convince people to watch movies on television screens We thought we would be able to convince people to watch TV shows and movies onn this tiny screen And for a while we did. peopleeople were watching television shows and movies on a small screen until they started to come up. find alternatives of quality that made the job of getting them entertained And all of a sudden today, you don't see people flipping the phones unless they're on a plane or unless they're watching a sports event or unless're plane again This is the natural way of holding a phone and that's by the sign, it just it's easier. it's feels more natural, your phone is more balanced. So when people started to capture First photos, then videos that way That gave rise to the new age of Verttical as its own language And now what we're seeing is the professional layer studios, where creators, where entrepreneurs are coming together put him thought formata that was initially a consumer discovery into a business and an aesthetic and a new language. So Obviously this is not new. There was Qibi, there was Go ninety, there was a previous generation of these vertical video apps Those failed and I believe you believe that it's not that they were bad products, it's just that they had bad business models. I think Quibi It's been fairly talked about how they spend too much money per minute of production relative to what today, vertical apps of all kinds are spendning. And they also happened to launch just at the time that TikTok was going viral in the US and taking all of that enthusiasm from consumers who are discovering something new Gone ninety and other apps that have tried to go into both vertical and horizontal, they're finding that it's not as easy to convince somebody to turn the phone around for a number of reasons. apps that are getting the most time withact This year, I looked at the Sensor Tower data. Again last week, Instagram number one, then TikTok. They're the ones who are vertical F, or leaning more of their time spent on the product into vers Yeah, but What's interesting is that those failed and you you point to the cost of the content and obviously reels and YouTube shorts, like they are heavy on user generated, quick, cheap, Almost no cost to make them. content But you also believe that there is a place for originals on these formats that vertical video could give rise to the Netflix of vertical videoide or some version of A Qibi or Go ninety that does make economic sense. How do you reconcile those to trajectories, primarily because the business case has been proven First in China, but also globally, there are two apps, Realhort and Drama Bx. that even though they don't report numbers, they're on track to make a billion dollars in revenue out of primarily vertical videos of several genres, including microdramas There's a second universe of apps, TikTok being the latest example that is going to get into has already commissioned their first original and launched, first original microeries, a so called sccreen timeime produced by Isa Rays compomany and In the last five weeks alone, you got Netflix, Disney. U Amazon, NBC, TikTok. Paramount, all those companies either announcing new vertical products, or launching new ones or talking them up in their earnings release. You'll have three different layers of Us that will support prorofessionally created at different budget levels, but professionally created Stpted content. Yeah, that's the question is what cost because the micro drramas We did a whole episode on this. You can find that episode we did with Re sccreen, but the cost of those shows is minuscule compared to what Netflix traditionally spends. So what is the cost structure going to be for the vertical video product produced by these traditional streamers? I think they're all getting Very carefully into the space realizing that they cannot make the mistake that ibi made and other apps made of trying to spend their way into relevance by throw in big budgets a project that were originally created for the television or screen of the movie and then got adapted into vertical I think you're going to see an evolution very much like in streaming, we did not see The twenty thirty million dollars per episodes at the high level that we're seeing today ten or twenty years ago, there's going to be a different level of appetite for spending by the different kinds of players, depending on what the goals are And I think what we haven't yet seen is how the market is going to evolve Wow mostost of these apps migrate into a hybrid model advertising supported and subscription. Today Most of them are selling shows individually through in app purchases you're going to see in TikTok is that their model is primarily ad supported and so is in a number of other apps that they own around the world And for the Netflixes and the Disneys when they do get into oional production, I would anticipate that their shows, obviously without knowing exactly what the strategy, but I would anticipate that their shows are going to be included in their overall subscription. Oh yeah, of course. they're going to want to do what Reels did, which was Bolt ono an existing addictive social media app and then become the video component of that app. I mean, that seems to be what the other players are looking at and saying, okay, if you're watching Netflix and Disney at home with your family at night Well, maybe you can we can follow you around all day and you can watch the vertical versions when you're on the subway or you're waiting at the dentist And then then we will capture more of your Viewership time. I