Welcome to the Architecture Podcast. This is Ary Paparro. I'm joined with Eric Franchie and our special guest, Rich Greenfield, who's been here before. He's a partner at LightShed Partners and a general partner at LightShed Ventures, sort of an expert in traditional media, or sometimes he refers to it as dying media. He's a Eric Glenn...
Yeah, he's amazing. He's so good. Just the deepest encyclopedic knowledge of all things dying media. Retains so much data and information, and just a fun guy to have a pod with. So no surprise he's a three-time guest.
Yeah. And I want to hear about some of the moves with Paramount and the Ellisons and Warner Bros. and TikTok. It's really kind of complicated how all this stuff is kind of getting mashed together, and I want to understand why should advertisers care. Should we care, right? It's kind of, you know, it's just all this mergers and acquisition stuff in traditional land.
Yep. Totally agree. And it's been a big week for adtech. So the refresh is going to be a big one.
When has it not been a big week for adtech?
This was a big one, though. I think that we have a whole new framework, AI agents. We're gonna replace this podcast with a bunch of agents talking about podcasts. Right.
Will they have our humor though? That's the question. Probably better.
Probably better. They're probably better. All right. And so housekeeping, March Live. I hate to give everyone the bad news. You know, the bad news is sold out. So...
So, if you're listening to this and you didn't register yet, you're pretty much not coming. And don't text me. Please. For the love of God, don't text me or text ad tech god. You know how to reach him. DM him everywhere. He's online on Twitter, on LinkedIn. Just hit him as many times as possible begging for a ticket. That's what we want. We have a wait list. If you really, really want to go, you can register live and put down your credit card, but it won't be charged unless some tickets free up. But we have a stacked agenda. We have great people coming. We just booked Peter Naylor, who's going to be in conversation with Coach Chava about some interesting things they're doing with AI. The agenda keeps getting better as we fill in the last slots. So look forward to seeing everyone on the 27th, which is a week from the coming Monday. With that said, let's jump in with Rich Greenfield.
I think it was, I was riling you up.
We haven't even introduced you and you're riled up. We're rolling. All right, listeners. We have Rich Greenfield, who will not be shy, a third-time podcast guest from LightShed Partners and LightShed Ventures. Rich, thanks for being here.
So, you get riled up about stuff and we want to hear about it. So we want to bring you on because there's so much going on in what you'd call the traditional media side, legacy media side, that's trying to catch up.
So much nicer than saying the word dying.
Yeah. Yeah. It's not dying, right? And everyone's drinking. We're all drinking, right? It's just a matter of when. So, but there's so much interesting stuff going on. I'm really interested in Skydance Paramount. And they are circling Warner Brothers and they also have this TikTok deal, but it's not clear if the TikTok deal is not really Skydance, but it's Oracle. What is going on? And why should we care? And what's going on?
Well, look, I think you should care because Larry Ellison, when you say it's not Paramount, right? The money behind Paramount is Larry Ellison, right? There's, you know, no offense to the Skydance team that acquired Paramount, but it's being funded by Larry Ellison. He was the initial backer of Skydance to begin with. He drove the Paramount acquisition.
You know, it's unclear. You know, in a Warner Brothers situation, there is speculation that Larry will be the money. It sounds like now they're searching for private equity money. Whether that's true or debt financing, we'll end up seeing. He clearly put in capital, meaningful capital into the TikTok acquisition. You know, in terms of Oracle, and Larry's the key behind Oracle. So, you know, you can sort of build this matrix of, you know, having your fingers in a lot of key places. You know, as AI is evolving, there's no doubt that Larry is sort of the mastermind above all of this. Not that David Ellison isn't running these businesses day-to-day, but there's clearly sort of a higher 4D chess-like plan that you can emerge. Now, look, to be very clear for your listeners and viewers, I'm very happy you have viewers. Now, Ari, the key is, you know, they don't own TikTok and they're not going to own TikTok. They're going to own 15% of TikTok. And so that's very different than owning and controlling. There will be an actual board and, you know, there will be a management team to be determined on TikTok. But I think it's fair to say that, you know, something like Paramount, and who knows if they end up buying Warner Brothers, but you would assume as a 15% owner that you'll be able to do things that are favorable. You know, will they be the, you know, go-to source for news? You know, Paramount just bought The Free Press. Will you see, you know, a little bit of incremental exposure or certain things that they'll do that preference that content? You have to believe that would just make sense if you have better access to the management team and to the company.
