a16z Podcast - a16z Podcast: On Marrying Entertainment and Technology

Episode Date: December 5, 2018

with Jeffrey Katzenberg, Meg Whitman (@MegWhitman), and Marc Andreessen (@pmarca) In this episode of the a16z Podcast, based on a discussion that took place at our annual a16z Summit, Marc Andreessen interviews Jeffrey Katzenberg -- formerly CEO and co-founder of DreamWorks SKG (and chairman of Walt Disney Studios during some of its biggest hits), now co-founder of tech holding company WndrCo -- and Meg Whitman -- former President and CEO of Hewlett Packard Enterprise, and now CEO of Quibi ("quick bites"), focused on short-form mobile video. Both Katzenberg and Whitman have known each other for years, but they resided in two different worlds -- entertainment and software -- which are now merging, not only through their current venture but more broadly, given fundamental shifts in the entertainment and media landscape. In this conversation, Andreessen probes them on where Hollywood comes in (or doesn't); the intersection of software and new media, including how content creation changes as platforms evolve; and what’s next for entertainment. Along they also touch on their unique working relationship, and leadership lessons learned...

Hi and welcome to the A16Z podcast. Today's episode is with Jeffrey Katzenberg, current partner of Wonderco, co-founder and former CEO of DreamWorks, SKG, Meg Whitman, CEO of Quibi and former CEO of Hewlett-Packard Enterprise, in discussion with A16Z general partner and co-founder Mark Andreessen. The conversation, which took place at A16Z's annual summit event, is all about the intersection of software, new media platforms, and what's next for entertainment. We have two amazing guests with us today, and I think their backgrounds. are sufficiently well-known. I won't spend a huge amount of time,

but suffice it to say if you've used the internet or a personal computer in the last 20 years, you've used products that Meg has been an integral part of grading and building across eBay, Hewlett-Packard, and her influence across many other companies. And then Jeffrey Katsenberg is a Hollywood legend. If you've seen a movie in the last 30 years, Jeffrey made it. Well, as I say, if you've seen a movie and enjoyed it,

Jeffrey made it. If you didn't like it, that was other people. And the two of these folks actually have been long-time friends and have teamed up in a new business, which we'll spend some time discussing. as we get into it. But I wanted to start with, we were in the green room, and Meg and I were catching up, and Jeffrey popped in and then had to step out. And Meg's observation, once Jeffrey left the room was, and I quote, you will not find two people more dissimilar in the United States of America

than Meg Whitman and Jeffrey Katsenberg. And so that leads me to the question of how did you two meet, how did you develop your relationship? And then how is it that you are so amazingly different. Well, I'll give you a little history. And then Jeffrey can tell you how we decided to do this together. So we first met at Disney. Jeffrey was the head of the Walt Disney Studios. I was in strategic planning, and then head of marketing for the consumer products business. And we actually got to know each other there. And in strategic planning at Disney, Jeffrey really didn't like strategic planning. It's corporate.

Corporate and its controls and all that kind of stuff. But we got along quite well. And then I ended up at eBay, and he had taken DreamWorks. You know, he started DreamWorks and was about to take DreamWorks public, and he was looking for board members for this new company and asked me to be on the board of DreamWorks. So I did that for about three or four years. and then stepped aside to run for governor, which we could go into later. And then...

I did, listen, I respect that you want to go do this. I just want to remind you that you're going to run as a Republican in the state of California. Not thinking that's a really good idea, but off she went. And it turned out to be not a great idea. Fortunately now, she's 100% liberal Democrat. I have turned into a liberal Democrat. I have. But anyway. And then HP and DreamWorks, had a very strong technology partnership.

Much of our software and infrastructure ran the DreamWorks Studio. So you can pick it up from there. So I had worked on this business plan at the time we had called it New TV and really the opportunity to, I think, really do something completely new and exciting and really recognized in the building out of a first version of this business plan

how much I actually didn't know. And, you know, I was really seeking out somebody who could be the other half of what is an essential equation here. And, you know, I think I recognize that this was about creating a new kind of content, but also equally important, a new platform and a new user experience. Because Megan and I had sort of been buddies and talking through a bunch of things. And she had indicated maybe at, you know, she had been at HP. She said she was going to go for five years. She had been there over six. And, you know, said, I really think it's time.

And, you know, about six weeks later, so I saw this come across the ticker that she had decided to step down. And I think I called her kind of a, maybe a minute or two after it came across the ticker. I'm not sure. It wasn't that long, but pretty near that. And I said, what are you doing?

