Vertical Integration and Regulatory Concerns

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The critically acclaimed series explores the undeniable chemistry, whirlwind courtship, and high profile marriage of one of the most iconic couples of the twentieth century with Sarah Pigeon and Paul Anthony Kelly leading a cast including Naomi Watts, Constant Zimmer, Alessandro Navola, and Grace Gummer Called a stunning Portrait of Love by Variety, Love Story is Emmy eligible in all limited series categories. now streaming on Hulu and Hulu on Disney plus for bundle subscribers It is Friday may twenty ninth Backrooms is the big story of the box office this weekend. a low budget horror thriller directed by a twenty year old YouTuber is gonna open bigger than most studio blockbusters, kind of amazing. But the backstory on Backrooms includes a major media business figure you probably wouldn't associate with low budget horror Peter Chherin is a producer on the film, and his company Churnin Entertainment is the studio. It co financeced the movie with A twenty four, which will release it So I invited Peter on the town to talk about it, as well as a bunch of other topics in the media landscape. If you don't know Churnin, he's been a major figure in entertainment media for decades now and has great insights top executive at Fox under Rupert Murdoch for more than twenty years, and he ran both the film side of the business and Fox broadcasting screen lited everything from Family Guy to twenty four and Titanic and Avatar Since twenty ten though, he's been the CEO of the Churnnin group which invest in digital media companies. He was early in Pandora, full screen bar stool, podcasts like crrime junkies, and he built an entertainment arm First in Internet Entertertainment, which has made investments in projects like Planet of the Apes movies. he just did Apex and the show Man onn Fire at Netflix, Both were number one at the same time And then in Northbad which has production companies that make everything from Love is Blind at Netflix to sports documentaries Earlier this year, he sold North Rad to Media Wan, the French production powerhouse. And now he's got backrooms, plus a first look film deal at Apple. Churnin's also one of the smartest thinkers about entertainment. So today I've got him on the show talking about the changing landscape, what's scary and what's not, what's next for Netflix, Paramount, all the others, and where the smart money is investing in Hollywood From the Ring and Park, I'm Matt Ballany and this is the toown All right, we are here with Peter Cherin, who is the founder and CEO of the Curnin Group and the founder of North Rad and the co founder and partner at TCG, the investment group. am I missing anything? That seems plenty to me. You got a lot of jobs All right, well welcome on the show. and we're having you on in an interesting context because if you had said to me that backrooms, a no budget Horror thriller that is about to win the box office directed by a twenty year old YouTuber. that that was a Peter Churnnin movie. I would say no way. So first of all, how in the world did you get involved with this movie? First of all, let me qu it it was directed by a nineteen year old at the time. It was now twenty. R It was now twenty. And I think we greenlit the movie when he was eighteen Oh my God You know, we have a division in the company called North Road Films by Cory Adelson One of the things we've done there is we have a deal with A twenty four where we co finance movies together. This was actually the second movie that we've done. We did one about two or three years ago. so Coreory's always looking for things to do that are interesting there. and she found this project Backrooms. Was she scrolling the four Chan room? to be fair, there were two young producers who really found it Yeah And they brought it to Cory And then we brought it to A twenty four. So we are both. And generally, the rough deal with A twenty four is We each put up fifty percent of the money, We each split the proceeds fifty percent of the money And then you know, we don't get paid to produce, they don't get paid to distribute. And so it's a pure fifty fifty venture. And so you know, but there were two young producers Dan Cong and Micheler, who found this thing on the internet and found Cane and then brought it to Cy Cory got really excited and then we brought it to A twenty four. And then You know, we obviously co produced the movie with several other people, but we were quite actively involved from the studio perspective, you know we arrange for it to go to Vancouver, we brought in Craig Ferguson, who was really instrumental. He was one of the producers, but We produced at his facility in And that Cooper Through Craig, we brought in Oz Perkins the producer with us and so long legs. I wasn't my company was overwhelming of I Cory Adelson, who worked for me But look There are a lot of people who are Knock on Wood is hoping this movie is successful tomorrow inststrumental, a lot of other producers. A twenty four has been a phenomenal partner on this ' done an amazing marketing job And so there's a lot of people that are involved, but from our company, it's particularly Corey Adelson And at some point, James Wan an atomic mononster came on board this film. When did that happen and why? they were