Sure. So, okay, let's peel back the onion a little bit. So, Paramount, done, it's owned by Skydance. The, um, Bari Weiss part of the team, she's the editor-in-chief of CBS. Um, she's not, uh... and then Warner Brothers is...
We call it Warner Bros too. Just Warner Bros. The bros at Warner.
Is Paramount looking to buy the whole thing including HBO and CNN and Discovery and everything, right?
I mean, if you read the press, that is certainly true.
Now, is it possible they don't buy the whole thing? They just buy the studio and the other stuff spins out differently.
Look, I think there's a chance that no deal actually happens in the next six to nine months. They wait for the company to split up and over the next couple of years try to just buy HBO and the studio. You know, is that a possibility, a real possibility? Absolutely. Like, there is, you know, Warner Brothers is certainly not in a precarious situation. They don't have to sell. You know, I think there is a view of Wall Street, even before this emerged, there was a view that the split would unlock value. The stock went from $67 up to $121.30 on excitement for a split. Now, it didn't get to 20 because of the split, but there's no doubt that there is excitement for smaller pieces that could be easier to digest by more companies.
Now, a lot of people who listen to this podcast, I don't want to disparage them, but they're sort of adtech people. Right? So, neither of these companies has a strong adtech play, right? They're just, they're media companies. They're publishers. They make money on ads, but neither one of them owns, as far as I know, any really significant assets in the tech space pre-TikTok, right? Am I wrong there?
Uh, I think, I mean, look, I would say traditional legacy media companies have not really put tech on the same pedestal that they put content creators. Like they look at someone like Tom Cruise, but they don't look at a top engineer. You know, look at the way Mark Zuckerberg, I'm sure you've talked about it on this pod repeatedly, but look at the way Mark Zuckerberg is paying top engineers, right? Like...
But it's a really important, but Ari, it's a critical point. Like Netflix treats engineers as rock stars, right? Like just the way they treat content and talent. That is not something you've seen in media companies. And I think the big question is, will David Ellison, you know, he obviously came from, you know, he's a disciple of, you know, comes from Oracle. He grew up walking the halls at Apple a lot and Steve Jobs and all of that. And so will he bring, you know, he's talked a lot about it. Like if you think about sort of his commentary, I was at a conference last week where he spoke, you know, he even in his initial pitch for the Paramount acquisition, he's talking a big game about infusing technology and really rethinking how content is made, how it is marketed, how advertising is made and injected into this. But again, it's all talk for now. We haven't seen any of this. They've owned it for 75 days. Like we haven't seen any of this future that you're talking about. That is only the hope. And I'd say none of the media companies that I look at have done a really good job on the adtech side to date.
I would say that they made one move last week by announcing Jay Espinosa as the CRO for Paramount. So it's a new role. There hasn't been a CRO at Paramount. John Healy, I think, reports to Jay now. Jay is an adtech native. He worked at my first company, Undertone. He went to RUN, which was an early DSP, led Bubl's revenue, then went to Roku. So, I think that's, you can count that as like a real move, but to your point, they haven't yet acquired assets. They haven't yet reorged all that stuff.
Hiring Jay is a great move. Like, I think it's a really interesting signal, just the way hiring Cindy Holland to run Paramount Plus and streaming, right, is a really smart move. Bringing in a new team on the film side, like they are making really interesting strategic hires.
The question is though, that has to actually effectuate itself in terms of how they actually run the businesses. We need to see a difference in how they actually operate, right? And so I'm excited to see if they can bring in not just the people but actually change how things are actually done. I mean, Bari Weiss just came in, right? Like, I know this is like, you know, this is like a heretic coming into, you know, an old school news organization, but you know what? Like...
But my kids don't know what CBS News is. My kids, like these companies all need to, it sort of goes to your comment earlier, Ari, about, you know, an investment in TikTok and like every single part of these companies needs to be blown up. I mean, you probably need, I know this, I feel bad saying this, but my guess is 70 to 80% of the people that work in these businesses probably need to be fired, right? Like these businesses are undergoing seismic change. It's not just you need to have less people, which you certainly do, but you also probably need different people. Like you need, just like you're making the comment about bringing in Jay, like you're going to need new people with new skill sets that understand how to build an audience in 2025 and beyond. And that is, and because you can't sell ads, right? Like think about everything that you talk about on your, you know, in this podcast, Ari, it's about, you know, how do you deliver ads? Well, you need eyeballs. You need viewership. And I mean, my big focus is time spent. If you don't have time spent, you can't deliver. And like, who's winning time spent right now? The big winner of time spent is YouTube.