And she said, what do you mean? I'm out of here. I'm going away and holidays and, you know, going to catch up with Griff. spend some time with the kids and all of that. I went, no, no, no, what are you doing tomorrow? And she said, I'm going away, Jeffrey. And I went, well, could I come see you for dinner before you go away?

And she said, oh, I guess so. And so I flew up, and we had a three and a half hour dinner, and I took Meg through this business plan. And at the end of it, she said, okay. And I said, okay, what? She said, okay, I'll do it. She's going to have a few other things we've got to work out here in this, but, you know, and here's what you will see. So, yes, we are actually, in the most amazing way, completely polar opposites,

and therein is the power and the strength of, you know, opposites attracting and recognizing that we are setting out to achieve this sort of convergence of right-brain, left-brain, northern California, southern California, great tech, and great content. And certainly I recognize, I know what I know, I know what I don't know, and I know that she knows what I don't know. And that really is what set us on the path. And I can, by the way, I can confirm, so I was on the board of the field of Packard with Meg during her tenure, and I can confirm how determined she was to retire after, which is her conference room was actually named a Telluride

and had one of those super photo realistic, like one of those, like, you know, so it was life-sized decalsals who see it like on the side of a bus on the wall, which was literally a shot of Telleride. And every meeting, she would start by reminding me that as soon as she was done with HP, that's where she was going. And so this had to be a compelling. This was a little bit of a detour.

But I think one more startup. Compelling idea, compelling idea. And one more startup. So this is interesting. Startups, obviously, Meg, you've been integrally involved in startups with running eBay, and then, you know, Jeffrey, you obviously with the co-founder of Dreamworks.

But you also, both of you have, you know, are legendary for your achievements running large companies as well. For a new venture in entertainment, which I'll ask you to describe in more detail, but for a new venture in entertainment, like why, you know, the most logical,

expectation, I think, and how, you know, in Silicon Valley, when there's something new, we start a company to go after it. Down here, it feels like, generally speaking, if there's something new, the existing big companies go after it, the existing studios, specifically, because they just have such tremendous throw weight and being able to go after new formats, you know, talent relationships and all these things. So why a startup? Well, I guess for me, I've had the opportunity to work at very big public companies at scale and, you know, at Gulf and Western and Paramount, at Disney, really sort of at the outset back in the 1984. But, but but still a place with a lot of pre-existing assets there.

I found that for me, there was actually nothing more exciting than starting from scratch. Those are the most rewarding things when you have an idea and then can build something out of it. I remember on DreamWorks to really give credit to how that started when in 1994 Michael Eisner fired me at Disney and he actually called me into his office and you know to sort of say it's okay it's probably time to part company here and I didn't know that actually the moment I walked into his office without telling me he had actually issued a press release so when I got back to my office I had a number of people that had so it had gone out on the wire now you think about in 1994 you know that's a little bit like on a telegraph thing you know there's no internet or anything I don't think Al Gore had invented it yet anyway but when I got back

to my office, it was actually on the telephone, was Stephen Spielberg and Bob Zemeckis, who were on vacation in Jamaica and called to congratulate me on getting fired. We had made a movie Roger Rabbit together, and actually it had a really great partnership. And they were just laughing and laughing. I thought this was the funniest thing ever. Couldn't believe it. And, you know, oh boy, this is really great. And Bob Zamekis, I give him full credit, is the one.

He said, you know what, Jeffrey, you should just start your own. studio. Okay. That's a pretty good idea. And so off we went. And when, you know, Comcast showed up at the right moment and the right time to pass the baton on DreamWorks animation, which, you know, was never a question of if it was when, the thought that occurred to me is, is that, you know what, the opportunity to go back and be 25 years old again with the knowledge and the experience and the resources. I, over the years, made 406 live action movies, 41 animated movies, 75 TV shows, and five Broadway plays. So the idea of doing 407, 42, 76, or six, was not as exciting as actually just starting from scratch. So for me, you know, I just love the idea of

what we're doing today. Nothing more exciting. Yeah, great. And maybe you could tell us about the new company. Yeah. So what we are trying to do is to bring the best of Hollywood and the best of Silicon Valley together in a way that has never been done before. And it is really bringing right-brain, non-linear thinker storytellers, together with left-brain engineering. And what we are trying to do is create a platform where we offer short-form, and I'm going to describe that in a minute, short-form video of Hollywood production quality built for mobile.

And mobile first, mobile only, honestly. And it's a very unique use case, because today you leave your home every morning with a little television in your pocket. And you have these in-between moments during the day. Ten minutes here or there. And today, you're checking, you know, Instagram or social networking, your casual, playing casual games, you're surfing the Internet.