on right at the beginning. Okay. and the same thing with withith Sean Lving in twenty one Laps. It's really the three main producing companies That origination were terminant. tomach monster and twenty one laps. Why does a project like this need so many producers doesn't they all came alone. I feel like that's the eternal question in Hollywood. Yeah, look there were or four people who are very instrumental every day on this movie One from each of those companies, and then also Craig Ferguson There are a bunch of other bosses like myself, Sean and Jameson I guess you deserve some credit for creating an environment where you find and pay for things We were not on the set producing this thing on a day to day basis It's interesting that this is a YouTuber that is making the leap because you were pretty early invvesting in the creator space with full screen. Any I mean, what did you learn out of that? and did you think that in the year twenty twenty six, we would see this run Digital native filmmaking talent, making the leap not just to getting Hollywood style movies made, but getting big audiences, you know, obsession just opened big and is keeps growing and now we've got this other YouTube first movie that is going to be big. I Absolutely believed that. You did. Yes. we look You know, we have been huge believers in the creator economy and YouTube going back. I think we invested in full screen fourourteen years ago. Look, it's also to be fair, it's no accident. We are the only media company based in Silicon Beach. Our offices are in P Vesta. We are across the street YouTube is right over there. M Facebook is right over there you know, As a company, I'm deeply interested in technology, and we've always been deeply interested in going back You know, when I founded Hulu for everybody else invested in streaming. I think He is and by the way, you talked about this on your IMX podcast this week, which is you have to be relentlessly interested in technology. You have an obligation to do it. You have an obligation to both from a business perspective and creatively And I think, so we invested in full screen, which was the original creator economy company fourteen years ago. you know, we invested F or five years ago in Night Media, which is the weeding you know, cateor management company, manageed Mr. Beast at the time that we invested in it So we've always been a believer in that And I think in terms of would I ever ever imaginine that YouTubers would be big Hollywood P presents? Absolutely. And if you look at, in my opinion, the key to Hollywood has always been finding new talent early You know, whether you go back a hundred years and they were looking to find people out of Broadway, you know, you go back to the days of Roger Corman, look at the amount of talent that came out of Roger Corman That was in some ways an analog fifty years ago. You know lookook at the number of people twenty five, thirty years ago came out of MTV, doing MTV videos, you have to be relentlessly focused on where the next generation is coming from and the next generation are making YouTube and TikTok shorts. Yeah, I guess I'm just a little surprised that that generation with all the distribution opportunities that are available online now, they are gravitating towards this traditional in theaters motion picture experience You know what? we're seeing the economics that are being created out of this and hard to match that with YouTube videos. Yeah. But I think it's deeper than that.. They obviously YouTube is an incredibly effective place. for them to connect with their audience. and the really good ones certainly Kain Parsons is deeply connected to that audience But conversely, you know, there are much bigger budgets available and to the degree they have a more ambitious, creative vision It is easier to realize that with Hollywood budgets And it is a different kind of Global and communal distribution model. there's a big difference between, you know, Almost anything that's watched on YouTube is watched They' by people on their phone on their PC by themselves, etcetera There's something deeply satisfying to artists about creating things which people are going to watch in a communal environment By the way, who do you think is going to buy IMax? I listen to your podcast. I think I agree with you. I don't get the studio side because there's too many competitive pressures A few people said we should have talked more about Sony. because they're at least a technology company that might be interested. Yeah, think I think there's more likely to be private equity And And I do think there may be more Interesting talent opportunities that people have talked about. Oh, interesting Look, there are big, big filmmakers who are obsessed. with IMAax. So Chris Nolan takes his Odyssey money and becomes the face of IMax with a backer behind him. Yeah. I don't know if they become a face part but I believe that there are a number of big filmmakers who might very well be interested making sure it goes to the right place. Interesting. Well, this is one of the reasons why I wanted to have you on because you are super smart about the media landscape and you have a sprawling empire that touches a lot of the areas that we talk about a lot on this show First off though, you you launched North Rad as big ambitious film company television got