What’s the Deal with ‘Seinfeld’?

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Welcome back to The Bulwark. I was to Hollywood. My name is Sunny Bunch, called her editor at The Bulwark, and I’m very pleased to be rejoined by Julia Alexander had her on the show before. She’s with Parrot Analytics. She writes weekly newsletter for puck as one of the most smart and entertaining and informative people out there on the world of streaming data.

It’s it’s It’s Julia and the entertainment strategy guy, one and one a on my my list. They’re they’re battling it to the death. But since she does my show, she’s number one right now. So if you’re listening, out there, ESG. You gotta you gotta get it together.

I thank for being on the show, Julia. Really appreciate it. Thank

you for having me always an honor to join.

So I wanna talk about a couple things. We’re we’re gonna talk about Disney’s earnings call here in a couple minutes. But the first thing I wanted to discuss with you was something you wrote about last week, which is that and something I found very surprising. I guess it probably shouldn’t be surprising because Seinfeld is one of the most popular sitcoms in the history of television. Usually popular.

Back in the day, huge hit on syndication. And so it shouldn’t really be a shock that Netflix has has a hit on its hand with Seinfeld. But there was one thing I was kind of surprised by was that it’s not just a hit. It is it is a hit with it’s a reason people stay with the service. And it’s a hit with younger audiences.

I think I think the number was forty one percent or something like that of viewers of Seinfeld are under the age of thirty five on Netflix. So let’s talk about that. What what does Netflix have on its hand with Seinfeld. What are what are they doing there?

Bluntly, they have something they need, which is the type of comedy that encourages repeat viewing. The term I use for us a lot is snackable content. So if we think of dramas, you don’t get a lot of dramas that people rewatch over and over again. Some of the ones that come to mind that where that does happen are like the Sopranos. Like, people tend to rewash the Sopranos almost annually.

But comedies are repeat viewing engagement. It is the type of thing that people put on before they go to bed. It’s the thing people put on when they’re sad or they’re sick. When they’re cooking. And so what that does is increases the perceived value of a service because it’s what you’re engaging with over and over again.

So other titles like Seinfeld that would be included in this, would be stuff like New Girl, it would be stuff like the office, which went to peacock, stuff like Friends, which went to HBO Mac, And unsurprisingly, if we think about that kind of type of sitcom. Right? It’s a very specific type of broadcast sitcom that we’re talking about. Those if we think about Friends in the office, those were in Netflix’s two best performing shows for years, and then they left because of that reason they went to peacock and HBO Max. So with Seinfeld, the goal with Netflix always to replace that.

It was always to find something that people would come back to over and over again and that would register on some of their most watched stuff and that would register amongst people who were potentially looking to cancel Netflix and that was the reason they were staying. And what my research has shown is that that’s happened. Is that the value of that title to Netflix is extraordinary because it is one of the few comedies that Netflix has that’s long running so more than four seasons. That people kind of put on over and over and over and rewatch. And so the reason I say it’s exactly what Netflix needs is because they’ve tried for years to create a comedy of the similar vein.

They’ve tried with Grace and Frankie, which is, you know, a great show. They tried with the ranch from Chuck Lohrey. They’ve tried with a bunch of the things to kind of recreate this almost broadcasty child, sitcom that gets people to engage, and they really haven’t succeeded with it. The closest counties they have done really well for them in terms of longevity or dramities. Right?

It kind of oranges the new black. More drama than comedy. One would argue. They don’t really have this. And so the goal with seinfeld was to prove that there was an audience that would watch comedies over and over again on Netflix if it was available to them, and that’s what they found.

And and they’re finding it to your point of what we’re with in the article I wrote, they’re finding it within a large cohort of audiences that would have potentially canceled their service, which Netflix refers to as high risk churn. It’s a type of customer that is far more valuable than those that are constantly engaged with the service because they’re worried about losing them. So the fact that Seinfeld is finding that engagement, which is great, and that’s finding engagement amongst those that we’re going to cancel, makes that show especially valuable for Netflix. Howard Bauchner:

There’s something you said right at the beginning of that that jumped out of me because I’m I’m fascinated Here, a thing I have been fascinated by in the world of television for a long time is what is going to is there ever is there ever going to be a replacement for the syndication model, basically, is my is my so, like, I I have a theory that the sitcom is basically a an endangered format at least as we understand it because the whole model of the sitcom was one out of every ten that you make goes to syndication and make somebody a billion dollars, you know, or one out of every twenty or one out of whatever. But there’s there’s like huge home run potential for these shows. And obviously Netflix has that insight. So Seinfeld is that, Friends is that, you know, the ones we mentioned, big bang theory is that. But you you have it’s hard to make that sort of thing in the world of streaming.

Right? I mean, has there been any streaming native show that has performed in that sort of manner.

No. Bluntly, no. And to your exact For sitcom,

specifically I’m sorry. Specifically for sitcoms because I feel like stranger things, that’s that’s a different world. But like but Right.

And even, like, comedies broadly. Right? Like, even comedies, you have to kinda separate into its own little barrels. And, like, there’s been successful comedy shows on streaming services, but not like sitcom style things that we’re used to. And to your to your exact point, we were just saying earlier, they made twenty of these shows.

There was pilot season where they’d go out and then then maybe have one they’d have maybe five that lasts longer than two seasons and one that kinda goes ten seasons and they’re syndicating and it’s making money and it’s great and they do a spin off like young Sheldon. That kind of happens or Joey for one season. What happened with streaming was the economics change. The the the economics that allowed for that type of show to work on broadcast was that as long as it reached a certain amount of yours and they had to have yours, in a certain demographic, the advertisers were happy. And as long as the advertisers were happy, they could pay for the show.

And so they would do things. Like, if you talk to any of the producers on modern family, if you just listen to what they say, they worked a lot with advertisers, same as Blackish. They were kinda like Blackish wants you know, the Toyota wants to do a whole thing in blackish and so they worked that way that joke in. Right? So it was like, great.