And what we are going to offer is a step-function improvement and quality and storytelling and user experience because, as Jeffrey said, the content needs to be as differentiated as the tech platform. And we're going to do it in a way that has never been done before. So we're excited about the name of the company is Quibi. For a long time, it was called New TV. That was never actually the name. And we kept referring to this kind of content as quick bites, quick bites during your day.

And one day we looked at each other and said, quick bites, we should call it quibby. And it stuck. So that's the name of the company, and we're off and running. And maybe just to help people understand from a content standpoint, you know, what we're doing. And I would, I think maybe three things to kind of describe to you. So the first is that if you go back to, so today, as Meg said, if you're 25 to 35 years old, is our core audience of who we're targeting on this. You're watching 70 minutes of short-form content today,

and it's going up like this. It's up 30 minutes year-over-year. So people love what they're seeing. There's nothing wrong with short-form content. It's just highly differentiated from the kind of production and quality of what we are able to invest down here. The analogy I would make is that if you go back to television

in the late 80s, early 90s, which is when network TV was literally at its pinnacle. There were multiple TV shows that had audiences of from 30 to 40 million people a week watching them, Seinfeld, friends, ER. HBO comes along and says, we're not TV, we're HBO. They weren't being derogatory.

That wasn't a pejorative statement. It just said, we're going to be differentiated. So they eliminate commercials. They change the form and format of storytelling. They're not beholden to 30 minutes, 60 minutes. 13 episodes and 26 episodes. That alone is kind of almost revolutionary in narrative storytelling.

Also, they're not beholden to standards and practices. So things that you literally could not put on network television, you know, language, sex, violence, nudity, these things. So you have sex in the city, sopranos, the wire. None of those shows could actually air on network TV. And then finally, they invest and put a level of capital to work to support production that ads supported

simply could not afford. So in 2002, they ordered 10 episodes of Band of Brothers for $125 million. If you translate that today, it's close to $30 million an episode. So far above and beyond what anybody else was doing.

So if they say, we're not TV, we're HBO, what we would say is, we're not short form, we're actually quibby. And a way to think about us in terms of storytelling, in terms of our lighthouses, the things we think will be brand defining for us, there's an analogy to give you in another form of storytelling that has

actually already tackled this and done it in a remarkable way. So novels for pretty much forever, for many, many, many, many hundreds of years, a typical chapter and a typical novel would be 20 to 40 pages long. Simple reason. When an average person sits down to read, you read a page a minute, in 30 minutes, your eyes are tired. So publishers have been saying,

and editors have been saying to their authors forever, if you don't want somebody to stop in the middle of a chapter, don't write them longer. I've yet to meet that author who thinks it's a good idea for us to stop in the middle. An author comes along about 16, 17 years ago and actually go, goes at this, and he's not the only, nor was he the first, but it's the one that got the attention

to me. Dan Brown writes the Da Vinci Code, 464 pages long, 105 chapters. The average chapter's less than five pages. And I would argue there's actually not a single thing about the Da Vinci Code that's lesser other than the length of its chapters. He told a great story with all the complexity of it. And so that analogy is what we're setting out to do, telling things that you would Think of our movies, two to three hours in length, a tried, true, tested form of narrative. And then we are delivering them in these act breaks, which are under 10 minutes.

Now, again, delivering in act breaks is something that Hollywood has been doing for 70 years. Every time you turn on TV and you watch a network show, they are delivered in act break. So if you're watching This Is Us, the first act break comes at eight minutes and 30 seconds every single time every single week and the show length is 42 minutes it's not 42 minutes and three seconds it's not 41 minutes and 41 seconds it's 42 minutes to the second so as storytellers we have a talent pool who for many many many

many decades, has perfected this idea of writing to these prescribed act breaks. And so we are converging. It's not new science. It's actually applying these tried-true tested ways into what creates a new format. Right. And so the typical way, if you have a new idea in tech, you usually start a company, you raise a seed round, A, round, B round, kind of what we do every day, if Meg knows the question I'm heading towards.

If you are in the entertainment business, early TV, early movie studios, they didn't spend a lot of money early. You know, first movies didn't cost much to make because they were kind of learning the format as they went. If you start a retail store, you start with one store to get the format right before you build 100 stores and raise a ton of money. You guys are starting life, Quibi.

Quibi is starting life with a $1 billion seed round, which in China is totally normal. But here in the United States of America in 2018, at large. And so maybe talk about the rationale for starting, you know, because the alternate scenario we start with, I don't know, 10 million, do a show, let's see how it goes.