into reality TV, sports docs, all sorts of areas, film television launched it in twenty twenty two, arguably the peak TV And then you sold it earlier this year, got French company to buy it And some people in town looked at that and said If Chherin is the smartest media investor in town And he's selling That is a sign that we're in trouble Why did you sell Northbroad So first of all, I'd say I'm incredibly proud of what we've built. We raised three hundred million dollars. We sold this thing. It's been widely reported. So I'm not saying this, but what has been reported we sold it for tweet eight hundred million and a billion dollars so I'm really proud of what we built and I'm really proud. I think we built more EBITDA in a shorter period of time than any other independent company And so we certainly did not sell it out of desperation That being said I think the platforms are so powerful I think it's hard to be a standalone independent company And I think We woke up and said, we gott to get bigger. We need more scale You look at the platforms, you look at their practices, you need more scale. They have such enormous scale, you need more skcale to compete against them etceter. So It wasn't that I felt like we were in trouble because we were actually growing every year. We were profitable every single year we did it And I'm really proud of what we built. But I also felt like in order to thrive in the world forward, you need to get bigger. That's number one. The second thing I felt is that, you know the platforms at this point are all truly global you know, they are Gobal platforms, I think Most of them have more subscribers outside of the US than inside the US at this point. So all the successful ones and they've really globalized the distribution of content I think no one has ever globalized the creation of content. I think if you look back historically You know, the big European companies were never particularly successful in the US And the big US companies never really cared about making content overseas. We all cared about selling our content over sure, but we never really cared about making it And I think that it's important that the content companies become as global platforms are. I think you need to do that in order to thrive successfully with them. and so You know, I've thinking and talking to my partners here at North Rad Jesse, among others about how do we get more global? because I think it was the most important thing You know, we have gone out and bought Turkish company, we bought a Mexican company. know, we've looked at and had conversations with a bunch of other international companies So we've been focused on getting more global, but this was an opportunity to a macro level in form of merger. So global is your focus. What are some other focuses? You have investments across the landscape. You're heavily invested in the podcast industry. Are you bullish on podcasts? Are you buying A you drinking that kool Aid now? I think I started drinking that koolid ten years ago. so I drank that kool Aid a long, long time ago. And just so people know, you have investments in the Crime Junkies podcast, the Rest' History compomany that does very popular podcasts out of the UK, and you have a couple of other big investments as well By the way, we had a conversation with the ringer a long time ago You know, we certainly built there was a time. there was a moment in time when Bar Stool was the biggest podcast company and We clely control that company. Here's what Id say about podcasting. I am a huge, I think podcasting has gone the way of most media right now, which is U It's you don't want to be in the middle. You want to be a big podcasting company or you want to be a very targeted podcasting company and you don't want to be a bland sort of middle company, which is, I think true of everything in the media business And I'm very bullish on podcasting on those two ends of the barbell. I thought you were going to say it's gone the way the rest of the media business and it's trying to become television. Well Well, I think you know a lot certainly a huge of the growth in podcasting has come in video, you know, mostly by YouTube. And now you're certainly seeing Netflix trying to be very aggressive in the podcasting space. Can Netflix hope to compete with YouTube It's just it seems a little sad to me that the content decisions Netflix is making right now seems to be hyper focused on engagement. and increasing this time spent, even if it means watching hour after hour after hour of podcasts. they don't care. They just want to try to get closer and closer to that YouTube metetric of engagement without thinking more about the quality. And I know they're talking about it more on their earnings calls and such. It seems to drive Netflix crazy how much engagement YouTube has. and I don't know if they're ever going to be able to win that battle. Well I think that first of all, I would never bet against Netflix. They have had an unparalleled fifteen twenty year track record. and so We'll see, I think that I guess I'd say two slightly contradictory things there. Number one, engagement is an important metric for them and worth paying attention to And, you know, they are as smart about analyzing data as anyone I know. so I'm sure that if they're focused on engagement, it's for good reason. That