The economics of what broadcast and advertising was allow those shows to find funding and allow those shows to find an audience and specific audience to keep going to get to the five season hundred episode mark and then start syndicating. What we didn’t see in streaming for a long time was this because if we think about it, the idea of streaming as a competitive sphere is still relatively new. Right? It’s like three years old, the idea of actual competition. Netflix could say for a very long time they were gonna do ads because they’re bring from a a place of total and absolute monopolization.

They could say we’re not gonna do ads because we’re the only streaming service out there. So therefore, we’re the only thing that can really grow. Then all of a sudden, you have competition, it’s a fair marketplace. These are things that we celebrate in healthy democracy. All of a sudden, Netflix is now losing customers to to kind of to competition, the revenue is drying up, all these things are happening.

So Netflix goes, we’re gonna bring ads in. And one of the benefits to bringing advertisers in is that advertisers like certain types of shows. They like sitcoms, they like procedurals. These are the type of series that Netflix couldn’t necessarily make because the way that their efficiency metric worked was that a certain show had to have a certain completion rate. It had to have a certain referral value.

So that means that if you watch Stranger Things and then you watch Bridgerton, that had a significant referral point versus if you watch stranger things and then watch criminal minds or NCIS. That was less of a point, but it was still a point. And if you watch stranger things enough thing else, then you got no referral value. All these different metrics add up and kind of an excel sheet and it creates an efficiency rating and that’s how Netflix kind of views. Is this a success or not?

Is this something that we want to invest in alongside, like, creative development, although I would argue it’s kind of less on that end, a lot of data focus. And I’ll give you another example how we know that SICOMs haven’t really worked in streaming in terms of being able to acquire subscribers, which is the goal for a lot of these new streamers, is peacock. Right? Peacock teamed up with Tina Fey and and Mike Mike sure. I mean, these are gods among the comedy scene.

Right? Thirty Rock, the office. Good place, all those types of shows. And they couldn’t bring in girls five ever is a show that got canceled after two season. I’ll be talking going to Netflix, Rutherford Falls got canceled.

These are the types of shows that they couldn’t get people in the door to watch. Comedy as a whole, that that what makes those types of comedies valuable is that they’re what keep people from canceling. So if you’re in Netflix and your biggest concern right now is current in your biggest market. Your biggest concern is how do we bring people? How do we keep them?

Sorry. How do we keep them there? Comedies. That’s why you see them making deals for things like girls, I remember. That’s why Seinfeld’s so important.

But they couldn’t actually prior to dealing with advertisers or bringing in advertisers rather. And prior to kind of making these deals first, it comes that they think can work on their bigger platform. It’s like the manifest type effect. You weren’t seeing a lot comedies coming out of Netflix because the economics just never made sense for it. Let

me ask. I I mean, this this seems like confirmation of the idea that Netflix is essentially the the the the the next version of broadcast. Right? Because the way I understand what you’re saying is a sitcom type show is great if you already have a built in customer base. If you already have the hundred million people who are there and are just looking for something to watch, a sitcom can work for Yeah.

But if you’re, like, if you’re a peacock or, you know, or Paramount Plus or whatever, nobody is signing up for those networks to watch, like, the new Tina Fey show. Mhmm. Is that is that basically is that is that more or less how how you’ve seen it shake out? Yeah. From

a data perspective, that’s true. And there’s always I mean, I’m sure e ESG will appreciate this, but there’s always outliers. Right? There’s always something where you’re like, oh, well, this is working. Like, this this thing just works and it’s found its audience and it’s it’s doing what it needs to do, and that’s great in terms of a customer acquisition perspective.

But when we kind of look at comedies as a whole, if we think about how, you know, human behavior. Right? If we just get to that, if we think about how broadcast used to work. You sit down with your remote and you go through and you might put something on. And if we think about how people programmed.

Right? The programming teams figure out how to do those blogs, you might watch NBC for and then they’ve got friends coming on and they’ve got something for they’re saying their programming fit. They’re like, here’s your drama, here’s your sitcom, and then you figure out how they’re gonna put it all together. And to kind of get people to watch the channel for as long as they can because their biggest concern is programming for the next two hours and keeping that engagement high. With streaming, the whole question is how do you get people in the door that tends to be dramas?

It ninety nine percent time, it tends to be big dramas, whether they’re sci fi fantasy thriller, whatever it might be. That’s what gets people in. But then when people are done, especially with Netflix when they’re bingeing, what keeps them there? Sometimes it’s movies. We see a lot of people kind of return to watch movies over and over again or and just watch films in general.

A lot of the time it is licensed content that is comedies or procedural. Because they’re done with the the stranger things. They’re done with the bruisers and whatever. And now they wanna go and watch something that they’re gonna laugh at. I mean, that’s gonna kind of chill them out, something that they’re gonna put on before bed.

There’s a term for this since it’s called contextual recommendations. If we think about how algorithms work right now, If you were to watch the handmade sale on Hulu, the next thing that Hulu would recommend would be something similar to the handmade sale. I think we talked about some last time I was here. And the issue with that is that most people when they watch the handmade sale do not watch something similar to the handmade sale afterwards. They’re they’re done with it.

They don’t wanna watch anything related to it. They wanna watch something like a brick and mortar like the office. They wanna watch something that’s completely different and kind of a palate cleanser. And so if we think about streaming services, the comedies are there to kind of not just supplement the dramas, but they’re there to really make that value of the package. And the package, you know, is that streaming service of all that content really, really enticing.