So why start with a billion dollars? So our view was we couldn't actually make this successful without launching a platform with a lot of content that was very well distributed. And so a good chunk of that seed ran will go to make content. And I should say we are not a studio. We are actually commissioning the content from our studio investors, the big four here, plus six or seven more. And we felt like we had to have a lot of content because there is, Jeffrey didn't mention this,

but there is no library to buy for this very high quality. short form content. So unlike Netflix or Hulu or that bought a library, there is no library to buy. So we have to commission that content. And we think that a competitive varied entry is not only the quality of what we are doing, the quantity of what we are doing. And then we have to let people know about it. This is an entirely new concept. And so we've got to make sure that we launch effectively and that as many people as possible come to try it. And then we have to earn our way to going forward. So we felt like we needed to raise enough money to do this content, do the marketing and then give ourselves some runway because things won't work out exactly as we think

they will and we wanted to make sure that it'll be better exactly and this is one of the differences between geoffrey and i'm always thinking you should have seen my version of the business plan versus her version of the business plan i'm like maybe how about we don't run out of money in four months geoffrey so anyway so we've given ourselves a nice cushion and we were fortunate we were able to one of the other real differentiating characteristics of this platform is 10 major studios have invested in this platform. And they have given us access to their best IP, their best showrunners, and talent. And in this town, 70 to 80 percent, maybe even as high as 80 percent of the talent,

is actually locked up in these studios. So to get the best IP and the best talent, we needed the studios to all get in the boat and row at the same time. No one studio could do this by themselves. They all recognize that. And so that's how we were able to really raise the money. For the production quality standpoint, the goal is to zero in at the same level of what people are used to today. Yes.

So the way maybe to think about it, Mark, is that if, you know, you look at sort of the evolution of the YouTube platform, which is truly one of the most spectacular media platforms, certainly at scale, ever created. And they've really done a remarkable and brilliant job here. So this is literally now 13 years old. It started with cat videos. Seriously. And now, through this tremendous capital investment, many billions of dollars into both the platform itself and scaling it on a global basis and then opening it up and then bringing monetization to it, there are so many things that they have accomplished with it.

They have 1.9 billion monthly active users watching more than a billion hours of content every day. When they put this monetization in place, it actually created an amazing opportunity for entrepreneurs and creating. and innovative people who really built this entire new ecosystem and a new form of engagement with audiences. And it's been very successful to a point. These are the YouTube stars. Yes. So we started with user-generated content, UGC,

and then about five or seven years ago, eight years ago, they brought this monetization which began so anybody could actually get ad support for their content. They would take a 45% distribution, and they would actually sell programmatic advertising. The result of that was this now amazing professional class that grew into this. And I'm going to say this, and again, in a good way,

please don't turn this phrase into negative. It's now a semi-professional group of storytellers and creators who have, as I said, done extraordinary and very imaginative things. Well, and I think even they, I think, would say they're going for authenticity. They're going for what they would call authenticity, I think, has contrasted to like fully-

Well, they're doing an amazing job with very limited resources. So let me just put this into context so that you understand, in a way, I would just say why I so admire what it is they've done. In terms of the amount of money that you can invest in a piece of content

and actually recover that money, if not make a small return on it, is a couple of thousand dollars a minute. So you went for user-generated content, which is zero cost, And now went into this professional content, which ranges from about $500 a minute up to a couple of $1,000 a minute. You know, I was involved at DreamWorks where we had awesomest TV. That was typically our, and we actually had a very, very successful company and brand.

And our content ranged in that $500 to $1,500 a minute. There are a few things that we did more than that. So look at $3,000 as sort of the top amount that is being spent. and then Go 90 came along and actually doubled that. So there are a few people that have dabbled in it. Well, an average scripted hour of television today, whether it's on cable, broadcast, or streaming videos, is $100,000 a minute.

A movie, it's $100,000 a minute. You know, you can be really talented and really gifted and really interesting and all of those. At $3,000 a minute versus J.J. Abrams with $100,000 a minute, I'm sorry. It's just a different content, and it's a different quality. I think the reason that there is this white space out there of very high quality, short-form content

where no one is doing it, is because if your only monetization mechanism is advertising, you can't make it pay, because at $100,000 a minute times 10 minutes, you've got a million dollar piece of content. Even YouTube cannot sell enough advertising to generate a return on that. So we've got to monetize this with subscription and advertising,

more subscription than advertising. And that changes the economics dramatically. It's why HBO wasn't, you know, why networks couldn't compete with HBO when they went out and made Band of Brothers. Right, right. So let's talk more general. Let's expand out to kind of the broader world of kind of what's happening, entertainment and video. So you all are well aware. When digital music came along, it led to a, you know, spectacular implosion of the music business.