being said, I also agree with you that Their fundamental raison detre is to provide high quality video programming around the world and that they should not take their eye. I'm not I'm not suggesting they are taking their eye off that ball, but They certainly shouldn't and they should keep doubling down on that. Did they go after another studio? I first of all, I was shocked. when the Wner deal was announced. We were all shocked. I still would say no at this point. you know in the vice something I was both shocked they went after it and then I was shocked how quickly they dropped out at the moment they dropped out. Oh, you were. interestnteresting. I thought that once they were in, I always thought the Ellisons would get it because if you know David at all, he is relentlessly focused on proving himself and becoming a media mogul and he just was not going to let that asset get away. But to the reason I say I was shocked is Netflix had it Netflix had a sign deal and u You know, they had topping rights, everything else. And so. That's the sense in which I was shocked. But the shareholders didn't like the deal. No You know what you know, your job as someomeone running this company is to create shareholder value over time. And if you have real conviction that you're making the right bet You're willing to make some rough decisions for shareholders T lookook, by the way, Ted and Greg certainly seemed to be willing to do that during the period of time when it was their deal. Sure. I think something rattled them. I don't know whether it was shareholder reaction. I don't know whether it was you know, the regulatory reaction and that might have been worse something routed them in You know, I don't think there is anything quite as compelling as Warner Brrosers Yeah. So you don't think they're going to go after Sony or Universal or even Lionsgate I don't, but by the way, I didn't think they were going to go after Warner. so right donon't pay any attention to me No, no, no, you, you know, most deals come across your desk. so I know you have insights This episode is brought to you by Hulu Chase Infinity stars in the Testaments, Hul's new comoming of age drama series set in the world of the Handmaid's Tale Variety calls it an exemplary follow up to the original series and a magnificent coming of age story Also starring Anne Dowd and Lucy Halliday, the testaments is for your Emmy consideration in all eligible categories, including outstanding drama series and outstanding lead actress in a drama series for Infinity For more information, visit hulu. com slash FYC Snoring, gasping during sleep feeleeling fatigued? askk your doctor about Zepbound, Terzepetite, the first and only FDA approved prescription medicine for moderate to severe obstructive sleep apnea,SA and adults with obesity Zbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea, OSA, and obesity to improve their OSA. 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No. I'm shocked that You know, I guess I was shocked that the process in court went on as long because it was obvious that kids could go away at whatever point they got fairly compensated. Right. And so You know I was shucked up to them. I wasn't shucked there. But so that part has been resolved And then I think you got to say that Fox clearly is pretty well positioned B, I think they deserve a lot of credit in the technology and new media side. Arguably as much credit as any media company over the past four or five years. Just for buying Tubbe and the podcast company Red Sa Fenters, which is the podcast company which you know, we made a deal with them recently on crime junkies Mom. Those are really smart acquisitions and they've been run really well. So I think that Fox ret good shape. And You know, I think they also on some le deserve credit for not making a lot of big mistakes in the past few years. Yeah, it's just there are so many things about that company or both of them Fox and News Corp that are hallmarks of Rupert Do you think the New York Post stays r Rupert Do you think you know any of these things, the California post, any of these things that they're doing in the journalism space, it just they it feels like the moment Rupert's sign around, that stuff goes away. Yeah, although I believe. Best of my knowledge, Lockghlan actually cares quite a bit about You think he does. Yeah. Okay. Well, you would know better than me. I was really focused on the Fx of it all and you know sure. News Corps clearly has G great strength in the Wall Street Journal, great strength Harper Collins, great strength the Australian real estate business I can't speak to the rest of the newspaper business. Speaking of Fox, by the way, Jim Cameron is still upset that you guys tried to not green lightight Avatar more than fifteen years ago You know, that's not a fair characterization. You heard what he said. He said something about how you wouldn't make the movie until he threatened to take it to Disney. Yeah. I think that's his view of it. We went, you know, it was The point which Fox Green littted, it was close to double the most expensive movie ever made Right. By the way, had been Titanic, which I had made on You go through the normal hand wringing and making a decision like that Do you look at the studio heads of today? and kind of pity them a little bit the decisions they