And so if they if the big thing that people are coming in for is the House of the Dragon, The thing that they’re watching afterwards is the Friends, The Big Bang Theory, The South Park. That’s what kinda keeps them engaged and they’re like, oh, well, my favorite show is here. Or I can rewatch it or I can laugh and it’s awesome. Sometimes you get shows like our flag means death and people wanna check it out and so they go check it out and it’s a comedy and it’s kind of, you know, on the cusp of doing some cool stuff and That’s a typical title that might bring subscribers in. But more often than not, the comedy is what people find ideally through contextual recommendations that feel broadcasty.

Right? That feel like, okay. I’m recommending this comedy to have to watch this thing and we wanna keep you engaged with it. Going back to my earlier point, the issue with creating those types of comedies. Those long running comedies is that the audience, first of all, had to be aware of them and with algorithm recommendations they might not be.

Discover is a whole issue. And two, it’s difficult to make those shows even if they’re a little bit cheaper. If there’s no data supporting them doing what it’s gotta be doing. When you buy a Seinfeld, it’s a show that people know. It’s a show that gets recommended because it touches just enough interest that people are seeing on their page, and it’s a show that people can watch over and over and over again.

It’s also a show, and this is really important as well. We don’t talk about as enough. It’s a show that is still highly memeable on both YouTube and TikTok and Instagram and all the and Twitter. And it’s the type of thing where people are hyper aware of it. And so that cultural cache tied into the easy accessibility and availability of it being on Netflix, makes people who are younger seek it out.

They finally start watching it. It makes older people rewatch it and they’re kinda going back to it. So the fact that it’s kind of constant in the culture still makes that more valuable than trying to create something that is a cultural like, guys, that is insanely difficult now more than ever.

When you when you survey people about how they watch these shows, do you find that for, like, a a seinfeld for example? Are they sitting down and just, like, turning on or I’m gonna watch season two and I’m gonna let it play. Or are they going for specific episodes? Are they sitting down? Like, I wanna watch the Supernazi episode or I wanna watch, you know, whatever else.

I’m I’m just curious how they actually how they actually do it. If it’s like a modern streaming, we’re just gonna sit down and let the thing play and go through it. Or if it’s more like a like a self curated syndication, like I wanna watch this this this and this.

I think that’s a very very interesting important question Right? It is and I and from what from what our research shows, it’s kind of they’re sitting down. They’re watching it. Majority. They’re sitting down.

They’re watching. They’re letting it play. I think when you get a lot of his people who, again, are cleaning and they put on the background, are decompressing and so they kind of just put something on. So that shuffle button actually really comes into play. It’s like, I don’t wanna think about it.

I just you put on an episode. It’s great. I do think there is a segment of audience that we can see that I always call the I think you should leave now audience. If you doctor fans of I think you should leave now, they go in for a specific sketch. They’re like, I am talking about sketch.

I wanna watch that sketch, and then they kinda go back and forth. They like, exit out, then they’ll go to another sketch. They don’t typically watch it through the whole way again with groups of friends or whatever it might be versus the the sitcoms, traditional sitcoms, It is still people kind of just turning it on, re watching season after season after season or just putting on a block of episodes that they’re really into. They might be into an arc. They wanna watch the Rachel and Ross arc, or they they wanna watch, you know, specific, like, specific camera type episodes.

Which is again where that curationally comes into play. Because once you have people seeking out these types of shows, the nice thing about sitcoms and the nice thing about broadcast the way that they if we think about also, to your point about syndication, when you would watch rebroadcast these types of shows and reruns, you didn’t think about you put it on, it was like, great. I mean, they’re gonna like this episode and I’ve seen a bunch or I’m not gonna like the episode and I don’t and it whatever, I’ll just go to something else. With Netflix or Peacock or HOMAX or whatever it might be, that option isn’t really there as much. You’re you’re choosing what you’re getting unless you hit the shuffle button.

And I think that’s where this curation really comes into play because people when they’re I in my from my in my understanding, from my research, when people are find looking for these sitcoms, they’re just looking to decompress. They’re just looking for something they can put and they’re immediately feeling better. It feels familiar. Unless they’re watching it for the first time, like a lot of Gen Z are, they’re kinda like, I don’t care what this is, and it that’s where you see the difference in streamers, or you have a peacock or an HCMX that curates, like, collections. And they’re like, you wanna watch the Kramer episodes, you wanna watch Elaine episodes, whatever they might be, we’re gonna make sure that we have this packaged up for you.

It’s eight episodes you can go and hit play and we’ll just go through them. Netflix doesn’t do this as well. They kind of have their rows, but it’s not curated. It doesn’t really make a lot of sense. And so when you’re going in, you’re hitting the shuffle button or you’re just clicking on a season, hitting an episode and be like, okay, I guess we’ll go from here.

We don’t typically see people sit down, hit season one, play episode one, like and they’re starting from the get go unless they’re doing a rewatch. It is kind of more on the lines of like, oh, I have an episode in mind and I’ll let that play out across different episodes. But it’s not like they’re jumping back and forth between episodes, the way that you would see with, like, sketch. Can you see

what the sort of so we we we you have a sense of the age of the audience. Do do you have a sense of who is watching a show like Seinfeld for the first time? Versus who is who is watching it because they like, I I grew up watching it. Right? Or I I watched it on syndication.

I watched it on, you know, box five at five PM for six years. Like, you know, I like, but you you don’t you don’t have a sense of that? We don’t

yeah. I don’t have a sense that I mean, Netflix would for sure? I’m sure Netflix. Yeah. But we the way the way that we look at data and then surveys that I do, it’s not as substantial as what we would need to then, like, say, yes, this is what most people are doing within this age group.

If I had to put money on it, I’m I would put money on Gen Z younger millennials watching for the first time or re watching, like, from the beginning. And I would put older audiences kind of going in episode like, the ups that they want and then letting things play. But I have no real data to back that up. That would just be intuition Yeah. Okay.