think not only time, they also are trying to capture frequency All the apps are realizing that in order to deepen the level of engagement, it's not just about Sheer watchatch time. Netflix has spoken about Qualality metrics, Spotify has spoken about number of days per month. Getting more days per month requires a mobile strategy and to win in mobile, you really do need to have vertical Another example, Peacock has announced that they're doing vertical live NVA broadcasts. They're they just running some tests now. if you go to the app, you have to catch the game, but those broadcasts are produced like one of the most difficult things to do. and and they're exclusively created for the vertical experience. That's interesting. They should do a vertical version of SNL other live events where you could watch it on your phone, same version, but just a different presentation If you watch Instagram feed, the clips are actually adapted to vertical, right? the way that they organize the screen. Oh right. yeah, you're right. Okaykay. They are you doing it? 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In fact at the Vvertical media summit, Dong Yang, the head of Media enttertainment partartnerships will be join by the H Prodion offfer Race Comany to talk about how They're inviting creators and Hollywood producers to submit projects for production and they want to be the place where people go to get shows string l All the other apps from Real Sort to Hollywater, to drrama Bx, they're all commissioning shows, Fox just made an investment into Hollywater, the parent company of My Drama. and as part of that investment, Fox itself is making two hundred micro serious. and again, they they use the There were verticals here because they're not All dramas So you're going to see a year from now a much bigger universe of buyers. Pcok just announced two vertical reality shows they are going to premiere in the summer I think the number of buyers is going to increase very quickly the question is whether how quickly the genres expand and to what levels the budget get to and what are the business models That is interesting. the monetization is the big issue here because You have talked about this and others as well. Meta monetizes the viewing hours on their platforms at five times the rate that Netflix does, att least that was in the fourth quarter of last year That's correct. Why? Is it just the volume play? becausecause every you know we're taught to believe that Premium can command higher Advertising rates And Netflix has the subscription element So why is it so much more profitable? Is it just the content cost is nothing? I'm talking about revenue before you even go into cost But on a revenue per hour basis, metaiz monetizes As you said, five times the rate of Netflix, according to our estimates. Because they have more ads per hour of engagement than anybody else on those ads. don't always necessarily feel like cs, they don't feel like interruptions. And they pair of that with an ad stack that allows tons of clients who advertisers who had never been into able to create video ads And now through their suite of tools and targeting, they're able to produce videoS. Th fifty billion dollars run rate. come from over two million advertisers. they are using their generative video tools Again, that's just meta. YouTube is also monetizing very effectively. They're not in their monetizing and YouTube actually does have a partners share program that pays directly to the creators are share of the revenue generated by the adts as well as the music owners Cherylf the licensing revenue. Yeah, we had Kareim Rama on last week, the sububway takes guy and he was specifically explaining why he's taking his new show from TikTok to YouTube and making it longer because of the economics. It's just so much better on YouTube, but that's YouTube's kind of push into the originals space. They are now promoting this concept of there being shows on YouTube that you can buy into as an advertiser just like the NBC Primetime lineup And they are kind of seems like they're trying to have their volume cake and eat it too with the more premium and o market of selling directly into shows. Do you think that that will find its way into the vertical universe as well, where you will be able to as an advertiser, buy into particular shows? And as a content creator, you'll be able to have something distinctive on these platforms where you are not just joining the millions of people producing content but you will have a specific show with maybe even some marketing, maybe even some guaranteed you know push push alerts or something that can help you find an audience. We have a YouTube speaker at the summit and that's one of the questions that I'll ask him. I don't know how much of their I think that the announcement that they just made is specifically about television, the push very successful push to get into television sets and get advertisers who already see them as the number one platform on mobile to also see them as the number one platform on television. But they have lots of optionality by being multi platform, multi format, playing from short form to long form For example, They they were able to leverage their position in everybody's algorithm. The fact that they know what you're watching in the morning and during the day so that when you come home at night, the algorithm is likely to serve to you something that they know you're interested in. And I think that's one of the reasons why theyve grown so much in total time spent over the last several years. mean, And that's the holy grail