have to make and the movies they have to make? or do you think that is still the most fun you can have at a studio or in an entertainment job. I certainly don't think it's the most fun. I think they are very, very tough jobs right now But I also think that They could be made more fun with a greater embrace of risk You'd like to see more risk. I'd like see more risk and I think that, you know, I would assume and what do I know that Mike and Pam have had more fun than anybody else in those jobs. Mike and Pam at Warner Brothers were talking about. Well, they did not have fun in that three to four week period when everyone thought they were getting fired. Yes, but I didn't have fun in the year before Titanic came out when everyone thought I was going to be fired But You know, you have fun when you take risks and they work. And I think that as their things started coming out And they had a phenomenal they had more fun and they they deserve every bit of success. They took more risks They took smart risks And I think that those companies You can't just live on SQLs, you can't just live on existing iPage. It's a terrible thing to do to the Oence. I hope that there is a lesson to those big studios in both obsession and backrooms because They should be taking risks like that. You know, And if you go back to the big franchises, which they are making infinite sequels of, are generally fifteen to thirty, forty years old at this point Thef theonians wasn't born when they started. Yeah And, you know, historically, Hollywood did a really good job of consistently tryrying to make youth oriented things. make youth oriented comedies, make you know, youth oriented horror movies at that And studios shouldn't give that up. I'm not saying they all have given it up and there are certain things, you know, universal does good job in the horror area, et cetera. Yeah But And there are signs that Gen Z is coming back and we've seen from studies, they like movies, and we've gone over that a lot on the show. And it's your job to do that. and the jobs would be much more fun. to the degree you did more of that. All right Let's talk a little bit about the Warner Brothers Paramount merger because you must be looking at this. I mean, this deal, we thought there was a lot of debt attached to the Warner Brothers discovery transraction This company is coming in hotter than hot with dead They have money from the Middle East that they are recruiting. You've raised money. You had money from Qatar What do you make of the financial transaction? Is this is this all setting up for a potential Titanic style disaster. If this debt causes this company to just have to cut costs into oblivion. A couple of things I would say is the Ellison family alone. This is the second biggest media company, second only to Netflix. So they can clearly afford to do whatever they want. Sure. But but Larry, I mean, there's the only reason they're looking in the Middle East is because Larry's like, I'm giving you money to a point. Yeah. But but look they can afford to do whatever they want and they clearly are already putting a lot of money You know, I think that I'm not opposed to the deal. I think both those companies are subscale And I would hope No one's rooting for them more than me in the following sense that What the industry could use more than anything is another strong competitor And It's a tough, whatever the analogy is, triple bank shot they've taken on both financially and creatively That's what you're supposed to do in life You're supposed to take big risks, you know We certainly, you know, Rupert, who you know, I worked with for twenty years. mister Risk took more risks than anybody and clearly it worked for him And most, you know, Netflix took big risk Big success comes from big risks Whether or not they will succeed, I can't tell you But you think it's possible You think it's possible to cut six billion dollars out of this combined company while still investing enough in a technology stack to be competitive with Netflix. Yes, but they may and make thirty movies a year. They may have to raise more money into it. They may have to contribute more money. I'm not close enough to the. day to day, but it's certainly possible and they're not stupid people No, they're they're they they've clearly spent years looking at these numbers, I haven't. I think the industry should be rooted for it in the sense that we need a strong competitor. And I'm also not of a mind that consolidation is the really bad thing in the. by the way, I am of a mind that vertical integration is the really bad thing in the industry right now. The idea that these platforms R owning and producing everything that they distribute and owning all rights in perpetuity of everything that they distribute And I think it's a very dangerous thing for the industry. And I think that there's a clear analogy to You know, there was a regulatory There were regulatory protections put in place during an analogous time which was in the early nineteen seventies when the media business was controlled by three broadcast networks. And the regulators felt like They shouldn't be able to own the stuff that they are. And I believe that Everybody and by the way, to be fair, it's not Netflix. It's Disney iss hugely vertically integrated. Yeah. They all you know they all want to be I mean, that's