Yep. Yeah. It's all about distribution, right? And when you talk about tech, you're talking about distribution in a sense because that's how you get the eyeballs through really good apps and, you know, compelling social experiences and AI feeds and things like that, right? But nobody is going through the Paramount library and streaming it on Paramount Plus. In fact, the content on Paramount Plus actually gets more viewership when it's on Netflix, right? Like people are not binging on these platforms. Sure, they'll watch the latest episode of 1883 or the, you know, the, or Tulsa, what is it? Tulsa King, they'll watch an episode for sure, but they are not binging on these platforms. And if you don't have time spent, he can't do a lot on the advertising side. So like what Jay needs is not just, you know, money to spend on adtech to build that. He also needs engagement. He needs lots of content and a product that literally causes people to spend a lot of time. And you only get a lot of time if you have a tremendous amount of content and a great underlying UI that understands the viewer and delivers them what they want to watch when they want to watch it.
So, so does, how does Warner Bros. help that?
Warner Bros. gives them a lot more content, but doesn't solve the tech problem at all. Like Warner Bros. is not exactly a leader. What, HBO, HBO Max, Max, HBO, whatever it is right now, he gets more scale, but you don't actually get anything unique there. You don't. And, you know, look, if I was sitting in, if I was sitting in David Ellison's shoes and I had 70, 80 billion burning a hole in my pocket, I don't think I would be buying Warner Brothers. I think I would be literally realizing that, you know, you can actually go out and acquire anything you want. Look, he just bought UFC, right?
What about Roku? Well, isn't Roku like the ideal acquisition here?
I mean, look, Roku could be a very interesting acquisition. I mean, look, it's a large acquisition. It doesn't generate cash flow, right? It's just starting to generate a little free cash flow. So, it would be a, you know...
It's the distribution and tech play.
I mean, you would reduce churn on your paid if you had the device as well.
There's no doubt you'd reduce churn.
Correct. I don't... you could certainly decide just like we were talking about with TikTok, right? Can you lean on the button? Can you preference something? Absolutely. If you own the platform, the platform has a tremendous amount of power. And so, look, we thought Walmart was going to buy Roku. We were wrong. They bought Vizio. We thought Comcast five or six years ago was going to buy Roku. We were wrong. They decided to do a joint venture that has largely gone nowhere. Sorry, Comcast. But, you know, like there are many people that should have bought Roku. Now, has Roku actually been for sale? Does Anthony want to sell? I don't honestly know that. He certainly has been right that the world has moved towards streaming. So, I don't know whether he wants to sell. But again, if I were sitting in David Ellison's shoes, I would argue what you just said makes a tremendous amount of sense. Owning Roku as a tech building block makes a heck of a lot more sense than doubling down on content when the reality is you can acquire all of the great talent. If you want, you know, think about House of Cards. House of Cards was going to go to HBO. Netflix overpaid for it. Like Hollywood, sports, all of these businesses, if you spend a lot of money, you can have everything. And so what you can't get though are platforms. And so platforms are really interesting. And so yes, I think that makes a tremendous amount of sense. But again, there's no synergy with that transaction.
You know, you don't get Harry Potter, you don't get Superman, although I'm not sure you really want Superman, but like, you know, there is certainly the prestige of an acquisition like that. And so, you know, unfortunately, I think it's... I don't think that's where their head is at, but it's where it should be. They should be thinking about how do we invest in world-class tech and really try to own the customer and the platform. Now, to be fair, Larry Ellison has the ability to do both. So, I would also say that his fortune dwarfs the entire media business ex Facebook and Google.
Um, so the, um, and we've heard this story about like we want to bring tech to the party back in the Hulu days and they bought, they brought Kilar in and he did a great job creating the Hulu app and the experience and that was important but it wasn't the whole game. They were not a tech company ultimately. They still were a Hollywood company. Um, but anyway, I want to transition to TikTok. What is the current state of play? Is it acquired? Is it not? Is it we're waiting on the Chinese? Are the soybeans involved? Do we have to trade soybeans for TikTok? What is going on?
You know, over the next six months, this is supposedly done. But, you know, you wake up, I don't know about you, Ari, but like I was hanging out Friday afternoon and all of a sudden you see a, you know, a Truth Social post from our president saying, 'We're putting 100% incremental tariffs on China.' And then the next day it's, 'Oh, it'll all be fine. Don't worry about it.'