Music business had been around for, you know, 70, 80 years at that point. And it just went into complete meltdown for a whole variety of reasons. A lot of people thought that when streaming video arrived on the internet in kind of the mid-2000s, the same thing would happen to movies and TV. And then, you know, sort of the giant upside surprise has been, particularly for TV, you know, the golden age of, I mean, I don't even, it's beyond a golden age now, right? It's like a platinum age or something, right? It's like, you know, platinum age now. There's, you know, 500 scripted drummers in the U.S. this year, and the quality level is just spectacular. Yes.

Right. And it's spectacular across the streaming platforms, Netflix, all these Amazon and then HBO and even the broadcast networks are up in their game and everybody's got this spectacular content. And it's this massive expansion of the business. So why did music cave in, but yet TV did so well? I think that the television movie industry has, done a much better job of always looking to create a price value proposition for its customers

that created incremental value. So whether it was going from movie theaters to network, then to cable, then to VHS, DVD, it's every single, you know, every decade or so, there is a new way in which our content is packaged, repackaged, and offered up to consumers in a great price value proposition, which obviously Netflix is the latest, most spectacular version of that. The music business actually has not done and did not do as good a job of it, is that everybody will remember this, which is that for years, if you go back to the Jurassic era when I started and listen to music,

When you would buy an album, there were three to six songs on that album of, you know, 10 or 11 or 12 songs that were actually hits. I go back to literally, you know, Saturday Night Fever and Greece. I'm talking about things that were movie-driven, you know, flash dance, footloose, you know, Good Morning Vietnam. There's movie after movie after movie soundtracks, multiple tracks. And that was true of an album. He bought a Beatles album or Rolling Stones.

There were many. Then the CD disc comes along, and I'm not sure who was driving what here. They eliminated the singles business. And when they eliminated the singles, so you had to earn an album, right? You had to put out multiple singles. Nobody even in this room's ever remembered

that there was a single, right? And then if you had successive successes in a single, you then actually earned an album and an album came out. What the record companies ended up doing is going, you know, let's just skip all that. One song, put it on an album, and now sell an album for, you know, $15. You mean one song you want?

Yeah, and you had to pay $15. With another dozen songs that maybe not... It didn't actually... It didn't matter whether they were good or not. You didn't have to earn it anymore. You were forced. Now, I don't want to get sideways here in this, but there are multiple instances

where the music industry took advantage of it. it's customer. And it always happens in any business when you do that, ultimately, customer is going to win. There's a customer involved. Right, right, for disruption. And then the other thing that's just spectacular about TV, and you guys are being an example of this with short form, but the other thing just spectacular about TV is right for, I don't know, for 40 years, the critique of TV, right, it was the dumbed down, you know, it was the vast wasteland,

lowest common denominator content, you know, it was pitched at kind of the, you know, the, let's say, the viewer with the least expectations. And then, you know, the other just like shocking kind of twist of this era that we're in today is, so much of it seems like It's driven by video content aimed at the smartest audience that you can get. I mean, the shows are getting to be, like, unbelievably intricate, right? And they're plotting and their characterization. You may have seen there's a book. Stephen Johnson wrote a book called Everything Bad is Good for You.

And he actually examines this phenomenon, a psychology called the Flynn effect, which is basically a cues arising over time. And he basically establishes correlation of possibly causation with increasingly complex entertainment. You can't watch The Sopranos, like, you know, kind of sitting back in your couch, dozing off, like, you have to pay attention, right? It's very complex, right? And so what was the switch that was flipped in the TV business that said, let's get smarter? I mean, that's been going on for a really long time.

I mean, that, you know, several decades. And, you know, I think you've got to give a lot of credit to HBO Showtime. I think they were really sort of the ones that saw that opportunity of being able to raise the bar from broadcast television. But remember, broadcast television, you know, I was with John Wells today, you know, who created, you know, ER and West Wing. And, you know, these are amazing, amazing TV shows that were in the 90s and stuff. But I think certainly HBO in particular really raised the bar, challenged.

And then a number of the cable FX has come along. John Langraft did some and continues to do exceptional work. And, you know, the good news is the consumer has won because the content creators realized that they're going to get rewarded when they do exceptional work. Right. And that, you know, our audience is smart and aware. and appreciate them.

Right. So I want to go into kind of work and life, more general topics. So we referenced up front, Meg, you described how you and Jeffrey are polar opposites. We didn't quite get the level of detail there that I was hoping for. So I'm going to come back to that. We could go into that. So here's a question. So as Meg was leaving HV and she and I, one of the last meetings we had as she was leaving,

I'll just remember you observed at the time that Jeffrey is, I think you said, far more disciplined. And I found that to be as a person, I found to be a very striking observation because Meg is maybe the most disciplined person I know. And then she started telling me story after story after a story about how Jeffrey is even more of a disciplined person than Megas in terms of how he runs his life and runs his work.