Cool. One one other minor thing that was kind of interesting, peacock picking up their Hallmark vertical You

you you

were very high on this. You you think this is a big why is this a a big win for for peacock? I

think if you asked any average consumer who’s slightly in the know about streaming services and asked them to define what streaming services were. It’s peacock and Paramount Plus are the most difficult to answer. It’s the most difficult to be like, here’s what I need this streaming service. Like, here’s what they do versus Disney’s very easy. Now looks easy.

H. B. Max is very easy. And so with peacock, the issue I always had with their strategy was that they kept trying to replicate what the others were kinda So they were, like, we’re gonna have a show like Belle Air. We’re gonna have these big, like, doctor Death.

We’re gonna have these big prestigious premium type shows that are comparable to HBO and Showtime and FX and and even Apple TV plus to an extent. And my argument was always, that is not who your audience is. You’re some of your subscriber bases. If most US households according to latest research are gonna have three and a half streaming services in terms of video entertainment in their homes that they’re paying for. We accept the fact that one is Disney, one is Netflix, at this point, it seems it seems most likely.

You’ve got one streaming service that people might go for. Who p fuck is going after that audience is already signing up for HPMX. They’re already signing up for Apple TV plus and they’re watching Amazon Prime video. So what is Pico? Pico is to me, the audience has always been cable cutters who are slightly older, who want to replicate cable at the cheapest format that they can.

And the only two companies that can do that pretty well our Paramount and NBCUniversal Comcast because of their libraries, because of the fact that they own next day rights for streaming, they can actually kind of do that with sports and news. And so when the homework started coming up, I was like, yes, that is that is who your audience is. If we take the most basic assumption of the peacock audience, which is and this is totally gender stereotypical. But, you know, dad likes football. Mom likes real house wives, kids wanna watch Jurassic World or whatever movie or whatever, you know, kids content is happening over there.

Having the hallmark channel especially going into the holidays is the type of content that people one are gonna sign up for, and two keep hyper engaged with. It is it is bravo, but times ten. And so for peacock, when they’re trying to identify what their brand is, when they’re trying to say, here’s what makes us different, latching onto that audience who’s going, I like Hallmark movies. I got that with cable I no longer have though with my cable or I’m looking for a better way to do this, is the easiest way to engage with that audience in the most effective way. The hallmark

thing is interesting because it it you know, I I am not as skeptical as some people are of the HBO Warner Discovery merger. I feel like that makes sense. In the same way that I think Hulu and Disney plus and ESPN plus all coming together makes sense. I mean, I I feel like we’re we’re headed towards a great merging and and that will be best for everybody involved. Maybe one day they can get all of these things to us via underground cables of some sort, and we’ll just get them right to our TV.

It’ll be it’ll be wonderful. But but, anyway, I I digress So the big the big news from yesterday was the Disney earnings call. I there I I don’t understand I don’t understand math I’m not a math person, so I was very confused when I saw that Disney plus has twelve point one million new subscribers and still managed to generate two hundred million dollars less in revenue —

Mhmm. —

from their direct to consumer. How does that how does that math work? Is this is this a function of, like, Indian subs? Is it, like, what is what’s going on here?

The average revenue per user, which is ARPU and industry slang, dropped across the board. So it dropped in every major market, which means that as much as Disney was adding subscribers, it was losing the amount I was losing money on all the subscribers that was kind that were coming in and the also the amount of subscribers they have. Part of that is from increased churn in certain markets, part of that is from discounts that are kind of coming into play. And so when you look at that basic math of you might add this many customers, but if you’re only making this much money on the customer coming in, you can actually still lose money. That’s partially what hit their revenue.

And then also their operational costs greatly grew. So it was not that they just missed on the top line. They missed on the bottom line. They they not only brought in less revenue than the quarter before, they also brought in They also had higher expenses in the quarter before and the year before. And so that’s big and the big issue with Walt Wall Street.

When they’re looking at the subscriber count, The thing that happened three quarters ago was that Wall Street stopped caring about subscriber growth. They were like originally for the last six years, that’s been their only concern. Are you growing subscriber of people coming in. In the last three quarters, they suddenly went, you know, but are you making money on these subscribers? And none of the streaming services other than Netflix are profitable.

None of them Disney is the closest. They’re supposed to be profitable by end of q four or or, yeah, end of q four next year. And they’re saying we’ll then breakeven and we’ll start making a profit. But the issue at The Street has, which is why their stock is the lowest that it’s been in twenty years, is that they don’t know because they don’t know if Disney’s gonna get those operational costs under control. And the thing about Disney is as a company, you could look at Disney and say, cool, you’re gonna spend money on Disney excuse me, on Disney plus and direct to consumer.

And we know that it’s gonna take some money some investment and that’s okay. Because you could rely on parks and you could rely on media networks. Remember, media networks is one of its biggest, biggest revenue drivers, and that’s like ESPN. That’s like all the all the broadcast stuff. On that call, you have Christine McCarthy who’s the CFO, the Chief Financial Officer going, we expect accelerated cord cutting, which anyone would have said, any like, of course, we can we can see that people are getting rid of cable.

Two, we expect pretty big slowdowns in advertising on television because of inflation and the hang the recession hanging over our heads. Three, it we’re at our peak cost, so we’re hoping that operation cost for direct to consumer goes down, but we’re not sure, for parks and Shanghai have closed. We don’t know what’s gonna happen when Florida because of hurricanes. We don’t know if COVID it might cause other shutdowns in China long term, Japan long term. And so all of a sudden, everything becomes this perfect hurricane of, like, potential concern.

It is like Disney’s lose not losing money on the media networks, but it’s slowing down. Direct consumer is getting more expensive and the average revenue per user is dropping. And we are seeing we’re about to see them introduce a three dollar price like. I don’t think they’ll have a huge churn rate in terms of people canceling, but they will see some churn. Three, something that doesn’t get talked about enough with direct to consumer in Disney.