You know, my point being just because everything looks like it's moving forward, you know, this still depends on actually what is the state of relations between the US and China. And I'm not, look, I'd love to sit here and opine that I have any clue or clarity. I'm going to be brutally honest. I have no idea. Like there's no way to predict what our president is going or not going to do on tariffs and international relations with China, let alone other countries over the next six months. So yes, right now it feels like it's on a path towards actually, you know, again, it's not really a sale.
What's the deal? What's the deal terms? As far as you know, right now.
There is no sale of TikTok. They are creating a US separate entity. That US separate entity will house everything including the algorithm. So you will transfer the algorithm into the US business, but that algorithm will be regularly updated from the Chinese algorithm. The US team will decide whether or not to accept those updates. You would presume, unless there's some data security reason, but you would presume they will accept those updates. And so, you know, it puts more control in the US and on US land for those changes obviously, but, you know, from a functional standpoint, from what I understand, Ari, you're going to be using the same TikTok app. You're not downloading a new app.
Yeah, that was a rumor going around for a while that all the users were going to have to redownload. That's not true.
It does not appear to be true. It looks like you will wake up one day and literally every single thing will look exactly and function exactly the same except for the fact that the algorithm is now housed in the US versus in China and there will be new owners because ByteDance will become a 19.9% owner and you will have a whole group of new investors come in who are injecting some capital into it.
And the new owners include Larry... really nothing's really changing.
Yeah. From a, from a... if you're an advertiser, nothing is changing.
Actually, what is changing is you are now less worried about it disappearing. So if you were worried about, if you were worried about ramping your spending because you didn't know whether, oh my god, was this not going to exist? Should I shift more of my budget to Meta or should I shift my budget to AppLovin or whoever? Like now you're not worried about that, right? Because now you know at least it certainly seems like TikTok is not going anywhere.
Right. Right. So and the owners, the new owners as you understand it is Larry Ellison is involved but Skydance is not directly. Is that correct?
Correct. This is, you know, you are having Oracle as an investor. You've got three new investors coming in including Oracle. Oracle still do the data security, but you'll have three investors taking 15% each, including, you know, you've got a Middle East investor coming in, but you've got three new investors coming in. And then there's like a consortium for that remaining 5%. There's a consortium of a whole bunch of companies that we believe are companies like Fox and others that are like getting little tastes of TikTok.
Little taste control or meaningful ownership. There was this rumor going around that Barron Trump was going to be on the board of directors of the new TikTok. I don't know if that was real or disinformation. No idea. No information. All right, let's transition to another favorite topic of ours. The one that like Richard and I like to DM about, which is The Trade Desk, everyone's favorite company. So I specifically want to talk about their operating system, Ventura, because that's really how it overlaps with mainstream media. And they have a deal with DirecTV. Their original deal with Sonos died. And you podcasted or wrote this shows they are serious about being a tvOS competitor. Are you, give me your bull case then.
Well, I'll tell you, I didn't know, so I'm going to, I wouldn't plead ignorance, but I would say I didn't realize that DirecTV, we've been very complimentary of the DirecTV operating system. The Genie operating system actually, you know, works really well in integrating the linear world and the app world, but I didn't realize it was a Google, it was the Google, essentially Google TV infrastructure.
Right. So it's built on Android TV.
So they couldn't actually go to a, so DirecTV could not go to a TV manufacturer and do an OEM deal. It was actually banned because only Google's allowed to do that with the Google TV OS.
By transitioning from Google TV to Ventura, it actually now opens up so that not just can Ventura do deals with TV OEMs, but actually this joint venture can. And so now you can actually have the Genie Ventura operating system could actually be natively installed on a TV. So just the way you think about how Google TV works beautifully with YouTube TV. So like if you buy a new Sony set and it has Google TV on it, YouTube TV is a beautifully integrated experience. I think now they're setting this up so that DirecTV Stream with Ventura will be a beautifully installed and integrated experience between TV and apps on OEMs. Now those OEM partners are not announced yet. Like so we're still, the key is this is not about devices today. This is an OS integration that, so you're basically swapping the Google OS for the Ventura OS. The next step of this I assume will be CES, will be OEM partnerships whether that's TCL or Hisense. I have, you know, you tell me, you probably have more insight than me who is most likely, but my guess is you're going to see OEM integrations. But what this says, you've already hired Rob Caruso who came over from Google TV. He now is the head of product for Ventura. So you've made some big hires at Ventura. You've done this DirecTV deal. And meanwhile, I think most of the industry believes that Ventura is dead on arrival.