And so I was wondering maybe if you could describe why somebody as organized a discipline as you thinks he's that much more. Well, because he is. Okay. And how so? I mean, I will tell you that this company would not exist without Jeffrey Katsenberg. Jeffrey is a classic entrepreneur

that has willed this company into existence. And, you know, this is a guy who has, you know, cultivated relationships in Hollywood over 40 years in an incredibly disciplined way. One of the differences between Silicon Valley and Hollywood, this is a town of relationships and emotional connections. I would characterize

Silicon Valley as a little bit more transactional. If I need you, I will get together with you and we'll do something. But if I don't need you for 10 years, I might not see you for 10 years. That is not the case here. And so that discipline of keeping in touch, of running your life in a very disciplined and organized fashion,

Jeffrey has incredible capacity for work. You know, I have incredible capacity for work. You know, Jeffrey has probably 50 percent more capacity for work than I do. So, actually, it's been quite a bit of fun. I will say that part of the differences is I am a left-brain linear thinker, and Jeffrey, self-admitted, is a right-brain non-linear storyteller. And so often he will argue in stories and allegories. And I will say, Jeffrey, do you have any data to suggest what you have said is true?

And he'll go, no, but it absolutely is. I will argue in total available market size, return on invested capital, you know, linear programming. Linear, you know, okay, exactly, Jeffrey, how is exactly we're going to make this content and exactly what is that cost? So about two weeks, ten days or so ago, we got our content team together. So just to tell you, so since we are building a business for 25 to 30-year-olds, I felt like we need to have a lot of them in the room where it happens. right they really so we're hiring a lot of 25 to 30 year olds because you cannot have the 60 year olds actually doing so i went out and i decided that while meg was being patient getting all the business stuff and the billion dollars raised and all of that that i was actually going to try and invest

that time and do something that i hoped would have an equally important return for us so i went out and i interviewed and meg will tell you i'm not exaggerating 120 kids young Emerging leaders. Emerging leaders, 25 to 30 years old. Quibs. I call them the quibs. They're not the kids, they're the quibs. And, you know, literally, I just had a process for me

where I wanted to meet everybody, and it was really a great, actually exciting process of getting to meet. What is this next generation of talented people out of movies, television, studios, networks? And one of the questions I would always ask as one of my last questions to each one of them, which is, okay, if you're going to get in a rowboat to do this

and one other person can come along that can pull as much weight as you, tell me who that is. So I'd make them give me a recommendation, by the way, and I would say to them, part of how I'm going to judge you is how good that person is when I meet them, right? So they couldn't give me a stiff because they didn't want to have somebody else good. So anyway, we ended up hiring about a dozen of them.

And, you know, as Meg will tell you, it's truly the most amazing group of people. They are so excited and so smart, smart. Not jaded. Anyway, they're incredible. So a week ago or 10 days ago, they invited, they were doing an offsite themselves to sort of just talk about a whole bunch of things of how to get organized and some priorities and stuff. And they asked Meg and I to come at the beginning of the day just to sort of kick it off.

And we walk in the W Hotel, 8.30 in the morning. and Meg and I sit down, and I guess maybe they're about 15, 16 people. And Meg pulls out, I'm not kidding you, a three-page, single-spaced, handwritten notes that she proceeds to actually talk that, here's the brand, here's the culture, here's the goal. It was like a Gettysburg Address. While she's doing that, I write four words down on a piece. a paper, and go for it, right? But let me tell you how this works when it works well.

And one plus one, most of the time, is five between the two of us. So we have to innovate on a number of dimensions. We have to innovate on content, as Jeffrey has told you, but we have to innovate on the experience of viewing video on your mobile. Think about viewing video on mobile today. It's an okay experience. It's not a great experience. I now watch everything on my mobile,

because I want to know what that experience is like. So this weekend, I watch the bodyguard on my mobile. Has any of you watched The Bodyguard on your mobile? You should try it. Because it's quite dark. It's a new show. Anyway, so I'm watching it. And it's dark.

It's dark. And that's because we have to innovate, actually, from what we call script to screen. We have to think about how the producers and the content creators can shoot the film differently, so it looks better on your mobile, how we can display it better on the mobile. We think people will come to our application in portrait, but they will want to watch in landscape, and then they may want to go back and forth. And when you do that today on your phone, you see the black lines on either side

and you see the black lines this way. We have to overcome that. And that is a combination of how we make the platform work and how we edit and how our creative shoot. So there is a huge amount of innovation that is script to screen. Neither of us could do that without each other. Well, here's the perfect example.