They’re running out of countries to launch in. So when they add all these numbers every quarter, every two quarters, there’s always like they added, you know, five million more than than Wall Street expected. Part of the thing I always point to is, like, they launched nine countries. So they have a built a number of subscribers. They were gonna add guardless.

If you look at a Netflix, they’re out of room to roll out. They they’re in every country they’re gonna be in. And so, Netflix, when they go, we add two million subscribers actually a big deal because you’re like, they found customers. And the the way that I think there was some shock in the United States when Amazon announced that they added more customers in the US for Prime Video for Thursday Night Football than they had, like, over you know, compared to Black Friday or anything else. And everyone was like, didn’t know there were more customers in the United States that were not using Amazon.

And we’re now signing up for Amazon. This thing happening with Netflix where you’re like, oh, they added three million subscribers. I didn’t know there were people to still add Netflix because they’re in every country. With Disney, Disney plus is gonna hit a point where they’ll roll out in every country that they’re gonna roll out into. And so then it’s like, okay.

Well, what does your growth rate look there? And what does your revenue on that growth rate look like? So all these things are happening. This is kind of explains how we got here. My quick thing before before I hand it back over to you is it is such a like typical Wall Street move where the earnings were not that bad.

This was not like a cataclysmic report. This was like Disney coming out and saying, hey, things are slowing down, but also we hit the highest level that we think of operation cost. We’re bringing ads in next month. So our average revenue per user is going to jump. It’s gonna be pretty much it’s gonna be much higher than what it has been.

So things are looking pretty good. We still expect even with the economic macro headwinds as they are. We still expect that we’re gonna be profitable this time next year. And Wall Street lost its mind. Jim Cramer’s on CNBC calling for Bob Jayback’s head.

Like, it’s one of those moments where you’re kind of like, I don’t understand the reaction to it. It was not a great earnings. It was not a terrible earnings. It was kinda like, yeah. This is what this is kind of what we were expecting.

And I think what you’re seeing is Disney is the last big company within this kind of media and entertainment sector that’s in streaming, and Wall Street is kinda, like, crap. Like like like everything now is, like, what does this look like for all of these companies? Yeah. I

I didn’t understand the stock drop either. To the extent that if I, you know, wasn’t horribly conflicted, I probably would have picked up some Disney stock myself. Because that like Yeah. It’s super cheap right now. People should I I’m not getting for record, not investment advice.

But, you know, but I I wanna I wanna ask one question about a a thing that you had mentioned very briefly, Prime Video. So when I I remember seeing that that that announcement by Amazon as well that they the more most sign ups, you know, that they that they had seen over whatever twenty four hour stretch or whatever whatever the number was. Was it specifically was it actual sign ups for Amazon Prime, or was it activations of Prime Video? It

was Prime. It was because they because they compared it to Black Friday. And and Okay. So

it was, like, people actually signing up for the for the, you know, a hundred whatever prime is now, hundred fifty dollars a year or whatever it was, like, people signing up for oh, okay. Interesting. Yeah.

That’s why it was crazy. Because I was like, I didn’t at this point, I assumed if you lived in the states if you hadn’t had Amazon by now, you’re probably like against having it. You’re like, I don’t wanna support Jeff Bezos or whatever.

Actively Yeah. Actively

opposed that was on that. As opposed

to just, you

know,

can I I I wanna I wanna run a theory by you. Let me know if this is this is dumb or doesn’t make any sense. Hocus Pocus two is an enormous hit for Disney Plus. My theory is that Hocus Pocus two is the Adam Sandler equivalent for Disney plus Like, not you know, you like, you know how Adam Sandler’s making movies for Netflix and there are movies that people aren’t necessarily gonna go see in a theater. But everybody likes Adam Sandler, so they watch them because they’re on Netflix and you got it.

That is

what I kind of assume Hocus Pocus two is. Do you have any idea? Is is that do you think that’s far off

I I remember. Or did

Disney leave money on the table? Yeah.

So it’s funny because I have different opinions and very very smart people in the space Mendelsohn who’s over at the wrap now and ESG who I think I think is kind of sides with Scott on this. I’m on your side. I wrote a piece to talk about this. I said Hocus Focus two is the quintessential streaming I was like, this is also a thing that people forget about Disney is that they’re or they don’t forget it, but when they think of their theatrical business, it is global. Is a fully global business.

They rarely launch something here that they wouldn’t launch overseas. And the only times they do and as good as the opposite, actually, The only times that they puts up on Disney plus here and release theatrically globally is if Disney plus is not available. Like, and they’re like, okay. We’ll put this in theaters. So when we look at Hocus Pocus two, there’s a huge nostalgia factor to us.

Right? It’s people who wanna watch it and then at people who are a little bit older, might have young kids, it becomes family event that you can type what you can do. Nastalgae does not travel for that movie outside of the United States. And Disney executives know that, people who cover the space know that. And so we look at Hocus Pocus two, one, that movie was never gonna be successful in theaters globally by any

means. Two,

to your exact point, when we talk about theaters, and this is such a conversation. Right? And I say it’s and I know that you feel the same way. I say somebody goes to theaters. I like theaters.

Going to a movie theater now with higher inflation requires there’s especially for the average consumer, who might have a family of, like, four and they’re spending eighty bucks of the theater, ninety bucks of the theater requires this kind of promise of something. There needs to be this promise of, like, an avatar to, you know, a kinda type situation. Doesn’t have to be just superheroes. But, you know, kind of what makes horror movies really work. We’ve talked this whole year about why horror movies are working.

And it’s like, you think about what makes theatrical gonna be work right now. It is spectacle that needs to be experienced with community or audience live, and that needs to be experienced kind of opening weekend. Right? This thing of, like, I have to go watch it, I have to go watch it now, and I have to go watch it in a theater because I can’t do what I can do at home. Hocus Pocus two.