here. It's all about time spent now It's, you know, that is how these services are judged. That is the competition between Netflix and YouTube. It's not, do you have a hit show What percentage of overall video usage are you capturing And when that becomes the metric the entire ecosystem. changes because you have to think volume. You have to think, what am I going to put on my service that's going to be like a strong middle reliever and just eat up innings And it feels like All of these services have now recognized that and they're going to podcasts. They're going to these short form low cost vertical videos It seems like the loser here is high cost professionally produced additional Film and TV. Am I wrong I don't think that they're the loser because the If you hear Netflix talk, there are very deliberately now talking about the quality metrics and about how not Every view and hour is the same. something I predicted, they would start saying partially because it is true. An hour of an NFL game is not. Worth the same of an hour of short form necessarily produce a video of inequality. Oh if you talk to Ted Serandos about this, it drives him absolutely crazy that he's getting his butt kicked by YouTube because so much of that volume is literal garbage. It's people watch listening to ambient noise on YouTube dog videos. It's nothing, you know, it's they are being judged against a service that will' put anything on It's really tough. I think it's tough to compete a lot of videos on YouTube, I think everya will agree are pretty good. and they do a very specific job for you when you want to watch it and They are great at serving consumers throughout the day, somethinghing that I think Netflix and all the other streamers are recognizing part of the push to get podcasts on the platform is precisely so that they can get people to start thinking about Netflix in the morning, whereas before they used to think about it I Night. I know you guys talked about a little bit about that yesterday All right, so I'm Joe Blow, TV producer Do I drop everything and try to get into vertical video right now? or are the economics not there. It is one of the most difficult questions about when to get into something. The timing has to be right If you're interally, you will bang your head against the wall and you'll feel that The market, the budgets are not for you If you're too late, you'll miss out on learning, you'll miss out on experiment, you'll miss out on being the first reality show, the first sitcom, the first Mcumentary There are so many firsts in Vvertical that have yet to be created And at the same time, there are so many incredibly talented production companies, producers, directors, writers, actors in Hollywood who would love to have their next project see the meet consumers And I think there's so many different business models that Anybody who's even a little bit curious about Vvertical as a knew atificial language should try to experiment to at least try to learn Well, congrats to Isa Ray for getting in there early and congrats to all of these micro drama producers who are making episodes for a hundred grand And people are watching. They're paying d. They're doing the Freemium model. I mean, do you see Freemium taking off? Freemium is now the main model in China where the single biggest apps called bread frruit is all my vitance now accounts for about half of the total revenue in the country, advertising does as opposed to subscription and in app purchases And another misconception that short dramas are short form In reality, they are you can think of them as two hour movies with seventy cliffhangers built in. that's exhausting to write and my prediction is that microdramas or vertical dramas and vertical series in general will get shorter. But the episodes won't necessarily be one minute or two minutes. I can envision how a show could be literally a half an hour sitcom Chos is shot vertically natively. Yeah. and you get the first five for free and then you maybe pay with micropayments or whatever to get the rest. Or it's all included in your Netflix subscription. Yes, exactly. or you get it as part of your subscription. Well, this is all fascinating. Good luck with your event, june third Is it on the Sony lot? Where is this event It's out there W Hollywood. Well, good luck with the event. Thanks for coming on the show. Appreciate it. Great. Thankk you so much. Great to see you We're back with the call sheet Craig, this is a pretty good season for SNL, I would say. Like didn't love the finale. thought they kind of wasted Will Farrell a little bit But overall, pretty good season. Yeah. I think we've seen a couple people break out. Ashle Padilla is now, I think one of the funniest people we've had on SNL in a long time. aggreree. And I think that's been a huge part of this season. I like that new guy. Jeremy Mhane. I think he's funny. The Tucker Carlson thing is amazing. Tucker Carlson Yeah So it's interesting because last year at this time, we were talking about an exxodus SNL was going to clean house after the fiftieth season. and Kinda did, kindinda didn't They had a few big exits, added five people heading into this off season I know it's early. Don't forget Bo and Yang left halfway through this season. He did. That's huge flegs. What a fles Leaving halfway. Just like, yeah, you know, I was in, but now I'm out Nice to see you guys. I'm going to go do my award show. I think my prediction this year. I know it's early And I know Lauren doesn't even think about this stuff until July, August I think SNL is going to come back next season pretty