the goal. That's why you buy these companies is to vertically integrate. That's the goal. And I think that's the most dangerous thing for the Hollywood creative community right now. And do you think there's any chance of these Finson rules coming back? I mean, I hear that all the time and I know the antitrust people would love it I'm not convinced that Simpson per se will come back. But you never know whether there will be more, I do believe there should be more regulatory scrutiny on this kind of concentration I believe that people should be concerned about the health of Hollywood. It's one of the Great American industes. Look I'll give you another example Historically Now you go back fifteen, twenty years, Hollywood IP was the number two U.S export I believe it is now, I believe it's a negative. I believe Hollywood imports more international content that it exports right now. because People are buying all rights in perpetuity and just sitting on those rights and distributing themselves as opposed to in the open market So I believe that Hollywood should be concerned about this I believe the creative community should be making noise about it And you never know what will happen. you know, you never know whether Regulators do something the creative community of get its act together and pressure people. And I believe personally, I also believe it's in I believe it's in the platform's best interest to beess vertically integrated It's more it's a more creatively vibrant thing to do I personally believe If there were more legitimate back ends, I believe it would be good for the business creatively. You know. the lack of failure that exists right now is a terrible thing. failure Th valuable You know, and the creative community isn't motivated You know, isn't scared of failure and motivated by success. R? You're talking about the elimination of bac endnds has made everything a single or a double and there's no home runs. But if you sell a show, you're going to get paid you get paid and You know, I always just say people work for me You don't learn shit from success other than how wonderful you are And trust me, you're not that wonderful. You learned so much from going through failure and learning from those failures and Let me be clear, I failed more than anybody. I failed so much then I'd like to hope that I've learned from those failures and I believe it's really important best creatively out of people to give them real upside incentive and to be concerned about failing What's an asset that you would love to own right now that you don't or invest in Well I probably wouldn't tell you if I had once. Oh, yes, you can. Come on. it could be anything. It could be something that's not for sale No, look, I think that we are I don't haveone else to tell me it. You know, we are We remain deeply interested in sort of thinking about where the media business is going and there are a bunch of things we're looking at there We're very interested in the sports business very large, although We are not an investor in teams. We tend to be an investor in what I call spports J. You're like the only one that isn't at this point. Yeah. So you know, we're an investor in know the largest youth sports business, We're an investor in the professional lacrosse League You know, we were a big investor in sports gambling before it was legalized by the Supreme Court. You know, so we continue to we continue to be very aggressive sports investors. You know, by the way we're A sports investor in North Row sports a Sports investor in Omaha Yeah Payton Mannings company. Which of the companies that you have invested in or bought are you most proud of? something that you saw early somethingomething that you took from A to Z Which one of them? You know, I'm extremely proud of Fol I'm very proud of Crunchy Rll. You know, Crunchy Roll, we invested in Crunchy Roll thirteen years ago. That's the anime streaming service. That's the anime streaming service. We invested when they had one hundred thousand subscribers and You know, we were arguably the first outside capital to invest in streaming because at that point Disney had, you know, there was just Netflix and Hulu, which , you know, we started at Fox with NBC and And Nos existed. Nobody else was there yet And we were big believers in streaming and we invested there we invested they had one hundred thousand subs. We grew it into five million subs and then sold it to ATNT. AT andT subsequently sold it to Sony. It now has twenty one million subscribers and we feel like we were integral in helping build that.' really proud of that I reallyally proud of Mial sports I don't think you're allowed to say that on a Ringer podcast. I'm happy to say grew that business aggressively and you know, felt like we identified the right trends early on You know, there are two companies we're investors in right now. We're very early investor in the aura ring business. I'm unfamiliar with that business. You know, those aura rings that people wear to measure sleep and measure fertility etceter. Oh ye Oh yeah, yeah yeah, they're they're beating the Apple Watch Wildly the most successful wearable device right now And just it was just reported they're about to go public, But that business has grown insanely We're really proud of a weird little business we invested in that's grown insanely Uh ors