The value perception of that movie is I’m gonna have friends over and put Hocus Pocus on because I’m paying for Disney plus or I’m gonna open Disney plus up and I’m gonna watch it because it’s available to me in my mind for free even though you’re paying monthly for it. In my mind, that’s a free movie that I can watch. For Disney, and this is what I think gets left out the conversation. This movie and the headlines, the Nielsen numbers, Jen, rated in what Disney kinda put out right before the advertising tier rolls in is, like, people are engaging with our platform. And that movie, they will people will rewatch over Halloween weekend can watch in the weekends leading up, Halloween.

All of a sudden, Disney plus right before a price hike and the ad tier comes in. Suddenly, you’re like, I can’t live without Disney plus. Look, I’m like, look, I’ve been using it. Right? That movie, the value it generates for Disney plus and DTC is more valuable than the potential twenty million dollars in found money that happens in theaters.

And that’s if people go to theaters. And I think to your point and kind of what I was getting to with the the experience you promised Hocus Pocus two does not come with it. It doesn’t even necessarily have the same type of experience that you get. If you put network before Christmas back in theaters. And you get a lot of former emo kids who go out together and they all sing it.

You know, it’s like an experience where they’re going on, they’re having this focus, who doesn’t have that. And so why would Disney, especially with their research kind of showing this, pull it out of movie and theaters deal with potentially bad press on it with that headline of, like, here’s what it did in theaters. Have to go through the all the trouble of figuring out what that back what the pay looks like to talent when they’re when they’re figuring out what that looks like in terms of box office, Instead, they can go. We’re gonna put it on streaming. We know it’s gonna be a pretty decent hit on streaming.

We know that we can figure this all out, and it’s gonna help our our direct to consumer business at a time when we really need it to. Everything about that movie, I think your Adam Sandler comparison to SpotOn is exactly that. It is like I don’t want to spend money on this, but in my head, it is because I’m paying for it already, and it’s there. Yeah.

Yeah. No. I mean, I I I I I think I tweeted something to this effect, but, like, Normally, I would yell at Disney, and I would say, you are leaving money on the table, your killing theaters, stop it. So I mean, like, I don’t think this is I don’t think it’s a theater movie. I just and, you know, maybe that’s my own bias because I’m not a Hocus Pocus fan.

No. I

think I think you’re right. And I and I put this in the p two because it’s funny. I think in all the data shows that I ninety five percent of movies should go to theaters. At least, especially when if the when when I was looking to the research on this, when I think this mean, it was like ninety six percent of movies made ninety eight plus percent of its revenue within thirty to forty days. So if you’re in theaters for thirty days, so much you’re gonna make on that movie anyways.

And so now that they’ve have basically the exhibitors on their knees and they can say know, to AMC and to Regal or whoever, that we’re only gonna be in theaters for thirty five days, and that we’re gonna bring it to Disney plus and or HBO Max or whatever. And you can see that bump. We see it all the time. There’s a bigger bump on movies that come to streaming platforms after they’re in theaters. Ninety five percent of movies should be in theaters.

Go and do it. Like, it it just makes business sense. These types of movies and and again, I really like your Adam Stanley comparison. Like, that type of movie, like, the Hocus Pocus is, there’s like certain films or you’re like, I’m not gonna pay to see that. I don’t know many people who would pay to see that, but that is a type of movie.

That a bunch of people in their twenties and thirties are gonna have drinks over, and then we’re gonna make a huge little thing about it. We’re gonna have a Hocus Pocus Night And all of a sudden, it’s like, wow. What a great moment. People sign up for Disney plus to kinda do it because in their mind, it’s maybe that’s worth eight dollars. Like, sure, I’ll pay eight bucks and I get this and I can cancel it thirty days later.

That’s still cheaper than going to see in theaters and wrangling my friends to try to figure out when everyone can go. And if you’re if you got kids, those kids will watch it over and over again. And when I talk to who’s kids watch Tokyo’s focused too for the first time, like, watched it again and again. And so for Disney, it’s like, the quintessential win, and that is the quintessential streaming movie. At a time when I also argue this in the pukpeas, that Disney is the most experimental.

If if if we have a line of executives on this end is on the far right is Ted Sarandos going at Netflix. Go we don’t need to put movies in theaters. We can build franchises. The gray men is gonna be the next big film franchise. On the bar left is David Zas who says there’s no reason we should ever send a movie to streaming services anymore.

It should just go to theaters. In the middle, you kinda got a Jeff Shell at NBCUniversal who’s, like, most of the movies should go to theaters, but we’re gonna do, like, day and date for Halloween ends. We think we’re gonna experiment. Paypal is the most, like, let’s experiment. Like, let’s see what happens if we took this year and we do this year and let’s get more data to understand where we’re going with it.

Most of those films should go to theaters and I think he’s made mistakes on other titles. This one, I was like, if they had put in theaters, I think would have been the bigger mistake. I think they made the right move.

Yeah. Yeah. I mean, movies like turning red or, you know, probably probably should have gotten a a at least limited goal. Run. Alright.

Let’s one more one more Netflix thing here. You know, for a long time, people thought Ryan Murphy, the guy behind Glee and Nick Tuck amongst other amongst other shows. He he was signed to a massive nine figure deal by by Netflix. They they wanted him to make hit shows for them. And the first five or six of those shows were not hit shows.

They were, I mean, they were watched. But but now he has two in a row that are pretty big pretty pretty big. I mean, Damer is enormous. Damer is is a is a very big hit. And the watcher, I think, is also is also doing very well.

What what is your read on the on the on the fallout from Daimler? I mean, is does this does this prove Netflix was right? To sign him to the thing? Will they sign him again? What is it is it the sort of thing that is franchisable like American horror story?