much the same as it was this year. My prediction is no big exits, big turnover, maybe one or two I could see Mikey Day leaving the dude' forty five years old He's been on there a long time. I could see a couple others that have been sort of pandemic era. cast members moving on, but for the most part, I think all five new cast members will get picked up. and most people will be back. I agree with you. There are currently sixteen members on the cast, which is still probably too big, but I do think The featured players are all pretty good. And it's rare that I think like I think Ben Marshall is pretty funny the tall guy. I think he's had a great season. He was a on the please don't destroy group and then became a cast member Um I think you still need Kenan and Mikey Day because there's still like the stalwarts that you can just throw in any sketch. There's no guy behind the two of them that can be the dad in a sketch right now. Maybe. I know. but At some point man, like you got to turn it over The whole secret of the show is reinvention. And we had the same weekend update guys for a decade We've had these people who are over a decade. Yeah, we've had people who are like fine, like never going to be on in the Hall of Fame somehow last ten years on the show. like I don't know, man. I think it's time. I know Mikey Day writes a lot And that is probably a plus But seems like it's time. Do you think The struggle in theatrical comedy is and just the struggle in comedy in general is causing cast members to stay in SNL longer because it used to be. you came, you blew up, you left, you became a comedy movie star. And now that's not really a thing. And because of even just like the way SNL is filmed, the culture behind it, it's not as insane anymore Do you think these people are treating us and know more as like a day job that you can do for a decade plus rather than you get in after you get in for three years, you get out and you become a movie star? Oh, well, clearly that's happening. I mean we've talked about this before. You have cast members who now go off and do other shows while they're on SNL Adie Bryant had her Hulu show produced and then canceled while she was a cast member And you can do that now and these people all have influencer businesses, they tour. Social media has given them platforms outside the show. It really is something you do for twenty weeks a year and then you go off and do something else. Yeah, and you can go do stand upp in the summer and stuff like that. but it does feel like no one is leaving SNL to become a movie star anymore. No It's just not same business as it was. So I think the incentive to leave is not as great as it used to be because What's really out there? You probably just go back to doing stand upp and making content on whatever channels you have. Oh no, no. this is not a question of who wants to leave. I mean, Boen Yang' interesting because he has a film career and I don't know how much of a star he'll end up being, but he certainly has as good a shot as anyone. Yeah, it's just not the same where you have these guys who have to like send off Hollywood to stay on the show. That's not happening anymore. And to the extent that you do send it off, you can still do it goo off and do your movie. Like Lauren is so much more allowing of that kind of stuff. He's just it's just not his hands. I mean, we saw with the press that these SNL people were doing this year. I mean, there was a blitz towards the end of the season. There was pieces in GQ Vanity Fair, the trades were doing pieces like New York Magazine, all these all the press that this cast was doing. Lure never used to allow that He would keep a tight hold on these people And now it's just a different era. The only person I think could get a little itchy and want to leave because of to start I m is Marcello. I know yeah, I figured you would say that. We saw Marcello outside the chateau. That one night. I forget what party we were at That guy looked like he thought he was a movie star for sure Yeah I love that you said you didn't say he look like a movie star. You saidt look like he thought he was a movie star. He looked like he thought he was a movie star And I could see him being like, what are you talking about? I just sold out the Hollywood Bowl. for a Spanish language stand upp tour, like I don't need this anymore Now hopefully His reps will talk some sense into him. But I have a feeling the opposite will be the case. They'll say to him, you do a global stand upp tour, you can make fifty million dollars in a year. or you can go back to your little sketch comedy show. I could see him in a successful sitcom. He could have his own Abbott Elementary or what have you. Sure. But do you see him as a movie star I don't see anybody know Especially as a comedy movie star, that doesn't really exist. So I guess by default, the answer is no. Nate Bergoti, the biggest comedian on the planet right now. He's got a movie coming out in a couple of weeks and I saw the tracking. it's ten million Yeah, That's not the same as the days of Will Ferrell and Adam Sandler opening movies huge All right, bottom line No big turnover on SNL. That's the prediction. I think it's the exact same cast. U I think that may be One or two here or there, but for the most part I think Jane Wickline could be on the firing line. I think, you know, maybe some of these older ones, they could be gone, but we'll see. Okay, that's the show for today. I want to thank my guests, Haronon Lopez, producer Craig Horrback, ouritor, Matt Pevick. and I want to thank you. We'll see one more time this week.