So Anton Fouqua, who is directing one of our first shows. Who's the director of Training Day, the Equalizer and lots of great movies? Fantastic, really, really super talented. and very cinematic director. So last week, Anton Fouca got together with the product and engineering team and agreed on a series of tests that he's going to go out and shoot here, dealing with all these issues around landscape and portrait

and all the things that you are sort of natural opportunities for us to improve on the experience. But that is a perfect example, and he's excited about helping us author a new language. He volunteered to be our pioneer on how to do this. And then the engineers, we have to figure out, okay, so now we get the contrast right in the core film. Now you're in different in light environments. You're in here, and it's pretty dark, then you move outside, or then you move to the lobby, and then you move outside. And what you will see is your video washout. And today, what you have to do if you have an Apple, iPhone, is you have to go to the brightness slider.

You have to change it as you move about, and then you get back to your app. So how about something simple, like you basically take that brightness slider and put it into the app. Okay, and you can do that any number of ways. You could do it with your fingers, you could do it in any number of ways. And so that kind of thing, just that attention to detail about how to make this look fantastic. And, you know, our sort of aspiration is, if you think about what Apple and Android have done for photography on mobile,

we need to do that for video on mobile with them. So, you know, it's a perfect example of where one plus one equals three, and neither or five, and neither of us could do it without the other one. So it's actually been quite fun. So something you do both have in common is you both worked over the years with, some of the really great business leaders and innovators of the last, you know, 50, 60 years who've built, you know, a lot of what we now think of as kind of American culture, American business.

And so I want to do maybe sort of a moderately paced lightning round of sort of lessons learned from people you've worked with. And I was wondering, Jeffrey, if you could start with Barry Diller. Well, Barry Diller hired me when I was 23 years old to be, you know, his runner. And what's a runner? Go for, you know, go go, go get it, go get the coffee, go get the laundry, get the dry clean, whatever. It's just go for it. And, you know, he did one of the most remarkable things,

and I didn't understand it while he was doing it, but over the course of a number of years, he actually had me work in all of these different areas of the business. And in a way that was incredibly unsettling and very disruptive for me in trying to find a career path, you know, I would work in marketing and distribution for a year and a half and just start getting traction, and then he would move me to international.

And I would work there for a year under, you know, the leadership there, and I'd learn the international business, and then he'd yanked me back and move me into a TV area. And at the end of about eight years of doing, you know, and it just was actually, I didn't really understand it, and he never expressed what it was that he was doing. And at the end of it, he ended up making me president of the studio. And when he gave me the job,

I realized I know how to do this because he had invested in me in really preparing me for a job he someday thought I would be able to do. And I have to say, I wish as an industry we had done that. I think generationally, it's not happened today. And, you know, I would say the thing that Barry,

I mean, there are many, many, many great lessons from him. He really is, in the best sense of this, a wise man. And I think the thing that he instilled in the most of all is, I'll give you two things. One, you can only rely on your own instincts. This was supposed to be a lightning round. Okay. Is this the quebebebe? Is this the queby mindset? Quibi, kind of.

Quibi, sorry, quivie. Is this loby? I'll do the medium short version of it, which is you, you know, you only can rely on what your own instincts. You have to find things that you love, believe in them, have the courage of your conviction, and go for it, because nothing in our business actually happens. The other thing, which I think culturally is something I have never forgotten is, is that in order to succeed in our business, you actually need to have the absolute right to fail. And what I mean by that, and what he meant by that is, is that we are a business that is about creating unique and

original things, stories, ideas. Unique and original equals risky. Risky means sometimes it's not going to work. If you take out of the equation the right to fail, you don't take the risk, you ain't going to get unique and original. Thoughts the mind. Outstanding. Well done. Well done. Well done. That was a thousand dollar a minute special effect right there. Meg, your long-time friend Mitt Romney, you've worked with and known for a very long time. From a business standpoint, what did you learn from Mitt? Yeah, a couple of things.

One is that doing a small number of things with excellence is far better than spreading yourself too thin and doing 50% of the things at 50%. And so the notion of simplicity and focus and constantly simplifying what you are doing, especially in a startup, I learned from Mitt. The other thing I learned from that is, and throughout my career, is you are only as good as the people that work with you.

And so the right person, in the right job, at the right time, with the right attitude, is absolutely critical. And if you make a mistake, fix it fast. When you make a mistake on a person that you have hired, this is not like fine wine. It never gets better with age. Never. And so it's the right thing for you and that person.