I mean, is it is it the sort of thing they can build on? Or is it just like, well, they they finally got lucky with this this big deal they signed? I think I also love that

you brought up Tuck, which is one of my I love that show. And and you didn’t bring up the prom, which was maybe the movie that costs Netflix quite a bit of money that Ray Murphy did. Well, that as part of his deal. The the the easy answer and simple answer is, like, no. Ryan Murphy is not worth what they spent on, which I think was about three hundred dollars.

What he produced up until Damer would come would generate nowhere close to that amount of value. Damer would. Dahmer by itself hits a three hundred million. So you could argue that, okay, Dahmer by itself is worth the deal that they paid for Ryan Murphy except that they still overpaid for what they got from him. What I think they’ll do going forward is what they should do.

Is Ryan Murphy makes one off projects for Netflix. And they say, cool. We’ll be in a bidding war with most likely Disney. Like, we will bid against John Langriff at FX to get your next project, and then we’ll bring you here if we think it’s gonna do what it’s gonna do. And to because that’s what I think is gonna happen with all the major showrunner deals.

With all the major showrunner deals that have kind of happened. Most of them have not really panned out. Even JJ Abrams over at HBO Max is not really panned out. And then he’s kinda, I think, going Apple. You’ve got you know, Shonda is, like, the only one that’s maybe panning out, and that’s basically just kind of on Bridgerson and in Ventiana.

We’ll see what kinda happens next. The the issue with trying to standardize talent is you can’t standardize creativity. You can’t be like, okay, we’re gonna put this much money in, and therefore, we need you to produce this amount of stuff. The overall deal, which is not going away. I think the overall deal states, but the mega overall deal is way.

The overall deal was always just a way to say we believe in news we like you. We want you to make stuff for us and we prefer if you did it here and not somewhere else. And so we’re gonna kinda sign you to this and we’ll guarantee projects. But it was never like we’re gonna give you five hundred million dollars and then we’re gonna see how this goes because vast majority creatives over a five year period are gonna create multiple projects that generate the kind of buzz and law and viewership that Damer does. Like, it’s just not gonna happen.

Even the the duffer brothers have made one show and done very well for them on Netflix. But the idea that the dahmer brothers, the dahmer brothers, the dahmer brothers owned the dahmer

brothers. The doff that should be that should be a show. That’s what?

Created by the Duffer brothers. But the the idea of the Duffer brothers are gonna come out and make another stranger things feels very unlikely. In the same way that the Game of Thrones guys did it, they’re gonna make another Game of Thrones children like that’s just not creativity works. I think we try to standardize it and at that level of pay. Does it make sense?

You wanna make an overall deal for fifty million dollars? You know, like, hey. Like, that makes more sense to me. To your other question, I think is the the biggest question. Can Netflix get out of Damer what they wanted, which is an American backstory.

It runs for eleven seasons still does pretty decently and people kind of tune in. I think it’s a no it’s definitely no in my opinion, but I think those are two pronged answer. One, Netflix’s scheduling means that the longevity of that title has to carry enough buzz and carry enough viewer up to last longer. If we think about how why American horse story kinda works, it’s every you know, it’s, like, eight months. She’ll runs.

Or, sorry, six months, she’ll runs. Then they’re six months off and it comes back and they do something else. Also so that’s one. One is, like, literally just from a programming strategy, there’s only certain amount of shows that if you take prolonged amount of time off and then come back for that people might be interested in. Two, although it’s also an anthology, And the idea is that, look, they saw what happened when the true crime space.

It’s true crime space with podcasts. They saw what happened with their own their own success their own documentaries and other single dominoes. So the idea is, like, let’s double down on it. There’s clearly interest in this. The thing that worked with American horror story And I’ll compare it to American Crime Story because I think that’s closer to Damer.

With American Crime Story, it was like subverting genre every season. Was like they subverted, you know, supernatural stuff. They subverted the kind of mentally insane the asylum type stuff. You know, they subvert teen can’t be teen slasher. Like, they found a way to kind of subvert use the same actors to kind of do something really interesting and build out there.

And I think that’s key to why American horror story worked because even though it’s the same show, every season, although feels very right in Murphy, feels different enough. American crime story, which is not a success with American horror story, runs into the issue. I think Damer runs into will run into, which is like, okay, people are super into OJ. That was awesome. Not super interested in Monica Lewinsky.

Definitely not super interested in Johnny Versace. And so there’s this viewership that kind of massively clients. And so all of a sudden, you’re trying to figure out what are people gonna be really fascinated by from a true life perspective. And the thing about Damer is that Damer of all the serial killers. Damer still has this weird hold on American culture where people are like, Jeffrey Dahmer, like, he’s referencing Kesha songs.

You know what I mean? It’s it’s a thing that’s, like, people still have this weird connection, Jeffrey Dahmer, and they’re fascinated by him. Also, Evan Peters has a very, very intense fandom. It’s like a weird fandom, and they would watch whatever he does, especially him in Ryan Murphy. I think, let’s say, the next season is Ted Bundy.

Bundy’s overplayed. Like, you would need another Ted Bundy thing. You’re gonna do John Wayne Gacy because they kinda tied in the documentary saw viewership, people are not that interested in John Wayne, Casey. Like, there’s very few serial killers left that you’re like, oh, yeah, like, you do Zodiac. Like, there’s a movie.

Fincher already did it, and he did another show that was basically like that on Netflix. Like, there’s this thing where how do you franchise true crime in a way that taps into people’s obsession with this type of stuff, the way that Damer did, and the way that this one series really worked. And I think in part because of the Evan Peters’ Ryan Murphy situation, and I don’t think that work. I don’t think it works if you wait too long to do it. And I don’t especially when there’s all this serial killer about stuff coming up, like, five, six years ago, all these rights were optioned.

People were wondering why there’s a bunch of serial killer stuff. Nine or nine years ago, all these things were optioned, then they went to development, then they were development hell during COVID and other out, which is why there’s all this serial killer stuff. That’s gonna go away. New trends will come in. And so I don’t think Damer’s gonna be this huge, you know, like, this six, seven season show that does really well.