what that we sort of, you know, we spend a lot of time doing what we call thematic work, which is just trying to to identify where things are going And We identified probably six or seven years ago, collectibles as being a big thing bought the Weeding Collectibles auction house And then we merged that business with a company that of all things grades grades baseball cards. Oh, ye, I know that. My kids into baseball cards. There's only one company that does it. That's our company. So we're a investor it's not our company. We're a big investor along with several other people. Yeah. But that business has grown like is a really important business. So we're really proud of that U so look We're proud of Me Eater, which company we own There's a lot of businesses who are proud of So do you think this content recession in Hollywood is going to end soon There are some signs that production is coming back a little bit to Los Angeles, there are some signs that Studios are buying a little bit more than they were. Do you think this is an inflection point where we are we've seen the bottom? And when it comes back, how is it going to look different So first of all, I think not to beat a dead horse I think less vertical integration would be the single biggest thing that could revitalize the content industry because you know, if you look at the heyday of Hollywood, which was seventies, eighties, nineties, That was fueled as all those B movie studios which were hurting in nineteen seventy became television powerhouses and that was one hundred percent because of Vinson, same thing with the MTMs, the LoreMars, all those great companies. But if that doesn't happen, do you think the industry will come back Look, I don't think the industry iss going away You know, I think the strongest thing you'd say about the industry is that these tech companies clearly believe that content drives tech adoption and very important marketing for that. I think the same thing is true with brands. Clearly content is driven brand adoption more than anything going on for fifty, seventy five years. And I think you see brands J it importance of content You know, I don't think Hollard is about to come back overnight. I hope that You know, what's going on so far in twenty six in the movie business is an ongoing trend L dec quare victory in my mind, but Certainly the signs are positive I would certainly hope that more production comes back to L.A But look, the best thing that could happen is more competition, which is why I said earlier, I'm rooting for Paramount. I think another big strong competitor the marketplace. You, I think on a microbis, I think what really led to things bottoming out was COVID clearly was hurtful, but I think also the shift in Wall Street sentiment away from growth and towards profits you were in a period where you had a lot of people investing in growth and they all start wildly cutting back Profit sense Look, I would make an argument that all of the He By the way, it easy for me to say, I don't know all of the streaming platforms with the exception of Netflix under invvest in content You know, And I think if you look at I one of the reasons Netflix is so strong is they invest more than anybody else But I think the rest of them are all underinvested. They don't have enough content And you see all of them having churn rates that are too high? I say that by the way, as a viewer, you know, as a viewer of with HBO of Amazon of Disney, all There's not enough new stuff on a regular caveance. for them. And I think they in order to achieve the kind of success, which say are all betting on. they're all betting on streaming as being their future need to invest more in content. You have a deal at Apple. Do you feel like you know what they are doing in content I feel like people around town don't quite know what Apple's doing. Well, I'm certainly not going to say about my partners that they don't know what they're doing. I don know, but you don't have to be as confident that they know what they're doing. No I think they know what they're doing and by the way, and This is going to seem kiss assie. I think they deserve a tremendous amount of credit. You know, I think for smaller budgets than Probably any of the other streaming platforms, I think they have had a higher track record. they've had a higher success track record alost. Moffet Nathanson just put out a quality index, the analyst firm. and Apple was ahead of Netflix Look, I think they deserve enormous credit for the amount of high quality their' batting average in high quality I think one of the reasons you should ask them, I believe they made a movie deal with us I think they've been more effective at doing that on the series side Then on the movie side And I believe that their desire is to do more of that on the movie side and to really sort of match on the movie side, what they've successfully done on the television side.. So you are bullish on media. You're one of the few guys that has really navigated it exceptionally well in your post studio life. Look Super complicated, super challenging. but by the way life is supposed to be complicated, challenging What I am certainly bullish on is human beings are desperate for entertainment and information. That ain't going away. I think it behooves all of us not to pigeonhole ourselves as you know, we