And he taught me that as a really young age. Right. So make a more general business question for you. So you obviously coach a lot of young up-and-coming executives. You've got a bunch in your new company. When you give advice to young, up-and-coming female executives, is it the same advice that you give to young up-and-coming male executives, or is it different?

To young up-and-coming, it's the same. But as they get a little bit more than young up-and-coming, like 10 years into their career, it's a little bit different. And I will tell you something that Frank Wells taught me. So I show up at Disney in strap planning as a 32-year-old. So I'm not quite up... I mean, I'm in the middle. Not in the middle, but I'm early stage,

but not so new that I was just... out of business call. And Disney's quite a rough and tumble environment. And I would go to these meetings with, you know, 17 guys, and they just talked all the time. And I couldn't get a word in edgewise. And finally, Frank pulled me aside. And Frank was the president of Disney at the time. And the president and chief operating officer. They pulled me aside. He said, Meg, you're just as smart as these guys, but you need to talk. Because we don't know that if you don't talk. And I said, yeah, but this seems like really hard because they just are talking and they don't

really know what they're talking about. And it seems really hard. And he goes, when in Rome, do as the Romans do. And he said, you have to screw up your coverage, and you have to just, you know, make it know what you know. And I often tell women that, you know, you just sometimes you just have to do what you think is the right thing to do, and you have to screw up your courage, particularly early on. Because it's somewhat difficult when you're the only woman in the room, particularly now it doesn't bother me at all. But at 32, it did.

Right, right. I was past quibby age. Got it. So, let's see. How should we close? How should we close? A couple questions, actually, on the broad-based concept of politics, tonight's election night, so it seems right. So Meg, you did, you alluded to you famously ran for governor in California a few years back.

I'm not going to ask you about that, but I will ask you, if a personal friend comes to you in 2018 and asks for advice, says they might be interested in running for office and ask for advice of running for office in 2020. What advice would you give that person? So honestly, I'm of mixed minds because we need people like everyone in this audience to actually decide to get into the action and run for office or make a conversation. This country isn't going to heal if we don't all get involved in one way or the other. So if any of you were to ask me, I would tell you you should do it. But then I would tell you, make sure you know exactly what you're doing. This was the most difficult thing I have done in my entire career. And it is a full-on combat sport every single day.

It was eight years ago today that I lost the election. And it is a full-on combat sport for two and a half years. And I will tell you, it's just the most difficult thing that I've done. difficult thing that I've ever done. So make sure you're wired for combat. Make sure that you understand that running for office is completely different than governing. And I think that's one of the problems in our systems today is what it takes to win are completely different skills than what it actually takes to govern. So I would encourage people to do it. It was the most extraordinary experience. I'm a better CEO because I did it. But I still have post-traumatic stress syndrome,

honestly, eight years later. Right. Yeah. And then, Jeffrey, you've been heavily involved in politics for a long time. And so I supported many candidates. You know, in recent years, it feels like, right, we've alluded in previous sessions here to sort of the rise of populism on both the left and the right. And then what you might describe is, let's say, effusing of politics and entertainment in the sense of, you know, Donald Trump, is your view, as somebody who's been working with politicians for a long time, is your view that we are in an aberrant period of politics and that we will return to a normal state with kind of normal politicians, normal campaigns, normal process at some point? Or do you think that with 2016, do you think that was a turning

point and we're now at a new frontier no and we've seen this now for now almost 40 or 50 years in which we tend to swing strong one way or the other and you know you can sort of look at how the presidency pretty much every eight years we seem to go pretty opposite of where we have been and so there's no question it is swung to an extreme further than it has certainly in my life lifetime. And I believe in the power and the strength of the enterprise of our democracy. I think that the Constitution is strong, and I think it is being bent and tested in ways that it hasn't before. Ultimately, it will prevail. And, you know, for those that are on the outside, it always seems dire. You know, there are many people that felt the eight years of, you know, Barack Obama was

painful for them. And they found themselves on the other side of that, to an extreme. The thing that is so disconcerting and painful is, is that, and it is the unique thing, not in history, but this moment and time. Again, I was a teenager during the civil rights movement, and we were a country divided in the same kinds of ways with the same level of rhetoric and extremism. And I think it was just a very difficult, painful. time for this country. I think we're in the middle of that again. And I don't recognize it. And it's very hard for me to reconcile it. But I do believe ultimately in the power, which is why, you know, I believe like every single one of us must exercise your voice, exercise your

vote, that above all else. And I would even just say to you that whatever the moments and extremes are, 20 years from now, the population of America is not going to look like. what it does today, that alone is going to change it. No matter what, you know, unless we become a totalitarian enterprise here, which I don't believe is possible. Good. That seems like a great note to end on. Thank you very much, Jeffrey and Meg.