Well, waiting to see some, no one has a Ventura TV in their house. That's for sure. So...
They won't until the end of 2026, I would assume.
What is the, I'm ignorant on the subject, I admit it. What is the current business model of DirecTV? Like what are they up to as their core business of sort of satellite TV has been in decline. What's their strategy right now?
DirecTV has, I mean they still have their satellite business with millions of subscribers that have DirecTV satellite. It is private equity owned and it is really building out on the streaming side. So like their version of YouTube TV which is called DirecTV Stream and they've, you know, I'd say the one thing where they've been a leader in is creating packages, meaning slimmer packages, sports and news, kids and family, like really trying to segment down into skinnier bundles far more so than others.
So they're a virtual MVPD as well as an end-to-end player for people in rural areas. And I think ultimately that's probably more of their business.
It's interesting. Yeah. Yeah.
Than anything else. They're leveraging their history obviously to get deals done, you know, their satellite legacy, but I think their core business going forward will be far more on the vMVPD side.
Yes. Now, the last I'd heard, this is, I don't have any updated information, but several months ago, last time we talked about Ventura, I had heard they were having a really difficult time getting apps made for Ventura because The Trade Desk was insisting on UID2 as a data framework there. And people like Netflix or Apple or, you know, Disney didn't want to participate on those terms. Any, have you heard anything on that or is that just still scuttlebutt?
I haven't. But I'll say, you know, if you don't have YouTube, Netflix...
Yeah. Disney Plus dead in the water, right? Yeah.
I mean, you might as well just shut it down. So, again, I don't know how this ends. All I know is there are five or six apps, let's just say, that if you don't have, you can't be in this business anymore.
Yeah, totally. So researching this episode, one thing I noticed was you had this, you had a predictions article. You had the 17 predictions for 2025 on your excellent blog and man, you're nailing it. Like a lot of them are hit it. And I wanted to kind of highlight a couple of them that maybe were worth conversations. So number four, search continues to move into apps and away from Google. That's kind of a toss-up right now. I think...
It is because I think right now there's still this debate over where does, what happens to search, right? Like I think, you know, this conversation of what does search look like? I mean, we're sort of all waiting like is OpenAI launching a browser, but there is no doubt. I mean, I look at little things, right? Are 800 million people around the world using ChatGPT now? Are they all abandoning Google? No. Do I know more and more people that are using ChatGPT for searching? Absolutely. Do I know more people using Perplexity? Yes. Do I see, I mean I think you're going to see by the end of this year Reddit roll out their new search, right? Like they are becoming more and more of a destination. Like I think there is more and more search behavior is shifting away. Now on the flip side, Google's doing a lot on the AI front, right? Like you look at Nano Banana, which is probably best-in-class image creation built into Google and built into Gemini. And you know, they're now putting, you know, Gemini is everywhere now inside of the Google ecosystem. They still haven't made the switch from that main Google experience. I mean, I feel like at some point in the next 18 months, there won't be traditional Google search, but we'll see.
I'm going to give an unsolicited plug for the Acquired podcast. They came out with their third Google episode this week, and it's entirely about Google's AI history, and it is fascinating how they were ahead of the game, then they missed the ball, then they came back. And how all the other companies interacted with them, including why OpenAI was even formed in the first place. It is a really must-listen even though it's like four hours long.
They talk slowly. So you can do 2x, you do 2x speed on that.
Is the bet that some of these Chrome changes are going to be what, you know, basically preserves Google's position in AI?
Well, let me go a step further. You know, you've read the reports I'm sure like I have. We all know that now, we all are well aware that Google's a monopoly and there's nothing the world can do about it. Correct. Yeah.
So that's what we've learned. I'm just quoting the judge. I'm not making this up. So, if you are a monopoly and you can't do anything about it, if you're Google, do you go out and sign the same deal you did for search with Apple? Right? Like, does Gemini become the default inside of iPhones? Like I think that's sort of to me what's really interesting is just sort of, you know, is there a world where Google has the same sort of global power in an AI world because they become the default everywhere? It's possible. And so I do think that search is moving more into apps and I think it's sort of unavoidable. On the other hand, Google is certainly flexing its muscle and finding new ways to expand its use cases every single day. And it's certainly like there are some best, I mean I look at Nano Banana, like there are some best-in-class products.