make big budget sequel movies or all we make is this. I think we you need to be They have an obligation to be desperately interested in the audience and where the audience is going. That's why I'm so desperately interested in YouTube Fasinly' desperately interested in TikTok You know, I certainly not only don't I look down on any of the things, I think they're all fascinating and I think it's I think it's your obligation in this business to be desperately curious about the audience and then to try and connect artists and audiences together. On a macro basis, I'm really bullish. Audiences are desperately interested in being entertained. How that's going to happen is going to change every single year. will change more rapidly than ever the fundamental desire for that is not going away And I think all of us need to be nimble and fast and curious and bold and adventurous in all those things about how to achieve that. And I think if you are that, look There a couple of big mackero things going on. you know Driver' cars huge opportunity. I agree. I've been saying that for years. You know, the people migrant that huge opportunity if there are, you know People have more leisure time because of AI, huge opportities I know what people want to do in leisure times They want to be entertained. Yeah. Are you a big vertical video guy? You know, I watch a bunch of st. I don't you know, I don't watch full movies on vertical. But you're not you're not down in the Chinese soap operas at night. No, but look, we actually spent a bunch of time analyzing those businesses four or five years ago looking at at those businesses and looking at the potential of them. I'm looking forward to your next filmmaker being way younger than nineteen. I think we got you got to go pre teeen. Preteeen horror directors are the next hot hot subject. I think that's a really good challenge and I think we should take you up on it. Okay. Yeah. well got to be washed up and over the hill by twenty. Yeah All right, well, thank you, Peter. A appreciate the time. Matt, I really appreciate it. Thank you We are back with the call sheet. Craig, let's get right into it. We talked about backrooms with Peter. What is our prediction for backrooms? The tracking is at forty million per NRG, whichich is huge. That is gigantic. That would be eight hundred twenty four's biggest opening ever by a lot. Civil War only got to twenty five point five million. Honestly, NRG has been undercounting so far this summer. and I think this is the kind of movie that they are going to undercount on the pres sales are gigantic, like on the level of Scream seven, which got into the sixties. Now the tracking services are saying that this movie is going to be front loaded because it's all the fans of the YouTube series that are buying tickets in advance. But honestly, I think this is going to surge I think one hundred ninety million views for this YouTube series. This is something young people care about And this is going to get way over forty million. So let's set the line at forty five and I will take the over. I'm gonna take the over as well. We've learned not to underestimate the YouTube audience passion. I know U this whole movie It already feels like such a big accomplishment. likeike the tracking being this high, the fact that I mean, this is a twenty year old director Kay Parsons. This whole thing started from a twenty nineteen four chan post of like an empty hallway And that grew into this large conversation around limal space and then it turned into this YouTube series and now it's this movie. And pretty impressive that this twenty year old director, I mean that has Chuate tell Edgeia four and Renotta Ryiness been this movie. It feels like A twenty four knows this movie is really good and they've put more marketing and effort into pushing this movie out than they ever have. Oh yeah. they're advertising on the NBA playoff. Yes. L H twenty four doesn't usually do that. It's like a that's like a traditional television ad byy. Yeah for a movie like this. They feel it broadening out or at least it has the potential to broaden out And we talk about this all the time about the momentum in that final week and that has really been the distinguishing factor in these movies lately and whether it becomes something that everyone feels they have to see opening weekend. and this is getting that feel. Yes. I think this is going to be a A conversation star a movie. I think a lot of people are going be talking about it. And it's funny because the whole premise of the movie is like these weird spaces, like severance is kind of like creepy but also makes you feel good. And that is kind of what the marketing of the movie is. is like, o, I don't know about this. I can't tell if this makes me feel comfortable or scared, but I want to go check it out. Very interesting. It is going to be hilarious to see everyone credit grab one Who discovered Kaine Parsons first and you know, these four Chan rooms are now the modern equivalent of the waiter at Spago who slips his script to a producer and gets a two picture deal. Yes. I mean, I read this whole article about how you know, four Chan and like Reddit stories are now a feeding ground for new ideas. Instead of a treatment or a spec or something, it's like these short stories on Reddit that are turning into horrorilms. amazing