In the same way, this is my last comparison, I don’t rambling. In the same way that I think we’re seeing on the film side, all of these studios kind of promising five types of movies and then being like, oh, we can’t guarantee interest plus the second one. Like, we don’t know if we can do this. I think Netflix kinda coming out and saying, like, we’re gonna build this universe without seeing if people are interested in a second season and then and then maybe a third. Is getting ahead of itself.

And I think it’s because they think that’s the American horror story audience, and I would argue that it’s it’s not, especially without Evan Peters, and especially without this kind of, again, dom or ask weird obsession thing that people have. Howard Bauchner: This

is a remarkably dark and vaguely sordid conversation, frankly. I like, this whole idea of, like, we’re gonna we’re gonna try and figure out which are the most popular serial killers. And we’re gonna make a dark universe out of the popular serial I the whole thing is very very dark. Alright. That everything I wanted to ask.

I always like to close by asking if there’s anything I should have asked or anything you think folks should know about what’s going on in streaming, world of entertainment more broadly, data, etcetera. What did I fail to ask? The I

don’t think you failed to ask anything. I think you’re great. But I the one thing I’ll add just because It’s very literally, as we’re talking, I got a push notification. I checked my phone, so I have ADD. And it was Netflix’s testing live programming.

And I think we’re getting into a moment, which is very fun to me, where if if anyone is also kind of and if you listen to this podcast, I assume you’re, like, media, entertainment, industry obsessed. We’re getting into this moment of, like, in a very short amount of time, Netflix executives are gonna come out and talk about how excited they are, about things, that two years ago, they refused they said they would refuse to ever do. So they’re gonna bet on sports leagues, they’re gonna bring sports leagues, entire leagues, like niche type leagues, kind of what ESPN plus is doing. They’re gonna bring niche leagues into Netflix. They’re gonna bring some form of live programming into Netflix.

They’re gonna bring advertising into Netflix. And the thing that I always say to people is that Netflix is going to become to your point, Sunny, Netflix is going to become a traditional type of entertainment company because without the monopolization that they had, that’s what they have to do. TV has always been advertising advertising as television, live programming, sports. These are things that people are naturally interested in what they’ll pay for. And so I think if anyone is super interested in kind of watching that play out, you could literally go back to every earnings call between twenty fifteen and twenty nineteen, even early twenty twenty, and have them say, no, and refuse.

In like the most, like like, this will never happen type way to those three things. And I think in the span of about a year and a half worth of quarterly earnings calls, you’re gonna hear them talk about how excited they are to introduce these types of things. And if that’s not the perfect harbor business school, case study of why you never say never, I don’t know what is, but it is it’s it’s a moment of of I would I would say it’s a moment of humility. I think, for Netflix. I think I think this moment of we are doing these things because we have to put one.

Well, why would it be humility though? I mean,

wasn’t wasn’t like, Iowa is I see, here’s here my accountant for that would be. I always kind of assumed that

whenever whenever a

company like Netflix makes a broad pronouncement

about

what they will or won’t do that it’s it’s whatever they need to say in the moment. I mean, I I just I, like, I I I don’t know. Maybe because I’m a genius. I have always I have always thought that, like, sports are the obvious. Like, you you you you can’t You can never predict what shows gonna be hit or not.

Nobody thought Stranger Things was gonna be an enormous mess. Squid Game. Nobody was like Squid Game is gonna be viewed by a billion people for an hour each. Like, nobody nobody thought any of that was was was gonna happen. But a thing that you can bet on is the NFL.

Like, the NFL is going to be a success no matter what network it’s on, and we see that with Amazon with Prime. I mean, people signing up for that. So if I I like, I’ve always I’ve always thought that all of those those were were just what they had say at the moment because they were focused on a different thing. For the only

reason I can I say humility is because I know enough Netflix people within some positions of power that it wasn’t like were you know, you you hear a lot of times where people inside Warner Bros. Discovery know not gonna do something that they’re talking about now or they know they’re gonna change it. They are like, they already know that. But they’re, to your point, have to go out with a certain thing, especially in front of investors and shareholders and say, like, an analyst say, this is the thing we’re committed to. And that’s why our business rides on it and and we’re doing it.

In Netflix, there was this genuine thought that was, like, why would we do ads? Like, like, that just doesn’t make sense and why would we do that? You know, why would we even look into sports? And and then things start happening. And I think now what’s really interesting about earnings is there’s no, like, walk back.

There’s no, like, we were wrong. Yeah. Right? Like, like, there there was, like, oh, well, actually, turns out that this is good. And so I do think between all those things, potentially movies going to theaters, although that’s the whole thing because you have to look at the I mean, obviously, something could do this, but the economics of going to theaters for certain amount of slate and global distribution whatever it might be.

But I think it’s interesting to see them kind of say, like, publicly. I think advertisements was kind of the breaking thing or the turning point of thumb, and now they can kinda be like, we’re gonna look into sports. We’re gonna look like, we’re gonna do these. Like, we’re gonna look into these things, and we might not do it. But we’re gonna look into it.

Yeah. Julia, thank you

for being back on the show. I really appreciate it. You should be reading her stuff at puck. If you if you aren’t already, make sure to sign up for that. What what’s your Twitter handle?

Tell the p I I don’t wanna botch it because I went.

At loud mouth Julia. I’ll mount

Juliet. Go go follow her on Twitter for her however much longer. Twitter exists. It’ll be fun. And my name is Sunny bunch.

I’m the culture editor at the Bulwark, and I will be back next week with another episode. See you next time. Get an inside look at Hollywood with Michael Rosenbaum. Let’s get inside Deborah Ann Wall. If you got the between True Blood daredevil to do again.

Partially because the Marvel

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